[Senate Hearing 105-858]
[From the U.S. Government Publishing Office]
S. Hrg. 105-858
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
=======================================================================
HEARINGS
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
on
H.R. 4101/S. 2159
AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD
AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 1999, AND FOR OTHER PURPOSES
__________
Commodity Futures Trading Commission
Department of Agriculture
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
46-086 cc WASHINGTON : 1999
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
ISBN 0-16-058116-8
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
----------
Thursday, February 10, 1998
Page
Department of Agriculture: Office of the Secretary............... 1
Tuesday, February 24, 1998
Department of Agriculture:
National Agricultural Statistics Service..................... 129
Agricultural Research Service................................ 129
Economic Research Service.................................... 129
Cooperative State Research, Education, and Extension Service. 129
Thursday, February 26, 1998
Department of Agriculture: Natural Resources Conservation Service 467
Tuesday, March 3, 1998
Department of Agriculture:
Rural Utilities Service...................................... 557
Rural Housing Service........................................ 557
Rural Business-Cooperative Service........................... 557
Alternative Agricultural Research and Commercialization
Corporation................................................ 557
Tuesday, March 10, 1998
Department of Agriculture:
Food and Nutrition Service................................... 647
Center for Nutrition Policy and Promotion.................... 647
Tuesday, March 17, 1998
Department of Agriculture:
Food Safety and Inspection Service........................... 745
Animal and Plant Health Inspection Service................... 745
Agricultural Marketing Service............................... 745
Grain Inspection, Packers and Stockyards Administration...... 745
Tuesday, March 24, 1998
Department of Agriculture:
Farm Service Agency.......................................... 865
General Sales Manager........................................ 865
Foreign Agricultural Service................................. 865
Risk Management Agency....................................... 865
Tuesday, March 31, 1998
Commodity Futures Trading Commission............................. 983
Department of Health and Human Services: Food and Drug
Administration................................................. 1021
Material Submitted by Agencies Not Appearing for Formal Hearings
Department of Agriculture:
Departmental Administration.................................. 1137
Farm Credit Administration................................... 1142
National Appeals Division.................................... 1146
Office of the Chief Economist................................ 1148
Office of the Chief Financial Officer........................ 1157
Office of the Chief Information Officer...................... 1162
Office of Communications..................................... 1170
Office of the General Counsel................................ 1172
Office of Inspector General.................................. 1179
Nondepartmental Witnesses
Ad Hoc Coalition................................................. 1205
American Association of Retired Persons.......................... 1207
American Farm Bureau Federation.................................. 1209
American Farmland Trust.......................................... 1212
American Federation of State, County, and Municipal Employees.... 1214
American Fisheries Society....................................... 1220
American Honey Producers Association............................. 1222
American Indian Higher Education Consortium...................... 1223
American Nursery and Landscape Association....................... 1226
American Seed Trade Association Corn and Sorghum Basic Research
Committee...................................................... 1232
American Sheep Industry Association.............................. 1236
American Society for Nutritional Sciences........................ 1239
American Sugar Alliance/Sugar Cane Growers Cooperative of Florida 1242
Bernard H. Berne, M.D., Ph.D..................................... 1247
California Industry and Government Coalition on PM-10/PM-2.5..... 1249
Centocor......................................................... 1252
Children's Nutrition Research Center, Baylor College of Medicine. 1256
Coalition of Experimental Program to Stimulate Competitive
Research (EPSCoR) States....................................... 1259
Coalition on Funding Agricultural Research Missions.............. 1260
Coalition to Promote United States Agricultural Exports.......... 1261
Colorado River Basin Salinity Control Forum...................... 1262
Colorado River Board of California............................... 1264
Columbia University.............................................. 1265
Consortium for International Earth Science Information Network... 1268
Cosmetic, Toiletry, and Fragrance Association.................... 1270
Council for Agricultural Research, Extension, and Teaching....... 1273
Doris Day Animal League.......................................... 1275
Everglades Restoration Oversight Group........................... 1276
Farm*A*Syst/Home*A*Syst.......................................... 1277
Federation of American Societies for Experimental Biology........ 1281
Florida, city of Gainesville..................................... 1283
Florida Nurserymen and Growers Association....................... 1283
Florida State University......................................... 1286
Friends of Agricultural Research, Beltsville, Inc................ 1286
Friends of the Earth............................................. 1289
Friends of the National Arboretum................................ 1290
Georgetown University............................................ 1292
Grocery Manufacturers of America................................. 1293
Health Industry Manufacturers Association........................ 1294
Humane Society of the United States.............................. 1298
International Association of Fish and Wildlife Agencies.......... 1301
International Seafood............................................ 1306
Intertribal Agriculture Council.................................. 1306
Joslin Diabetes Center........................................... 1309
Kwan, Quon Y..................................................... 1311
Land Trust Alliance.............................................. 1312
Massachusetts Foundation for Excellence in Marine & Polymer
Sciences....................................................... 1314
Metropolitan Water District of Southern California............... 1315
National Association of Conservation Districts................... 1317
National Association of Farmers' Market Nutrition Programs....... 1321
National Association of Professional Forestry Schools and
Colleges....................................................... 1322
National Association of State Foresters.......................... 1325
National Association of University Fisheries and Wildlife
Programs....................................................... 1326
National Association of State Universities and Land-Grant
Colleges:
Association of American Veterinary Medical Colleges and Board
on Veterinary Medicine..................................... 1328
Dr. James H. Mortensen, Academic Programs Committee on
Organization and Policy.................................... 1331
Dr. James J. Zuiches, Agriculture............................ 1332
Dr. Thomas L. Payne, Experiment Station Committee on
Organization and Policy.................................... 1335
Dr. Richard D. Wootton, Extension Committee on Organization
and Policy................................................. 1337
Dr. Richard L. Guthrie, International Committee on
Organization and Policy.................................... 1340
Dr. McArthur Floyd, 1890 Research Directors.................. 1341
National Center for Appropriate Technology....................... 1342
National Center for Resource Innovations......................... 1343
National Commodity Supplemental Food Program Association......... 1346
National Congress of American Indians............................ 1347
National Cooperative Business Association........................ 1348
National Corn Growers Association................................ 1349
National Cotton Council of America............................... 1350
National Dry Bean Council........................................ 1354
National Easter Seal Society..................................... 1360
National Pharmaceutical Alliance................................. 1362
National Potato Council.......................................... 1365
National Rural Telecom Association............................... 1368
National Telephone Cooperative Association....................... 1372
National Turfgrass Evaluation Program............................ 1375
National Utility Contractors Association......................... 1376
National Watershed Coalition..................................... 1377
Oklahoma State University, Oklahoma Agricultural Experiment
Station, Oklahoma Cooperative Extension Service................ 1379
Organization for the Promotion and Advancement of Small
Telecommunications Companies................................... 1383
Pharmaceutical Research and Manufacturers of America............. 1385
Predator Project................................................. 1387
Red River Valley Association..................................... 1388
Regional Aquaculture Centers:
Lester Myers, Southern Regional Aquaculture Center........... 1391
Dr. Richard Spencer, Tropical and Subtropical Regional
Aquaculture Center......................................... 1392
Dr. David A. Smith, North Central Regional Aquaculture Center 1393
Joseph McGonigle, Northeastern Regional Aquaculture Center... 1393
Ken Cline, Western Regional Aquaculture Center............... 1394
Society of American Foresters.................................... 1395
Society for Animal Protective Legislation........................ 1397
SPIN-2........................................................... 1399
Sunkist Growers.................................................. 1400
USA Rice Federation.............................................. 1402
United States Agricultural Export Development Council............ 1403
United States Apple Association.................................. 1407
United States Marine Shrimp Farming Program...................... 1410
United States Telephone Association.............................. 1411
University of Miami.............................................. 1413
University of Southern Mississippi, Mississippi Polymer Institute 1414
Western Rural Telephone Association.............................. 1416
Wildlife Management Institute.................................... 1419
Wyoming Governor, Jim Geringer................................... 1421
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, FEBRUARY 10, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:07 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Gorton, Burns, Bumpers, Kohl,
and Leahy.
DEPARTMENT OF AGRICULTURE
Office of the Secretary
STATEMENT OF DAN GLICKMAN, SECRETARY
ACCOMPANIED BY:
RICHARD ROMINGER, DEPUTY SECRETARY
KEITH COLLINS, CHIEF ECONOMIST
STEPHEN B. DEWHURST, BUDGET OFFICER
Opening Remarks
Senator Cochran. The meeting of our subcommittee on
agricultural appropriations will please come to order.
Today we are beginning our hearings to review the budget
request submitted by the President for the fiscal year
beginning October 1, 1998--the fiscal year 1999 budget--for
agriculture, rural development, and related agencies.
We are very pleased to have as our leadoff witness at this
hearing the Secretary of Agriculture, Dan Glickman. We
appreciate very much your being here, Mr. Secretary, and we
understand that you have accompanying you today Richard
Rominger, Deputy Secretary of the Department of Agriculture;
Keith Collins, the Department's Chief Economist; and Stephen
Dewhurst, the Budget Officer for the Department.
This subcommittee has jurisdiction for all programs and
activities of the Department of Agriculture, with the exception
of the Forest Service which is funded by the Interior
appropriations bill.
For this next fiscal year, the President has requested
appropriations of $56 billion for Department of Agriculture
programs and activities under the jurisdiction of the
subcommittee, which is a net increase of $8 billion from the
current fiscal year enacted level. Three-fourths of that
request is for mandatory appropriations required by law to be
appropriated.
The President's total discretionary appropriations request
is $12.6 billion.
This presents us with a proposed decrease of approximately
$330 million from the enacted level for this current fiscal
year. That's assuming that the President's legislative
proposals and offsetting savings are enacted into law.
The Department's request relies very heavily on the
adoption of new user fee legislation to generate $624 million
in collections for this next fiscal year. One of these
proposals is to cover the costs of meat, poultry, and egg
products inspections. This and other user fee proposals of this
administration have been rejected by previous Congresses, and I
suspect they will be rejected by this Congress.
Further, a $205 million savings in appropriations for the
crop insurance program results from the President's proposal to
shift sales commissions for agents from discretionary to
mandatory spending. That's not certain to be approved by
Congress either.
Many other increases proposed for food safety, integrated
pest management, and a host of other priorities are funded in
the President's budget by redirecting funds from existing
programs and activities.
I think it is fair to say that this subcommittee will not
have the luxury of being able to count on the availability of
user fee resources from legislation which has not been approved
by Congress, and I also expect that Congress will disapprove
many of the proposed shifts in funds from existing priorities
of the Congress.
So, we have our work cut out for us, Mr. Secretary, to get
these numbers to come out at the end of the line so that we
fund our programs for research, for agriculture production, and
for the food programs that are required to be funded by this
subcommittee each year. So, we will work with you to try to
identify the priorities and the needs for the Department's
funding for this next fiscal year.
We appreciate very much your providing us with your
statement in advance. It will be made a part of the record in
full, and we would invite you to proceed to summarize your
statement or make any other comments that you think are
appropriate.
At this point, however, I am going to yield to the
distinguished Senator from Arkansas, the ranking Democrat on
the committee, Senator Bumpers.
STATEMENT OF SENATOR BUMPERS
Senator Bumpers. Mr. Chairman, thank you very much. I will
ask unanimous consent that my formal statement be inserted in
the record and simply say that this is a sort of bittersweet
occasion for me because this is the opening round of the
hearings of my last year in the Congress and my last year on
this subcommittee.
Having said that, Mr. Chairman, let me thank you personally
for the cooperation and the kindnesses you have shown me. We
have agreed on most things, but even when we have not agreed,
they have been most amicable disagreements. I could not have
asked for a better chairman to work with on this committee, and
I want to publicly thank you for that and just summarize.
My statement would be basically the same things you said,
but I would just like to emphasize again that when you consider
the fact that the budget authority for 1999 is $332 million
less than 1998 and then you add $600 million in user fees to
that, we have a pretty tough year in front of us obviously
because I agree with you, Mr. Chairman. User fees have been
brought up here--I think this is maybe the sixth consecutive
year that the Department has asked for user fees, and it will
probably be the sixth consecutive year they will not be
granted.
But I just want to point up the magnitude of our problem if
user fees are not granted by this subcommittee or by the
authorizing committee, for that matter, which technically we
ought to have before we enter into such a thing as that.
But in any event, Mr. Secretary, I want to thank you for
your services. You have always been very responsive to the
members of this committee and we want to publicly thank you for
that.
Thank you, Mr. Chairman.
Prepared Statement
Senator Cochran. Thank you very much, Senator. I especially
appreciate your kind remarks. I do not know of any person I
have worked with in Congress that I have enjoyed the
relationship with than this distinguished Senator from
Arkansas. We have swapped this job back and forth over the last
decade a number of times. It has always been a pleasure to work
with him closely on the subjects under the jurisdiction of this
committee. We will insert your statement in the record.
[The statement follows:]
Prepared Statement of Senator Bumpers
I am proud to join Senator Cochran and my other colleagues on the
subcommittee in welcoming Secretary Glickman, Secretary Rominger, Mr.
Collins, and Mr. Dewhurst. Secretary Glickman was in my state a few
short days ago and it is a real pleasure to have him and others from
the Department of Agriculture with us here today.
This is a bittersweet occasion for me because it marks the first
hearing for the last annual appropriations bill of which I will have
the pleasure to serve as a member of this subcommittee. Over the years,
I have not always agreed with my colleague and friend, Senator Cochran,
on every single issue before us, but I am happy to say that those times
of disagreement have been very few and without doubt, the two of us
have agreed on far more topics than we have disagreed. I want to
publicly thank him for his courtesy, his thoughtfulness, and the
partnership we have shared these past several years in crafting the
funding bills for the Department of Agriculture, the Food and Drug
Administration, and the other agencies under the jurisdiction of this
subcommittee.
The fiscal year 1999 budget now before us appears to offer many new
initiatives and a few themes we have seen before. Last year, as we
considered the fiscal year 1998 bill on the Senate floor, I made clear
my view that investment in agricultural research must be one of our
highest priorities. I was disappointed to note the overall decline
below the fiscal year 1998 level in new budget authority requested for
programs in the Research, Education, and Economics mission area. I
realize that some of this reduction is simply a result of moving
specific programs to other mission areas or, as in the case of the
Census of Agriculture, a function of cyclical budgeting.
However, I have serious concerns about reductions in formula funds
to our nation's system of land grant universities and extension
network. The federal-state partnerships in agricultural research have
been the backbone for developing our nation's productive capability
which has made us the envy of the world. Similarly, the budget's
elimination of congressionally directed research through the
Agricultural Research Service presents a challenge to us and to the
research communities in our states who had looked forward to a reliable
partnership with the federal research arm of USDA. Still, I am
confident the commitment of the President and of Secretary Glickman
toward agricultural research is strong and I look forward to working
together to craft legislation for the coming year that will help
prepare our nation and our nation's farmers for the coming century.
I also worry about the farmers themselves. I know that may sound a
little disingenuous when you consider that net farm income, though
slightly down in 1997, was at a record high of $60 billion in 1996. It
is an unfortunate lesson of history, but prosperity on the farm is
usually fleeting. Cycles of high yields and high prices come, and those
same cycles, in time, go. In 1996, when the tide was high, Congress
with the stroke of a pen kicked away a tradition of cooperative support
and assistance that the farmer had known for more than a generation. It
may have been an imperfect partnership, but the American farmer knew
USDA would be there when it was needed.
USDA is still there and the challenge now is for the Department of
Agriculture to continue to be a Department for Agriculture in a very
changing economic and political environment. The 1996 Farm Bill did not
destroy the farm safety net, but it was badly mangled. Before declining
budgets and different directions in farm programs and farm policies
completely dismantle USDA's presence in rural America, we need to take
a few steps back and reflect on where we have been, where we need to
go, and how best to get there. I note that the budget for fiscal year
1999 contains several features designed to improve the farm safety net
and I look forward to hearing from the Secretary on this subject.
The 1996 Farm Bill also included the creation of a Commission for
Agriculture in the 21st Century. Being a new commission and a new
appropriations account in a time when it has been difficult just to
maintain the necessary ongoing programs, the Congress provided no
direct funds for this activity in the fiscal year 1998 bill. I hope we
will look more closely at the work and the potential of the Commission
this year. I fear we may otherwise one day regret having turned our
backs on the American farmer because times were good only to find that
without him, times may become very, very bad for the rest of us.
Food Safety continues to demand our strict attention. Food recalls
accounted for some of last year's largest news stories. Whether it is
contaminated beef or tainted strawberries, the American people are more
demanding than ever about the wholesomeness of the food they eat. Part
of this goes back to my earlier comments about research. It is vital
that we learn all we can about how to identify, detect, and prevent the
occurrence of food borne illness. It is equally vital that we proceed
with the very best science in order to avoid sensationalized scares
regarding food safety that can, in an instant, destroy businesses that
took generations to establish.
This subcommittee provided funds in fiscal year 1998 to implement
the President's Food Safety Initiative, a collaboration of USDA, FDA,
and CDC. The fiscal year 1999 submission carries this initiative
forward. Food safety is an area where everyone should be in agreement.
Food producers, processors, and consumers all have a vital interest in
knowing that products are reliable and safe. Consumers demand such
standards just as producers and processors hope consumers will demand
their products. As more and more foods are imported from around the
world, as emerging diseases and pests capture the headlines, it is more
important than ever that we hold food safety to the highest attainable
standard possible.
Again this year, the budget request is dotted with proposed user
fees. Some are new creations, some are old acquaintances. The budget
proposes to collect $573 million in new FSIS user fees. This sizable
amount, we are told, would equal only pennies per pound in additional
costs to the consumer. After all I have just stated about food safety,
one would assume that the American consumer would think nothing of
spending a few pennies more to know that the meat or poultry products
in the shopping cart are safe. Unfortunately, I am not convinced higher
consumer prices is the proper analogy to the user fee proposal.
If authorized and collected, the cost of FSIS user fees would
seldom, if ever, be absorbed by the meat and poultry processing
companies. Anecdotally, we are told that those few additional pennies
per pound would come, not out of our tax burden, but out of our
pocketbooks at the grocery store. However, it is most unlikely that the
companies would pass this cost on to the consumers in grocery stores
where competition is the most fierce. Instead, the companies are more
likely to pass on these costs to the one sector of the economy that is
unable to pass them on to anyone else, the producer. It seems odd that
while we worry about the small farmer, while we shake our heads at
livestock prices, while we worry about the economy of foreign nations
that might disrupt our livestock exports, we would in the next breath
propose adding another $573 million annual cost (nearly $2.8 billion
through the year 2003) to these very producers.
The Department of Agriculture touches on many more subjects than
those I have just discussed. Providing adequate nutrition for our
people, protecting our environment, promoting rural development, and
remaining on the cutting edge of world trade are but a few of the other
vitally important functions of USDA. As we proceed through this year's
hearing schedule, I look forward to hearing from all agencies of USDA
on their plans for the coming year.
The budget presented to us by President Clinton is a balanced
budget. It took a lot of pain and suffering by all of us to reach this
historic point. We will have a lot of pain yet to endure to make a
balanced budget more than simply a point in time. As we hear from
Secretary Glickman, and the other USDA officials that will follow him,
we need to keep in mind that austerity will continue as our guide. We
will also recognize our duty to the constituencies we serve today and
in the years to come. The passage of the fiscal year 1999
appropriations bill will be a point in time, but one which we must
assure will lead us in the right direction to a coming millennium.
STATEMENT OF SENATOR BURNS
Senator Cochran. Are there other Senators who would like to
make an opening statement? If so, I will be happy to recognize
you for that purpose. Senator Burns, you were here early.
Senator Burns. Well, Mr. Chairman, let me just place my
statement in the record.
The Secretary already understands that I have got--I do not
know why we ought to be appropriating any money for the
Department, to be honest with you. That is where I am at right
now.
Senator Bumpers. Would you repeat that?
Senator Burns. Yes; I do not know why we are appropriating
any money because I do not see an advocate down there for the
producer and I would sure like to.
I want to say that I am very disappointed in the roadless
areas so far as the Forest Service is concerned with EEP having
the money and not spending it, not competing. Those areas that
I think would best be left to really just a private sit-down, I
would like to sit down with the Secretary one of these days and
go over each one of these things because what is going on in my
State of Montana has far-reaching ramifications. It is serious.
It is serious beyond belief. I know there is a way to work
through this and I do not think probably in the public domain
is the place to do that.
I have a hard time telling my farmers if you think
everything is good on the farm. I have a hard time saying that
we cannot get as much for a 60-pound bushel of wheat as they
are getting for a pound of wheat in the grocery store. Now,
something is awry and I am not smart enough to figure it out. I
wish I was. I wish there was a single bullet, but there is not.
Prepared Statement
So, Mr. Chairman, I would just submit my statement for the
record and one of these days I would like to sit down with the
Secretary because we have some very, very serious things to go
over, if we possibly can.
I thank the Secretary for coming today and I thank the
chairman for holding the hearing.
[The statement follows:]
Prepared Statement of Senator Burns
Thank you, Mr. Chairman. I would like to start by stating how well
run I find this subcommittee to be, I believe the Chairman and the
Ranking member do a very good job of getting this process underway in
this subcommittee. I would also like to commend the staff of this
subcommittee for the professional manner in which they perform their
jobs. Last year their work was a good example of how this process works
and I do appreciate their fine work.
Now with that done, I am pleased to see the Secretary of
Agriculture before us today. In my mind this is a very timely hearing
considering much of the work that the Secretary and his department have
been involved with in recent weeks. Between the difficult times that
our farmers are facing in the field and the recent announcement on
roadless areas in our National Forests. These issues have all had a
definite impact on my state of Montana, and I honestly don't think a
lot of consideration is being given to rural America by the Department
at this time.
To start out with Mr. Secretary, we must all admit that the current
farm program is in existence and is moving forward. The producers are
getting their transition payments and all is well on the farms. That is
the feeling I am getting from my constituents when they talk to the
people in your department. But all is not well. When I go to the store
to purchase breakfast cereal, and have to pay $3.75 a pound for
Wheaties, and yet my farmers in Montana can't get that for a bushel
which weighs sixty pounds, well something is far from right on the
ground.
It is my belief, and it is shared by many on the ground that this
is due to inadequate trade policies and work both by the office of the
United States Trade Representative and the Department of Agriculture.
In recent weeks I have had numerous inquiries into my position on the
trade credits that this country is providing to countries in Asia. They
are wondering about their future in these markets.
It is my position that I will accept the first payment made by this
government to Asian countries, but Mr. Secretary we had better see some
realistic development in the trade of American agriculture products
from this effort. Without that I see a rough and rocky future for any
approval of additional efforts for bailing out these countries. When
our trade representatives are working with these people it is their
responsibility to make sure that American farmers and ranchers are
being taken care of on the world market.
As far as I am concerned this is not the case today. Most if not
all American farmers are proud of and will back their country to the
bitter end on matters of national defense and security. But, when doing
so they would like to think that their government is giving them a fair
break on dealing on the world trade stage. This is not the case today.
As we place trade sanctions on many countries in the world, thus losing
any and all opportunities for trade of food products with these
countries, our friends and trade partners move into those markets and
have a hay day.
It is known that some of our trade partners are going into the
countries we have trade sanctions with and selling above market price.
They then take the extra earnings they have achieved and sell below
market price in those markets in which we compete with them. Yet, for
the past two years the Department which you have been in charge of has
yet to spend one dollar of Export Enhancement Program, (EEP), funds to
counteract this trade difference. As a matter of fact you gladly turned
back about $60 million last year for disaster assistance.
This year you propose capping EEP at a sum of $320 million, when
Congress has provided you authority for up to $550 million for this
program. I would personally like to see some of that money used, but in
consideration of what you have done in the past couple of years, I
honestly don't understand why you are even putting that amount in the
account this year. I would be pleased today to hear you state that you
really plan on using it, but I doubt you will say much more than if
market conditions warrant the use of EEP funds your office will make
those funds available.
In contrast to the EEP funds the Department of Agriculture has gone
out and done a lot of good work with the Foreign Market Development
funds. This seems to be the one account in the Department and in the
Foreign Agriculture Service where the dollars are getting used. Then
again we face another obstacle set forth by the Department, the lack of
realistic funding for this program. If it is the one program that seems
to be working and bringing dollars back to the American producer, why
does the Department continue to under fund this vital program. It
appears all the Department does is carry over funds for the Cooperator
program.
This weekend I will be returning to Montana, as will many of my
colleagues be returning to their states, for the President's week
break. This Friday and Saturday in Shelby, Montana they will be hosting
the annual Farm and Ranch Days in which I will be in attendance,
answering questions and speaking to a number of farmers from Montana
and surrounding Provinces and states about our Agriculture policy. I
would like to invite you, and will assist your office to set up a time,
for you to speak to my farmers about their future via the phone. Then
you can explain to them why the rest of the world seems to be under
selling our grain on the world market.
By the way, are you aware of the significance of this meeting being
held in Shelby, it was the town that almost declared war on Canada
several years ago due to the amount of wheat that was coming across the
border in that area. They did it then, and don't be surprised if they
do it again in the near future Mr. Secretary.
I can guarantee you, your staff and the Department that until I
feel that the concerns of the American and Montana farmers are
adequately addressed on the world market that you will continue to hear
from me on this topic. I have not supported NAFTA or GATT and for the
reasons listed above. This Department and this Administration continue
to cut trade deals all across the world, but my farmers are not basking
in the splendor that they were assured would come their way. Because
the world looks upon us as easy traders, one of the first issues that
drops off the table is agriculture.
Why is it that everybody is concerned about the food supply the
American Farmer and Rancher provide. It is because without a doubt they
produce the finest, most reliable and SAFEST food in the world. The
rest of the world knows this, and in reality are afraid of our
producers. Mr. Secretary, I am willing to put any producer in Montana
up against, on a competitive market, any producer in any country in the
world. Time and time again they will produce a SAFER, more reliable and
less expensive product. But time and time again they, the producers,
are faced with the fact that they must compete not against another
farmer, but against a foreign government without much help from their
own.
It is apparent that the current Administration wants you and your
office to go down in history for providing a safer food supply for the
people of this country. Well, Mr. Secretary, if this Department does
not go out and assist our farmers with marketing on the world market,
you won't have to worry too much about the food supply here in the
United States. I wonder how safe you all will consider the food supply
that we will be required to import from foreign countries in order to
meet our daily needs.
Mr. Secretary, it is simple, Congress has provided you with the
tools do go out and compete on the world market. Please use them and
help our farmers make a decent living and have a chance. If not, the
idea of the Big Open will occur again, and states like Montana will
become the playgrounds that those with the big dollars would like to
see anyway.
Well that is my sermon on agricultural trade for today. Here ends
the lesson. Unfortunately now I must go onto the issue which I am sure
you knew I would bring up today, Roadless Areas and the moratorium on
any and all construction of roads in these areas.
I cannot believe the nature in which you and the Chief of the
National Forest Service allowed this to occur. A couple of weeks prior
to the announcement by the Forest Service, myself and several members
of this committee and the Energy and Natural Resources Committee,
joined in sending you a letter outlining our concerns and suggesting
that we were as concerned as you about the roadless areas. We stated
that we would be willing to work with you and the Administration in
developing a policy to address these issues in our states where your
announcement had the greatest impact. But obviously those people who
have elected us have no understanding of the finer issues, since their
voices and their concerns went selectively unanswered by your office.
This concerns me greatly, since we like the President are elected
officials, and although both Congress and the Administration like to
act like we have all the answers. By working together we may be able to
at least address them in a fashion that will answer the concerns of all
the people, not just special interest groups that fancy having one ear
or the other.
Mr. Secretary, your decision to implement this moratorium and to
notice proposed rule making has done more in the past few weeks to
reignite the fire that was once called the ``war on the west''. No
other Administration has done more to make people who live and work on
the public, and for that matter private lands, in the west feel as
though nobody cares about them like this Administration has. These are
real people, Mr. Secretary, with real jobs and real dreams about the
future, both for themselves and their children. Yet they are brokered
as insignificant pawns in a motion to please the extreme elements
within this Administration.
I have to honestly tell you how very disappointed I am in you and
your office for this action. There were numerous ways in which to
address the current situation, and you let them all slide in order to
preserve some righteous thinking person in the White House. Just
remember sir that which can be done by executive order can be undone by
executive order, and god forbid the consequences at times can be worse
than what we started out with in the first place.
Now I have preached a sermon, and given a lecture. I had hoped and
always thought that this might be the one committee where I did not
feel the need to do this, but current events have led me to this point
today.
On to a point of interest in regards to a situation in Montana. You
understand that I worked with the Chairman and Ranking Member of this
Committee last year to provide funding for a quarantine facility in
Montana for the bison that leave Yellowstone National Park. I also
understood that with the timing of the Agriculture Appropriations, and
the upcoming winter, that it would not be possible for the Department
to do much work in relation to that facility. However I had assumed
that in the past four months that there might be some dialogue with the
state of Montana and the Department on the future of this facility.
Mr. Chairman, I admit to being rather long winded today, somewhat
unlike me, but I had a great deal to get off my chest here today. I
again appreciate the leadership that you and Mr. Bumpers provide to
this committee and I am also aware of some of the differences that the
Ranking member and I have on these issues. But it was important to me
to get this out in the open and let the Secretary understand why I have
such a lack of confidence in the Department of Agriculture at this
time. Again thank you for this opportunity, and I look forward to
listening to the Secretary explain the USDA budget for the coming year.
I will have some questions later.
Thank you, Mr. Chairman.
STATEMENT OF SENATOR LEAHY
Senator Cochran. Senator Leahy.
Senator Leahy. Thank you, Mr. Chairman.
I too am one who has enjoyed working with you. We have
served for so many years. I think we both had dark hair when we
started. Well, you still have hair. [Laughter.]
I also was privileged to come to the Senate with Senator
Bumpers who has been, like you, one of the best friends I have
had here. I would like to praise Senator Bumpers because of
what he has done, both as chairman and as ranking member of
this subcommittee. I know that in that capacity he has had, as
you have, Senators from both sides of the aisle constantly
coming, asking for help on far more things than it is possible
to do. Like you, he has helped when it was possible to do it,
and when he was unable to, like you, he has still left the
Senators feeling that they had a fair hearing. No more could be
asked of any chairman or ranking member.
Right now we are close to funding full participation for
the WIC Program. Mr. Secretary, I would say that is a pretty
significant accomplishment when you consider that not very long
ago one-half of the pregnant women, infants, and children went
unserved.
Another important nutrition investment is the WIC farmers
market program which helps create farmers markets and assists
families on WIC at the same time. This committee has greatly
helped that program with continued funding, and it has turned
out to be a win-win situation; both a win for the producers and
a win for the consumers.
Secretary Glickman, I want to especially thank you and your
staff. I am glad that there is a USDA because you have been up
in the past several weeks to help Vermonters in the aftermath
of one of the worst ice storms in this century. I toured that
area, along with Senator Jeffords. I know how badly it was hit,
and I saw the USDA, the Vermont National Guard, and the private
sector come together to help us there.
The ice storm paralyzed communities from northern New York
to the tip of Maine. Trees collapsed from the weight of several
inches of ice that coated their branches. Power lines were
literally just ripped right out of the houses. We had miles of
utility poles that were just flattened. They were standing one
hour, and the next hour they were all down. Hundreds of
thousands of people were left without power for days and even
weeks, while temperatures dropped down well below zero. The
temperatures warmed up and we got hit with ice melting and
rivers flooding, overpowering their banks.
I was born in Vermont. I have lived there 57 years. This
storm is the worst I have ever seen. In the Burlington area, 50
percent of the trees were toppled or severely damaged, and
across the region 70 percent of the trees were damaged. You
have visited that area before, Mr. Secretary. You know the
beauty and the utility of those trees, and you can imagine what
it was like with them down.
Along with farming, forest and forest products make up the
majority of the economy of the region hit by the ice storm.
These rural communities, and the men and women who work there,
are going to be feeling the economic effect of this storm for
years to come. In some cases, sugarmakers and woodlot owners
and apple orchards are going to have to wait several years
before regrowth allows them to go back into what has been their
livelihood not only for them but their families for
generations. We see over $8 million in crop damages and $3
million in trail damages in our national forests and untold
millions beyond that.
The hardest hit, though, were the dairy farmers in many
ways. They are already struggling to make ends meet. Farmers
were left without power needed to milk their cows. Cows have to
be milked twice every day whether you have power or not, and
sometimes cows went for days without being milked. Farms lost
cows. Milk handlers were unable to get through on the roads to
make their pickups. Farmers had to dump thousands of pounds of
milk, and losing one milk check for a lot of these farmers can
make the difference of whether they stay viable or not.
Local and State assistance is going to help them, but
Federal relief is needed. I hope the Department can help us all
the way through. There are a number of programs that you have
in your Department, Mr. Secretary, and we are going to need
your help and we will continue to work with you.
But there is another storm on the horizon and that is
manmade. The storm that I am concerned about in the future is
the one that the Department of Agriculture is proposing in the
milk marketing order system. If it is made final, it is going
to put thousands of small dairy farmers out of business in very
short order.
The Commissioner of Agriculture of Vermont has advised me
that Vermont could lose one-half its farms under the USDA
proposal. Economic analyses by Agrimark Cooperative shows the
Northeast will lose $117 million in annual income. Almost all
regions of the country will be dramatically hurt.
So, you can imagine then, Mr. Secretary, you are going to
hear a lot about this. You just had a proposal and a report
which says we should increase efforts to keep smaller farms in
farming. Yet, your proposal for milk pricing will force a lot
of these same small farms out of business. We will address this
in authorizing committee, but I just wanted you to know it is
an area of concern.
Mr. Chairman, I thank you for your courtesy in allowing me
to go on longer than usual.
Senator Cochran. Thank you, Senator.
Senator Gorton.
STATEMENT OF SENATOR GORTON
Senator Gorton. Mr. Chairman, I would like to start out
also by saying how much we will miss Senator Bumpers when he
leaves. I was reflecting on the fact that there is almost no
one I have come across in my career with whom I can disagree
more frequently or more cheerfully with more eloquence on his
part and with less rancor from a personal point of view or, for
that matter, someone who is so great a friend and an ally when
we find ourselves in agreement. He has done a great deal on
this subcommittee and the Senate as a whole.
I guess I wish I could be so kind to the Secretary and his
budget, but Mr. Chairman, when you start by saying that in
spite of the image that the American people have of the
Department of Agriculture, overwhelmingly its money goes into
entitlements that have to do with transferring money and assets
from one group in our population to another and how little of
it goes into agriculture itself, as both we and the American
people think of agriculture, that is to say, our producers of
food and fiber.
To see a budget that continues to move so radically in the
direction of again cutting off farmers and being hostile to
them and their interests in the way that this does is an
intense regret. To see a complete cutoff, for all practical
purposes, of cooperative research programs of work between the
Department of Agriculture and our universities in order to fund
basically more welfare programs.
The President's ideology that he is unwilling to submit to
the Congress for its normal ratification just means in my view
that we have a Department of Agriculture that has forgotten
about agriculture, and I am convinced that you, Mr. Chairman,
as has been the case in the past, are going to come up with a
rather different budget in these research areas than the one
that has been submitted to us here.
I also join Senator Burns in a statement, that is not
directly relevant to this hearing because it is part of the
Department of Agriculture that belongs in the jurisdiction of
my subcommittee, over their forest initiatives, again hostile
to traditional uses without having solicited the views of the
people in communities who are greatly affected by those
decisions, making decisions that really ought to be decisions
made by the elected representatives of the people through their
Congress rather than in individual Departments.
So, I have to say that an appropriation bill that I hoped
we would have a wide degree of agreement on is one that is
simply going to create controversy and has deeply disturbed
people in agriculture in my State and I suspect across the
country.
Senator Cochran. Thank you, Senator.
Senator Kohl.
STATEMENT OF SENATOR KOHL
Senator Kohl. Mr. Secretary, we appreciate your willingness
to testify before this subcommittee today on the issues raised
in USDA's fiscal year 1998 budget. We recognize the magnitude
of the task before you. Managing the USDA with this
administration's commitment to a balanced budget is no small
task.
We do ask that as you review programs, you avoid picking
winners and losers and focus on treating all programs and
people fairly and equitably. Past decisions in one program, the
milk pricing laws, have created winners and losers with family
farms having the most at stake. What needs to happen to Federal
milk marketing orders is equity and simplicity to eliminate the
regional differences. Without reform, Wisconsin will lose
almost one-half of our family dairy farmers over the next
decade.
In addition, Mr. Secretary, the family farmers must be
assured that other countries are not being given an unfair
advantage or unfair access to our markets and we must expand
our agricultural exports. To achieve these goals, USDA must
actively monitor international agriculture trading agreements.
While properly constructed trading agreements alone will not
save the family farm, poorly monitored ones will harm their
existence. Without detailed analysis and careful attention to
the issues, I feel that family farms may in fact disappear
forever. Mr. Secretary, USDA's actions on these issues will
determine the future of the family dairy industry.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
Mr. Secretary, with that warm welcome. [Laughter.]
Thank you. We appreciate your being here.
Secretary Glickman. I am reminded of Senator Bumpers' joke
which I have stolen from him and told about 4,000 times. I
won't repeat it today.
But thank you very much, Senator Cochran.
Senator Cochran. It may be one of the few jokes of his you
can retell. [Laughter.]
Senator Gorton. I did not know there was one.
Secretary Glickman. If he has more, I would be glad if he
called me this afternoon.
Senator Cochran. We better get back on the subject here.
You may proceed.
Statement of Secretary Glickman
Secretary Glickman. Thank you. I want to thank you for your
courtesy and hospitality.
I also would like to pay tribute to Senator Bumpers. I was
in Lonoke, AR, Senator Bumpers, where we announced a water
program that you had actually gotten started. The affection
that people have for Senator Bumpers is higher than I have seen
for about anybody in public life. So, I know that his
contribution to his State is enormous.
In any event, I want to make a couple of comments.
Decreases in USDA Outlays
One is if you look at the chart here, outlays in the
Department of Agriculture for the last 6 years have clearly
been coming down. There are a lot of reasons for that, but the
prime reason is the reduction in entitlement spending: food
stamps and farm programs. Food stamp reductions have largely
taken place because of economic improvement and the resulting
reduction in the numbers of people on the rolls and their
length of time on the rolls, particularly for the last 3 years.
Farm program spending also has come down largely because of
congressional action related to AMTA payments.
So, the fact of the matter is that in the 1999 budget we
have requested increases in EQIP, increases in conservation,
and to fully fund crop insurance, but we have not asked for
more money to fund the basic commodity programs because we are
operating under the 7-year AMTA Freedom to Farm Act which has a
ratcheting down of farm program expenditures every single year.
So, I do not want the impression to be left that there is a
reduction on the farm side and an increase on the welfare side.
Congress has made some decisions on the farm side to lock in
reductions over the next 7 years, and I think by and large most
farmers--not all, but most--think that that decision was an
appropriate decision. And, we are implementing that the best
way that we possibly can. The flexibility provisions of that
farm bill have proven to be very positive.
Not every part of agriculture is doing well. Most farmers
are doing better because interest rates are down. They are low
because we have made progress on the budget. We also have made
progress on inflation. I think that is a tribute to both the
administration and Congress, but the fact is those lower
interest rates have stabilized a lot of the slide on farm
income that we saw in the 1980's.
Severe Weather Problems
But clearly, the Northern Plains regionally have the most
serious problem in agriculture today. The Dakotas, Montana, the
northern tier of States with the very severe weather problems,
coupled with prices particularly in grains that have not been
of an augmented level have caused serious problems there, and I
understand that.
Dairy Price Issue
In addition to that, dairy has not done as well as other
segments of the American farm economy. Dairy prices today are
better, but I cannot predict to you where they are going in the
future. I think the basic formula price for last month was
$13.30, which indicates some strengthening, but dairy producers
have suffered a great deal and I think that that is a problem
for us and we need to work on it. We have proposed milk
marketing order reform, which is highly controversial, but at
least we will get a national debate.
Weakened Livestock Prices
A third issue is livestock. Livestock prices, while they
have been strong the last few years, have weakened recently.
Part of that has to do with the Asia financial crisis. Part of
it has to do with other factors.
Conservation Reserve Program
But without trying to be overly defensive, I think it is
important to recognize that whether we are working on a
conservation reserve program for example in Washington State to
make sure that Senator Gorton's farmers are treated fairly
under that CRP program or we are dealing with exports or other
kinds of initiatives, the heart of the Department of
Agriculture is in our efforts to preserve stable income and the
health of production agriculture. We do a lot of other things
as well, such as seeing to the sustainability of land and
making sure that hungry people are fed.
But I take very seriously, coming from Kansas, my role in
preserving the strength of production agriculture. A lot of
decisions were made in the 1996 farm bill which changed farm
policy, and perhaps we need to talk about some legislative
issues. I want to make it clear that the heart of what we do is
to preserve a strong farm economy out there in all sectors, all
regions, and all commodities.
President's Balanced Budget
Let me just make a comment that we had to make difficult
decisions in light of the Balanced Budget Act of 1997 and the
President's commitment to a balanced budget, the first one in
30 years submitted. We had to make difficult decisions on
resources in terms of where we provide them and how they are
redirected. We did propose some new user fees. We absorbed
certain costs and looked at our own business practices. Those
efforts, combined with program reductions and reforms taken in
prior years, have made a significant contribution to the
President's balanced budget.
USDA's outlays, as you can see on this chart, are down by
about 14 percent over the last 6 years, from $63 billion to a
projected $54 billion.
Over this same period, employment, on the other chart, is
down about 20,000 through reorganization and streamlining
efforts. Today USDA is the smallest it has been since the mid-
1960's. We are doing our part to reduce the deficit.
But notwithstanding those facts, there are serious
challenges facing farmers, rural Americans, and the Nation and
we cannot abdicate our role in that area.
Civil Rights
I also want to emphasize to you the importance that the
President and I place on improving USDA's civil rights
performance. The necessary funding for civil rights-related
activities contained in this budget, the largest increase in
two decades in that area reflects that commitment. We are
asking for funds to carry out recommendations of our Civil
Rights Action Team and the National Commission on Small Farms
that support our civil rights agenda. In total, we are
requesting $250 million to invest in credit, outreach, and
conservation programs relating to civil rights, plus funding to
resolve discrimination cases that are currently pending.
Briefly, I want to go over the four major parts of the
budget. The first one has to do with economic and trade
opportunities.
Crop Insurance Program
The long-term viability of our farmers is now more
dependent than ever on their ability to manage risks inherent
in the market. This is what I call the post freedom to farm
market, where the Government is not actively engaged in
managing the supply and price of products. We believe that
maintenance of a strong set of risk management tools is
essential in this new situation, and that is why our budget
provides for full funding of the crop insurance program. We
will propose legislation to shift funding of certain crop
insurance delivery expenses to mandatory funding to ensure
maintenance of this vital program. There is no real safety net
out there for most farmers except selling our products overseas
and having an effective crop insurance program.
I admit to you that the crop insurance program is not
perfect in all respects, but having it based on mandatory
funding I think will give farmers some security that it will be
there for a long time.
National Commission on Small Farms
Farmers and ranchers need credit to succeed. Our National
Commission on Small Farms and our civil rights report
emphasized that, driving home the point that improved access to
credit creates opportunity for family farmers, in particular
beginning and socially disadvantaged farmers.
For that reason, the 1999 budget provides more funding for
farm loans. We have proposed doubling direct farm ownership
loans to $85 million and increasing guaranteed loans. Under our
budget, almost 3,500 beginning and small family farmers will be
able to acquire or save their farms. The budget keeps direct
and guaranteed farm operating loans at $2.4 billion to serve
some 28,000 limited resource farmers.
Government Debt Forgiveness
But I must tell you there is one other issue I urge you to
deal with and that is that the 1996 farm bill contains an
onerous provision which is a categorical ban on loans to
farmers who have had Government debt forgiveness since the mid-
1980's. Now, mind you, banks do not even do this. What the law
says is that if you have had any kind of a write-down in the
past, 10 years ago, you can no longer get a Government loan, a
direct operating loan, a guaranteed loan, or the related farm
loans that we have. So, that means, notwithstanding the
redemption that we tend to believe that people should have,
that once you have that impediment, you are forever barred from
Government assistance. No bank has that kind of onerous
requirement.
I admit to you that there were people back in the 1980's
that took advantage of Government loans and abused the process,
but since 1989 we have had between 75,000 and 80,000 people who
have had write-downs and most of those people are doing OK now
but they are forever barred from getting loans.
This is a very serious problem and one that has a
monumental effect. It was raised by our Civil Rights Action
Team, but it is a problem that affects every single State in
this country. I am sure, Senator Kohl, you have had people who
have had Government write-downs in the last 10 years. They are
no longer eligible for Government farm credit assistance. We
are denying a lot of small farmers access to credit.
We will ask Congress to replace this prohibitive standard
with one that we think is based on common sense that will
protect both taxpayers and hardworking, creditworthy farmers
and ranchers. This is also one that we need to work on quickly
because if we do not, we will lose more farmers because they
will not be able to get credit assistance, guaranteed or direct
credit.
Agricultural Exports
Exports have never been more important to the health of the
American agriculture. This is the other part of the safety net.
We have to aggressively use our efforts to open new markets,
maximize export opportunities, fight new obstacles to trade,
particularly sanitary and phytosanitary restrictions being put
on our products by other countries. We have been wrestling with
the Asia financial situation. We have been extending export
guarantees to key markets, keeping them open to our farmers and
ranchers.
On that point but unrelated directly to our budget, I want
to emphasize the critical importance to American agriculture of
congressional support for IMF funding. The stability of these
Asian countries to buy our products is in large degree due to
stability of their currencies and their economic conditions,
and it is unlikely that we will have much of a market there
without that kind of stability.
For 1999 we have proposed spending nearly $6.5 billion for
trade related activities, including a projected $4.6 billion
for export credit guarantees to protect sales to Asia. Just
this last week I announced that the Koreans were coming in for
an additional $100 million of credit for hides and skins,
Senator Burns, which had the cattlemen very, very interested.
Senator Burns. It will not be my hide.
Secretary Glickman. No.
Senator Burns. That is the only one I am interested in
right now.
Secretary Glickman. OK. Well, I will not comment.
But anyway, the fact is that the export credits are a key
way to deal with this issue.
The budget also proposes a flexible multiyear authorization
for the export enhancement program.
Rural Development
We also believe that the programs dealing with housing,
running water, electricity, and telecommunications are
critical. They mean job opportunities. Overall the 1999 rural
development budget will support about $9.8 billion in loans,
loan guarantees, grants, and technical assistance, which is
$300 million more than 1998 and $1.8 billion more than in 1997,
largely due to reduced and stable interest rates. The budget
supports the administration's Water 2000 initiative, homeowner
initiative, and maintains rural rental assistance to low-income
families. I will not read all of the statement here, but the
area of rural development is a very high priority to the
administration.
Agricultural Research
Research is critical to the future economic growth of
agriculture. Driven by publicly funded research, agricultural
productivity has grown at an annual rate of 1.8 percent over
the last 45 years. There have been all sorts of breakthroughs
that I do not need to go into here. The budget increases the
work we are supporting to identify and develop a better
understanding of genes that are important to agricultural
production and crop biodiversity. We also intend to increase
our competitiveness in the global market, production
efficiency, and ultimately our farmers' profitability through
our research.
The budget emphasizes improving sustainable management
systems to enhance the economic competitiveness of small farm
producers and protecting the environment.
Marketing is more important to American agriculture than
ever before, particularly protecting the health and well-being
of American agriculture at home and protecting us from
unfounded sanitary and phytosanitary barriers to trade. For
example, we are making excellent progress in combating many
plant and animal pest and disease programs such as brucellosis.
There are other budget increases that are useful in this
area, in the area of pest detection, disease prevention, and
border inspection. We have several proposals that will help
farmers and ranchers stay competitive in an increasingly
concentrated market, especially the meat and poultry markets.
Our budget requests funds to carry out the organic
certification program and broaden the pesticide data program.
National Food Safety Initiative
In connection with our goal for a healthy, safe, and
affordable food supply, the USDA budget includes $46 million,
roughly one-half of a Governmentwide increase of $101 million,
for the President's national food safety initiative. This
initiative will focus on enhancing the safety of imported and
domestic fruits and vegetables, food safety education,
modernizing our meat and poultry inspection systems, and
developing information and tools to control a greater range of
potential food safety hazards.
We are on our way to modernizing our 90-year-old meat and
poultry inspection system. On January 26, 1998, or less than 2
weeks ago, 300 of the largest slaughter and poultry
establishments, producing about 92 percent of all meat and
poultry, implemented the HACCP system. These firms are using
the latest science to identify and correct food safety hazards
setting the framework for change.
For 1999 we proposed boosting food safety spending by $34
million to a program level of $710 million. The resources will
allow us to maintain a frontline inspection work force
providing rigorous science-based inspection while working to
involve a greater range of food safety risks from farm to
table. As you know, we have proposed user fees in this area. I
am well aware of the controversial nature of them. I dealt with
them when I was in Congress.
My point is that, as I go around the country and talk to
people, the food safety issue is perhaps the dominant issue
that people talk to me about everywhere. So, in order to do
what we need to do in the food safety area, we have proposed
the user fees because without them we will have to either make
major cuts in those areas or major cuts in a lot of other
program areas. Funding for research and conservation needs to
be maintained but we also have to keep our frontline meat
inspectors on the ground.
Obviously, we are going to work with you to deal with this
issue the best way we possibly can, but given the fact that the
budget is going down, and we have a balanced budget, the old
expression is something has got to give and I do not want the
confidence that the public has in our food safety system
threatened.
I will have to tell you this. We have the safest food
supply in the world, bar none, but that is dependent on
consumer confidence. People in the industry also understand
that safe food sells. So, what we are doing with this is trying
to ensure that we have the infrastructure in order to keep that
public confidence as high as possible.
Food Assistance
In addition to that, not everybody has the advantages in
this society. Low-income people still need food assistance. The
budget requests full funding for the food stamps, child
nutrition, and WIC programs to ensure that that takes place.
With respect to food stamps, we propose to restore food
stamps to legal alien families, which include children,
elderly, and disabled persons.
For WIC, we are requesting the funds to support 7.5 million
recipients while we work to bring down the program's package
costs. There are several other areas.
One area I would like to tell you about is our budget
proposal for a new $20 million food recovery and gleaning
initiative to provide community-based grants to help
neighborhoods recover edible food and use it to alleviate
hunger. The research we have done documents that 25 percent of
the food produced every day in America is thrown away. Twenty-
five percent of food that is prepared in this country is
uneaten and thrown away, and a lot of that food can go to feed
hungry people and to supplement the Food Stamp Program and
other Government programs. These initiatives I think will help.
Conservation
In the area of conservation, obviously we need to continue
to have a vital, sustainable natural resource base. One of my
top priorities is implementing the farm bill's conservation
programs together with our State and local partners. To do so,
USDA needs $825 million for the Natural Resources Conservation
Service. That will help us to contribute to the
administration's clean water initiative which will improve
water quality in certain highly vulnerable watersheds that are
impaired by agriculture.
I will have to tell you that those programs are much more
farmer friendly than they have ever been in the past. Working
cooperatively with State conservation districts, with RC&D's,
and with other public and private bodies, most folks now
believe that we have gone to a carrot approach rather than a
stick approach when it comes to farmer-led conservation
measures around the country.
We are making outstanding progress in our land conservation
and cost share programs funded through the CCC.
On the CRP, we held our first signup last year under new
environmentally focused rules. We have just completed another
signup. The response has been impressive. There were mistakes
made, but by and large we have tried to correct those mistakes
as they have come to our attention. I mentioned that I was out
in the Pacific Northwest correcting one of those mistakes in
Senator Gorton's area. It had to deal with the environmental
benefit index as it related to air quality.
I am pleased to report that in 1 year we have doubled the
environmental benefits of CRP while at the same time saving
taxpayers hundreds of millions of dollars, and we are doing
similar things with the wetlands reserve program.
Another popular and vital conservation program, established
by the last farm bill and funded through the CCC, is the
Environmental Quality Incentives Program. The budget includes a
$300 million amount for EQIP, a one-third increase over 1998
funding, which is critical to support the clean water
initiatives. We also intend to manage EQIP to respond to
recommendations made by the Civil Rights Action Team to
increase participation by minority and low-income farmers and
other underserved clientele.
Customer Service and Program Delivery
In the area of customer service and program delivery, we
place high priority in this area. We are streamlining. We
intend to go down to approximately 2,550 service centers. Right
now we are about 2,700. And, we are collocating the county-
based agencies into one-stop USDA centers. We are also
consolidating the administrative functions that support the
county-based agencies. Many times you would have one office in
a county with an NRCS xerox machine, an FSA xerox machine, and
a rural development xerox machine. I use that colloquially to
talk about the fact that we have operated our farmer-based
decentralized systems as separate units for far too long from
an administrative perspective. We are developing a common
administrative and computing environment for these agencies to
achieve further efficiencies, and we have contracted with an
independent consultant to examine what further steps, if any,
we can take to improve the efficiency of our farm and rural
program delivery system. And, that study is to be completed
this year.
Office of the Inspector General
Our budget also includes an additional $22 million to
support a Presidential initiative for our inspector general to
crack down on abuse in our nutrition, rural development, and
other programs. Our inspector general has had great success
with a program called Operation Talon dealing with people who
are fugitives who are getting food stamps. That led the effort
for prosecutions all over the United States. This is another
very high priority for us. I might say that we have one of the
most aggressive and energetic inspector general operations of
any Federal agency.
So, I think to summarize in terms of our goal, to repeat
it, because Senator Burns is here, our prime function is to
protect the stability and security of America's food production
capabilities. The budget is falling largely because there are
fewer people on food stamps and the AMTA payment provisions of
the Freedom to Farm bill have called for yearly reductions in
farm program spending.
At the same time, we will fund whatever we need to fund to
protect our markets overseas because we believe that is the
ultimate safety net that American agriculture has, and in
addition to that, we need a strong and aggressive crop
insurance program to provide the safety net when disasters hit.
We also believe that funding for conservation programs and
our food safety and security programs are necessary for the
future of American agriculture as well.
So, I thank you very much, Mr. Chairman, for bearing with
me during this conversation. I would be glad to answer any
questions that you have.
Prepared Statement
Senator Cochran. Thank you very much, Mr. Secretary. 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 1999 budget for the Department of Agriculture
(USDA).
With the passage of the Balanced Budget Act of 1997 and the
President's commitment to the first balanced budget in 30 years, we
faced very tight funding constraints in developing the 1999 proposals
for USDA. At the same time, our strategic plan contains goals and
objectives we must achieve to meet the needs of the people we serve.
These fundamental priorities include: increasing economic opportunities
for family farms and for rural communities and expanding trade;
providing more tools for the wise stewardship of our natural resources;
feeding more needy children and families and raising consumer
confidence in the safety of the Nation's food supply; and providing
effective customer services and efficient program delivery and
improving the Department's civil rights performance.
The discipline we imposed on the 1999 budget forced us to make
difficult decisions to restrain, reduce, and redirect resources to
focus on the priority goals we established. We have had to propose new
user fees and contain and absorb certain costs. We thoroughly
scrutinized our employment and business practices. As a part of the
Department's continuing reorganization, we are implementing a field
office streamlining plan which collocates the county-based agencies in
one-stop USDA Service Centers and that will consolidate administrative
support functions for the county-based agencies. We are developing a
common computing environment for these agencies to optimize the use of
data and equipment and improve our efficiencies across the agencies.
The Department has also entered into a contract with an independent
consultant to examine what further steps, if any, we can take to
improve the efficiency of our farm and rural program delivery system.
That study will be completed by September 1, 1998. These efforts,
combined with program reductions and reforms taken in prior years, have
made a significant contribution to the President's balanced budget
submission to the Congress.
In addition to the improvements and strengthening in the economy,
several factors account for the projected 14 percent reduction in our
budget--from $63 million in 1993 to a projected $54 million for 1999.
Farm programs are more market oriented today, significantly lowering
outlays. The strong economy and welfare reform lowered participation in
our food assistance programs. Declining interest rates have led to
large savings in rural credit programs and the shift to user fees in
certain programs has contributed to deficit reductions. Over this
period USDA employment will be reduced by over 22,000 staff years
through our reorganization and streamlining efforts.
The President's balanced budget plan for 1999 contains a number of
new governmentwide initiatives that include participation of USDA
agencies, including:
--A Food Safety initiative for improving the Federal food inspection
system from farm-to-table, through increased inspection,
expanded research and consumer education, better food
surveillance, and improved Federal, State, and local
coordination.
--A Clean Water and Watershed Restoration initiative to achieve
further progress in solving water quality problems and
enhancing the environmental quality of agricultural and forest
lands.
--A Land, Water and Facility Restoration initiative so that the
Forest Service can better protect wildlife habitat, maintain
recreation sites and preserve the national forests.
--A Climate Change Technology initiative to support research aimed at
investigating mitigation tactics, including production
practices which sequester greenhouse gases, to minimize the
adverse effects of agricultural production practices on climate
change.
--A Food Gleaning initiative to increase food recovery by one-third
above current levels by the year 2000, providing a significant
source of food to food banks and other non-profit institutions
to help feed hungry people.
--A Law Enforcement initiative to provide funds and resources to
crack down on fraud and abuse in the Food Stamp and other
programs. This supports the President's commitment to assure
that program benefits go only to those who are in need and
eligible.
The President's budget proposes $57.4 billion in budget authority
for 1999 for USDA compared to a current estimate of $55.9 billion for
1998. Budget authority for discretionary spending, which accounts for
about 25 percent of USDA total budget authority, declines from $15.6
billion in 1998 to $15.2 billion in 1999. The request before this
Committee for discretionary budget authority is $12.6 billion.
The budget also proposes legislation that affects the discretionary
request before the Committee, including user fees for the Food Safety
and Inspection Service; the Animal and Plant Health Inspection Service;
the Grain Inspection, Packers and Stockyards Administration; the Farm
Service Agency; and the Natural Resources Conservation Service. The
budget also proposes shifting sales commissions for the crop insurance
program from discretionary to mandatory spending. We will send this
proposed legislation to the authorizing committees. If the entire
package is enacted, it would lower the discretionary request to this
Committee by $829 million.
The budget also proposes legislative changes in some mandatory
programs, including restoring food stamp benefits to most legal aliens,
reducing the Federal share of administrative funding provided to the
States in the Food Stamp Program to prevent cost shifting, reducing the
cost of the crop insurance program, capping cotton step-2 payments,
providing a flexible multi-year cap for the Export Enhancement Program,
and increasing the Environmental Quality Incentives Program, Rural
Empowerment Zones, and a change in the formula for Forest Service
payments to States.
Before addressing specifics of the budget, I want to emphasize the
importance that the President has placed on our civil rights work at
USDA; the priority is reflected in the budget. The President's budget
calls for the largest increase in civil rights funding in two decades.
For USDA, that means providing funding to carry out the recommendations
of the Civil Rights Action Team (CRAT) as well as the recommendations
of the National Commission on Small Farms which support our civil
rights agenda. In total, we are requesting about $250 million for civil
rights-related activities that would increase farm ownership and
operating loans; increase loans and grants to construct housing for the
Nation's farmworkers; support an integrated research, extension, and
education competitive grants program for new technology adoption and
transfer to small farms; eliminate disparities in funding and enhance
the Department's cooperative efforts with institutions of higher
education that are primarily devoted to the needs of minority students;
and improve outreach and technical assistance to assure that all
customers have full access to USDA programs and services, and to
provide assistance to socially disadvantaged farmers and ranchers
through a substantial increase in the Section 2501 outreach program.
Also, we are requesting increased funds for more timely processing and
resolution of complaints, as well as efforts to prevent disputes and
discrimination.
farm and foreign agricultural services
The mission of the Farm and Foreign Agricultural Services area is
to secure the long-term vitality and global competitiveness of American
agriculture. Implementation of planting flexibility and other
provisions of the Federal Agriculture Improvement and Reform Act of
1996 (the 1996 Act), in conjunction with strong export programs and
sound trade policy, are helping us reach these goals. However, we
remain concerned about the adequacy of the safety net for our producers
and have been working to expand and improve programs which help
producers manage their risk. We are also working hard to assure
improved assistance and expanded opportunities for minority and limited
resource producers in our farm programs.
Maintenance of an effective economic safety net for our farmers and
ranchers is a major priority for our plans in 1999, particularly in our
proposals for risk management. Last year we proposed legislation to
make some modest improvements in the safety net which were not acted
upon by the Congress. The proposed improvements included, among other
things, provisions to permit extension of the terms of marketing
assistance loans during periods of extraordinary market disruption; and
the expansion of revenue insurance. These proposals deserve further
consideration by the Congress.
The challenge of providing improved customer service with improved
efficiency as resource constraints are tightened also remains a major
focus of our efforts, particularly in the Farm Service Agency (FSA) and
the other county-based farm conservation and rural development
agencies. The independent study being conducted by a private consulting
firm during 1998 of our county-based agencies will help us better
assess county office workload and identify options to gain efficiencies
while meeting customer needs.
Farm Service Agency
The consolidation of staffs and county offices, establishment of a
common computing environment, and the convergence of administrative
services at all levels of the county-based agencies, continue to be the
focus of FSA streamlining efforts. FSA staffing has changed
dramatically as a result of these streamlining efforts and workload
changes brought about by the 1996 Act. FSA Federal and county staffing
is projected to be down by over 500 staff years, from 17,267 staff
years at the end of 1997 to 16,744 staff years at the end of 1998 as a
result of buyouts, Reductions-In-Force (RIF's), and attrition. The 1999
budget for FSA salaries and expenses proposes a program level of $976
million, including $30 million earmarked for the establishment of a
common computing environment in the service centers of the county-based
agencies. The budget also incorporates a proposed increase in user fees
to help offset some of the costs of providing information and other
services to FSA clients. It is estimated that the budget will support a
staff year level about 7 percent below 1998 levels.
Farm Loan Programs
Access to credit is one of the most important elements of success
in farming. That point has been made in fairly dramatic fashion by
USDA's Civil Rights Action Team and by the Small Farms Commission.
Improved access to credit means more opportunities for beginning and
small farmers and, in particular, members of socially disadvantaged
groups. For that reason, the 1999 budget provides more funding for farm
loans. Farm ownership loans would be increased to $85 million in direct
loans and $425 million in loan guarantees, compared to 1998 levels of
$45 million in direct and $400 million in guarantees. In terms of
people served, this means that 3,500 beginning and small farmers will
be given an opportunity to either acquire their own farm or to save an
existing one--600 more than during 1998. About 1,000 of these farmers
will receive direct loans and the rest will receive guarantees. The
budget also provides for $2.4 billion in direct and guaranteed farm
operating loans, which maintains the 1998 level of funding and would
serve an estimated 28,000 beginning and small farmers about 12,000 of
whom will receive direct loans.
The share of direct loans made at the reduced interest rate for
limited resource borrowers would be continued at current levels about
61 percent for farm ownership loans and about 40 percent for farm
operating loans. The budget also provides funding for emergency loans,
credit sales, the boll weevil eradication program and credit for Native
Americans.
The Administration will also be proposing emergency legislation to
modify the 1996 Act prohibition on loans to borrowers who received debt
forgiveness. It is unfair to deny these borrowers a second chance.
Commodity Credit Corporation
Changes over the last decade in commodity, disaster, and
conservation programs have dramatically changed the level, mix, and
variability of the Commodity Credit Corporation (CCC) outlays. CCC
outlays are projected to total $8.6 billion in 1998 and $8.4 billion in
1999 and are projected to decline to a total of about $7.0 billion in
2003. Since the late 1980's, commodity program spending has declined
dramatically, spending for ad hoc crop disaster programs has been
virtually eliminated, and spending for conservation programs has
increased and has become a major portion of CCC's outlays. Commodity
program outlays account for about two-thirds of total CCC outlays in
1999, and they largely reflect the pattern of production flexibility
contract (PFC) payments set in the 1996 Act. Outlays for the commodity
programs are projected to decline from $6.0 billion in 1998 to $5.7
billion in 1999 and to $4.0 billion in 2003.
Conservation program outlays account for almost one-fourth of the
CCC expenditures in 1999. The 1996 Act authorized direct CCC funding
for the Conservation Reserve Program (CRP) administered by FSA and
several new conservation programs administered by the Natural Resources
Conservation Service (NRCS). CRP provides landowners annual payments
and half the cost of establishing a conserving cover in exchange for
retiring environmentally sensitive land from production for 10 to 15
years. The 1996 Act authorized the program through 2002 and set maximum
enrollment in the program at 36.4 million acres. Current enrollment
totaled about 28 million acres at the end of calendar year 1997. The
budget assumes that the acreage goal will be achieved gradually. Other
conservation programs funded by CCC but administered by NRCS include
the Wetlands Reserve Program and the Environmental Quality Incentives
Program (EQIP), which along with the Conservation Farm Option give
producers incentives to create long-term comprehensive farm plans. The
budget proposes to help meet critical water quality goals by increasing
CCC spending for EQIP by $100 million in 1999 and $350 million between
1999 and 2003. Other new programs funded by CCC include the Wildlife
Habitat Incentives Program which provides cost-share assistance to
landowners to implement management practices improving wildlife
habitat, and the Farmland Protection Program which provides for the
purchase of easements limiting nonagricultural uses on prime and unique
farmland.
Risk Management Agency
Implementation of the 1994 reform of the crop insurance program has
been a major achievement for American agriculture. It has alleviated
the need for ad hoc disaster assistance. About 63 percent of the
insurable acreage nationwide is covered by the program, about 22
percent at the catastrophic (CAT) level of coverage, which is fully
subsidized by the Government, and 41 percent at higher levels of
coverage for which producers pay a portion of the premium. Producers
may buy-up to 75 percent of normal production and 100 percent of
expected market price or purchase a relatively new product, Crop
Revenue Coverage (CRC), which provides protection against price
declines even without a production loss. CRC already accounts for about
16 percent of the business.
While the reform legislation allowed for a dual delivery system
with FSA providing CAT coverage and private insurance companies
providing both CAT and buy-up coverage, the private insurance industry
has demonstrated that it can handle the job alone and has been given
that opportunity beginning in 1998.
There are 17 private insurance companies of various sizes
participating in the program. Sales agents work for these companies,
mostly on a commission basis, while loss adjusters are usually
independent contractors. Companies sell policies that the Government
reinsures. However, the companies are required to retain some risk of
loss on the policies they sell, for which they may earn underwriting
gains or incur underwriting losses.
Weather has played a big role in the program performance over the
last few years. In 1997, the weather was particularly good and
indications are that the program had a very favorable loss ratio of
less than .80, which is well below the statutory requirement of 1.10.
Consequently, the companies received underwriting gains based on the
risk they retained. Under normal conditions, the amount of underwriting
gains received by companies would have been far less.
The 1999 budget provides full funding of the crop insurance
program, but proposes legislative changes to accommodate a shift in
sales commissions for agents from discretionary to mandatory spending.
This shift would consolidate all program spending into a single account
and eliminate the possibility of the program being restricted by a
limited appropriation of discretionary funds for sales commissions. In
effect, the proposal is intended to fix a problem that dates back to
the 1994 legislative reform of the program which divided the funding
for company expense reimbursements between the mandatory and
discretionary budgets for the sole purpose of meeting technical scoring
requirements.
Because the shift to mandatory spending will require PAYGO offsets,
the Administration will also propose various program changes, including
a reduction in the loss ratio, a limit on CAT coverage to $100,000, and
other changes. These changes are expected to take effect in 2000
because other program offsets are available for 1999.
It should also be noted that the Risk Management Agency is charged
with the responsibility for risk management education. About $5 million
is budgeted in the agency's mandatory account for this activity in
1999. The Cooperative State Research, Education and Extension Service
and the Commodity Futures Trading Commission are assisting in the
education program. This is expected to be an important part of helping
producers adjust to the changes in price and income support programs
that came about in the 1996 Act.
International Trade and Export Programs
The performance of U.S. agricultural exports was again robust in
1997, reaching the second highest level ever at $57.3 billion. While
this was somewhat below the all-time high achieved in 1996, many
positive developments did occur. It was the third year running in which
agricultural exports topped $50 billion, and new export records were
established for both intermediate and consumer-oriented products. And,
for the 37th consecutive year; U.S. agriculture made a positive
contribution to the Nation's trade balance, with exports exceeding
imports by $21.5 billion.
The value of agricultural exports to the Nation's economy is very
significant, but for the agricultural sector, exports are critical.
Today, U.S. agriculture's reliance on exports as measured by gross
receipts is approaching 30 percent, a level which is twice as high as
for the U.S. economy as a whole. With improving productivity and slow
growth in domestic demand, the future prosperity of our farmers and
ranchers is increasingly linked to strong export markets. Recent
changes in domestic farm policy also have reinforced the importance of
global markets and have made export performance a critical component of
the farm safety net.
For these reasons, USDA's 5-year strategic plan has established the
expansion of global market opportunities for U.S. agricultural
producers as one of the Department's primary objectives. With this
mandate, we are continuing our aggressive efforts of recent years to
bolster export competitiveness, open new markets, and expand exports.
The 1999 budget request supports these efforts by providing a total
program level of nearly $6.4 billion for the Department's trade and
export promotion activities.
The CCC export credit guarantee programs are the largest of the
Department's export promotion activities. These programs make an
important contribution to meeting our export expansion objective by
facilitating sales of U.S. agricultural products to buyers in markets
where credit is necessary to maintain or increase sales. The value of
these programs is being demonstrated this year. In recent months, we
have made available to countries in southeast Asia and the Republic of
Korea a total of $2 billion of export credit guarantees. This action is
helping these countries tackle their import financing problems and
allows them to continue to purchase agricultural products from the
United States. By doing so, continued access to these important Asian
markets will be ensured.
The 1999 budget adopts a new approach for presenting the annual
program levels and budget estimates for the guarantee programs. These
estimates will now reflect the actual level of sales expected to be
registered under the programs for which CCC guarantees will be issued.
This change will result in more realistic estimates of the costs of
these programs and will increase the accuracy of the CCC budget
estimates. The actual level of guarantees to be issued during the
course of the year will not be limited by the budget estimates but will
instead be determined by market conditions and program demand.
Based on this new approach, the budget projects a total program
level for CCC export credit guarantees of $5 billion in 1998 and $4.6
billion in 1999. These levels are substantially above sales
registrations in 1997 and prior years, due primarily to the recent
boost in programming to Asian countries.
The Export Enhancement Program (EEP) has seen very little activity
during the past 2\1/2\ years because of world commodity supply and
competitive conditions. Nevertheless, the program remains in place and
can be reactivated whenever market conditions warrant. To ensure our
ability to do so, the budget provides a program level of up to $320
million for EEP in 1999, an increase of $170 million above this year's
level.
In conjunction with the budget, we will be submitting proposed
legislation to provide a flexible, multi-year program level
authorization for EEP, which will apply to the 1999 to 2003 period. The
proposal will authorize a total program level of $1.2 billion for EEP
over the 5-year period and will provide administrative discretion to
the Department to determine the annual level of funding for EEP. Any
funding that is not used in 1 year will remain available for use in
subsequent years. However, the annual level of programming will
continue to be subject to the Uruguay Round export subsidy reduction
commitments. The proposal would generate approximately $1.4 billion in
savings during the 5-year period that will help to offset increased
funding proposed in the budget for other mandatory programs.
The pace of programming under our other subsidy program, the Dairy
Export Incentive Program (DEIP), has increased significantly during the
past year. This has helped to move additional dairy products into
export markets and modify price fluctuations here at home. The budget
projects a somewhat reduced level of programming under DEIP in 1999
because of a projected tightening in the domestic supply situation;
however, the actual level of programming will be determined by market
conditions at that time.
The budget continues funding for the Market Access Program (MAP) at
its maximum authorized funding level of $90 million. In recent years,
the Department has taken steps to make MAP more targeted and friendly
to small businesses. These efforts continue and, in 1998, for the first
time export promotion assistance will be provided to small companies or
cooperatives only.
The Public Law 480 foreign food assistance programs remain a
mainstay of efforts to assist developing countries meet their food
import needs and develop long-term trading relationships. For 1999, the
budget requests a total program level of $979 million for Public Law
480 programs, which is expected to provide 2.8 million metric tons of
commodity assistance to recipient countries.
For the Foreign Agricultural Service (FAS), the budget provides
direct appropriated funding of $146 million, an increase of $6 million
above the 1998 level. The budget includes a proposal to establish a
buying power maintenance fund to assist FAS manage unanticipated
changes in the costs of its overseas operations. These changes result
from exchange rate losses or gains and overseas inflation which are
difficult to predict when budget estimates are prepared. Under the
proposal, a revolving fund would be established which can be drawn upon
to meet higher costs resulting from exchange rate losses.
Alternatively, exchange rate gains would be credited to the account and
would be available for use to meet future cost increases. This proposal
responds to a request of the Conference Committee on the 1998
Agriculture Appropriations Bill.
The budget also proposes that certain FAS Information Resources
Management costs, including the operating costs of the CCC Computer
Facility, will no longer be funded through a reimbursable agreement
with CCC. Instead, these costs will now be funded through FAS
appropriations. With this change, this funding will shift from
mandatory to discretionary spending and will no longer be subject to
the annual limitation on CCC reimbursable agreements established by the
1996 Act.
rural development
Rural development creates opportunities for people who live in
rural America--the kind of housing they occupy; access to such
amenities as running water, electricity, telecommunications; and the
strengthening of local economic activity that affect their prospects
for finding a job that will allow them to earn enough income to have a
decent standard of living. The Department's rural development programs
help rural residents achieve these benefits by providing financial
assistance and by working with rural communities through partnerships,
empowerment and technical assistance. Under this Administration,
special attention has been given to serving those rural communities
that have been underserved in the past--where poverty is persistent and
unemployment remains high.
Overall, the 1999 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 supports the Administration's
National Home Ownership initiative to increase home ownership, and
maintains rural rental assistance for low-income families and
individuals, many of whom are elderly women. It continues programs that
provide infrastructure for meeting electric, telecommunications and a
variety of other community needs. Further, it encourages business and
industry activity in rural areas through loan guarantees that create or
save jobs.
About $129 million of the rural development program funding would
be targeted to Empowerment Zones and Enterprise Communities (EZ/EC).
The EZ/EC initiative reaches communities with the most persistent
poverty and other economic adversity, which have developed strategic
plans for development. In addition, the budget proposes to provide $20
million annually in mandatory spending to fund additional grants for 5
new rural Empowerment Zones.
About $715 million of the $2.2 billion in budget authority included
in the 1999 budget for USDA's rural development programs would be
funded under the provisions of the Rural Community Advancement Program
(RCAP). RCAP was enacted in the 1996 Act. It provides flexibility for
transferring funds among programs in order to meet local priorities. It
also provides for the development of strategic plans to help guide the
development process. The Department's proposal assumes the full
flexibility to transfer funds among accounts as authorized in the 1996
Act, which is an important tool in tailoring assistance to meet the
unique needs of each rural community.
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 water and waste disposal programs are one of the
Administration's highest priorities. The budget provides $500 million
in grants, essentially the same level as provided in 1998. In addition,
the budget proposes a $73 million increase in the direct loan program.
This level of funding 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.
The 1999 budget provides for $1.65 billion in electric and
telecommunications loans, about $55 million above 1998; however, there
will be a shift in how this assistance will be provided in order to
meet growing demand. The budget proposes greater reliance on direct
Treasury rate and Federal Financing Bank insured loans. Legislation
will be proposed to authorize direct Treasury rate loans under the
electric program. This authority is currently available under the
telecommunications program.
The budget calls for $175 million in loans to be made by the Rural
Telephone Bank, the same as 1998. The Administration continues to work
with the industry towards its goal of privatizing the bank. In 1999,
the bank is proposed to become a ``Performance Based Organization,'' in
order to establish its commercial viability prior to being fully
privatized in 10 years or less.
With regard to the distance learning and medical link program, the
1999 budget includes about $15 million for grants and $150 million in
loans at the Treasury rate, requiring a total budget authority of $15.2
million. In 1998, Congress provided a budget authority of $12.5 million
which the Department converted into a grant program of about $12.5
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.
Rural Housing Service
USDA's rural housing programs have been important in improving the
availability and quality of housing in rural America since the 1970's.
The programs reach those who cannot otherwise afford decent, safe, and
sanitary housing, and those who cannot obtain credit from other sources
to achieve home ownership.
The 1999 budget supports $4.4 billion in rural housing loans and
loan guarantees, an increase of about $200 million over 1998. This
includes $1 billion in direct loans and $3.1 billion in guaranteed
loans for single family housing. Direct loans are available only to
low-income families, low-income meaning less than 80 percent of area
median income. Guaranteed loans are available to families up to 115
percent of area median income. Further, the Administration will propose
legislation to make guaranteed loans available for refinancing existing
direct loans--$100 million is included in the $3.1 billion overall
funding level for this purpose.
For rural rental housing, the budget includes $100 million in
direct loans and $150 million in guaranteed loans. These levels
represent a reduction of $29 million in direct loans from the amount
available for 1998, but a significant increase in guaranteed loans,
which were first introduced in 1997 and are limited to about $20
million in 1998. The guaranteed loan program has operated on a pilot
basis to date but has shown great potential, particularly where it can
be used to leverage other Federal, State and local or private
financing. It serves a higher income clientele than the direct loan
program, yet reaches some lower income families and individuals, and
operates at far less cost than the direct loan program.
USDA currently has a portfolio of about 18,000 rural rental housing
projects which contain about 470,000 units. About one-half of these
units receive rental assistance payments. Tenants in units receiving
rental assistance pay 30 percent of their income for rent. Rental
assistance, provided through 5-year contracts, makes up the difference
between what the low-income tenant pays and the rent required for the
project owner to meet debt servicing requirements. The average income
of tenants receiving rental assistance payments is $7,300. In 1999,
contracts on an estimated 37,500 units are expected to expire. The
budget provides for the renewal of these contracts and a limited number
of contracts on additional units, and includes full funding of all new
farm labor housing projects. No rental assistance is provided for
projects financed with guaranteed loans.
The 1999 budget also provides for $97.1 million in loans and $72.9
million in grants for various specific purpose housing programs. This
includes $32 million in loans and $13 million in grants for farm labor
housing projects, an increase of $17 million in loans and $3 million in
grants over last year's levels. This would allow the agency to finance
658 new units and rehabilitate 199 units of existing housing for farm
workers. The increase is proposed as part of USDA's CRAT report.
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 in rural areas remain adequately funded.
The business and industry (B&I) loan program is one of our best
means to help foster the growth of rural businesses including
cooperatives. The cooperative form of business is seeing a resurgence
throughout rural America, agricultural producers are embracing
cooperatives for a variety of purposes including: value-added
processing, to return more of the value of farm products to producers;
as a safety net, to protect against price fluctuations; and for the
traditional use of purchasing farm supplies. Many ``new-wave''
cooperatives are being organized and operated in a manner which is
quite different from the historic cooperative principles. The 1996 Act
helped to improve the effectiveness of the B&I loan program in
developing cooperative businesses by authorizing loan guarantees to
assist farmers and ranchers to purchase start-up capital stock in
processing cooperatives where the cooperative will process the
commodity being produced by the farmer. The 1999 budget maintains the
direct loan program at $50 million, while the guaranteed loan program
would be funded at $1 billion, including $200 million that will be
directed to cooperative-owned businesses. Further, using the
flexibility available under RCAP, the Department expects to fund a $1
billion guaranteed loan program during the current fiscal year.
Our investments in cooperative businesses, however, will not
provide the expected returns unless there also is an investment in
understanding the ``evolving'' cooperative form of business. Therefore,
the budget also proposes an increase of $2 million in funding for
research on cooperatives. These funds will be used to form cooperative
agreements primarily with State departments of agriculture,
universities, and colleges to conduct research on rural cooperatives.
This funding will help provide vitally needed research and information
at a time when available Federal resources in this area are dwindling.
Through the intermediary relending program the Department provides
low interest (1 percent) loans to a variety of public and private
organizations who, in turn, provide loans to finance business
facilities and community development projects in their local areas. By
providing assistance through local organizations the Department ensures
that funding is used on the basis of local priorities. The budget
maintains support for the intermediary relending program at $35
million, the same level as 1998.
Rural business enterprise grants may be provided to public bodies,
Indian tribes, and nonprofit corporations to finance and facilitate
development of small and emerging businesses in rural areas. The budget
provides $40 million for rural business enterprise grants in 1999, a
small increase from 1998.
The budget provides for an increase in the Alternative Agricultural
Research and Commercialization (AARC) program from $7 million in 1998
to $10 million in 1999. This program is particularly useful in meeting
the needs for capital to commercialize innovative value-added products
from agricultural and forestry materials and animal by-products.
Salaries and Expenses
The Department's rural development programs are delivered through
about 800 field offices, located within USDA Service Centers. The
delivery system has been noticeably improved by the introduction in
1997 of a centralized system for servicing single family housing loans,
which will save taxpayers $250 million through 2000 and allowed staff
resources to be redirected to other urgent needs. Further, the rural
development programs are included in our administrative convergence
efforts for county-based agencies.
The 1999 budget includes $529 million for the administration of
USDA's rural development programs including AARC. This amount includes
funding for an estimated 7,138 staff years, which is a decrease of
about 150 below 1998.
food, nutrition and consumer services
USDA's farm and food safety programs help ensure a safe and
affordable food supply, while the nutrition assistance programs help to
ensure that low-income families are adequately nourished. The Food
Stamp, Child Nutrition and WIC (the Special Supplemental Nutrition
Program for Women, Infants and Children) Programs are the primary
programs for carrying out the Nation's food assistance policy. The 1999
budget request combines better management with increased funding to
advance the Administration's war on hunger and demonstrate our
commitment to improve the nutritional levels of low-income households.
The Food Stamp Program will be funded at a program level of $23.9
billion in 1999. The Administration proposes to restore Food Stamp
benefits for vulnerable groups of legal immigrants. Upon signing the
1996 welfare law, the President pledged to work toward reversing the
harsh, unnecessary cuts in benefits to legal immigrants that had
nothing to do with moving people from welfare to work. The President
believes that legal immigrants should have the same opportunity, and
bear the same responsibility, as other members of society. The 1999
budget would provide Food Stamp benefits to 730,000 legal immigrants at
a cost of $535 million in 1999 and $2.5 billion over 5 years. The
proposal expands access to Food Stamps for families with children,
people with disabilities, the elderly, and refugees and asylees.
Legislation will also be proposed to address the allocation of
administrative costs between the Temporary Assistance for Needy
Families program, Medicaid, and the Food Stamp Program which will
result in a savings of $180 million in 1999.
We are working to improve Food Stamp program integrity, and are
requesting funds to improve accuracy in the food stamp certification
process to achieve our annual performance plan of reducing error by at
least 4 percent. The annual plan calls for an increase in food stamp
overpayment collections of 5 percent a year. Achieving these goals will
reduce program costs by over $60 million. We will also continue our
integrity efforts to reduce State over-billing of State administrative
expenses and trafficking.
Child Nutrition will be funded at a program level of $9.6 billion,
an increase of $0.4 billion from the 1998 estimate. This increase is
needed for increased free meal claims in the School Lunch Program,
increased school and child care enrollment and food cost increases.
Child Nutrition Programs, both school and community based, help keep
children nourished and ready to learn. The Child Nutrition Programs are
particularly well positioned to provide nutrition assistance directly
to children from low-income families, easing the transition from
welfare to work for their parents and to support the President's
initiative to assure reading skills by the end of the 3rd grade.
With portions of the Child Nutrition Programs expiring at the end
of 1998, we will also be seeking reauthorization legislation. We want
to work with Congress to improve program integrity, reduce paperwork
burden, support the President's child care initiatives, and foster
improved dietary practices. As stated in the annual performance plan,
we will work to assist school food service management to implement
better business systems and increase the proportion of correctly
claimed free meals. And we believe we can better meet the Recommended
Daily Allowance and Dietary Guideline requirements for meals served, as
well as improve the nutritional intake of school children. School
programs are demonstrated to be a very effective way to shape the
nutritional choices not only of our children, but their families as
well.
WIC will be funded at $4.2 billion, 4 percent more than the 1998
appropriation and sufficient to support 7.5 million recipients.
Improving Federal and State program management will be a major focus of
our activities for 1999, including continued efforts to reduce the
overall cost of WIC food packages by 10 percent by 2002. WIC State
agencies have been highly successful in keeping unit food costs down
for the past decade primarily through rebates on infant formula, and
now we will be working together to expand other promising cost control
activities. We are also undertaking a series of management reforms to
improve WIC program integrity.
The Commodity Assistance Programs will be funded at $317 million,
including $96 million for the Commodity Supplemental Food Program, $45
million for the Emergency Food Assistance Program (TEFAP), $140 million
for the Nutrition Program for the Elderly, and the budget also requests
$15 million for the farmers' market program, an increase from the $12
million provided in 1998.
The budget includes $20 million for a new gleaning initiative that
would be used to support community-based grants and other incentives to
help local neighborhoods recover edible food before it is lost and use
it to help alleviate hunger and distress. With billions of pounds of
food going to waste, we anticipate that the initiative will yield large
returns in helping needy families through temporary hard times,
supplementing food stamps for some; and for others providing necessary
sustenance on an occasional basis.
The budget also requests funds for research on nutrition assistance
programs. The Administration places high priority on receiving
accurate, relevant, and timely information from research and evaluation
on the food assistance programs. To ensure that the policy and research
needs of the nutrition programs are most effectively met in the context
of administering the food programs, the Administration strongly
believes that the Food and Nutrition Service (FNS) is the appropriate
agency to oversee and administer these research funds.
For Food Program Administration, the primary funding source for
administrative management of the Nation's food assistance programs and
the Center for Nutrition Policy and Promotion, we request $111.8
million, an increase of $4.2 million. The increase will fund existing
responsibilities at current levels and provide for increased Civil
Rights effectiveness. In addition, the requested increase will improve
food assistance program management, particularly financial system
integrity. Also, funds will be used for work on year 2000 Dietary
Guidelines for Americans.
food safety
On July 25, 1996, a milestone was reached in our strategy for
making significant gains in improving the safety of America's food
supply. The final rule for Pathogen Reduction and Hazard Analysis and
Critical Control Point (HACCP) Systems for meat and poultry products
was published. This rule modernizes a 90-year old inspection system and
lays out the Administration's commitment to improve food safety and
reduce the incidence of foodborne illness by 25 percent by the year
2000 as stated in the Department's strategic plan.
On January 27, 1997, the first implementation date for the final
rule was reached. All meat and poultry establishments now have in place
standard operating procedures for sanitation to ensure they are meeting
their responsibility for preventing direct product contamination and
maintaining sanitary conditions. 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. On January 26, 1998, the 300 largest establishments,
which produce 92 percent of inspected meat and poultry products, were
required to have HACCP systems in place. In addition to HACCP systems
in place, those establishments that slaughter and those that produce
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 in all establishments.
The final rule sets an important framework for change, but is only
part of our overall strategy to improve the safety of our meat and
poultry supply. On January 25, 1997, the President announced the
National Food Safety initiative. The initiative includes seven
components for improving the Federal food inspection system from farm-
to-table. Key components include expansion of the Federal food safety
surveillance system, improved coordination between Federal, State, and
local health authorities, improved risk assessment capabilities,
increased inspection, expanded research, consumer education, and
strategic planning. The initiative reflects a high level of
coordination between agencies within USDA and the Department of Health
and Human Services. For 1999, we plan to build on these investments
which Congress supported in 1998. Continued investment in meat,
poultry, and egg products inspection activities will enhance public
health by minimizing foodborne illness from these products.
For 1999 the budget requests $623 million, an increase of $34
million over the 1998 current estimate. The additional resources will
allow the Department to address a greater range of food safety risks
from farm-to-table. At the farm level, we will work with producers to
develop voluntary measures that producers can utilize to reduce
pathogenic contamination of animals prior to presentation at the
slaughter plant. In addition, we will provide support to State
educational efforts that will improve the ability of producers to
respond to new demands that slaughter and processing establishments may
make with the implementation of HACCP. In order to improve inspection
we will provide additional technology and training to Federal
inspectors and provide special assistance to State programs to
facilitate their transformation to HACCP. Another key component of the
Department's strategy in 1999 will be targeted food safety education.
In a coordinated effort between the public and private sectors product
specific and audience specific messages that address food safety risks
relevant to such groups will be developed, evaluated, and disseminated.
The 1999 budget request proposes legislation to recover the full
cost of providing Federal meat, poultry, and egg products inspection.
We estimate that this proposal would generate approximately $573
million in new revenues in 1999 and thereafter. The budget requests
$150 million in appropriated funding to convert the program to user
fees and to maintain State inspection programs. 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 and the special assistance proposed for 1999.
Requiring the payment of user fees for Federal inspection services
would not only result in savings to the taxpayer, but would also ensure
that sufficient resources are available to provide the mandatory
inspection services needed to meet increasing industry demand. The
overall impact on prices as a result of these fees has been estimated
to be less than one cent per pound for meat, poultry, and egg products
production. The implementation of the user fee authority would be
designed to be fair and equitable, promote accountability and
efficiency, and minimize the impact on the affected industries.
natural resources and environment
The 1999 budget reflects the Department's continuing commitment to
voluntary, cooperative and well-financed conservation programs that
provide farmers with the financial and technical assistance they need
to remain competitive while not putting our vital natural resources in
jeopardy. The 1996 Act recognized the need for this balance and
dramatically expanded USDA's conservation mission by creating new or
refocused existing conservation programs. The effects of programs like
the Conservation Reserve Program and the Environmental Quality
Incentives Program (EQIP) are already being felt as we focus on
protecting mainly environmentally sensitive lands that need our
attention while returning fertile lands to production.
As farmers rely more on markets and utilize greater planting
flexibility, it becomes even more critical that we maintain and
strengthen our technical expertise in the field, where it is needed.
The Department's field office streamlining initiative has been
successfully implemented so far and has enabled NRCS to continue to
provide high quality technical assistance to farmers with
proportionately fewer management and support staff. In so doing, NRCS
has reduced headquarters staff by over 50 percent, reduced State office
staff by almost one-third, and consolidated a number of administrative
functions, which will continue under the administrative convergence
initiative for USDA's county-based agencies.
The request for appropriated funds for NRCS totals $826 million
which includes $650 million for conservation technical assistance and
water resources assistance. This will fund critical NRCS technical
support needed to meet the ambitious goals set out in the agency's
Annual Performance Plan. For example, in 1999, NRCS will protect more
than 4 million acres of cropland against excessive erosion and complete
conservation management systems on 6.4 million acres of grazing land.
The budget will also provide the resources needed by NRCS to maintain
and enhance the conservation partnership that has grown over the years
not only with conservation districts but also with farmers, ranchers,
and other private landowners. As we approach the 21st century, this
partnership becomes more vital when we consider how much more we can
accomplish for the environment when we work together.
The budget supports this continuing shift toward greater
cooperation and includes an increase of $20 million for incentive
payments to those States that are successful in increasing the level of
non-Federal support for the private-public partnership. To further
leverage the Department's conservation dollar, we are also proposing to
collect $10 million in user fees for certain types of products or
technical services that are available in the private sector or that
provide mostly private benefits. Fee structures and applications will
be developed by NRCS with direct input from State offices and other
groups or individuals that are directly affected.
The technical assistance budget also includes the NRCS contribution
to the goal of improving water quality in certain highly vulnerable
watersheds where it is impaired by agriculture. Through the proposed
interagency Clean Water and Watershed Restoration initiative, in order
to strengthen local leadership capacity, NRCS will direct $20 million
to Competitive Partnership Grants. These funds will be awarded to
locally-led institutions such as conservation districts or watershed
councils, primarily for the hiring of non-Federal watershed
coordinators who will take an active role in problem identification,
goal setting and watershed restoration planning. An additional $3
million is also provided for monitoring work to help target resources
and document baseline conditions and performance. In addition to these
appropriated funds, the budget includes an increase of $100 million for
EQIP as proposed legislation in 1999 to provide added support to the
Clean Water initiative as well as to meet other Administration
priorities in the Civil Rights area.
In the watershed planning and construction area, the Department
will continue efforts that have begun in improving how these limited
resources are allocated. Only the most cost-effective and
environmentally beneficial projects will be funded with an emphasis on
nonstructural management systems. We will also continue to examine
approved watershed plans to eliminate those projects that are now
infeasible in order to reduce the backlog of unfunded work. Beginning
in 1999, technical support for NRCS' watershed planning and
construction activities will come from the agency's conservation
technical assistance program which will reduce the number of NRCS
accounts that include payroll items. Also, we will try to help sponsors
with implementation costs by allowing some of the funds to be used to
subsidize rates of municipal loans administered by the Rural Utilities
Service. Increases are provided for additional planning activities and
for educational assistance to watershed sponsors to make them more
aware of the need to examine and possibly repair older systems.
Finally, the Department's 1999 budget continues its support of the
290 authorized Resource Conservation and Development (RC&D) areas. It
will also be sufficient to support the approximately 25 new area
authorizations that I hope to announce later this year.
research, education, and economics
The budget recommendations for the programs administered by the
four Research, Education, and Economics (REE) mission area agencies
reflect the importance of scientific, technological, and economic
knowledge on future performance of the agricultural sector in the U.S.
economy, and its competitiveness abroad. Driven by publicly funded
research in Federal laboratories, land-grant universities, and private
sector investments, agricultural productivity has grown at an annual
average rate of 1.8 percent over the past 45 years. Yet hunger and
malnutrition remain a problem for too many people in the U.S., and
throughout the world, and with the projected population growth rates,
there are moral challenges and economic opportunities to make our
agricultural system even more productive in the future. Federally-
supported agricultural research and education is needed to promote key
Departmental objectives related to expanding agricultural-based
economic and trade opportunities for all producers; ensuring a safe and
affordable food supply; and protecting natural resources for the
benefit of current and future generations.
The ability of U.S. agriculture to help meet world food
requirements relies on research and technology to enhance productivity
growth, develop a safer food supply, and address critical human
nutrition needs. Increased support for research and education will also
lead to a better understanding of how agricultural production impacts
the environment and how effective management practices can be applied
to mitigate harmful effects. Federal support for research conducted at
land-grant universities and private laboratories encourages these
institutions to invest in science and technology needed to address
critical issues at a level beyond what they could do on their own.
Publicly supported research and extension programs provide the basis to
complement much of the work carried out by the private sector.
The activities proposed under REE aim to achieve the five general
goals for research and extension set forth in the mission area
strategic plan and in the agencies' performance plans: (1) an
agricultural production 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) an agricultural system which protects
the environment; and (5) enhanced economic opportunity and quality of
life for American citizens. These goals are derived from the purpose
statement for agricultural research in the 1996 Act and the advice we
have received from users and stakeholders represented on the National
Agricultural Research, Education, and Extension, and Economics Advisory
Board.
Total funding requested for REE agencies in 1999 is about $1.8
billion. Within this total, research in ARS would be increased by $32
million, funding for Federal facilities would be reduced by $43
million, funding for university research and extension would be reduced
by $9 million, and support for economic research and agricultural
statistics would be increased by $3.1 million. ARS will be redirecting
about $35 million from a number of ongoing research projects to support
programs and initiatives of high national priority.
An increase of $6 million in the ARS budget is provided for
research efforts to reduce the incidence of emerging diseases and
exotic pests that threaten the safety of the U.S. food supply. Of the
total, $3.7 million will be used to enhance the development of
diagnostic tests, vaccines, and other immune strategies that prevent
the outbreaks and spread of exotic and zoonotic diseases, and
pathogens. The remaining $2.3 million will be used to prevent the
introduction of emerging plant diseases and pests.
Enhanced genetic diversity supported under the Department's Food
Genome initiative can reduce the likelihood of losses due to rapid
environmental changes or epidemics of pests or pathogens. An increase
of $3.5 million in the ARS budget is provided to support the continued
development and maintenance of living germplasm collections for crops,
animals, and microbes. New funding for this initiative is also proposed
in the Cooperative State Research, Education, and Extension Service
(CSREES) budget. Under proposed legislation, competitive grants
totaling $10 million will fund selected projects that enhance the
genetic knowledge base resulting in improved agricultural production
and crop biodiversity. Also, within the total CSREES National Research
Initiative (NRI) funds, $16 million is proposed for this initiative.
The budget for ARS includes an increase of $14 million for the
President's Food Safety initiative. Of the total, about $8 million is
provided for pre-harvest food safety research to design effective
control programs to prevent the spread of bacteria and parasites from
animals to humans, and to improve post-harvest handling practices for
fruits and vegetables. The remaining $6 million is provided for post-
harvest research in support of the HACCP model implemented by the Food
Safety and Inspection Service. Efforts will be focused on developing
methods to reduce the pathogens and toxins infecting our food supply,
including fruits and vegetables, and meat and poultry products. The $11
million increase proposed in the CSREES budget for food safety research
and education programs will complement the ARS efforts. Of the total
CSREES request, $3 million is proposed to assess the impact of food
handling and storage practices on selected population groups, and $3
million of the NRI funds is proposed for research to improve the
understanding of disease-causing pathogens. The remaining $5 million
targets education programs for consumers in support of HACCP
implementation for meat and poultry products.
An increase of $5.5 million in ARS will support the development of
substitute pest management technologies to replace pesticides that are
slated for elimination under the new Food Quality Protection Act (FQPA)
regulatory standards. The research will also support the Department's
commitment to encourage the adoption of Integrated Pest Management
(IPM) practices on 75 percent of the Nation's crop land by the year
2000. The CSREES budget also includes funding to support the
Departmental goal on adoption of IPM practices. Increased funding of
$15.5 million is proposed for research and extension programs on
improved IPM systems to provide pest control solutions that are
economically and environmentally sound. All IPM activities in the
Department will be coordinated by the newly established Office of Pest
Management Policy which will work closely with EPA to promote safer
pest control practices and coordinate data and analysis to support
informed decisionmaking on pesticide regulations.
The ARS budget also includes a $10.5 million increase in support of
the Presidential Initiative on Human Nutrition. The overall objective
of the human nutrition program, conducted at the six ARS Human
Nutrition Research Centers, is to enhance nutritional means to promote
optimum human health and well-being for individuals through improved
nutrition. The impact of nutrition on childhood growth and development
will be given special emphasis. Of the total request, $1.5 million is
also proposed to expand the sample size of the ongoing dietary survey
to provide more accurate and up-to-date information on food consumption
patterns for pesticide tolerance review activities mandated under FQPA.
Additional emphasis is placed on addressing pressing environmental
issues. An increase of $7 million in the ARS budget is proposed in
support of the President's Climate Change Technology Initiative. This
will also complement the climate change research undertaken by the
Forest Service. Efforts will be aimed at minimizing the adverse effects
of agricultural production practices on climate change, as well as
using agricultural practices to mitigate global warming. An additional
$2 million is provided under the President's Clean Water and Watershed
Restoration initiative to deal with the recent Pfiesteria outbreak in
the Chesapeake Bay.
ARS also plays an important role in the Administration's initiative
to restore the South Florida Everglades ecosystem. The budget includes
an increase of about $1 million to develop mechanisms to control the
spread of invasive Melaleuca trees and $4 million for construction of a
quarantine facility to house the study of biological control agents.
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.
The budget includes about $36 million for facility construction and
modernization projects, a reduction of $43 million from 1998. Of the
total, $2.5 million is provided for modernization of the Beltsville
Agricultural Research Center at Beltsville, Maryland. The request
includes $17.7 million for modernization of facilities at three ARS
Regional Research Centers. Remaining funds provide $5.6 million for the
renovation of facilities at the National Animal Disease Center at Ames,
Iowa, $3.5 million for ongoing renovation projects at the Plum Island
Animal Disease Center at Greenport, New York, and $1.4 million for the
renovation of the Grain Marketing and Production Research Center at
Manhattan, Kansas.
The budget request for CSREES is reduced by $9 million from the
1998 appropriation. Within this total, however, there are proposals for
enhanced programs to support a number of high priority research and
education projects and Presidential initiatives. Offsetting reductions
are proposed for selected research and extension formula programs.
Current law gives States broad authority to determine research program
priorities and provide funding for selected projects accordingly. In
addition, the Administration recommends legislative changes to permit
States to use up to 10 percent of the Hatch Act and Smith-Lever formula
funds for research and extension interchangeably.
The CSREES budget includes an increase of $33 million for the NRI,
bringing funding for this competitive grants program to $130 million.
NRI grants support a wide range of environmental, health, food safety,
and nutrition programs through a competitive, peer-reviewed grant
process that is open to all of the Nation's scientists. NRI encourages
breakthroughs and new approaches to problem-solving in biological
sciences that equip scientists with powerful new tools to meet
continuing and emerging challenges in agricultural and food sciences.
CSREES also proposes a $2 million increase to develop and improve
sustainable agriculture systems which require fewer off-farm inputs.
The Sustainable Agriculture Research, and Education program, which has
been funded at $8 million annually since 1995, is proposed to be funded
at $10 million. Research and education grants under this program are
awarded competitively at the regional level.
In response to the recommendations of the Civil Rights Action Team
and the National Commission on Small Farms, the CSREES budget also
contains proposals of $27 million for selected activities to strengthen
programs at minority-serving institutions and to enhance opportunities
for small farm and minority producers. The request includes $4 million
to address problems that are unique to small farm producers. Proposed
legislation which authorizes grants for integrated research, extension,
or education activities, is requested to carry out this program. Other
proposals include $12 million for the renovation and construction of
the 1890 facilities, $5 million to support additional extension agents
under the Extension Indian Reservation Program, $3.5 million to expand
the extension and teaching capacity at the 29 Native American
Institutions, and $2.5 million to enhance the education capacity at the
Hispanic Serving Institutions.
The CSREES budget includes $2 million for continued expansion of
the REE Data Information System begun in 1996. An increase of $1.2
million above the 1998 appropriated level is provided to continue
development of an interactive information system with the capability to
manage administrative, financial, and management-related data for any
research, education, extension, and economics activities. This
information will be used for GPRA reporting and evaluation
requirements.
The Economic Research Service (ERS) is an important source of
information on food and agricultural related issues, and the economic
and social science research conducted by ERS helps both policymakers
and producers make informed decisions. The budget request for ERS is
$56 million, a decrease of $16 million below the 1998 appropriated
level. The 1998 appropriation included $18 million for food program
studies previously funded within FNS. The 1999 budget reflects this
funding within FNS, which we believe is the appropriate agency to
conduct this research.
The ERS budget includes increases to support economic analysis on
three high priority issues. Funding included as part of the President's
Food Safety initiative would support work with the Centers for Disease
Control and Prevention to more accurately assess the costs of foodborne
illness and the economic consequences of efforts to improve food
safety. ERS would also collaborate on the development of risk
assessment models to identify where pathogens enter the food chain and
where control efforts would be most cost effective. A second increase
would support an assessment of the Department's role in meeting the
information needs of small farmers. More specifically, ERS will assess
how information needs vary by the type of operation, how well USDA and
private information services meet the needs of small farmers, and what
reforms and modifications in the Department's current market
information programs are needed in order to better serve small farmers.
Finally, an increase is included to support research on electric
utility deregulation in order to assess the potential impacts of
deregulation on the Department's rural utility loan programs, the
competitiveness of rural businesses and communities, and rural
households.
The National Agricultural Statistics Service (NASS) is also an
important source of information. NASS estimates and forecasts are
relied upon by a wide range of participants in the agricultural
economy, and NASS has earned and maintained an unmatched reputation for
accurate, unbiased, and timely information. The implementation of the
1996 Freedom to Farm Act has made reliable and timely information about
production, supply and prices even more critical to participants in
agricultural markets.
This year for the first time, NASS is conducting the Census of
Agriculture which has previously been conducted every 5 years by the
Department of Commerce. The census serves as the main source of local
level data about American agriculture, the only complete enumeration of
farmers, and an important benchmark for USDA's program to produce
national and State estimates. Overall, the budget for NASS reflects a
net decrease of $11 million, from $118 million to $107 million, due to
the cyclical funding needs of the Census. With the proposed NASS
budget, 98 percent of total national agricultural production will be
included in NASS' annual estimates program, an increase of 5 percent
above 1998.
The NASS budget includes increases for two follow-on surveys to the
1997 Census of Agriculture: (1) the Agriculture Economics Land
Ownership Survey (AELOS) which has historically been conducted as a
follow-on survey to the Census of Agriculture since the 1950's; and (2)
a national survey of the fast growing aquaculture industry for which
very little data is currently available. For NASS' Agricultural
Estimates program, an increase of $1.4 million is included to expand
the current pesticide use surveys supporting implementation of FQPA to
include the fast growing nursery and greenhouse industries. In addition
to providing pesticide use data for an important sector of agriculture,
this initiative also supports the CRAT recommendation to address
concerns about farmworker exposure to pesticides and the
Administration's IPM initiative.
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 $31 million in new user fees from those who directly
benefit from USDA services. New license fees are requested to recover
the cost of administering the Packers and Stockyards Act except for the
one-time restructuring costs. Expanded user fees are requested for
developing grain standards and developing methods for measuring grain
quality, and for certain animal and plant inspection activities.
The budget includes an increase of $11 million for the Agricultural
Marketing Service (AMS). Modest increases are requested 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. The proposed rule to
implement the Organic Foods Production Act was published on December
16, 1997. In order to implement this new program, we are requesting
additional funds to accredit organic certifiers. Program costs will be
recovered through user fees. Funding for the Pesticide Data Program
(PDP) was provided within AMS in 1998 after being funded through the
Environmental Protection Agency (EPA) for 1997. For 1999, program
increases are requested to initiate a rapid response capability
necessary to support EPA's data requirements under FQPA. As part of the
President's Food Safety initiative, an increase of $6.3 million is
requested to broaden the scope of PDP to include microbiological
testing of fruits and vegetables.
For the Animal and Plant Health Inspection Service (APHIS), the
budget contains $10 million in new user fees and a redirection of $12
million from APHIS appropriations for the cotton growers' share of boll
weevil eradication to a USDA loan program. This redirection in boll
weevil eradication allows an appropriations decrease without a decrease
in program operations. Program successes in brucellosis eradication
allow an $8 million redirection to higher priority activities to help
the agency comply with international trade agreements. APHIS
anticipates that all 50 States will reach brucellosis Class ``Free''
Status by the end of 1999. The budget assumes increased cost sharing
from beneficiaries of Wildlife Services activities. Also, this budget
supports activities that would increase agricultural exports. 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 Agricultural Quarantine Inspection at the borders.
APHIS will likely inspect upwards of 85 million passengers potentially
carrying banned agricultural products into the United States.
The budget requests an increase in available resources of $4.8
million to strengthen the Packers and Stockyards (P&S) 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
related to livestock and poultry marketing. Specifically the agency
would: (1) hire additional staff to monitor and analyze packer
competitive practices and the implications of structural changes 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. P&S programs
will be able to conduct upwards of 1,950 compliance investigations in
1999. Legislation will again be proposed to authorize a dealer trust
similar to that of the existing packer trust. The legislation would
require dealers to maintain trust assets covering the value of
livestock inventory and accounts receivable due from the sale of
livestock until livestock is paid for. This proposed trust would be a
valuable tool in assisting the recovery of payments for unpaid sellers.
Finally, this budget proposes to fund the one-time costs of $3.0
million associated with restructuring the P&S programs. The
restructuring will strengthen P&S programs' ability to investigate
anti-competitive practices and provide greater flexibility and
efficiency in enforcing the trade practice and payment protection
provisions of the Act.
Funding for grain inspection is maintained at the 1998 level and
GIPSA expects to officially inspect 260 million metric tons in 1999.
The budget proposes to recover the cost of standardization and methods
development through increased inspection fees.
departmental management activities
Several offices are responsible for Departmental management
activities. These offices provide leadership and administrative support
to USDA agencies. The 1999 budget provides the resources necessary for
these offices to enhance their leadership, coordination, and support
the Department's Strategic Plan Management initiatives to: ensure that
all customers and employees are treated fairly and equitably, with
dignity and respect; improve customer service by streamlining and
restructuring the county offices; create a unified system of
information technology management; and improve financial management and
reporting.
As indicated previously, this request reflects a number of priority
funding increases to carry out the recommendations contained in the
report of the Department's Civil Rights Action Team. In both 1997 and
1998, the Congress increased funding specifically for certain civil
rights activities within Departmental Administration. These activities
will continue. The 1999 budget includes an increase of $6.3 million for
civil rights and other activities. These resources are needed to meet
the Department's strategic objective of ensuring that all employees and
customers are treated fairly and equitably with dignity and respect.
The funds will support additional staffing to improve personnel
services and assistance to USDA agencies, including ethics compliance;
to improve outreach to USDA customers including support for the new
USDA Office of Outreach that will assure all customers, especially
underserved populations, have full access to USDA programs and
services; and to enhance management-employee relations that support
early resolution of employee grievances and conflicts within USDA.
The Office of the General Counsel (OGC) provides critical legal
support and advice to the Department and its agencies. An increase is
proposed in 1999 to facilitate the processing and adjudicating of civil
rights complaints by expanding the Civil Rights Division in OGC.
The Office of the Chief Information Officer provides policy
guidance, leadership, and coordination to USDA's information management
and technology investment activities. The proposed increase for 1999
includes $1.5 million for further development of the Department's
information technology capital planning and investment control programs
and the USDA information architecture. USDA is also taking a strong
management approach to effectively respond to the challenges of year
2000 remediation and we fully expect that all mission critical systems
will be compliant by no later than March 1999.
The Office of the Chief Financial Officer (OCFO) provides overall
direction and leadership in the development of modern financial
management structures and systems. In addition, the OCFO is responsible
for implementation of the Government Performance and Results Act
(GPRA). Additional funds are requested for 1999 to strengthen the
Department's capability to provide cost accounting information for
services provided, particularly with regard to implementing GPRA.
The request includes additional funds to continue the
implementation of the USDA Strategic Space Plan for the Washington
metropolitan area. This plan has been tailored to meet the needs of
USDA based on the projected staff levels at the Washington headquarters
and to provide a safe, efficient work place for our employees. The
Beltsville facility will be ready for occupancy in early 1998. The
design for the first phase of the South Building renovation was
completed and a construction contract is expected to be awarded in
February. The design for phase 2 of the modernization is now underway
and scheduled to be completed during 1998. The 1999 request includes
funds for the construction of phase 2.
The Office of the Chief Economist advises the Secretary on policies
and programs related to U.S. agriculture and rural areas, provides
objective analysis on the impacts of policy options on the agricultural
and rural economy, and participates in planning and development
programs to improve the Department's forecasts, projections, and policy
analysis capabilities. The proposed increase would be used to continue
USDA's initiative to provide enhanced weather and climate data for
agricultural areas. This initiative includes modernization of USDA's
weather and climate data acquisition equipment to allow USDA to
continue to provide data to and receive data from the National Weather
Service, and implementation of the second phase of the National
Agricultural Weather Observing Network which will manage the
collection, quality control, and dissemination of the weather and
climate data in agricultural areas.
An increase is proposed for the Office of Risk Assessment and Cost
Benefit Analysis in support of the President's Food Safety initiative.
Additional funding is also included for the Commission on 21st Century
Agriculture. The Commission is conducting a comprehensive review and
assessment of the future of production agriculture in the U.S. and the
appropriate role of the Federal Government in support of production
agriculture.
An increase is proposed for the Office of Inspector General (OIG)
including $21.7 million to support a Presidential Law Enforcement
initiative. Included in the initiative is funding for OIG to expand
activities to crack down on fraud and abuse in the food stamp and other
nutrition programs. In this area, estimates indicate that over $50
million a year in food stamps goes illegally to convicted felons and
prison inmates, and that a sizable number of retailers who accept food
stamps make money from them illegally. OIG's recent pilot effort,
Operation Talon, has been extremely successful. In the 24 metropolitan
areas around the country included in the pilot, Operation Talon
resulted in the arrest of over 2,200 fugitive felons and the savings of
millions of dollars to the U.S. Treasury. This initiative will allow
OIG to expand these efforts nationwide.
In addition to food stamp fraud, these funds will also enable OIG
to dedicate more resources to rural rental housing programs, and
disaster and health and safety programs. Health and safety of food from
production to the consumer is of special concern because of such highly
visible emergencies as contaminated strawberries in the School Lunch
Program and the tainted meat in the food distribution chain resulting
in the recall of 25 million pounds of ground beef from public
consumption.
That concludes my statement, I am looking forward to working with
the Committee on the 1999 budget so that together we can meet the needs
of our clients and at the same time balance the Federal budget.
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Office of the Inspector General
Senator Cochran. Mr. Secretary, you mentioned the Office of
Inspector General. I just wanted to bring up the fact that I
had a meeting with the inspector general in my office yesterday
to talk about some of these initiatives.
One thing which we discussed was the authority that we had
written into the agriculture appropriations bill I think in
1996 giving our OIG access to forfeited funds or funds that
were forfeited to the Government by reason of actions taken by
this office so that we would not have to appropriate as much
money to operate that office in the future. But for some reason
or another, the Department of Justice has blocked access to
those forfeited funds. I wonder if you would take it up with
the Attorney General and find out what is going on. For 2
straight years, we have had that authority in the law, but the
Department has prevented its being implemented.
Do you know anything about that problem?
Secretary Glickman. Not any more than you have just stated,
although I have talked to Mr. Viadero, as my staff has, and I
will follow it up with the Attorney General. The fact that it
is in the law--and I think the law is pretty clear--we need to
work this out.
Senator Cochran. Well, I would like to work with you if you
feel that we can be of any specific help in getting cooperation
from the Department of Justice on that subject.
Asian Financial Crisis
On another topic, the Asian financial crisis is something
that is being talked about because it concerns us in
agriculture with respect to pressure on markets for U.S.
agriculture commodities in that part of the world. Many of
these countries are major markets for U.S. agriculture
commodities such as soybeans, poultry, beef, cotton, and
others.
What is the situation with respect to our access to those
markets, whether we are going to sustain losses in sales in
that part of the world? What about the use of our Federal
programs such as GSM credit guarantees in helping to deal with
that problem?
Secretary Glickman. I dispatched a team to Asia: our Under
Secretary, Gus Schumacher, and the head of our Foreign
Agricultural Service, Lon Hatamiya. They were in virtually
every country in Asia. Their assessment is basically that the
crisis could reduce U.S. agricultural exports between 3 to 6
percent from levels where it would have been had there been no
crisis. Much as this loss will be in Korea and Indonesia, which
is expected to account for the lion's share. I do not think
they expect very much impact at all with Japan or China, Hong
Kong, or the other nations.
Now, we have just made available about 2 billion dollars'
worth of CCC export credit guarantees to the Republic of Korea
and five Southeast Asian countries. That action is helping to
ease liquidity constraints. A lot of these people could not
even get letters of credit because the banks would not issue
them in some of the areas. So, this is the highest priority for
us right now in terms of the farm sector, to make sure that
those markets remain open to us.
It is my understanding that there is no statutory limit on
the amount of GSM credits that we can provide. It is a budget
question determining how much of a loss there will be, and we
obviously have to work with OMB on this particular issue. But
it is my goal to use that provision of the law aggressively in
order to ensure that goods keep flowing.
Now, some of the other countries in the world are extremely
unhappy with our use of these export credits--Australia, for
example, I think their term for us was--how did they
characterize it? Avaricious looters. The Americans were
avaricious looters moving into a market which they believe
perhaps was traditionally their own. The fact of the matter is
the use of our credits is perfectly consistent with our
obligations under all international trade arrangements.
Again, these are not subsidies. These are Government
guaranteed bank credits, a commercial credit. But this is at
the heart of what we are doing in this particular area.
As I mentioned just briefly, the livestock industry, which
used to only export 2 or 3 percent of their product--but which
now exports up to about 10 percent--is very much affected by
this, pork and beef particularly. But the poultry industry has
been a little more on historical trend to both Hong Kong as
well as Eastern Europe.
We are going to aggressively use our credit programs.
Obviously we will have to look at the potential for taxpayers'
losses in this particular area, but I would say that is the
biggest line of defense right now for our exports. And it is
not limited by the budget estimates.
By the way, we have thought that we would use about--let's
see. What are we talking about? About $5.7 billion this year?
Mr. Dewhurst. $5 billion this year, $4.6 billion next year.
Secretary Glickman. But that is based on what we considered
the demand to be. That is not a cap. The level could go up if
their utilization--and our desire is to move as much product as
we possibly can.
Senator Cochran. I think Mr. Dewhurst responded to you that
the plan was to use up to $5 billion this year and $4.6 billion
next year. Is that your understanding of the forecast?
Secretary Glickman. I would just say that is an estimate,
though. It is not a cap.
Mr. Dewhurst. That is right. That is an estimate of our use
of that authority, but it is not a limit. We could go above
that number if that is what the situation requires.
Federal Crop Insurance Funding
Senator Cochran. Speaking of limits, one of the caps that
is proposed in the President's budget request is on the cotton
program, proposing to save $110 million. This savings, as I
understand it, would fund the Federal crop insurance sales
commissions. And, there is another cap that is supposed to save
an additional $48 million.
These are troubling to those of us who come from cotton
producing States. We worry about why the administration has
singled out the cotton industry to impose these caps to help
fund the crop insurance program. If enacted, the
competitiveness of our cotton products may be harmed,
particularly in light of this Asian financial crisis, making
sales more difficult.
Have you undertaken to assess what the effect of these caps
would have as a practical matter on the marketability of U.S.
cotton in the overseas markets?
Secretary Glickman. I would ask Mr. Collins.
Mr. Collins. Yes, Mr. Chairman; we have looked at that. You
are right. It would hurt our competitiveness somewhat. Our
estimate is that a total loss of sales might be a couple of
hundred thousand bales as a result of these caps, $140 million
cap in fiscal year 1999. We would have essentially $193 million
total that we could spend in the year 2000 and beyond.
I might point out just one thing, though, that for every
dollar that we spend in step 2 payments on the export side, we
are spending $2 to support domestic mills. There has been very
little evidence that that $2 spending on the domestic mills has
really made that much of a difference in domestic mill use.
But overall, yes, there would be some effect on our export
competitiveness.
CSREES Research Programs
Senator Cochran. One other proposal in the budget that
troubles me considerably is zeroing out Cooperative State
Research Education Service research programs and the reduction
of formula funds for the Hatch Act, Smith-Lever, McIntyre-
Stennis cooperative forestry research.
What is the rationale for proposing such significant
reductions in formula research and extension programs? These
enable the States to meet local priority needs, to set some
goals for helping students, things like 4-H Club activities,
others that are at the heart of rural communities and small
schools around the country. I worry about the approval of that.
I do not think we are going to approve that. Why do you propose
it?
Secretary Glickman. First of all, let me say with respect
to both the cotton step 2 program, as well as this program, we
obviously are going to work with you to try to devise the best
dollars and language that we can get under the circumstances.
The step 2 program has been the subject again of a serious
amount of OIG audits and investigations. So, we need to work
together to make sure we enhance our competitiveness, but at
the same time have a program that gives the taxpayer a good
bang for the buck and is not prone to being misused. I think we
hopefully can do that.
On the formula funding, obviously this is something else
that relates to the total budget picture. We do not anticipate
that the proposed reductions in the formula program will have a
materially negative impact on activities carried out at the
State level. States will have full discretion to fund their
research and extension activities that they consider to be of
high priority, and the reductions in Federal funding can be
offset with modest increases in State and local funding, less
than 1 percent I believe, the total amount.
So, there are a lot of pieces of this puzzle. There are
some increases in the research budget in other areas as well.
We will work with you on this.
Senator Cochran. Senator Bumpers.
Senator Bumpers. Mr. Secretary, thank you very much for
your statement, a big part of which I, of course, agree with.
But Senator Cochran has touched on something that is becoming
increasingly important to me because I have just been studying
it a little bit.
But a couple of years ago, as best I could tell, we were
putting about $1.3 billion into research each year. Does that
sound like about a right figure, Mr. Dewhurst?
Mr. Dewhurst. Yes.
Senator Bumpers. When you consider we spend about $40 to
$45 billion a year over at the Pentagon to make things explode
and then we spend, which everybody would agree with, roughly
$15 billion at NIH for medical research, but when you consider
the fact that we have roughly 435 million acres of arable land
in the lower 48 and we are taking 2 million acres a year out
for highways, urban sprawl, housing, shopping centers, and so
on, and we are adding 2 million people to the population every
year, and when you consider the addition of people to the
population every year, 2 million, taking 2 million acres out of
cultivation and we are spending $1.3 billion on research, that
seems frankly like a pitifully small amount.
Would you comment on that?
Secretary Glickman. My personal reaction is I agree with
you. We have to deal with the priorities in the total budget
process, and working together, we do our best to try to make
sure those priorities are an adequate amount.
There are some increases on the research side of the
budget. We have put some additional money into human and food
genome research as well as the Pfiesteria and other key problem
areas, but the total dollars have not been going up.
I would say a couple of things here. If you had to ask me
is every bit of agriculture research we are doing necessary or
is there duplication of research being done at various
universities around this country, I would say probably there is
some duplication of research and not every bit of agriculture
research that is being done is necessarily serving the good as
much as it could.
We do have an outside advisory group that is looking at our
facilities now and trying to see if there is a way that we can
better do our research job less expensively. It is difficult to
close down a research facility, as you know.
Senator Bumpers. I want you to close all the others. I do
not want you to close the ones in Arkansas.
Secretary Glickman. That is right.
Overall, I do not think we spend enough in agriculture
research.
Senator Bumpers. We obviously do not.
Secretary Glickman. That is a personal item, but we have to
do the best we can and we have to make the best of the
resources we have.
Senator Bumpers. We have a gigantic train wreck that is
going to happen probably long after I am dead, but you can see
it developing and we are not really addressing it. That is the
reason I raise that sort of macro, long-term problem.
Secretary Glickman. Let us just take a few areas. How do we
increase yields without using more pesticides, herbicides,
fungicides, particularly in massive areas of both the arid area
of the United States but also in the developing areas of the
world. That is obviously one key area. How do we produce more
nutrition in the crops that are grown, how do we protect
production agriculture and still not have land wash away and
blow away.
As you look down the next 30 or 40 or 50 years in terms of
crisis problems, how do we deal with global climate change,
which I know is controversial, but I suspect that it is going
on and we have to protect American agriculture in that process
rather than just say it is not happening and we do not want
anything to do with it. We have to make sure we do adequate
planning, and that means research activities as well. So, we
need to spend the money to do it.
Senator Bumpers. Mr. Secretary, what kind of food safety
inspection do we have on imported fruits and vegetables? I have
never really known.
Secretary Glickman. The FDA is essentially responsible for
that. They do some spot inspections.
Senator Bumpers. I will save that. They will be here, so I
will save that question for them.
Secretary Glickman. I would say they are rather limited in
amounts, and that is one of the reasons the increase in the
President's budget is to provide more resources for them.
Senator Bumpers. I just will make one observation--two
observations.
No. 1, in connection with the train wreck that I have
described, we have a piece of that problem which is slightly
different in my State. The Mississippi alluvial aquifer which
covers a good portion of Mississippi, a lot of Arkansas, a
little of Missouri, the southern part, northern Louisiana. I
had been successful in getting money to study the depletion of
that aquifer. Those studies have been completed.
Rice Production
As you know, we produce roughly 43 percent of all the rice
produced in this country. Rice is very water intensive, and we
have been depleting that aquifer for rice growing for many,
many years now. We have reached the point where if something is
not done, rather dramatically done, by the year 2015, rice
production, because of the loss of that aquifer, will be so
much lower, and by the year 2020, there will be no rice grown
in my State, virtually none.
I felt so strongly about it, I went over to talk to the
President about it, and of course, coming from Arkansas, he was
fully familiar with it and put some money in his budget request
to start dealing with it.
All I want to say is it is a $1 billion problem. In the
budget, the President asked for $13.5 million to initiate a
program that the Corps of Engineers--now the Corps does not
like agricultural products. They are not prohibited from doing
them, but they do not like them. They are going to have to
learn to like them because this is not just a problem in my
State. This is a problem that is developing everyplace, for
example, the Ogallala aquifer that covers the Plains States.
That aquifer is going to disappear too.
So, what we are proposing to do is to divert surface water
from the rivers to the rice fields. I tell you that simply
because the Corps of Engineers is going to have to get actively
involved, even though they would rather not, and the Department
of Agriculture is going to have to help in coordinating these
efforts and helping us determine where the most critical areas
are.
Now, finally, Mr. Secretary, let me laud you by saying I
think you have done a superb job. You have been a very
responsive Secretary. I have never called, I have never asked
for anything that I did not get a fast response.
Food Safety Inspection Service
But I must say when it comes to the Food Safety Inspection
Service, the one big disagreement I have had with the
Department is the way the Hudson Foods case was handled. I have
been familiar with that company since I ran for Governor in
1970 when it was just doing a few million dollars a year, until
it became last year a $1.5 billion business. Let me just say
what my concern is and ask you to respond to it.
What Hudson Foods had was one meat packing--they are big in
the turkey and poultry business. That is all they are. They
built a meat packing company just to accommodate Burger King.
It was a state-of-the-art facility. There is no question but E.
coli was found in the plant. There is not any question that the
Secretary of Agriculture, the Food Inspection Service had to
move. They had to do something to find out about it.
But what happened, I really felt that these were
gratuitous, inflammatory, and unnecessary statements made that
caused Hudson to have to sell a good company, built over a 30-
year period, and they had no choice but to sell at what I have
been told is $300 million less than the fair market value of
the company. The publicity was so pervasive and so volatile
they could not survive it.
Yet, the E. coli that was found in that plant came from
another USDA-inspected beef slaughtering plant. The question
was why should Hudson have had to bear the brunt of it when the
E. coli that came into that plant came from another FSIS-
inspected facility, which so far as I know, till this day has
never been named, and yet Hudson had to bear the whole brunt of
it. It seems to me that USDA and FSIS should have taken the hit
on the very fact that this beef came in from another inspected
plant which Hudson had relied on. Hudson was relying on FSIS to
make sure that the beef they got from these other packing
plants--they bought from about 15, but they were all inspected.
They had the right to rely on the safety and the efficacy of
that beef.
Secretary Glickman. Well, first of all, let me say that I
am somewhat limited because there has been a U.S. Attorney
investigation, and I do not know if there is a grand jury
looking at this.
Senator Bumpers. Well, I was not aware of that. I am not
trying to prejudice the case.
Secretary Glickman. I cannot talk about the specifics of
that case.
E. Coli
The only thing I can tell you is this, that I think we have
learned a lot from that episode. E. coli was either nonexistent
or we had not identified it as recently as 15 years ago. It is
new. It is virulent, it kills, and it is a troublesome problem,
much more than a lot of other food safety problems. The fact is
that we are learning about this and how to deal with these
kinds of problems. The companies are learning as well how to
manage their systems in order to keep problems from happening.
We have to regulate that process. So, I cannot tell you today
that everything we did was perfect in that context.
But I would tell you this, that I have had some very
successful meetings with the meat and poultry industry as a
result of the new HACCP rules that went into effect. The new
HACCP rules changed the way that they and we do business so
that no longer do you wait until you find a problem in a piece
of meat that has gone out in the countryside before you take
action. You try to deal with the systems approach so that you
test and the company itself focuses on those critical systems
at every stage of the operation.
Right now the focus is primarily on the packers,
slaughterers, and processors. Restaurants are beginning to use
this system as well. We obviously need a farm-to-table system
that involves production agriculture and involves the consumers
because they are the last line of defense.
Hopefully with the new system there will be a process that
will provide greater public safety so unsafe products will not
be distributed. We will discover hazards inside the operations
of the plant, and at the same time we will be involved with the
companies in a way that still preserves our arm's length
regulatory approach but in a cooperative way to try to find a
problem when it occurs early on.
So, Senator, I cannot tell you that I would do it exactly
every iota of the way we did it before, but I will tell you
this, that this issue is one that is going to grow in magnitude
and complexity, the concern about food safety. What we have to
do as a country is to make sure that the industry and USDA are
working together to try to understand that the public cares
about food safety more than they care just about any other
thing in the world. So, we are just going to continue to do the
best that we can, and the new system I think will help a lot.
Senator Cochran. Mr. Secretary, we have a vote in progress.
We are going to have to go over there and be recorded and we
will be right back. We will stand in recess temporarily.
[A brief recess was taken.]
Senator Cochran. If the committee could return to order. We
apologize for the interruption for the votes on the floor of
the Senate.
We are prepared now to resume our questioning of the
Secretary of Agriculture. Senator Bumpers was in the process of
asking questions. He will be returning, and we will yield to
him when he does return to continue his questioning, but until
he returns, I am going to call on Senator Burns, if you are
ready, or Senator Kohl.
Senator Burns. Mr. Chairman, I will be very quick. The
Secretary and I have talked over a couple of things. We are
going to have a sit-down when we come back, and we have some
very specific things we would like to go over and maybe we can
find some answers. We are very concerned not only with the road
moratorium and how that is being held, but also what the
designs are on the Royal Teton Ranch and how that plays into
the public land management there north of the Yellowstone Park.
We just talked about the buffalo situation and APHIS and the
things that we have to do to deal with that situation.
So, Mr. Chairman, rather than take up a lot of time, I have
a whip meeting anyway. We have agreed to sit down and visit
about it because these are isolated instances that probably
have very little to do with the overall picture of funding the
Department of Agriculture.
Senator Cochran. Thank you, Senator.
Senator Burns. Thank you. I want to thank the Secretary for
that, and I want to thank the chairman.
As far as Mr. Bumpers going through his final hearings on
agriculture appropriations, I for one am very disappointed that
he is leaving because he is one of the easiest guys to imitate.
I can give his space station speech on the floor now if they
give me a pointer. And I got them all up and we can do all
those things. I will miss him because he is a great source of
good humor. So, I will be sorry to see him go.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
Senator Kohl.
New Milk Marketing Order
Senator Kohl. Thank you very much, Mr. Chairman.
Secretary Glickman, when USDA announced the new milk
marketing order, two options were proposed which you called 1-A
and 1-B, 1-A being the status quo and 1-B recognizing the need
to make some movement.
You have said on innumerable occasions that you do not
support status quo, that you support movement. The nature of
that movement is the contentiousness that exists in terms of
what is finally going to be done, but there has never been any
question about your position that the present system needs to
be changed. I am troubled by the fact that 1-A, which
represents the present system, is still out there.
Now, is that a misunderstanding in my interpretation of
what you said, or do I have cause to wonder about what is this
1-A?
Secretary Glickman. Senator, somehow I believed you would
ask this question. So, let me just say this.
We have indicated that 1-B is our preferred option. So, we
are clearly on record as saying 1-B, which reflects some
changes in the order of price determination for class 1 milk,
is our preferred option.
We had examined several options before, five or six, and 1-
A and 1-B had clearly the most public interest as well as
congressional and academic support. So, we chose to pool those
two options into this final review process for comment. There
is no question the Department prefers 1-B, but we also now have
to go out to the public and get the input in the hearing
process that is necessary. In a sense, what we have done is we
have given people a clear choice, and now it is up to farmers,
dairymen, consumers and others around the country to help us
augment the record in order to make the decision that we have
to make.
By the way, even if I had only gone with one option, under
the law, I would have been required to accept testimony and,
where relevant, make modifications in that anyway in accordance
with the Administrative Procedure Act.
Senator Kohl. I appreciate that and I understand how----
Secretary Glickman. If I just may make a couple of other
points.
Senator Kohl. Go right ahead, yes.
Secretary Glickman. In the 1-B option, we also provide a
transition option, a suboption of 1-B. So, what we have in 1-B
is differentials for class 1 milk in some regions of the
country flattened out. Some class 1 milk price reductions do
occur, although reductions would not be as great as some would
expect for all milk prices because of the way it is computed.
We have also proposed a transition option where there would be
a bump-up on the price in certain areas. We proposed two or
three different ways of doing that, and that is also out there
for public comment as well.
Dairy did not get transition assistance in previous farm
bills as we went to a more market oriented system. So, what we
have tried to do is provide some transition assistance in this
bill.
One final thing, if I might. We have also proposed flooring
the basic formula price until such time as all of this milk
marketing order reform is done, and there will be a hearing
next week on the 17th on that issue as well. That is a separate
issue but they kind of relate.
Senator Kohl. Yes; and I appreciate that answer, but I
still must say that having heard you say so often that the
present system cannot endure and will not endure, and
recognizing that the Department has the authority to make the
change--it does not have to come up for a congressional vote--
--
Secretary Glickman. But we have to take public comment.
Senator Kohl. That is all right and I understand that, but
it is not as though USDA is not aware or has been unaware of
the problem and has gone into this whole process starting from
ground zero. USDA is pretty expert at the order, and you as the
leader of the USDA, having taken a position, which I respect
and, as you know, agree with, that the present system must
change, it still is troubling to have you put out the present
system as though it were maybe not your alternative but an
alternative. And I do not understand that.
I know how contentious this is and what kind of powerful
forces are arrayed, and then I hear Senator Leahy representing
his own district saying, hey, we cannot change the system, the
system benefits us. Any change in the system will be a disaster
for Vermont. And you hear that I am sure from other States.
And then I see, yes, the present system is still out there
as an alternative, maybe not yours, but an alternative. You can
understand how, as I learn more and more about the political
system and how it operates, that the fact that you put that out
as an alternative is troubling to those of us who want change,
particularly in light of your stated position that change must
occur. If change must occur, then why is 1-A, the status quo,
out there?
Secretary Glickman. Well, let me say a couple things. One
is that we do provide preferred alternatives and options on
environmental impact statements all the time. We do it on
proposed rules. We will provide options on proposed rules
sometimes when there is a very strong public interest
perspective, and we decide to put options in there. So, that is
not unusual. This is not the only case we have ever done that
before.
The second thing I would say is that it is incumbent upon
us to get folks in your district and your constituents to
actively engage in this rulemaking process. We are going to get
inundated with comments on these rules. It is very important
that your perspective on this be known. I am not sure if it
conforms with the 1-B option--I think you had even further
ideas on what to do, but it is very important that your
perspective is reflected in that rulemaking process.
The third thing I would say is that beyond 1-A and 1-B,
which really just relates to differential prices on class 1
milk, there is a lot in this rule that affects the price of
milk. For example, we changed the way the basic formula price
is computed which will probably have the benefit of reducing
the wide variations. It will be based on a longer time period
and there will be some consolidations and are other things in
there as well.
So, my hope is that we get the kind of comment that we are
hearing now.
But again, I want to make it clear. We have set forth a
preferred option. It is not as if I am bucking or ducking the
issue, but we do have a preferred option.
Senator Kohl. All right. I do appreciate that.
State Trading Enterprises
Mr. Secretary, charges have been brought in state trading
enterprises in England for illegal importing schemes, but
problems do exist in prosecuting STE's in England. I am asking
what is being done to ensure that state trading enterprises,
which may well be engaging in unfair transfer pricing of dairy
products, are compelled to compete fairly with United States
farmers.
Secretary Glickman. Well, generally, I am aware that the
IRS and Treasury are looking at this issue to see if there are
any violations of Federal revenue laws. So, I have asked our
folks to provide them whatever assistance that they need. That
is on the pricing issue. So, we need to make sure they comply
with our laws.
I also would say that we are generally concerned about
state trading enterprises, and we intend to highlight this
issue in the next round of trade discussions. The Deputy was in
Singapore last year where this was one of the dominant issues
raised. The state trading enterprises in Canada, and there are
others.
Senator Kohl. New Zealand particularly.
Secretary Glickman. There are dairy boards.
Senator Kohl. You understand, which I am sure you do, what
they do at the worst--and they do do that--is they price their
products to the American affiliate so high that the American
affiliate does not make any profit, and then there are no taxes
to be paid. As a result of that, the American affiliate is able
to undersell local domestic companies and take away business
because of this unfair pricing procedure that they go through
which brings their tax liability down to zero.
Now, that is something which I know you do not agree with
and the IRS does not agree with, and we need to get to a
resolution of that. I would like to hope that will be on a list
of priorities that you have.
Secretary Glickman. It will be.
European Union
Senator Kohl. Last question. The European Union is
aggressively targeting our traditional barley malt markets in
Central and South America. Five years ago the malt industry
exported 6 to 9 million bushels. This year only 50,000 bushels
were exported from the United States. This business was
essentially lost by three Wisconsin companies, so I am very
concerned.
You have the Export Enhancement Program which helps
companies compete against unfair competition. My question is,
can we expect that you are going to give the companies in this
industry, the barley malt industry, the help they need to
compete with other companies in Europe who are subsidized by
their governments and have thereby been able to take away this
6 to 9 million bushels market in Central and South America on
barley malt?
Secretary Glickman. Well, I need to look at the issue
specifically. The EEP program, the Export Enhancement Program,
is geared to the specific issue of dealing with unfair farm
subsidies--it's not just a trade tool. It must be focused on,
let us say, the EU or other places that are undercutting us in
a way that we need to use this authority to keep markets. So,
if what you are saying is an accurate reflection, it would seem
to be something that would be suitable for EEP. But we will
take a look at this. I presume our folks know about this
particular issue, but we may need to contact your office to get
more information.
Senator Kohl. I would appreciate that. I think we can
provide you with enough information that would hopefully
satisfy you that there is some assistance here that is
deserved.
Secretary Glickman. Have these constituents of yours filed
any other trade complaints under various sections of our trade
laws?
Senator Kohl. Well, maybe I can be in touch or you can be
in touch and we can work out the facts and maybe some
resolution.
Secretary Glickman. Yes.
Senator Kohl. I would appreciate it.
Secretary Glickman. OK.
Senator Kohl. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
Senator Cochran. Thank you, Senator.
Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman. I just have one
or two items.
Status of Agriculture
Mr. Secretary, first of all, does the Department have any
studies as to what the status of agriculture in this country
will be, good or bad or somewhere in between, once the farm
subsidies expire?
Secretary Glickman. I will ask our Chief Economist to
determine what we are doing there.
But as you know, Congress authorized a Commission on 21st
Century Agriculture. In fact, there is a representative. I
believe Jim DuPree from Arkansas is on it. You do have somebody
from Mississippi on there as well.
They have started to meet and their task is to look at this
issue, but not as much from an economic perspective. It is more
what comes next, and they are currently doing that. We are
having trouble, frankly, providing them the resources they need
because our advisory committee budget is so limited. We are
trying to do our best to make sure they can at least do some of
their work.
Perhaps Mr. Collins might talk about what we are doing in
the post-1996 farm bill environment to look at what is going
on.
Mr. Collins. That is in our plans to look at, Mr. Bumpers.
We are going to be releasing on February 23 a 10-year
assessment that looks out at agriculture over the next 10
years. But in that assessment, we used the conventional
assumption that in years beyond the expiration of the farm
bill, we use the level of CCC payments that were available in
the last year of the farm bill which is roughly $4 billion. So,
we assume a $4 billion annual continuation beyond 2003.
But certainly as we move closer to the year 2003, we are
going to look at this question in more detail, and I think we
will also do it in conjunction with the Commission on 21st
Century Production Agriculture.
Secretary Glickman. Yes.
The other thing I would say is that crop insurance is going
to have to be the center piece for risk management. This
program works pretty well for some, not very well for others.
We really need to make it an effective operating tool for all
producers. If you are in the Northern Plains and you suffer
two, three, four disasters in a row, given the actuarial nature
of it, it is a problem. If you are in a place that does not get
disasters all that frequently, it can work out very
effectively. That is one of the reasons why we have asked for
moving it on the mandatory side in order to give it some long-
term predictability so it can operate. So, we have looked at
that as well.
We have provided some other safety net proposals like loan
extensions, other kinds of things that we have asked in our
budget before.
But the question is a good question. What happens post-
2002? Actually the question may be more relevant, what happens
next year and the year after? The first 2 years of Freedom to
Farm were quite good for most producers with the payments and
the market. They have come out ahead. I think the majority of
producers have come out ahead, but I do not know what happens
next.
Commodity Yield Comparisons
Senator Bumpers. Mr. Secretary, let me ask you--and if you
could just give me a short answer to this--what is the
comparison on a per-acre-yield basis of corn, wheat, soybeans?
Just take those. Those are basic food crops. What is the
comparison of yields now per acre as compared over the last 3
or 4 years? Are they not rather static? Are the yields in this
country not rather static? Secretary Rominger or Mr. Collins?
Mr. Collins. Actually we are doing much better in soybeans
over the last couple of years.
Senator Bumpers. Is that because of irrigation?
Mr. Collins. It is because of a change in agricultural
practices. Much higher plant populations per acre are being
used in the Midwest, and we also have much better varieties in
the South. So, the South is getting much better soybean yields.
We have actually gone up a little bit on wheat yields. If
you just look at this past year, 1997, we had the largest wheat
crop that we have had in the 1990's, and in the winter wheat
areas, Kansas and other areas, we had record high yields.
For corn, we had a 127-bushel-per-acre yield this past
year. I think it was the fourth highest in history, the record
being in 1994 of about 139 bushels.
So, actually we still do continue to trend up. I know your
concern earlier about research is whether we will be able to
sustain that trend given the research investment that we have
been making.
Agricultural Trade Balance
Senator Bumpers. Well, I am concerned about another matter,
and that is we depend on farm exports to keep our balance of
trade sort of halfway in balance. You stated I think maybe in
your statement, Mr. Secretary, that the trade balance afforded
by agriculture last year was a plus $21 billion----
Secretary Glickman. Correct.
Senator Bumpers. Even though overall exports were $3 or $4
billion less than the preceding year.
I am sort of coming back to where I was a moment ago, and
that is I do not see, unless we have some unbelievable
breakthroughs in research, any way that we can continue to
export unless we have much bigger yields than we have had in
the past. I do not think we can feed an ever-increasing
population in this country and continue to increase our exports
abroad unless yields go up much faster than they have been
going up.
This is just a country lawyer's sort of common sensical
approach to it. It seems to me that where we are headed is for
lower exports, not higher, because we are going to have to feed
an ever-increasing population in our own country and we are
taking a lot of land out of cultivation every year.
Secretary Glickman. I think you have to segregate
agriculture a little bit. Bulk commodities--well, there has
been some growth and some decline. The big increases in exports
have been in value-added, which is livestock, meat, poultry,
and fresh fruits and vegetables, and those have been dramatic,
profound increases. We talked a little bit about the poultry
exports to Russia and related countries. Our export growth has
doubled in the last decade, roughly. And much of that growth
has occurred in the value-added fresh fruits and vegetables
horticulture products.
In terms of the bulk commodities, I cannot give you a
projection. A lot of that frankly depends on the income levels
of these importing countries. Most of these countries want to
be self-sufficient in those commodities, and they look to us
kind of as a reservoir of last resort when things get bad.
So, I still think there is great positive potential out
there, particularly in the value-added side of the picture.
Senator Bumpers. I am not quite as sanguine about our
future on this as you are.
Asia's Commodity Export Value
The final question, Mr. Chairman. Of the $56 or $57 billion
in exports in 1997, what percentage of that went to Asia or
what dollar figure went to Asia?
Secretary Glickman. I think 40 percent of our exports go to
Asia.
Senator Bumpers. Have you already seen a decline in demand
for exports?
Secretary Glickman. A small decrease.
Mr. Collins. Our most recent data is only through the month
of November from Commerce, but it does look like that, plus
anecdotal data do show that our sales have fallen off some.
Secretary Glickman. But let me just tell you the real worry
of the dropoff is Korea and Indonesia. We have not seen any
material dropoff in China, Hong Kong, Japan, other major
markets.
Senator Bumpers. How did exports to China in 1997 compare
with 1996? Can anybody answer that?
Mr. Collins. They were a little bit lower. China usually
buys about 2 to 3 billion dollars' worth of our products. In
1997 they had a superb wheat crop. They had very large corn
stocks, and so they actually became a net grain exporter. This
is a country that in the early 1990's was importing 12 million,
13 million tons of wheat, in 1995-96 actually imported 3
million tons of coarse grain, and here in 1997 they became a
net grain exporter. So, there has been quite a shift in China
because they have been promoting a policy of self-sufficiency
in grains.
Senator Bumpers. They do not import cotton anymore either,
do they?
Mr. Collins. They are importing our cotton this year. I
think we expect somewhere in the neighborhood of 1 million
bales of cotton to China this year.
Senator Bumpers. Thank you, Mr. Chairman.
Senator Cochran. On that subject, I think India is another
country that has had a turnaround in production in wheat. It
used to be a big importer. Now it is self-sufficient and even
exporting some as I understand it.
Mr. Collins. That's true. They're also increasing their
exports of soybeans and they have become a competitor for us in
oilseed products in Asia because of their own soybean
production.
Secretary Glickman. But notwithstanding that, there is
population growth of the world. I hope that you are wrong and I
am right. The population growth is significant enough to allow
for radically increased demand over the next 10 years if we can
capitalize on that.
Conservation Programs
Senator Cochran. There is a substantial commitment in this
budget request to conservation which I applaud. We have done a
good job, I think, in helping to devise programs to protect
more effectively soil and water resources. We have also added
another dimension and that is incentives for development of
wildlife habitat on privately owned land where land is idle.
The conservation reserve program has been a big contributor to
nurturing wildlife, endangered species, and the rest.
I noticed in the EQIP program, the Environmental Quality
Incentives Program, there is a big increase in the request from
$100 million in mandatory funding to a total program level of
$300 million.
What is the justification? Given all these programs that we
have seen working effectively, like CRP and the wildlife
habitat incentives program, why is it necessary for that big
jump proposed in that one EQIP program?
Secretary Glickman. There is a tremendous demand for this
program. A lot of it involves small and medium-size livestock
operators who sense a lot of problems associated with
environmental issues affecting livestock production and the
need for water systems and sewer systems and control mechanisms
to deal with effluent. That is one thing.
There has also been a big demand from farmers installing
practices that improve water quality and the overall health of
their watershed. A lot of this was a result of State
conservationists and our farm folks around the country saying
there is a tremendous amount we could be doing in land
practices.
The Deputy might want to comment on this too.
Mr. Rominger. I think one reason, as the Secretary
mentioned, is water quality and the fact that as a country we
are beginning to focus now on the nonpoint source pollution,
which means in this case agriculture being one of those. So,
this is a program that will help farmers address those areas so
that they can improve water quality in the watersheds where
they are operating.
EQIP Program
Senator Cochran. Some are suspicious that this program just
gives the Department of Agriculture more people to go out and
beat up on farmers. But you are saying it provides technical
assistance and helps them meet the challenges of meeting these
goals and targets.
Mr. Rominger. Technical assistance and cost share money.
Secretary Glickman. I think that in the NRCS--the old Soil
Conservation Service--there was this belief that they had this
club and they hit people over the head, but I think by and
large, it is not true any longer. I mean, there may be some
Government programs that still do that, but by and large, NRCS
is cooperative with the farm groups, conservation districts,
related folks.
Senator Cochran. So, in this program when the person comes
to your farm gate and says, I am from the Government and I am
here to help you, he is really on the level? Is that what you
are saying?
Secretary Glickman. Theoretically. He would not be coming
unless he was asked to come.
Senator Cochran. Well, that would be a good attitude to try
to develop in the Department in these conservation programs
because a lot of farmers are still nervous that when you add
money to this program, you are just creating more trouble for
them rather than providing technical assistance, as it is
called.
Secretary Glickman. It also keeps land in production.
Farmers like to farm and if we can provide them assistance to,
let us say, prevent soil from washing away, they view this
positively.
Senator Cochran. I would like for the record to reflect
what our enrollment in the wildlife habitat incentives program
is anticipated to be in 1998 and what level of CCC funds will
be needed to support the enrollment number, what enrollment and
level of funding is projected to be needed to support the
program in 1999. Those can be submitted for the record. I do
not expect you to have all those details in front of you.
Lower Mississippi Delta Commission
There is a submission in the Interior appropriations budget
I presume--at least I know there is a request for $26 million
for new economic development initiatives in the lower
Mississippi River Delta. Some years ago, Senator Bumpers and I
and others proposed a commission to study the lower Mississippi
Delta to come up with some answers to the serious problems
because of economic stagnation in that area and human resource
problems of various kinds. The commission worked for a couple
of years, made some recommendations. We implemented some of
those. But now the President's budget is suggesting a $26
million new program to be under the auspices of the Appalachian
Regional Commission and its staff.
My question to you is, would this be just as well
administered by the Department of Agriculture's Rural
Development Agency or some other agency that is available for
that job?
There are some of these States, for example, like
Louisiana, Arkansas, Illinois, Missouri, which will be in this
new program--be beneficiaries of this new program--but they are
not in the Appalachian Regional Commission area. Some of the
Governors have--in particular, the Governor of my State is
worried that this is going to weaken the Appalachian regional
program and there is some controversy about that aspect of it.
It would be nice to have the benefit of your thoughts on
that. I do not want to put you at cross purposes with the
President right now in public.
Secretary Glickman. Of course, I will take jurisdiction
over anything you want to give us.
The only thing I can say is that I am not personally
familiar with the specifics of this. I do know that we have our
empowerment zone program. One is in the Mississippi Delta
region, and we are working with the Southern EZ/EC Forum, which
is an informal organization of communities in the region,
including Arkansas, Louisiana, Mississippi, to form a
partnership to implement many of the recommendations in the
original Lower Delta Commission report. We are talking about
expanding the number of zones.
As you know, the empowerment zone concept is basically to
do a lot of what they have talked about, which is to bring
various Federal agencies together but allow it to be locally
driven.
So, all I can tell you is that we will--we are still
working on the delta empowerment zone because it has done a lot
of good.
But I cannot tell you what the conflicts are. We will raise
the issue internally to see what else we might be doing on it.
Cochran Fellowship Program
Senator Cochran. There is a request, I understand, in the
budget for $3 million for funding a fellowship program which we
started some years ago to bring students, midlevel managers and
others in agriculture and agriculture-related activities, to
the United States to learn more about our market economic
system and political institutions, hoping that this would
develop better relationships between our country and others.
Tell me how that program is working, and if you can for the
record, give us a status of that fellowship program so we can
see where the money has been spent last year and whether we
should add money to that or $3 million is all we need to fully
fund that program.
Secretary Glickman. I would have to tell you this is a very
popular, successful program. The Vice President has a
commission with South Africa, and it is fascinating to see the
impact of the Cochran program with respect to people who have
been trained, South Africans who come to this country and train
in a variety of areas.
My records indicate in fiscal year 1997 about 700
participants from 45 countries received training through the
program. For fiscal year 1998, the number of countries is
expected to increase to 49 with the addition of Guatemala,
Senegal, Tanzania, and Uganda, and about 760 participants are
expected to participate.
So, we have asked for a basic $3 million which is the same
funding level, but I can tell you this program is extremely
popular.
Submitted Questions
Senator Cochran. Thank you for that, and we will continue
to monitor it and try to be supportive in our committee of the
program goals.
There are a number of other questions and areas that we
want to explore with you, but my hope is that we can submit all
those questions to you and have the answers printed in our
record. Other Senators may very well want to submit questions
too, and we hope you will be able to respond to them in a
timely way.
[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
food safety and inspection service
Question. User fees to require industry to pay the cost of meat and
poultry inspection have been consistently proposed by the
Administration although they have never been authorized. The fiscal
year 1999 budget for FSIS again assumes collections from these
unauthorized user fees. In the past, the Administration has proposed
user fees to cover the costs of pay for overtime of inspectors. The
fiscal year 1999 budget user fees to recover the full costs of
inspections. Why does the Administration believe this proposal will
have any greater success this year?
Answer. User fees are essential to the successful long-term
implementation of meat, poultry, and egg products inspection reform.
The time for user fees is now before budget restrictions hamper our
ability to ensure the safety of the food supply. Each year
discretionary funds for USDA have been getting reduced, which has made
it more difficult to ensure a stable budget for food safety inspection
activities. By converting the program to user fees now, we can ensure
that meat, poultry, and egg products inspection get the resources
needed to protect the safety of the food supply without an adverse
impact on other important USDA programs.
Question. Mr. Secretary, it is unlikely that Congress will
legislate these proposed user fees. What impact will adoption of the
FSIS's appropriations request have on the country's food safety if the
legislative proposal is not accepted?
Answer. In the event that the proposed user fees are not enacted,
we will have to seek additional funding for meat, poultry, and egg
products inspection to the level needed under current law.
Question. The FSIS proposed budget also requests increases for
other food safety program activities. What is the priority of these new
increases if an appropriation for inspection activities are required
and the full request cannot be provided for these additional
activities?
Answer. Maintaining an adequate inspection work force that has the
training and tools necessary for conducting effective inspection,
facilitating the adoption of HACCP by State inspection programs, and
ensuring food safety from farm-to-table are all essential to our
mission of improving the safety of the food supply.
Question. The fiscal year 1999 request for the President's Food
Safety Initiative includes an $11 million increase for the Food Safety
Inspection Service (FSIS). How will the agency use this money to fund
the FSIS portion of this initiative? Please designate which activities
are new and which ones are a continuation of current programs. Please
prioritize these activities.
Answer. Under the President's Food Safety Initiative, the Food
Safety and Inspection Service will facilitate the transformation of
State programs to Hazard Analysis and Critical Control Point systems,
work cooperatively with other Federal agencies to expand consumer
education, and develop voluntary measures to reduce the risk of
pathogenic contamination of animals on the farm. These new activities
would build on the successes and fill the gaps identified in the
President's 1998 Food Safety Initiative. The food safety activities
identified as part of the initiative are all of high priority and we
urge Congress to fund it as an integrated approach within available
resources to reducing foodborne illness.
Question. Farmers are currently over-burdened with regulations.
There is much speculation that FSIS will eventually implement
regulations which will affect the farmer and his farming operation. In
the fiscal year 1999 USDA explanatory notes, there is mention of
voluntary activities to deal with food safety issues from the farm-to-
table and the collection of data linking ``food animal production to
processing contamination.'' Would you please explain these voluntary
activities and how the agency plans to implement them?
Answer. We do not have, nor are we seeking, authority to mandate on
farm practices. The FSIS Animal Production Food Safety Program is
actively working with producers to develop voluntary science-based
animal management practices to improve food safety on the farm. To
assist producers in dealing with marketing pressures and to improve the
safety of the food supply, we are proposing risk assessment and
education activities. Risk assessments will help producers identify
food safety hazards and measures that can be taken on a voluntary basis
to mitigate them on their own behalf. Education is necessary to ensure
that producers understand the changes that are occurring within the
industry due to HACCP implementation and to communicate the ways risk
assessment can assist them in meeting these new challenges.
Question. Does the agency see the need in the future to make these
activities mandatory?
Answer. We do not see the need to make any on farm food safety
practices mandatory.
Question. How does the agency plan to collect this data and use it
once it is collected?
Answer. Successful development of risk assessments and education
strategies will require a collaborative effort between producers,
academia, and State agriculture and public health agencies. Any data
collected to support these activities will be used to assist producers
in identifying food safety hazards and cost-effective intervention
strategies they can voluntarily utilize on their own behalf.
Question. Mr. Secretary, the National Academy of Sciences is
publishing a report this summer on the creation of a single food
agency. Are there any joint initiatives that FSIS and the Food and Drug
Administration (FDA) are undertaking currently?
Answer. FSIS, FDA, and several other Federal agencies have a close
working relationship, which can be seen through the joint
implementation of the President's Food Safety Initiative.
Question. What is the Administration's current position on the need
to create one single food agency?
Answer. Like Congress, we are also interested in seeing the
conclusions of the National Academy of Science and would not like to
prejudge them at this time.
Question. The fiscal year 1999 budget request indicates an increase
of $130,000 to provide additional resources to the Under Secretary and
the Secretary to support activities associated with the President's
Food Safety Initiative. What sort of resources do you mean?
Answer. With the additional resources requested we will be able to
support the level of staffing necessary for this office to fulfill its
role of building greater public confidence in the safety of the food
supply and maintaining the integrity of the Federal inspection system.
Question. The fiscal year 1999 budget request proposes a number of
funding increases in support of the President's Food Safety Initiative.
Please rank these increases in order of priority.
Answer. The Administration has proposed an integrated food safety
initiative that encompasses several high priority activities and
involves several Departments and agencies. We encourage Congress to
fund this proposal within available resources as a part of the
integrated initiative.
national commission on small farms
The Secretary of Agriculture established the National Commission on
Small Farms on July 9, 1997, and identified the Natural Resources
Conservation Service (NRCS) to provide support to the Commission.
Question. What recommendations were made by the Commission and does
the President's fiscal year 1999 budget incorporate these
recommendations?
Answer. There were in excess of 140 recommendations made by the
National Commission on Small Farms. All of the recommendations are
outlined in the January 1998 Report entitled ``A Time To Act--A report
to the USDA National Commission on Small Farms.'' A copy of the report
is being provided for the record. No additional funds have been
requested in the President's fiscal year 1999 budget to implement
recommendations of the commission's report. It is anticipated that
recommendations can be accommodated through ongoing operations.
Question. Why was the NRCS chosen to support the Commission?
Answer. NRCS was selected because of its long standing history and
success in working with outside groups and locally led initiatives.
Question. Is the Commission still in formation and meeting
formally?
Answer. The Commission was chartered for a period of up to two (2)
years. Although the commission is currently not meeting, it is
scheduled to reconvene within nine (9) months of the receipt of their
report to provide input on emerging concerns within the Commission's
domain.
wildlife habitat incentives program
Question. What is the enrollment in WHIP anticipated to be in 1998?
Answer. Enrollment is anticipated to be approximately 170,000 acres
under 3,400 agreements.
Question. What level of CCC funds will be needed to support this
enrollment in fiscal year 1998?
Answer. This enrollment level will require up to $30 million in CCC
funding.
Question. What enrollment and level of funding is projected to be
needed to support the program in fiscal year 1999?
Answer. The enrollment level is expected to be 114,000 acres under
2,300 agreements with a funding requirement of $20 Million.
clean water and watershed restoration initiative
The Clean Water and Watershed Restoration Initiative is proposed to
be funded under the new interagency Environmental Resources Fund for
America. Funding of $23 million is designated for NRCS participation in
this initiative.
Question. Which activities are proposed to be funded through the
``Clean Water and Watershed Restoration Initiative''?
Answer. NRCS funding for the Clean Water and Watershed Restoration
Initiative in fiscal year 1999 is proposed at $23 million. This
includes a requested increase of $20 million for partnership grants and
$3 million for natural resources inventory evaluation needs.
Question. Please describe each one and provide the cost of each
activity.
Answer. The activities proposed to be funded include partnership
grants designed to comprehensively improve water quality to be funded
at a level of $20 million. The partnership grants will enable State and
local organizations to hire non-federal watershed coordinators. Also
included in the increased funding is $3 million for improved natural
resource inventory evaluation needs. This will enable the development
of baseline assessments, integration of compatible inventories, and the
evaluation of program impacts and will fund an additional 30 FTE's.
debt forgiveness
Question. Mr. Secretary, you are proposing that the Congress pass
``emergency legislation'' to modify the 1996 Farm Bill prohibition on
loans to allow farmers with past debt problems and restore
creditworthiness to once again be eligible for USDA loans. What is the
pressing need for this legislation?
Answer. There are several thousand family farmers who may need USDA
farm loan assistance but are prohibited from obtaining it because they
received a debt forgiveness on loans that were made to them in the
past. This isn't fair. Even the bankruptcy code allows borrowers
restore their credit worthiness. Moreover, much of the debt USDA has
forgiven over the last several years traced back to the mid-1980's when
an accumulation of too much debt coupled with a decline in farm income
and land prices produced an credit crisis. These were circumstances
beyond the control of borrowers. Further, USDA actually encouraged
borrowers to restructure their loans in ways that lead to the debt
forgiveness, and borrowers did so without knowing that it would mean
they would not be eligible for new loans. In fact, these borrowers were
eligible for new loans until the 1996 Farm Bill changed the ground-
rules.
Question. Should this legislation be passed by the Congress, how
many farmers in your estimation would then be eligible for farm loans?
Answer. Since 1989, USDA provided debt forgiveness to about 73,000
farm borrowers. About 11,000 of these borrowers still have active
accounts. There is no information available on the status of the rest
of these borrowers. A sizable number may no longer be farming; however,
the Department has heard from many former borrowers who are still in
business and could use new loans. The legislative proposal would also
affect those borrowers who receive a debt forgiveness in the future.
Question. Does the fiscal year 1999 President's Budget assume that
these farmers with past debt problems would be eligible for loans? If
so, what number of farm loans are estimated?
Answer. The President's 1999 budget is based on current law, which
includes limits on the authorized levels for both farm operating and
farm ownership loans. With the enactment of the proposed legislation,
the additional demand for these loans would be accommodated within the
authorized levels. In general, this would mean that there would be
increased competition for direct loans, which would most likely affect
applicants who do not qualify for targeted assistance as beginning
farmers or members of socially disadvantaged groups. Borrowers who do
not receive direct loans may, however, be able to obtain a guaranteed
one.
county office closings
Question. Mr. Secretary you have committed not to close any county
offices without Congressional input beyond those already named. At the
same time, the Department is currently streamlining and collocating
offices at the state level.
A. Is there an employee reduction number each State Director is
required to meet as a result of the streamlining and collocation of
offices.
B. Is staff being reduced on a state-by-state or county-by-county
basis? Please explain the rationale used to decide where staffing
reductions occur.
C. What are you doing to make reductions in staffing at the state
level do not predetermine further county office closures.
Answer. USDA has been downsizing its county-based program delivery
offices since 1994 when Congress passed major reorganization
legislation. Pursuant to commitments made when that legislation was
passed USDA developed a plan to close or consolidate USDA field offices
into service centers. We have reduced the number of offices from 3,700
to approximately 2,700 and will be down to below 2,600 by the end of
the year. Beyond these office closures we have no specific actions
identified at this time.
No employee streamlining plans have been established in relation to
the service center collocation effort. However, individual service
center partner agencies are managing within their assigned resources
and budgets which may impact staffing levels in the field and require
further office closures. In addition, we are awaiting the outcome of
the Departmental study on the structure and delivery systems of FSA,
NRCS, Rural Development and the Risk Management Agency.
workload study
Question. USDA has an outside consulting firm conducting a workload
study of the farm and rural program delivery system of county-based
agencies (FSA, NRCS, and RD) to be completed on September 18, 1998.
What has the consulting firm been told to look at specifically?
Answer. We have contracted with Coopers and Lybrand to conduct a
study of the farm and rural program delivery system of FSA, NRCS, and
RD. The study will evaluate the county office workload and resources of
these agencies in relation to their program responsibilities and
customer needs. It will also review ongoing efforts to improve
efficiency and identify, assess and, as appropriate, recommend
alternative approaches for the organization and staffing of the county
based agency delivery system. The results will be drawn upon in
developing budget and operational plans for subsequent years.
Question. Are streamlining and collocating of offices postponed
until the study is completed?
Answer. We have proceeded with the closure of FSA county offices
according to the 1994 plan. The current target for the number of
service centers is 2,554. The number of field office locations has been
reduced from 3,726 in 1994 to 2,775 at the end of calendar year 1997.
Under current plans, office moves and closures will reduce our
locations by 221 service centers. However, staffing reductions proposed
for 1999 may require a reexamination of our county office structure.
Because there is a point at which an office can be too small to
function effectively, it may become necessary to further consolidate
offices where staffing reductions take place. Results of the study
should be useful in any such reexamination of further restructuring and
consolidation of field offices. I will consider any closure decisions
in light of cost effectiveness and quality of service to the producer,
and I will keep the Committee apprised of any prospective closures.
county committee conversion to federal status
Question. Much concern exists regarding the impact of converting
county committee workers to federal status. Please explain this
conversion process of federal employees and county employees. Is this
process also postponed by the workload study?
Answer. As you know, I favor converting FSA non-Federal county
committee employees to Federal civil service status. Conversion would
eliminate the challenges we face in operating two different personnel
systems for FSA employees in county offices. We are working with
Congress to enact changes in authorization needed to implement the
conversion, and the process has not been postponed by the study being
carried out by Coopers and Lybrand.
Question. What criteria is being used in this conversion?
Answer. We have proposed that current employees with 3 years of
permanent county committee service be given career civil service
appointments. Employees with less than 3 years of permanent county
committee service would be given career-conditional civil service
appointments and the period of current permanent county committee
service would be counted when determining the 3 years of service
necessary for converting to career civil service status. Temporary
county and area office employees with appointments of 1 year or less
could be converted to temporary Federal civil service appointments.
Former permanent county committee employees would retain reemployment
rights resulting from a reduction-in-force. Other provisions would
facilitate certification of agreements between labor organizations and
USDA concerning bargaining units and their representation.
Question. How does this conversion process play a role in the
streamlining and collocation of offices?
Answer. The conversion process is intended to enhance management
capabilities and office productivity which should facilitate office
streamlining and collocation initiatives. Equitable re-employment
procedures are central in both conversion and streamlining activities.
Question. Please explain this Common Computing Environment (CCE)
implementation. Why is CCE exempt from the Department's current
moratorium on purchases of information technology?
Answer. The county-based field offices are being restructured into
Service Centers to improve customer service. At the core of this
initiative is a shared information system built on a Common Computing
Environment (CCE) that will provide Service Center staffs access to
customer, program, technical, and administrative information,
regardless of the agency they represent. The CCE is based on identified
business needs and will provide the enabling technology for
implementing reengineered business processes to provide one-stop
service to customers.
The CCE will enable USDA to: optimize the data, equipment, and
staff sharing opportunities at the service centers; overcome the
extreme limitations of the current legacy systems; and enhance customer
service into the 21st Century.
In fiscal year 1998, a business integration center has been
established to facilitate the development of reengineered business
applications and pilot testing at nine USDA Service Centers, as well
as, test and evaluate information technology alternatives. Depending on
the availability of funding, the plan is to achieve complete migration
from legacy systems to the identified CCE by 2002.
CCE is not exempt from the current moratorium on purchases of
information technology. OCIO is working closely with the Service Center
Implementation Team and will review any contract actions requiring
waivers, as necessary.
lower mississippi delta
Question. The fiscal year 1999 budget proposes a $26 million
increase in the Interior budget for a new economic development program
for the lower Mississippi Delta.
Does the Rural Development Agency have the existing structure to
implement a new economic development program in the lower Mississippi
River Delta? If so, why is this proposal not under USDA's jurisdiction?
Answer. I cannot answer the question as to why the proposal for the
new economic development initiative for the lower Mississippi Delta was
in the budget as it was. The proposal was not discussed with the
Department. However, USDA does have a structure in place that could
administer the program and we have been working on an effort involving
the lower Mississippi Delta Center and the Empowerment Zone and
Enterprise Communities in the Delta to pool their resources and efforts
to more comprehensively address the economic and community development
problems in the Delta. A Memorandum of Agreement between these parties
is scheduled to be signed in March of this year.
salaries and expenses
Question. The fiscal year 1999 budget includes $529 million for the
administration of USDA's rural development programs, including the
Alternative Agricultural Research and Commercialization Corporation
(AARC). This amount includes funding for 7,138 staff years, which is a
decrease of about 150 staff years below the fiscal year 1998 level.
In what areas of Rural Development does the decrease of 150 staff
years occur, and how will the reductions be accomplished?
Answer. The reductions occur throughout the Mission Area; 80 in the
Rural Housing Service; 49 in the Rural Utilities Service; and 24 in the
Rural Business-Cooperative Service. My policy is that the reductions
will primarily come from administrative areas rather than program
areas. I anticipate that administrative convergence will provide the
reductions.
environmental resources fund for america
Question. The fiscal year 1999 Budget proposes the Environmental
Resources Fund for America which would include funding for the Rural
Community Advancement Program (RCAP). Why did the Administration
include the RCAP in its proposal for the Environmental Resources Fund?
What areas of the RCAP are included in this fund?
Answer. The Environmental Resources Fund is an attempt to show all
environmental expenditures in one area. Only the Water and Waste
funding for Water 2000 is included in the Fund.
boll weevil eradication loans
Misinformation regarding the interest rate in calculating the boll
weevil eradication loan program was given last year, resulting in a
shortfall of $250,000 in appropriated funds which would have supported
approximately $22 million in guaranteed loans.
Question. How many loans were made to farmers and what as the total
of those loans in fiscal year 1997?
Answer. Three loans were made in fiscal year 1997 totalling
$39,999,500.
Question. What is the anticipated number of loans that will be made
this year?
Answer. The 1998 budget assumes that five boll weevil loans will be
made this year. However, there are no applications on hand at this
time, so it is difficult to tell what will happen.
Question. How much is needed in additional funds to fully meet the
demand for these loans in fiscal year 1998?
Answer. As I mentioned, we do not have any applications on hand at
this time, and it is very difficult to predict the demand for this
program because the amount requested per application is relatively
large. The $30 million included in the 1999 budget should, however, be
adequate to meet the demand.
1998 supplemental appropriations
I understand the administration will be proposing supplemental
funding for fiscal year 1998 to increase the Departmental
Administration budget by $4.8 million and the Office of the General
Counsel budget by $235,000 to enhance funding for the Department's
Civil Rights. To offset these amounts, the Department has proposed to
reduce the largest USDA salaries and expenses accounts across the
board. In particular, the Farm Service Agency's salaries and expenses
account has been targeted to be cut by $1,080,000.
Question. Currently, the FSA has had to RIF 170 people this year.
What additional reductions in force, if any, will be required if this
proposed rescission to cut salaries and expenses in FSA funding is
enacted?
Answer. The Farm Service Agency (FSA) is anticipating a reduction
in force of 152 people in fiscal year 1998. The proposed rescission of
$1.080 million is not expected to result in any additional staff
reductions beyond the expected 152. Instead, the impact of this cut
will mainly affect the non-salary portion of FSA's budget which
includes funds for equipment, travel, supplies and contracted services.
Question. In Rural Development, the budget reflects a 153 staff
year reduction from fiscal year 1998 to fiscal year 1999. What
additional reduction in staff will be required if this proposed
rescission to cut salaries and expenses in RD funding is enacted?
Answer. There will be no further staff year reductions resulting
from the proposed rescission. Rural Development will defer planned
expenditures in information systems to compensate for the proposed
rescission.
Question. What will be the impact of each of the other proposed
rescissions in salaries and expenses funding, by account, on each
agency activities?
Answer. The proposed rescissions are based upon total FTE's and the
use of the Department's civil rights resources, and in total, represent
about one-tenth of one percent of the total appropriations, The
rescissions will not have a noticeable impact on the involved programs.
The agencies affected by the rescissions will be making small across-
the-board reductions.
Question. What is the urgency of providing the supplemental funding
requested for the Department's civil rights efforts?
Answer. These resources are needed to meet the Department's
strategic objective of ensuring that all customers are treated fairly
and equitably with dignity and respect. The funds will support
additional staffing to improve personnel services and assistance to
USDA agencies, including ethics compliance; to improve outreach to USDA
customers including support for the new USDA Office of Outreach that
will ensure all customers, especially under served populations, have
full access to USDA programs and services; and to enhance management
employee relations that support early resolution of employee grievances
and conflicts within USDA.
It is hoped that these supplementals will be enacted by the end of
March.
An increase of $4.8 million is requested for Departmental
Administration consisting of:
--$1,123,000 for Human Resources Management activities,
--$1,004,000 for outreach to USDA customers, institutions, and
businesses,
--$273,000 for conflict resolution,
--$1,900,000 for ongoing policy, oversight,and program activities
conducted by Human Resources Management, Office of Operations,
Procurement and Property Management, Office of Administrative
Support, and Small and Disadvantaged Business Utilization,
--$500,000 to establish a commission on civil rights.
An increase of $235,000 is requested for the Office of the General
Counsel which would staff the newly created Civil Rights Division and
continue to reduce the backlog of complaints pending.
agricultural research service buildings and facilities
The President used his line-item veto authority to cancel funds
appropriated for fiscal year 1998 for planning and design of two ARS
replacement facilities: (1) the Biocontrol and Insect Rearing Facility
in Stoneville, Mississippi (-$900,000), and (2) the Poisonous Plant
Laboratory in Logan, Utah (-$600,000).
The rationale given for cancellation of funding for each project
was: (1) the funds weren't requested by the President; (2) additional
appropriations would be required in the future; and (3) the need for
additional research facilities is under review by the Strategic
Planning Task Force, due to report in April 1999.
Funding for the Biocontrol and Insect Rearing Facility in
Stoneville, Mississippi, was initiated on the basis of a USDA report on
insect rearing capabilities which the Committee requested in fiscal
year 1997. While the President's cancellation message notes the fact
that ARS conducts insect rearing at nearly 30 locations as a reason for
removing the funding for the new insect rearing facility, the ARS
report notes that ``most of these operations are not of major concern *
* * as they are location specific and produce only a small number of
insects for limited use.'' The USDA report indicates that the only
three major facilities that produce large numbers of insects in support
of many important projects that are in Starkville and Stoneville, MS,
and Honolulu, Hawaii--the Starkville facility being ARS' primary insect
rearing laboratory.
A copy of the report is submitted for inclusion in the record.
Insect Rearing Facilities
introduction
Senate Report No. 104-317, accompanying the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriation Act for fiscal year 1997, contained the following request
by the Senate Committee on Appropriations:
The Committee is informed of the critical importance of the
role of ARS in terms of insect rearing capabilities for
purposes of the development of new technology in crop
production. The Committee is interested in obtaining a summary
of the capabilities of FIRS to meet present and future needs
for insect rearing, and specifically requests that a proposal
be submitted to the Committee outlining these needs prior to
the submission of the fiscal year 1998 budget. The Committee
further directs ARS to refrain from closing any existing
facilities or programs aimed at insect rearing until the
results of this study have been reviewed by the Congress.
In response to this directive, an internal Agricultural Research
Service (ARS) assessment of insect rearing facilities was conducted
with input acquired from external location review committees. Based on
these assessments, this report outlines facility needs in support of
two primary areas of crop production. The proposed facilities will
support new insect and weed control technologies for the southern U.S.,
California, and Hawaii.
background
ARS conducts research on, and pilot scale production of, many
different insects in support of Integrated Pest Management (IPM)
programs in a variety of crops. Efficient production of high quality
insects is essential for their successful use. Mass reared insects are
used as test organisms when developing resistant host plants,
biorational/chemical controls and in basic biological studies, or are
used directly in biologically-based control strategies such as the
release of sterile insects or biological control agents. Application of
these technologies using mass reared insects has allowed the
eradication of the screwworm fly from North America; aided in the
elimination of the Mediterranean and/or other fruit flies from
California, Florida, and Texas; and many similar successes with pests
from various crops.
A number of new technologies now being developed by ARS are
dependent on the release of large numbers of beneficial insects,
however, the efficiency of insect rearing has been identified as a
limiting factor that needs additional research. Examples of
biologically-based technologies in this category include, but are not
limited to, viruses that control Heliothis, parasites that control the
boll weevil, beetles capable of killing leafy spurge, parasites that
search out and attack fruit flies, and many of the pests themselves
that can be used directly in sterile insect release programs for
control. These organisms are typically grown under controlled
environmental conditions, packaged and distributed by the insect
producer, and then taken to the field where they are applied to control
the target pests. Unfortunately, mass rearing technology and facilities
within ARS are based on 1960's (or earlier) technology, and thus are
severely outdated and no longer capable of fulfilling the current or
anticipated research and development needs.
the role of major insect rearing facilities in ars
Mass rearing facilities fulfill two primary roles in ARS research
programs. First, they produce large quantities of test organisms to
supply researchers with adequate amounts of products to test new
control strategies at realistic levels of operation. This is extremely
important in the development and evaluation of new area-wide IPM
technologies prior to full implementation by action agencies or
farmers. Second, they allow limited laboratory rearing methods to be
scaled up for mass production using industrial-sized equipment and
handling techniques. Making the step from the laboratory bench to
production scale operations is a significant component of ARS research
that involves designing new equipment, improving handling methods, and
evaluating product quality.
current ars insect rearing facilities
ARS conducts insect rearing at nearly 30 locations in support of
local research and action programs. Most of these operations are not of
major concern for this report as they are location specific and produce
only a small number of insects for limited use. ARS, however, operates
three major facilities that produce large numbers of insects in support
of many important projects. These facilities are located in Starkville
and Stoneville, Mississippi, and Honolulu, Hawaii, and are the focus of
this report.
Mississippi
The facility in Starkville (Robert T. Gast Insect Rearing Facility)
is housed in a 24,000 sq. ft. State owned building adjacent to ARS
laboratories on the campus of Mississippi State University. Although
the Gast Facility is ARS' primary insect rearing laboratory, it is
severely limited in its production capabilities as the building,
supporting utilities, air handling capabilities, and existing equipment
are inadequate to meet production requirements and also do not meet
existing safety specifications. Future expansion of the University
campus is expected to displace the existing Gast Facility building.
Insect rearing in Stoneville is temporarily and inadequately housed
within the main laboratory building at the ARS Jamie Whitten Delta
States Research Center. Several different species of insects important
for corn and cotton production and an insect pathogenic virus being
used in a 201,000 acre area-wide management program for Heliothis are
produced in this temporary housing. The building in which insects are
reared was built for biology research and is not properly designed to
handle insect rearing or microbial production which needs to be
conducted under highly sanitary conditions, with specialized air, water
and waste handling systems.
ARS proposes to combine the two facilities from Stoneville and
Starkville into a new 50,000 sq. ft. laboratory and pilot plant that
will be located adjacent to the main laboratory at Stoneville.
Hawaii
The ARS fruit fly rearing facility is located on University of
Hawaii property in a residential area of Honolulu and is housed in old
World War II Quonset huts. Being surrounded by a densely populated
residential area has caused ARS problems of compatibility with the
local community due to odor and waste disposal. Several species of
fruit flies and parasites are mass produced in this facility that is in
severe need of replacement. The State has requested that ARS vacate
this facility in the near future.
need for new facilities
Despite hundreds of millions of dollars spent by agricultural
producers on insect and weed control, and millions of pounds of
pesticides being applied to vast areas of the U.S. each year, pests
continue to cause severe losses to a large number of crops. In two
recent reports, the National Academy of Sciences (1996) and the
Congressional Office of Technology Assessment (1995) called for
increased research and development of new biologically-based pest
control technologies to improve control effectiveness and reduce the
use of chemical pesticides. One of the primary factors limiting the
development of new biologically-based technologies (biological control,
sterile insect release, etc.) is our lack of ability to mass produce
high quality and effective agents at economically acceptable costs. The
proposed new facilities should eliminate this constraint.
Laboratory and Pilot Plant Facility at Stoneville, Mississippi
Although ARS has developed and successfully demonstrated
augmentative biological control technology and products on a small
scale, specific scale-up research and pilot plant production needs to
be investigated and improved so that industry can further develop and
commercialize these new technologies for U.S. producers. The proposed
mass propagation facility will include both developmental laboratories
and a pilot plant to address these needs. The pilot plant concept was
created to allow co-development of commercial scale equipment, improve
operational level processing systems, to develop and test other
scientific advances in insect mass rearing, and to accelerate
technology transfer in cooperation with industry. The projected cost of
construction for a new 50,000 sq. ft. facility is estimated to be $10
million ($200 per sq. ft.).
Laboratory and Quarantine Facilities in Hawaii
The fruit fly rearing laboratory in Hawaii is needed to provide
adequate facilities and equipment in support of evaluating new fruit
fly strains for use in action agency programs; to develop new rearing/
handling methodologies to improve the quality, longevity,
competitiveness and economics of mass reared fruit flies for use in
sterile insect release programs; and to develop new cost-effective
means of mass producing beneficial parasites of fruit flies that can be
released into the environment to control these pests. Due to the
quarantine status of many fruit flies in the U.S., this facility must
maintain a limited number of quarantine laboratories and small scale
rearing rooms. The projected costs of construction for a new 20,000 sq.
ft. facility are estimated to be $5 million ($250/sq. ft. due to
quarantine needs). The proposed ARS Fruit Fly Rearing Research
Laboratory will be located adjacent to the U.S. Department of
Agriculture, Animal and Plant Health Inspection Service (USDA-APHIS)
and the California Department of Food and Agriculture facilities in
Waimanalo, Hawaii. This facility will address research needs for fruit
fly control in fruit and vegetable crops supporting implementation
programs conducted by the States of California and Hawaii. This
facility will complement the existing APHIS mass production facility in
Hawaii which collectively will support fruit fly suppression and
eradication in Hawaii to prevent mainland infestation and greatly
enhance the agricultural production and export potential from Hawaii.
conclusion
The need for new insect mass rearing facilities within ARS that
support research and control efforts for major pests such as the boll
weevil, cotton bollworm, European corn borer, Mediterranean fruit fly
and other pests is clear. By combining two old and inadequate
facilities in Mississippi into a single new facility at Stoneville, ARS
will be better able to develop and support USDA and grower action
programs in field crop pest control. This facility Will be linked with
private industry through pilot plant operations for scale-up production
of organisms of commercial value. Operations at the proposed Stoneville
facility will be housed in a new 50,000 sq. ft. building that is
projected to cost $10 million. The proposed ARS Fruit Fly Rearing
Research Laboratory in Hawaii will address research needs for fruit fly
control in fruit and vegetable crops supporting implementation programs
conducted by the States of California and Hawaii, and USDA-APHIS, and
is estimated to cost $5 million. A small section of the Hawaii facility
will be constructed to maintain pest and beneficial insects under
quarantine conditions.
Question. Does the Department recommend new insect rearing
facilities, as the USDA report to the Committee submitted by Dr. Woteki
indicates?
Answer. The Department still believes that two new high production,
modern insect rearing facilities will need to be constructed as
described in the USDA/ARS Insect Rearing Facilities Report submitted to
Congress in fiscal year 1997. This will require combining the two
facilities at Stoneville and Starkville into a new 50,000 square feet
laboratory and pilot plant in Stoneville to address corn and cotton
pests. Also required is construction of a new fruitfly rearing facility
in Hawaii to develop new rearing/handling methodologies to improve the
quality, longevity, competitiveness and economics of mass-reared
fruitflies for use in sterile insect release programs, as well as to
develop new cost-effective means of mass producing beneficial parasites
of fruit flies than can be released into the environment to control
these pests in Hawaii and in the continental United States.
Question. When will each of these new facilities be needed?
Answer. Although the need is not immediate, ARS will eventually
need to move forward with construction and completion of these projects
to fulfill the Department's and the nation's long-range IPM goals, to
furnish new biologically-based replacements for chemical pesticides
that will be removed in the next several years as a result FQPA, and to
fulfill the needs of USDA and grower action programs in field crop pest
control. Decisions on when to make these investments in new facilities
will be reviewed annually as system-wide facility needs are considered
and priorities established for the annual budget.
Question. The President's fiscal year 1999 budget again proposes to
closed down the ARS Prosser, WA; Mandan, ND; Orono, ME; and Brawley, CA
facilities and to transfer the Melaleuca, FL facility from the Corps of
Engineers to USDA and initiate construction funding for this facility
in fiscal year 1999. Why isn't the Administration proposing to wait for
the Task Force conclusions before making these proposals?
Answer. The President's budget requires the reallocation of
existing resources to finance new, high priority research needs. A
number of projects carried out in ARS research stations at Prosser,
Washington; Mandan, North Dakota; Orono, Maine and Brawley, California,
were identified as less critical. Given these programmatic decisions,
management considerations lead to recommendations to terminate and
redirect resources to new research initiatives and close the mention
research stations. We believe there is adequate information for
Congress to act on these relatively straight forward recommendations at
this time without formal input from the Strategic Planning Task Force.
Question. Please give the Department's assessment of the adequacy
of the current ARS Poisonous Plants Laboratory office and laboratory
space.
Answer. The structure that currently houses the 20 staff of the ARS
Poisonous Plants Laboratory in Logan, Utah, is inadequate. The patch-
work building is too small and outmoded to fill the needs of the
current research program. The original metal building was constructed
in 1962. Four additions were constructed, the latest in 1984, but the
building is again too small to provide sufficient office and laboratory
space. The design is inefficient and awkward to utilize, difficult to
manage, and expensive to maintain. The building has 7,725 sq. ft. of
floor space, including laboratories and offices. The heating,
ventilation, and air conditioning (HVAC) system does not properly heat
and cool the building, causing personal discomfort and analytical
instruments to malfunction. The HVAC system is marginal in terms of
meeting OSHA laboratory standards for air quality. Corrective measures
have been taken, but expensive repairs and replacement of HVAC
equipment on this old structure are not justified.
Question. Why didn't the reasons given by the President for
cancellation of the Stoneville, MS, and Logan, Utah, ARS replacement
facilities also apply to the unrequested funds provided for fiscal year
1998 for planning and initial construction of the Western Human
Nutrition Research Center in Davis, CA, replacement facility, and the
Jornado Range Research Center in Las Cruces, NM?
Answer. Funding provided for the construction projects in Utah and
Mississippi was vetoed by the President under the line-item veto
authority for the following reasons: (1) the projects were not
requested in the fiscal year 1998 budget; (2) the funding was for
planning only and would require future additional resources for
construction costs; (3) the need for additional research facilities is
currently under review by the Strategic Planning Task Force mandated by
the 1996 Farm Bill to review potential consolidations of Federal
agricultural research facilities. The Task Force report is due in late
spring of 1999. In addition, ARS conducts insect rearing at nearly 30
other locations.
Because of other factors, funding for the Davis and Jornado
projects was not vetoed. In the case of the Davis, CA project,
relocation of the WHNRC from San Francisco, is necessary due to the
likelihood of substantially increased leasing costs at the current
site. This facility is one of six ARS Human Nutrition Research Centers
and the only Center responsible for testing the biological efficacy of
nutrition intervention programs. Research conducted at the Jornado
Research Center in Las Cruces, NM is a key component of the ARS grazing
lands program. ARS scientists, and collocated collaborators from NRCS,
EPA, and NSF are currently housed in a temporary facility. Both
relocations will foster continued cooperation between ARS and
university scientists by co-locating the ARS lab with university
facilities.
food recovery and gleaning
Question. Mr. Secretary, last year we spoke about the Department's
food recovery and gleaning efforts. You commented at the time that this
is an area ``where government can be a facilitator, without costing any
money.''
The fiscal year 1999 budget proposes $20 million for a new
community-based food recovery and gleaning program. Would you please
explain this proposal and why federal funding is now required for what
you last year described to be a ``no-cost'' federal effort?
Answer. Senator Cochran, you are correct. Last year I noted that
government can be a facilitator without costing any money. Government
can also take a more active role. And in this case, an active role is
warranted. We can multiply the value of the money we provide to local
charities working on food rescue, and dramatically increase the amount
of food that they can safely acquire distribute to the needy.
As you may know, the Department estimates that 96 billion pounds of
foods was lost in 1995. Not all of this is wholesome and nutritious, or
food that could be economically recovered by volunteer groups. However,
with a little bit more effort, we can rescue a whole lot more than we
are today--currently we rescue less than one half of one percent--and
we can use that food to feed hungry people. A key impediment is one-
time ramp up expenses that local organizations and charities must incur
as they take on the challenge of safely acquiring and distributing
perishable foods. Our proposal will help local communities pay for vans
and trucks, specialized containers to pick up usable food, other
supplies, and training for both staff and volunteers in how to safely
handle the food.
food and nutrition program research
Question. Would you please explain how the Economic Research
Service is executing the nutrition research and evaluation program for
fiscal year 1998 and why the Administration believes the Food and
Nutrition Service can better oversee and administer these research
funds?
Answer. I understand that ERS has consulted with many government
agencies, private and non-profit organizations, universities, and the
Food and Nutrition Service to solicit input for program development. A
recent conference under the auspices of the National Academy of
Sciences was sponsored by ERS to help design and focus the program. ERS
plans to operate a nationally diverse program which draws on the
research capabilities of the public and private sectors, including the
nation's academic institutions.
Despite the excellent work that ERS has done, the Administration
believes this research and evaluation program should be overseen and
administered by the Food and Nutrition Service. FNS has detailed
knowledge of the country's food programs and, because they administer
and have oversight responsibility for the programs, they better
understand the research and evaluation needs of the food programs.
Question. Would you please describe this initiative, its
importance, and long-term cost?
Answer. The National Food Genome Initiative (NFGI) is an essential
component of USDA's Research Agenda. It will vastly expand our
knowledge of the genetic make-up for species of importance to the food
and agricultural sectors. This knowledge is the key that will permit
the U.S. to develop and use new genetic technologies for improvement in
yield, pest resistance, production, and quality of the domestic
agricultural output. The Initiative will focus on mapping, identifying,
and understanding the function and control of genes responsible for
economically important traits in the major agriculturally important
species of plants and animals and associated microbes. The Initiative
expands the scope of the National Plant Genome Initiative (NPGI)--a
long term project of the National Science Foundation, the National
Institute of Health (NIH), the Department of Energy, USDA, and the
international research community. NPGI is described in the recently
published report from the National Science and Technology Council
(NSTC). (A copy of the NSTC report is being provided to the committee.)
The research for NFGI will build upon the foundation established in
the current USDA genetic research programs. In this way, USDA will
continue to acquire a full understanding of the genetics of
economically desirable plants, animals, and microbes, and will
simultaneously enhance the employment of new and developing genomic
technology needed to achieve a safe and secure food supply. It will
build upon current genomic research, such as the Human Genome
Initiative and the Arabidopsis Genome Research Project, to understand
gene structure and function which is expected to have considerable
payoff in crop species ranging from corn to soybean to cotton and
animal species ranging from cattle to swine to poultry.
In fiscal year 1999, the Department proposes investing $40 million
in the NFGI. The funds would be used primarily for whole genome
sequencing for rice and Arabidopsis; expressed sequence tag (EST)
analysis for corn, soybean, cattle and pig; data base enhancement and
interface for species data bases; and functional genomics. In fiscal
year 2000 and 2001, it is envisioned that the Initiative will increase
to $70 million and $100 million respectively, and then continue at $100
million per year, adjusted as appropriate for advances in technologies
and scientific knowledge, and as funds are available within overall
spending limitations.
I understand that the Department's fiscal year 1999 request
includes $30 million increase in discretionary appropriations for this
initiative and proposes legislation to provide for an additional $10
million.
Question. What authorization is needed for this proposed research
initiative and is the additional $10 million proposed an authorization
for appropriations or direct spending?
Answer. The fiscal year 1999 budget proposes new legislation to
establish a Food Genome Competitive Research Grants Program to support
the Federal investment in NFGI and to authorize annual appropriations
to finance the program. The budget recommends $10 million in
discretionary spending for the Initiative under this new authority to
support competitively awarded projects.
commission on 21st century production agriculture
The fiscal year 1999 budget request an increase of $350,000 to fund
the Commission on 21st Century Production Agriculture authorized by the
Federal Agriculture Improvement and Reform Act. Last year, the budget
request a separate appropriation of $1 million for the Commission. The
Committee did not approve that request but left it to the Department to
make funding available for the Commission within the overall limitation
on obligation for activities of advisory committees, panels
commissions, and task forces.
Question. Why has the request for the Commission fallen from $1
million last year to $350,000 for fiscal year 1999?
Answer. Last year's request assumed the Commission would employ a
staff of several persons, hold an ambitious schedule of meetings and
hearings, award research contracts, and publish the reports. Since that
request was submitted, the Commission members have been appointed and
met. This year's request was developed in consultation with the
Commission. Given the lack of appropriations last year, the Commission
has scaled down their planned activities. Current plans for fiscal year
1999 call for the employment of only one staff person, no research
contracts, less frequent meetings, and limited distribution of printed
copies of the reports.
Question. Is funding being made available for the Commission for
fiscal year 1998 within the overall $1 million limitation on
obligations for such activities? If so, how much is being provided and
which agency is bearing the cost?
Answer. The Commission is being provided up to $50,000 for fiscal
year 1998. The $50,000 will be made available within the overall $1
million limitation on obligations for such activities. At this time, no
funds have yet been made available to the Commission and the decision
has not been made as to which agency is bearing the costs.
chief economist: agricultural weather services
Increased funding was provided to the Office of the Chief Economist
for fiscal year 1998 to improve weather and climate data for
agricultural areas.
Question. Would you please explain the agricultural weather
initiative more fully. Also, how are the fiscal year 1998 funds being
spent and what additional resources will be required in fiscal year
1999 and each future fiscal year to fully carry out this program and
for what specific purposes will these funds be required?
Answer. Weather data is a key input to agricultural production
forecasts, disaster assessments, fire and flood control, conservation
and natural resource programs, global change analysis, environmental
monitoring, and drought mitigation. Program and budget cuts underway in
the National Weather Service (NWS) have significantly curtailed
meteorological data and services formerly available to USDA. For
example, as a cost cutting measure, NWS recently announced it will
cease delivery of weather charts and satellite imagery used extensively
by USDA.
The Office of the Chief Economist (OCE) is using a portion of the
fiscal year 1998 funding to purchase computer hardware and software
compatible with that being adopted by NWS. When fully implemented, this
will be USDA's only source for obtaining NWS data products.
The remainder of fiscal year 1998 funds are being used to collect,
quality control, and disseminate weather and climate data in
agricultural regions no longer covered by the NWS. In fiscal year 1998,
USDA is acting to mitigate NWS data losses in the southeastern United
States, a prime agricultural area where weather and climate data gaps
in agricultural areas have been well documented. A data collection
center is being staffed at Stoneville, Mississippi which will
concentrate on improving data collection in key agricultural states
including, Mississippi, Florida, Alabama, Georgia, and South Carolina.
For fiscal year 1999, OCE is seeking additional modernization funds
and staff to continue software development to improve access to and
delivery of NWS data and forecasts to additional USDA field sites.
Also during fiscal year 1999, data collection efforts will expand
beyond the southeastern United States. The staff at Stoneville will be
increased, and additional cooperative agreements will be established to
acquire agricultural weather and climate information in Texas,
Louisiana, and parts of the southern and central Plains.
Beyond fiscal year 1999, initiatives will be directed at completing
data acquisition activities across the remainder of the nation's
agricultural areas, specifically, the Plains, Great Lakes, and Midwest.
The exact funding requirements will vary depending on the extent of
weather data collected and the agricultural areas covered.
civil rights
Question. Mr. Secretary, at your request, additional funds were
provided for fiscal year 1997 and again for the current year for the
Office of Civil Rights to address the backlog of pending equal
employment opportunity and program discrimination complaint cases.
However, the backlog of cases seems to have grown, not diminish.
Is any progress being made in this area?
Answer. Significant progress has been made with both program
complaints and employment complaints. Experience by others has shown
that when an agency starts to address complaints after a period of time
in which they were not acted upon there is a sudden flood of complaints
filed by those who are hopeful that their case will be seriously
considered. Once these complaints are filed, the filing rate
diminishes.
Question. How many cases were closed at the end of fiscal year
1997, how many were pending in the courts; and how many had not been
addressed?
Answer. When the Department focused on addressing complaints filed
with USDA in late fiscal year 1997 and early fiscal year 1998, we
discovered that the basic case load information was confused and
incomplete. Some complaints that were submitted over the past few years
had not been properly logged into the system, and others were
inaccurately included in the case file with similar cases instead of
being counted as new ones. The backlog of program complaints were not
updated and verified until November 1, 1997, and employee complaints
until January 1, 1997. As of these dates, 1,129 of the 3,179 complaints
filed were closed, and 2,050 were active. Normally there would be no
active program complaints pending in court. However, the latest amended
list in the Pigford class litigation contains 351 names of which 143
have complaints filed with the Office of Civil Rights. Of these, 43
were filed before February 21, 1997.
Question. Please provide this same information for fiscal year 1998
to date.
Answer. Two hundred eighty new cases have been filed since the
backlog was verified. Fifteen of these cases have been closed and two
hundred sixty five are active cases.
Question. How many of the above cases are employee complaints and
how many are complaints by farmers?
Answer. Out of the 3,459 complaints that we have on file, 1,118 are
program complaints and 2,341 are employee complaints. Of the program
complaints, 155 are from farmers. USDA has closed 229 of the program
complaints and 915 of the employee complaints.
Question. What are the Department's plans to address the pending
cases?
Answer. In addition to re-establishing the program complaints
investigations unit this year, the program complaint process is being
accelerated through contracts with 10 investigative firms, 14 temporary
investigators, more than 20 part-time law students, 10 temporary
support staff, and about 10 detailed employees to resolve the entire
backlog in a methodical and organized manner. New cases that have been
received are being addressed using a re-engineered process that should
process and resolve each new complaint within 180 days under normal
circumstances.
Backlogged employee complaints are being resolved to the extent
possible through a mediation process that uses USDA employees and
mediators outside the Department. For example, the Forest Service
resolved 75 percent of its backlog cases through mediation during a
special initiative this past fall and winter. New cases that are
relatively clear cut are being quickly addressed by in house staff to
reduce the time and cost to resolve them.
Question. Last year, you indicated to Senator Robb that the most
pressing need for the Office of Civil Rights was to establish the civil
rights investigative unit and that unit was critical to addressing the
backlog of cases and ensuring timely resolution of future complaints.
Why wasn't that unit funded from the funding increase the Department
received for fiscal year 1997, and has that unit now been established?
Answer. We did not want to simply hire more employees until we had
examined and understood the extent of the workload and how past
procedures used by USDA to handle these cases had contributed to the
backlog. Consequently, most of last year's funds were used for these
purposes. We also concentrated on addressing those cases which had a
potential to be quickly resolved.
Our intention is to improve both how we deal with the complaint
process and how we can make institutional changes in USDA policy and
employee attitudes and actions that will prevent future situations that
lead to complaints. The program complaints investigations unit has been
established and is responding to the program complaints that have been
made against the Department. At the same time, other oversight, policy
and program actions have been proposed to further ensure that fair and
equitable treatment is provided to USDA customers through services to
the public.
Question. Of the increased funding requested for fiscal year 1999
for civil rights related, how much of this is for the processing and
resolution of complaints?
Answer. The increased funding requested for civil rights activities
will be used to strengthen the Office of Human Resources Management,
the Office of Outreach and conflict resolution capabilities, so we can
serve USDA customers and employees better and prevent future
discrimination complaints.
About $170,000 of the total proposed increase for fiscal year 1999
would be used to cover increased pay and operating costs for the Office
of Civil Rights to process and resolve complaints.
Question. How does this compare with the current level of resources
devoted to these activities?
Answer. About $3.5 million will be spent to resolve program
complaints in fiscal year 1998 and nearly $3.7 million will be needed
for fiscal year 1999.
The fiscal year 1999 budget proposes $250 million for civil rights-
related activities. This is an increase of $150 million above the
fiscal year `98 level.
Question. Please list the individual activities for which increased
funding is requested in the fiscal year 1999 budget and indicate the
fiscal year 1998 funding level and staffing levels for each activity
compared with those requested for fiscal year 1999.
Answer. We will provide this information for the record.
[The information follows:]
USDA CIVIL RIGHTS INITIATIVE--BUDGET AUTHORITY
[Dollars in millions]
------------------------------------------------------------------------
1998
Program current 1999 budget
estimate
------------------------------------------------------------------------
Fund Civil Rights Activities in DA............ $12.8 $17.8
Improve Outreach to USDA Customers and 3.0 10.0
Socially Disadvantaged Farmers and Ranchers..
Civil Rights Division Within OGC.............. 0.2 0.9
Fund Small Farms Initiative................... ........... 4.0
Address Disparities in Funding of Institutes
of Higher Education:
1890 Facilities........................... 8.0 12.0
Extension Services--1994 Institutions..... 2.0 3.5
Hispanic Serving Institutions Education 2.5 2.5
Grants...................................
Extension Indian Reservation Program.......... 1.7 5.0
Farm Ownership and Farm Operating Loans:
Farm Ownership at $85 million level in 6.0 13.0
1999.....................................
Farm Operating Loans at $500 million level 32.0 34.0
in 1999..................................
Farm Labor Housing Program:
Subsidy for $32 million in loans in 1999.. 7.3 17.0
Farm Labor Housing Grant Level............ 10.0 13.0
Rural Rental Assistance Payments.......... 5.0 10.0
Address the Needs of Farmworkers: Fund NASS 5.7 7.1
Pesticide Use Survey.........................
Provide Increased EQIP Funds to Low-Income ........... 100.0
Farmers and to Address Environmental Needs...
-------------------------
Total, Civil Rights..................... 96.2 249.8
------------------------------------------------------------------------
In addition to the request for funding, the budget also reflects
increased staffing levels for some of the previously listed activities.
These include the following:
Administration.--An increase of 62 staff years. This will improve
civil rights related personnel services and technical assistance to
agencies, increase outreach and assistance efforts to under represented
customers and groups, enhance management-employee relations and support
early resolution of complaints. The increase includes staffing for the
newly established Office of Outreach within DA to assure that all
eligible customers have access to USDA programs and services and for
the Socially Disadvantaged Farmers Outreach Program, which is
authorized by Section 2501 of the Food, Agriculture, Conservation and
Trade Act of 1990.
An increase of 8 staff years is proposed to facilitate the
processing and adjudicating of civil rights complaints by expanding the
civil rights division in OGC.
Research, Education, Extension and Statistics.--Funds are requested
to support an integrated research, extension, and education competitive
grants program through CSREES for new technology adoption and transfer
to small farms. This initiative is intended to foster greater diversity
in small farm enterprises as well as enhance current small farms
production capabilities.
Additional funds are requested to address disparities in funding
and enhance the Department's cooperative efforts with institutions of
higher education that are primarily devoted to the needs of minority
students. Funds will also be targeted to improve outreach to socially
disadvantaged farmers and ranchers in cooperation with these
institutions to help stem the reduction of minority small farmers. The
Extension Indian Reservation program will be expanded to meet the need
for greater outreach by Extension Agents. One additional staff year is
included for the Small Farms initiative. The NASS proposal to support
collection of data on pesticide usage in nursery and greenhouse crops,
where the potential for farmworker exposure is high reflects an
increase of 10 staff years.
Farm Credit.--Funds are proposed to support farm ownership and
operating loans at the levels recommended by the CRAT report. Direct
farm ownership loans would be increased from $46 million in 1998 to $85
million in 1999. This funding increase will allow over 1,000 family
farmers to either acquire their own farm or to save an existing one--
nearly 500 more than in 1998. Roughly 60 percent of these loans are
provided to limited resource borrowers.
Farm Labor Housing.--Funds are provided to support a total of $55
million in loans and grants to construct housing for some of the
Nation's neediest families. This is over an 80 percent increase from
the 1998 level.
Environmental Quality Incentives Program.--An increase of $100
million is requested to address CRAT recommendations and Clean Water
Initiative goals. While this will not be used to support an overall
increase in staff for NRCS, we expect up to 50 staff years will be
devoted to CRAT related activities.
foreclosures
Question. In April 1997, USDA halted foreclosures on USDA farm
loans, pending civil rights reviews. As a result, 116 foreclosures were
postponed. In each state USDA office, a Civil Rights Independent Review
Group has been created to review these foreclosures. Have these Civil
Rights Independent Review Groups reported that discrimination
contributed to any of these foreclosures? If so, how many and in which
states?
Answer. The 116 cases mentioned were reviewed by the Independent
Review Team in the National Office. The Review Team was established to
review all cases in the foreclosure process only to determine whether a
question of discrimination was raised, not whether it occurred. Upon
the completion of their review, twenty-eight of the 116 cases were
referred to the USDA Office of Civil Rights, Program Complaint
Adjudication Division (PCAD). Of the twenty-eight cases referred to
PCAD, only eighteen discrimination complaints were filed, while the
other ten were determined to need additional loan servicing. Of the 18
discrimination complaints filed, one has been closed by settlement and
not foreclosure. Seventeen discrimination complaints remain open until
a decision is made whether discrimination occurred. Based on the
twenty-eight cases reviewed none have been foreclosed. With respect to
88 cases remaining from the 116 reviewed, additional servicing needs
are being carried out and none have been foreclosed. The Independent
Review Team was disbanded on September 12, 1997.
Question. How were these conclusions about discrimination
determined?
Answer. The Independent Review Group was given guidance through a
National written directive that includes a detailed checklist to assist
in the review. The checklist, when completed, provides a history of the
servicing actions taken and any documentation submitted by the borrower
that alleges discrimination. However, as indicated earlier, the
Independent Review Team did not make any determination that
discrimination occurred.
departmentwide obligations
Question. Please provide a summary of obligations, Departmentwide,
for each of fiscal years 1997-1999, 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 1997, 1998, and the 1999 budget in millions of dollars, excluding
Forest Service:
------------------------------------------------------------------------
1997 1998 1999
Object class estimate estimate estimate
------------------------------------------------------------------------
Salaries and benefits............ $3,424 $3,576 $3,617
Travel........................... 159 166 170
ADP hardware/software purchases.. 65 123 152
Contracts, grants and other 1,537 1,623 1,396
extramural agreements...........
Equipment (other than ADP 107 93 98
related)........................
------------------------------------------------------------------------
Question. Please provide the Committee with a consolidated listing
of obligations for fiscal years 1997-1999 for the following
crosscutting program activities:
--civil rights activities;
--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; and
--natural resources and environmental programs.
Answer. The following table contains the information. Please note
the amounts are dollars in millions.
----------------------------------------------------------------------------------------------------------------
Activities 1997 estimate 1998 estimate 1999 estimate
----------------------------------------------------------------------------------------------------------------
Civil rights activities......................................... $23 $34 $37
1890 Institutions and HBCU's.................................... 95 92 96
Pest management and related programs............................ 231 260 266
Food safety..................................................... 631 654 721
Nutrition....................................................... 411 421 457
Information activities.......................................... 46 47 48
Congressional relations and legislative affairs offices:
USDA (w/o FS)............................................... 3 3 3
FS.......................................................... 1 1 1
Natural resources and environment programs...................... 3,310 3,298 3,223
----------------------------------------------------------------------------------------------------------------
administrative staffing
Question. What is the total number of administrative staff for USDA
broken out by headquarters, regional, State, and field office levels?
Answer. The following table contains the information.
USDA Administrative Staff
Location 1997 estimate
Headquarters.................................................. 4,298
Regional...................................................... 4,353
State......................................................... 1,457
Field Offices................................................. 4,600
--------------------------------------------------------------
____________________________________________________
Total................................................... 14,708
employee details/assignments
Question. The fiscal year 1998 appropriations Act specifies that
``No employee of the Department of Agriculture may be detailed or
assigned to an 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.''
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 1997 and 1998 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 following table contains the information.
DETAILED FOR LESS THAN 30 DAYS--FISCAL YEAR 1998
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Date/length Purpose Reimbursed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
William Digdo (GIPSA)................ APHIS........................................ 15 days....................... APHIS Medfly.............................................. $3,837
Michael Haley (GIPSA)................ APHIS........................................ 15 days....................... APHIS Medfly.............................................. 3,934
James Ledoux (GIPSA)................. APHIS........................................ 20 days....................... APHIS Medfly.............................................. 2,993
Bradley O'Neal (GIPSA)............... APHIS........................................ 15 days....................... APHIS Medfly.............................................. 3,118
Robert Simpson (GIPSA)............... APHIS........................................ 2 days........................ APHIS Medfly.............................................. 411
Dan White (GIPSA).................... APHIS........................................ 2 days........................ APHIS Medfly.............................................. 441
Sylvia Magbanua (NASS)............... Office of Civil Rights....................... 28 days....................... Civil Rights training program............................. ..............
N. Blair (FS)........................ Office of the Secretary...................... 10/6/97 to 11/6/97............ Civil Rights Action Team.................................. ..............
G. Renteria (FS)..................... Office of the Secretary...................... 11/3/97 to 11/20/97........... Civil Rights Action Team.................................. ..............
M. Warren (FS)....................... Natural Resources and Environment............ 10/01/97 to 10/24/97.......... Support................................................... ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DETAILED FOR MORE THAN 30 DAYS--FISCAL YEAR 1998
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Date/length Purpose Reimbursed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Special Assistant to Adm. (FSA).. White House.............................. 10/01/97 to 09/30/98........ Personnel liaison for all White House personnel of $73,638 Est. (Reimb.
Cabinet agencies and Boards and Commissions within limited by 3 U.S.C. 112).
assigned portfolio.
Computer Specialist (FSA)........ OSEC/Modernization of Admin. Processes 1/19/98 to 05/09/98......... To provide Agency expertise to MAPP project managers... $20,519 est.
Program (MAPP).
Management Analyst (FSA)......... U.S. Environmental Protection Agency..... 10/01/97 to 11/22/97........ Assisted in the Information Resources Management Policy $15,409.
area involving contract resources.
Confidential Assistant to Rural Development, Office of Community 10/01/97 to 09/30/98........ To assist the Empowerment Zone initiative in helping $88,500 est.
Administrator (FSA). Development. the program/communities achieve economic and
sustainable development.
Confidential Assistant to Office of Communications, Photography 10/01/97 to 09/30/98........ Provide Agency expertise to the Photography Division... $52,000 est.
Administrator (FSA). Division.
Director, Performance Engineering NASA, Ames Research Center............... 2/01/98 to 05/23/98......... Provides assistance on the planning, technical $33,000 est.
and Analysis Group (FSA). guidance, and direction of the Independent
Verification and Validation (IV&V) facility operations.
Robert Cummings (FAS)............ Office of the U.S. Trade Representative.. 2 years 6/97-6/99........... Work on agricultural trade issues...................... Non-reimbursable.
Nancy Hirchhorn (FAS)............ The World Bank........................... 1 year 7/97-7/98............ Articulate USDA interests on project activities........ Non-reimbursable.
Stephen Huete (FAS).............. Inter-American Development Bank.......... 1 year 8/97-8/98............ Articulate USDA interests onproject activities......... Non-reimbursable.
David Schoonover (FAS)........... Office of the U.S. Trade Representative.. 2 years 6/97-6/99........... Work on agricultural trade issues...................... Non-reimbursable.
Ragiv Rastogi (RUS).............. Foreign Agricultural Service............. 39 months................... ....................................................... $252,549.
Thomas Bennett (RHS)............. Natural Resources Conservation Service... 1 yr. to date Temporary Test Laboratory (Peoplesoft)........................... None.
Promotion.
LaJaycee Brown (RHS)............. White House.............................. 180 days.................... Communications--Schedule C............................. None.
Marylan Chapman (RHS)............ Under Secretary's Office................. 120 days.................... Women in Agriculture Initiative........................ None.
Cheryl Cook (RHS)................ Office of the Secretary, Assistant 45 days..................... Administrative Convergence--Schedule C................. None.
Secretary for Administration.
Carolyn Cooksie (RHS)............ Farm Service Agency...................... 2 years..................... Minority Farming....................................... None.
Stan Gray (RHS).................. Office of the Secretary, Chief 3 months to date............ Business Process Reengineering......................... None.
Information Officer.
Debbie Matz (RHS)................ Farm Service Agency...................... 2 years..................... Loan Resolution Task Force--Political Appointee........ $110,000.
Debbie Matz (RHS)................ Office of the Secretary, Assistant 5 months.................... Deputy Assistant Secretary for Administration-- $96,411.
Secretary for Administration. Political Appointee.
Mary McNeil (RHS)................ Office of Congressional Relations-- 2 years to date............. Communications--Schedule C............................. $120,089.
Intergovernmental Affairs.
Angela Morrall (RHS)............. Office of the Secretary, Assistant 40 days..................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Charles Wehrwein (RHS)........... Housing and Urban Development............ 90 days..................... Housing Initiative..................................... $25,000.
Karen Murray (RBS)............... Extension Service........................ 9 months to date............ Partnering............................................. $52,000.
Carolyn Parker (RBS)............. Office of the Secretary, Assistant 2 months to date............ Civil Rights Outreach.................................. $73,733.
Secretary for Administration Office of
Outreach.
Carolyn Parker (RBS)............. Deputy Administrator, Office of Assistant 9 months.................... Civil Rights Implementation Team....................... None.
Secretary.
Vivian Peters (RBS).............. Foreign Agricultural Service............. 120 days to date............ Scheduler--Schedule C.................................. $50,997.
Samantha Speight (RBS)........... White House.............................. 180 days.................... Scheduler.............................................. None.
K. Basu (FSIS)................... Food and Ag Council...................... 2/98-2/99................... Civil Rights Assistance................................ Agreement developed.
P. Cohen (FSIS).................. DOJ/Criminal Division.................... 12/97-6/98.................. Assistance in the development of strategic plans for None (determining if detail
projects. benefits FSIS).
M. Eldakdoky (FSIS).............. FAS...................................... 3/96-5/31/98................ Food technology support................................ Detail benefits FSIS.
J. Gettleman (FSIS).............. DA: Appeals and Grievances Staff......... 1/98-4/7/98................. Senior Staff Assistance................................ None--just received SF-52--
determiningif detail
benefits FSIS.
F. Gwozdz (FSIS)................. ARS...................................... 1/97-5/98................... Staff Assistance....................................... Detail benefits FSIS.
C. Romeo (FSIS).................. Office of Under Secretary for Food Safety 10/97-3/98.................. Unclassified Duties.................................... Detail benefits FSIS.
L. Wright (FSIS)................. Departmental Administration.............. 3/97-12/97.................. To work on a CRIT...................................... Detail benefits FSIS.
Stephen Balson (FNS)............. USDA/OCFO................................ 10/01/96 to 09/30/98........ FISVIS................................................. $118,362.
Lawrence Blim (FNS).............. USDA/OCFO................................ 10/1/96 to 9/30/98.......... FISVIS/Accounting Standards Manual..................... $105,593.
Renee Brown (FNS)................ Under Secretary/FNCS..................... 10/6/97 to 1/13/98.......... Secretarial Support.................................... $5,732.
Kathleen Crampton (FNS).......... USDA/OCFO................................ 10/1/96 to 9/30/98.......... FISVIS................................................. $91,752.
Daniel Dager (FNS)............... Under Secretary/FNCS..................... 10/1/96 to 3/24/98.......... Budget and Legislative Support......................... $33,582.
Bruce Klein (FNS)................ U.S. Congress/Joint Econ. Committee...... 10/20/97 to 2/20/98......... Analytical Support..................................... $30,152.
Jane Manley (FNS)................ Under Secretary/FNCS..................... 10/6/97 to 12/20/97......... Secretarial Support.................................... $8,537.
Sharon Phillips (FNS)............ USDA/FSIS................................ 4/21/97 to 1/17/98.......... Secretarial Support.................................... $16,711.
Ismael Tercero (FNS)............. DHHS..................................... 10/1/96 to 10/13/97......... Tribal Health Programs................................. $1,542.
Velma Brooks (NRCS).............. FISVIS................................... 10/1/97 to 9/30/98.......... To provide clerical assistance......................... $38,703.
Rebekah Davis (NRCS)............. FAS...................................... 1/20/98 to 5/20/98.......... To provide research and writingsupport................. $7,000.
Pam Folson (NRCS)................ USDA/DAMS................................ 6/29/97 to 9/3/98........... Provides support to the Office of the Senior Policy $37,417.
Advisor for Service Implementation and to serve on
Team I of the Admin. Convergence.
Lois Loser (NRCS)................ USDA/NSD................................. 9/29/97 to 6/20/98.......... Provides technical support and is Acting Branch Chief.. $68,032.
Robert Reaves (NRCS)............. USDA/Administrative Management Service... 6/22/97-3/1/98.............. Provides leadership and direction to staff, assign $43,427.
work, set goals, participates in Departmentwide and
Governmentwide multi-organization project.
John Sutton (NRCS)............... FAS/ICD/DRD.............................. 8/21/97 to 8/31/99.......... Detailed to acting Branch Chief NTE 2 years............ $95,529.
Joan Conway (ARS)................ FAO...................................... 9/97-present................ Special Management Intern Program...................... ...........................
Robert Harmon (ARS).............. FSIS..................................... 7/96-present................ Training and to provide support to Microcomputer $25,613.
Support Section.
Stephen Heller (ARS)............. NIST..................................... 10/97-present............... To exchange high level expertise and knowledge related $59,228.
to leading edge technology.
Al Kemezys (ARS)................. MAPPS.................................... 8/96-12/97.................. Provide support for MAPPS.............................. $75,222.
Adrienne Labega (ARS)............ Metro Area Reemployment Center........... 8/97-present................ Nonreimbursable--medical accommodation................. None.
Carl Momberger (ARS)............. MAPPS.................................... 11/96-present............... Provide technical expertise on MAPPS................... $96,033.
Anne Riordan (ARS)............... USDA, Procurement Policy Division........ 11/97-present............... Provide support to Phase II of USDA Procurement None.
Modernization Project.
Charlotte Sorrentino (ARS)....... Office of the Secretary.................. 7/97-present................ Provide administrative support......................... Reimbursement being
requested.
James Spurling (ARS)............. Under Secretary for Research, Education, 8/97-present................ Mission Support........................................ None.
and Economics.
Mitch Geasler (CSREES)........... Under Secretary for Research, Education, 10/97-present, half time.... Mission Support........................................ None.
and Economics.
Mary Humphreys (CSREES).......... Under Secretary for Research, Education, 10/97-9/98.................. Secretarial support, Secretary, Research, Education, Reimbursement requested.
and Economics. and Economics.
Dafina Williams (CSREES)......... Under Secretary for Research, Education, 11/97-11/98................. Secretarial support, Under Secretary, Research, Reimbursement requested.
and Economics. Education, and Economics.
Audrae Erickson (ERS)............ USTR Office of Agricultural Affairs 3 months.................... Agricultural Trade..................................... None.
(White House).
Paul Flaim (ERS)................. President's Council on Sustainable 8 months.................... White House Committee on Sustainable Development....... None.
Development (White House).
Christian Foster (ERS)........... FAS...................................... 9 months.................... To work as an agribusiness policy analyst with USAID/ $111,490.
Global Bureau.
Keith Fuglie (ERS)............... Council of Economic Advisers (White 9 months.................... Senior Economist for Agriculture and Natural Resources. None.
House).
Carl Mabbs-Zeno (ERS)............ USDA/FAS/ICD............................. 1 month..................... To work under the Environment and Natural resources $10,650.
project.
Sara Mazie (ERS)................. USDA/REE/OSEC............................ 10/1/96-present............. Mission Support/Budget Coordination.................... None.
Toni Bradly (NASS)............... Office of Civil Rights................... 120 days.................... Civil Rights enforcement support....................... None.
Jorge Garcia-Pratts (NASS)....... CSREES................................... 261 days.................... USDA Liaison to the University of Puerto Rico.......... $95,000.
Craig Kirby (AMS)................ Assistant Secretary--MRP................. 9/22/97 to present.......... Provide support to the Asst. Secy...................... None.
Mark Kreaggor (AMS).............. MAP, then PACC........................... 10/1/97 to 3/28/98.......... Assist MAP and PACC with Time and Attendance BPR $8,000.
Project.
Kevin Clarke (APHIS)............. OCIO..................................... 10/1/97 to present.......... USDA Enterprise Network designteam..................... None.
Evelyn Davis (APHIS)............. OCIO..................................... 11/1/97 to 9/30/98.......... Assist with USDA Program............................... $69,909.
Walter Moczydlowsky (APHIS)...... OCIO..................................... 10/1/97 to present.......... USDA Enterprise Network designteam..................... None.
Karen Murray (APHIS)............. OCFO..................................... 10/1/97 to 9/30/98.......... Assist with USDA financial systems development......... $77,382.
Patricia Peer (APHIS)............ Assistant Secretary--MRP................. 12/21/97 to present......... Provide support to the Assistant Secretary............. None.
Frank Sanders (APHIS)............ OCFO..................................... 10/1/97 to 9/30/98.......... Assist with USDA financial systems development......... $61,999.
Joe Taylor (APHIS)............... OPPM..................................... 2/97 to 9/98................ VISA card implementation............................... None.
Mary Carmouche (GIPSA)........... APHIS.................................... 73 days..................... APHIS Medfly........................................... $7,340.
Michael Caughlin (GIPSA)......... FAS...................................... 10/1/97-7/1/98.............. Agribusiness Advisor................................... $97,500.
John Cox (GIPSA)................. APHIS.................................... 115 days.................... APHIS Medfly........................................... $6,183.
Roy Johnson (GIPSA).............. APHIS.................................... 147 days.................... APHIS Medfly........................................... Still on detail.
William Napoleon (GIPSA)......... APHIS.................................... 73 days..................... APHIS Medfly........................................... $13,642.
Wanda Pitiman (GIPSA)............ APHIS.................................... 73 days..................... APHIS Medfly........................................... $7,976.
Steve Reams (GIPSA).............. APHIS.................................... 147 days.................... APHIS Medfly........................................... Still on detail.
Mark Reimer (GIPSA).............. APHIS.................................... 73 days..................... APHIS Medfly........................................... $8,686.
George Wright (GIPSA)............ APHIS.................................... 37 days..................... APHIS Medfly........................................... $2,425.
Marci Hilt (OC).................. DA....................................... 5 months.................... Civil Rights Action Team (CRAT)........................ $38,995.
Barnedia Talley (OCFO)........... ASA...................................... 3 months.................... Civil Rights Implementation Team....................... $9,000.
Frances Trout (OCFO)............. OSEC..................................... Being Negotiated............ Travel Assistance...................................... None.
Jeff Knishkowy (OGC)............. Office of Acting Assistant Secretary for 1/13/97 to 1/31/98.......... Provide assistance to the Civil Rights Action Team to None.
Administration. include implementation of recommendations.
John Lom (OGC)................... U.S. Trade Representative Office......... 10/20/97 to 3/19/98......... To better serve USDA in dealing with international None.
trade disputes and related matters.
Lauretta Miles (OIG)............. USDA/Office of the Secretary............. 1/18/98 to 6/20/98.......... To provide six month detail assignment to perform $17,000.
clerical duties.
Robert Franco (DA)............... OPM...................................... 2/17/97 to NTE 2 yrs........ Develop SES Recruitment Strategies..................... $116,495.
J. Phelps (DA)................... OCFO..................................... 12 months................... Financial Info. Systems Vision project (FISVIS)........ $48,000.
C. Bailey (FS)................... Office of the Secretary.................. 10/1/97 to 1/2/98........... Civil Rights Action Team............................... None.
A. Brown (FS).................... Office of the Chief Financial Officer.... 10/1/97 to 9/30/98.......... FS Liaison............................................. $71,000.
J. Comanor (FS).................. Natural Resources Conservation Service... 10/1/97 to present.......... Support................................................ $70,000.
J. Dudley (FS)................... Office of Operations..................... 10/1/97 to 3/27/98.......... FS Liaison............................................. $47,116.
M. Fletcher (FS)................. Office of the Secretary.................. 10/12/97 to 1/2/98.......... Civil Rights Action Team............................... None.
C. Franz (FS).................... Modernization of Administrative Proc- 10/1/97 to 1/2/98........... Civil Rights Action Team............................... $88,000 est.
esses.
J. Gavin (FS).................... Office of the Chief Information Office... 10/1/97 3/31/98............. Support................................................ $31,000.
M. Hamilton (FS)................. Office of the Secretary.................. 10/1/97 to 11/30/97......... Civil Rights Action Team............................... None.
T. Harwood (FS).................. Hazardous Waste Management............... 10/1/97 to present.......... FS Liaison............................................. $123,300.
J. King (FS)..................... Office of the Chief Financial Officer.... 10/1/97 to present.......... FS Liaison............................................. $88,000.
Z. Okrak (FS).................... Office of the Chief Financial Officer.... 10/1/97 to present.......... FS Liaison............................................. $74,000.
B. Preston (FS).................. Natural Resources and Environment........ 10/1/97 to present.......... FS Liaison............................................. None.
C. Pytel (FS).................... Assistant Secretary. (ADM)............... 10/1/97 to 1/3/98........... Acting Deputy Assistant Secretary for Administration... $38,212.
V. Ross (FS)..................... Office of the Secretary.................. 10/1/97 to 12/31/97......... Civil Rights Action Team............................... None.
G. Sundstrom (FS)................ Hazardous Waste Management............... 10/1/97 to present.......... FS Liaison............................................. $85,860.
B. Velde (FS).................... Hazardous Waste Management............... 10/1/97 to present.......... FS Liaison............................................. $96,484.
K. Waldvogel (FS)................ Hazardous Waste Management............... 10/1/97 to present.......... FS Liaison............................................. $83,656.
S. Yaddof (FS)................... Cooperative State Research, Educ. And 10/1/97 to 1/31/98.......... Support................................................ $25,000.
Ext. Srvc.
J. Zeller (FS)................... Office of the Secretary.................. 10/1/97 to 11/7/97.......... Civil Rights Action Team............................... None.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DETAILED FOR MORE THAN 30 DAYS--FISCAL YEAR 1997
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Dates Purpose Reimbursed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Special Assistant to White House.............................. 10/01/96 to 09/30/97...... Personnel liaison for all White Housepersonnel of $71,071 (Reimb. limited by 3
Administrator (FSA). Cabinet agencies and Boards and Commissions within U.S.C. 112).
assigned portfolio.
Supervisory Computer Specialist OSEC/Modernization of Administrative 10/01/96 to 09/30/97...... To provide Agency expertise to MAPP project managers... $85,042.
(FSA). Processes Program (MAPP).
Supervisory Systems Accountant Alternative Agricultural Research and 3/09/97 to 05/03/97....... To develop the format for the AARC financial statements $17,816.
(FSA). Commercialization Corporation (AARC). for fiscal year 1997 and provide guidance on
accounting principles as they relate to government
corporations.
Confidential Assistant to Adm. Rural Development Office of Community 4/11/97 to 09/30/97....... To assist the Empowerment Zone initiative in helping $31,025.
(FSA). Development. the program/ communities achieve economic and
sustainable development.
Computer Specialist (FSA)........ OSEC/Modernization of Administrative 1/19/97 to 09/30/97....... To provide Agency expertise to MAPP project managers... $45,748.
Processes Program (MAPP).
Management Analyst (FSA)......... Office of the Chief Information Officer.. 2/24/97 to 08/18/97....... To assist in the development and implementation of $45,270.
USDA's Information Systems Technical Architecture and
Information Technology Capital Planning, and
Investment Control projects.
Robert Cummings (FAS)............ Office of the U.S. Trade Representative.. 6/97-6/99................. Work on agricultural trade issues...................... Non-reimbursable.
Nancy Hirschhorn (FAS)........... The World Bank........................... 7/97-7/98................. Articulate USDA interests on project activities........ Non-reimbursable.
Stephen Huete (FAS).............. Inter-American Development Bank.......... 8/97-8/98................. Articulate USDA interests on project activities........ Non-reimbursable.
David Schoonover (FAS)........... Office of the U.S. Trade Representative.. 6/97-6/99................. Work on agricultural trade issues...................... Non-reimbursable.
Ragiv Rastogi (RUS).............. FAS...................................... 39 months................. ....................................................... $252,549.
David Adams (RHS)................ Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Victor Agresti (RHS)............. Department of Justice.................... 90 days................... In advance of his permanent reassignment............... $20,000.
Joyce Allen (RHS)................ Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Steve Anaya (RHS)................ Office of the Secretary, Assistant 90 days................... Civil Rights Action Team (CRAT)........................ None.
Secretary for Administration.
Tracey Anderson (RHS)............ Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Mark Brad Benson (RHS)........... Center for Rural Pa...................... 3\1/2\ years.............. Partnering (Intergovt Pers Act--IPA)................... None.
Terry Bishop (RHS)............... Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Edith Brown (RHS)................ Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Rhonda Brown (RHS)............... Office of the Secretary, Assistant 5 weeks................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Helen Cordero (RHS).............. Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Angela Corley (RHS).............. Office of the Secretary, Assistant 120 days.................. Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Mary Fox (RHS)................... Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Leonard Hardy, Jr. (RHS)......... Office of the Secretary, Assistant 90 days................... Civil Rights Action Team (CRAT)........................ None.
Secretary for Administration.
Carlton Lewis (RHS).............. Office of the Secretary, Assistant 90 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Jacquiline Micheli (RHS)......... Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
Mary Parker (RHS)................ Office of the Secretary, Assistant 60 days................... Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
S. Leanne Powell (RHS)........... White House.............................. 180 days.................. Women's Issues Program--Schedule C..................... None.
John Soles (RHS)................. Rural Center, NC......................... 4 years................... Partnering (Intergovt Pers Act--IPA)................... None.
Joseph Taggert (RHS)............. Office of Congressional Relations-- 11 months................. Communications--Schedule C............................. None.
Intergovernmental Affairs.
Quinton Wilform (RHS)............ Office of the Secretary, Assistant 150 days.................. Civil Rights Implementation Team (CRIT)................ None.
Secretary for Administration.
James Coyle (RBS)................ USDA National Service.................... 7 months.................. America Reads and Gleaning............................. None.
Amy Donoghue (RBS)............... Extension Service........................ 120 days.................. Partnering............................................. $11,000.
Stephen Balsan (FNS)............. USDA/OCFO................................ 10/1/96 to 9/30/98........ FISVIS................................................. $108,424.
Jordan Benderly (FNS)............ DOJ...................................... 10/1/96 to 1/3/97......... Financial Crime Enforcement............................ None.
Lawrence Blim (FNS).............. USDA/OCFO................................ 10/1/96 to 9/30/98........ FISVIS/Accounting Standards Manual..................... $77,420.
Gail Brown (FNS)................. Under Secretary FNCS..................... 10/1/96 to 10/5/97........ Deputy Under Secretary Administrative Support.......... $3,754.
Donna Buntrock (FNS)............. Under Secretary FNCS..................... 10/1/96 to 2/24/97........ Administrative Support................................. None.
Kathleen Crampton (FNS).......... USDA/OCFO................................ 10/1/96 to 9/30/98........ FISVIS................................................. $83,316.
Daniel Dager (FNS)............... Under Secretary FNCS..................... 10/1/96 to 3/24/98........ Budget and Legislative Support......................... $29,120.
Dorothy Ford (FNS)............... Under Secretary FNCS..................... 10/1/96 to 9/21/97........ Legislative Support.................................... None.
Donna Hines (FNS)................ USDA/Office of Comm...................... 10/1/96 to 9/30/97........ Americorp Program Activities........................... None.
Kelly Jackson (FNS).............. Under Secretary FNCS..................... 10/1/96 to 8/9/97......... Secretarial Support.................................... $16,698.
Sharon Phillips (FNS)............ USDA/FSIS................................ 4/21/97 to 1/17/98........ Secretarial Support.................................... $21,667.
Ismael Tercero (FNS)............. DHHS..................................... 10/1/96 to 10/13/97....... Tribal Health Programs................................. $40,111.
C. Baker (FSIS).................. DA: Policy Analysis and Coordination 2/97-8/97................. Honor Awards Ceremony.................................. Agreement developed.
Center.
D. Barnes (FSIS)................. Office of the Secretary.................. 11/95-4/97................ Clerical Support....................................... Unsure if agreement
developed--Resigned.
M. Eldadoky (FSIS)............... FAS...................................... 3/96-5/31/98.............. Food technology support................................ Detail benefits FSIS.
F. Gwozdz (FSIS)................. ARS...................................... 1/97-5/98................. Staff Assistance....................................... Detail benefits FSIS.
A. Kirk (FSIS)................... DA: Policy Analysis and Coordination 2/96-8/97................. Clerical Support....................................... Detail benefits FSIS--
Center. Resigned.
M. Penner (FSIS)................. NRCS..................................... 12/96-2/97................ Office of Civil Rights Work Group...................... Detail benefits FSIS.
T. Powell (FSIS)................. OP....................................... 5/12/97-9/30/97........... Clerical Support....................................... Agreement developed.
Dawn Frobish (ARS)............... USDA-OIRM................................ 8/96-1/97................. Provide fiscal and accounting support.................. $42,185.
Robert Harmon (ARS).............. FSIS..................................... 7/96-present.............. Training and to provide support to Microcomputer $25,613.
Support Section.
Eliot Herman (ARS)............... National Science Foundation.............. 10/96-5/97................ Cell Biology and Molecular Biology Program Manager--to $64,560.
gain skills in competitive grant process.
Al Kemezys (ARS)................. MAPPS.................................... 8/96-12/97................ Provide support for MAPPS.............................. $75,222.
Adrienne Labega (ARS)............ Metro Area Reemployment Center........... 3/97-7/97................. Nonreimbursable--medical accommodation................. None.
Carl Momberger (ARS)............. MAPPS.................................... 11/96-10/98............... Provide technical expertise on MAPPS................... $96,033.
Michelle Snowden (ARS)........... Purchase Card Implementation Team........ 4/96-3/97................. Response to an EEO settlement agreement................ $62,369.
Charlotte Sorrention (ARS)....... Office of the Secretary.................. 7/97-Present.............. Provide administrative support......................... Reimbursement being
requested.
James Spurling (ARS)............. Under Secretary for Research, Education, 8/97-Present.............. Mission Support........................................ None.
and Economics.
Linda Wilson (ARS)............... MAPPS.................................... Fiscal year 1997.......... Provide support for MAPPS.............................. None.
Tammara Wright (ARS)............. USDA--Office of the Secretary, Civil Fiscal year 1997.......... Civil Rights Task Force................................ $21,938.
Rights Task Force.
Josephine King (CSREES).......... Office of the Secretary.................. 10/96-9/97................ Secretarial Assistance................................. Fiscal year 1997, $38,352;
fiscal year 1998 $2,694.
John Dunmore (ERS)............... FAS...................................... 9/96-2/97................. Technical Assistance--Turkey........................... $39,860.
Lowell Dyson (ERS)............... ARS/NAL.................................. 2/97-8/97................. File Automation........................................ None.
Ann Effland (ERS)................ USDA Civil Rights Task Force............. 12/96-2/97................ Civil Rights Task Force................................ None.
Audrae Erickson (ERS)............ USTR Office of Agricultural Affairs 3 months.................. Agricultural Trade..................................... None.
(White House).
Paul Flaim (ERS)................. President's Council on Sustainable 4 months.................. White House Committee on Sustainable Development....... None.
Development (White House).
Keith Fuglie (ERS)............... Council of Economic Advisors (White 3 months.................. Senior Economist for Agriculture and Natural Resources. None.
House).
George Gardner (ERS)............. USDA/FAS/ICD............................. 1 year.................... To work under the Africa RSSA project.................. $84,575.
Carl Mabbs-Zeno (ERS)............ USDA/FAS/ICD............................. 1 year.................... To work under the African RSSA Project................. $119,921.
Sara Mazie (ERS)................. USDA/REE/OSEC............................ 10/1/96-present........... Mission Support/Budget Coordination.................... None.
Sharon Sheffield (ERS)........... USDA/FAS................................. 5 months.................. To provide research and analysis of trade and $40,375.
agricultural policy developments in the countries of
the NiS/Baltic region, pertaining to their accession
to the WTO.
Teri Wray (ERS).................. USDA/PACC/MAP............................ 6 months.................. To serve as Customer Service Liaison, Executive Order $26,347.
on Customer Standards for MAP.
Sylvia Magbanua (NASS)........... Office of Civil Rights................... 137 days.................. Civil Rights training program.......................... None.
Linda Becker (APHIS)............. FSIS..................................... 4/97-7/97................. Assist with Merit Promotion............................ $11,409.
Phuong Callaway (APHIS).......... BAD...................................... 7/29/97 to 10/29/97....... Learning Assignment.................................... $11,000.
Joyce Key (APHIS)................ ASA-CRAT................................. 4/14/97-6/6/97............ Complaints Backlog..................................... None.
Craig Lambert (APHIS)............ ASA-CRAT................................. 4/1/97 to 7/31/97......... Complaints Backlog..................................... None.
Kevin McGrath (APHIS)............ ASA-CRAT................................. 4/14/97 to 5/30/97........ Complaints Backlog..................................... None.
Doris McLaughlin (APHIS)......... ASA-CRAT................................. 7/1/97 to 8/31/97......... Complaints Backlog..................................... None.
Linda Moore (APHIS).............. ASA-CRAT................................. 6/97-7/97................. Environmental Justice/Native American Programs......... None.
Ed Psaltis (APHIS)............... ASA-CRAT................................. 4/7/97-8/1/97............. Complaints Backlog..................................... None.
Mary Royster (APHIS)............. OHRM..................................... 9/1/97 to 10/10/97........ Assist with USDA Ethics Program........................ None.
Christopher Sikes (APHIS)........ ASA-CRAT................................. 4/7/97-8/1/97............. Complaints Backlog..................................... None.
Joe Taylor (APHIS)............... OPPM..................................... 2/97 to 9/98.............. VISA card implementation............................... None.
Rosemary Witcoff (APHIS)......... ASA-CRAT................................. 9/1/97 to 10/10/97........ Complaints Backlog..................................... None.
Clerance Abrom (GIPSA)........... APHIS.................................... 92 days................... APHIS Medfly........................................... $5,796.
Mary Carmouche (GIPSA)........... APHIS.................................... 95 days................... APHIS Medfly........................................... $9,423.
Michael Caughlin (GIPSA)......... FAS...................................... 10/1/96 to 9/30/97........ Agribusiness Advisor................................... $127,000.
Stuart Conser (GIPSA)............ APHIS.................................... 90 days................... APHIS Medfly........................................... $9,385.
John Cox (GIPSA)................. APHIS.................................... 115 days.................. APHIS Medfly........................................... $6,183.
William Digdo (GIPSA)............ APHIS.................................... 86 days................... APHIS Medfly........................................... $20,621.
Robert Fuller (GIPSA)............ APHIS.................................... 70 days................... APHIS Medfly........................................... $7,438.
Michael Haley (GIPSA)............ APHIS.................................... 116 days.................. APHIS Medfly........................................... $28,518.
Ray Hollis (GIPSA)............... APHIS.................................... 47 days................... APHIS Medfly........................................... $8,820.
David Johnson (GIPSA)............ APHIS.................................... 45 days................... APHIS Medfly........................................... $7,817.
Roy Johnson (GIPSA).............. APHIS.................................... 99 days................... APHIS Medfly........................................... Still on detail.
Jeff LaHaie (GIPSA).............. APHIS.................................... 109 days.................. APHIS Medfly........................................... $14,117.
James Ledoux (GIPSA)............. APHIS.................................... 103 days.................. APHIS Medfly........................................... $14,679.
Phillip Meachem (GIPSA).......... APHIS.................................... 63 days................... APHIS Medfly........................................... $7,739.
William Napoleon (GIPSA)......... APHIS.................................... 95 days................... APHIS Medfly........................................... $17,513.
Bradley O'Neal (GIPSA)........... APHIS.................................... 99 days................... APHIS Medfly........................................... $19,294.
Wanda Pitiman (GIPSA)............ APHIS.................................... 88 days................... APHIS Medfly........................................... $9,485.
Steve Reams (GIPSA).............. APHIS.................................... 116 days.................. APHIS Medfly........................................... Still on detail.
Mark Reimer (GIPSA).............. APHIS.................................... 88 days................... APHIS Medfly........................................... $10,329.
Linda Remondet (GIPSA)........... APHIS.................................... 63 days................... APHIS Medfly........................................... $7,537.
Larry Rice (GIPSA)............... APHIS.................................... 91 days................... APHIS Medfly........................................... $14,835.
Rayfield Riley (GIPSA)........... APHIS.................................... 63 days................... APHIS Medfly........................................... $13,329.
Robert Simpson (GIPSA)........... APHIS.................................... 116 days.................. APHIS Medfly........................................... $15,908.
Howard Suter (GIPSA)............. APHIS.................................... 92 days................... APHIS Medfly........................................... $10,722.
Gregory Tomas (GIPSA)............ APHIS.................................... 54 days................... APHIS Medfly........................................... $14,096.
Vince Volpe (GIPSA).............. APHIS.................................... 84 days................... APHIS Medfly........................................... $15,747.
Dan White (GIPSA)................ APHIS.................................... 116 days.................. APHIS Medfly........................................... $17,041.
James Winters (GIPSA)............ APHIS.................................... 84 days................... APHIS Medfly........................................... $12,764.
George Wright (GIPSA)............ APHIS.................................... 103 days.................. APHIS Medfly........................................... $6,574.
Marci Hilt (OC).................. DA....................................... 7 months.................. Civil Rights Action Team (CRAT)........................ $50,337.
Albert Jaeger (OC)............... DA....................................... 7 months.................. G-7 Conference......................................... $66,058.
Dale Alling (OCIO)............... RHS...................................... 180 days.................. Program Analysis....................................... $30,000.
Franklin Johnson (OCIO).......... MAP...................................... 1 year.................... TOBI Project........................................... None.
Chris Arrington (OCFO)........... ASA...................................... 6 months.................. Modernization of Admin. Processes project.............. $19,000.
Gary Barber (OCFO)............... ASA...................................... 6 months.................. Civil Rights Action Team............................... None.
Martha Joseph (OGC).............. NRCS..................................... 10/1/96 to 3/31/97........ Assist with Wetlands Reserve Program................... $23,362.
Jeff Knishkowy (OGC)............. Office of Acting Associate, Assistant 1/13/97 to 1/31/98........ Provide assistance to the Civil Rights Action Team to None.
Secretary for Administration. include implementation of recommendations.
Vincent Vukelich (OGC)........... GSA,OGPA................................. 5/5/97 to 9/4/97.......... Assisting in developing governmentwide guidance $22,184.
regarding implementation of policies in statutes,
Executive Orders and regs.
Joyce Fleishman (OIG)............ Department of Transportation Office of 10/1/96-4/11/97........... To serve as Principal Deputy Inspector General for $79,864.
the Inspector General. Department of Transportation.
Robert Franco (DA)............... OPM...................................... 2/17/97 to NTE 2 yrs...... Develop SES Recruitment Strategies..................... $116,495.
J. Phelps (DA)................... OCFO..................................... 4 months.................. Financial Info. Systems Vision project (FISVIS)........ $20,600.
Pam Folson (NRCS)................ USDA/DAMS................................ 6/29/97-9/3/98............ Provides support to the Office of the Senior Policy $37,417.
Advisor for Service Implementation and to serve on
Team I of the Admin. Convergence.
Lois Loser (NRCS)................ USDA/NSD................................. 9/29/97-6/20/98........... Provides technical support and is Acting Branch Chief.. $68,032.
Robert Reaves (NRCS)............. USDA/Department Administrative Management 6/22/97-3/1/98............ Provide leadership and direction to staff, assign work, $43,427.
Service. set goals, participates in Departmentwide and
Governmentwide multi-organization project.
John Sutton (NRCS)............... FAS/ICD/DRD.............................. 8/21/97-8/31/99........... Detailed to Acting Chief NTE 2 years................... $95,529
C. Bailey (FS)................... Office of the Secretary.................. 3/27/97 to 9/30/97........ Civil Rights Action team............................... None.
C. Brannon (FS).................. Office of the Secretary.................. 4/1/97 to 6/30/97......... Civil Rights Action Team............................... None.
A. Brown (FS).................... Office of the Chief Financial Officer.... 10/1/96 to 9/30/97........ FS Liaison............................................. $69,000.
J. Dudley (FS)................... Modernization of Administrative Proc- 10/1/96 to 9/30/97........ FS Liaison............................................. $95,266.
esses.
M. Fletcher (FS)................. Office of the Secretary.................. 4/1/97 to 6/6/97.......... Civil Rights Action Team............................... None.
C. Franz (FS).................... Modernization of Administrative Proc- 10/1/96 to 9/30/97........ FS Liaison............................................. $86,000 est.
esses.
J. Frey (FS)..................... Office of the Secretary.................. 7/1/97 to 8/8/97.......... Civil Rights Action Team............................... None.
D. Gentry (FS)................... Office of the Secretary.................. 8/4/97 to 9/30/97......... Civil Rights Action Team............................... None.
L. Goldman (FS).................. Office of the Secretary.................. 4/1/97 to 6/30/97......... Civil Rights Action Team............................... None.
R. Grand (FS).................... Natural Resources and Environment........ 3/16/97 to 8/8/97......... FS Laison.............................................. None.
S. Hague (FS).................... Natural Resources and Environment........ 2/2/97 to 9/30/97......... FS Laison.............................................. None.
M. Hamilton (FS)................. Office of the Secretary.................. 7/1/97 to 9/30/97......... Civil Rights Action Team............................... None.
T. Harwood (FS).................. Hazardous Waste Management............... 1/5/97 to 9/30/97......... FS Liaison............................................. $81,734.
F. Johnson (FS).................. Office of Information Resource Management 10/1/96 to 11/24/96....... Computer Specialist.................................... None.
J. King (FS)..................... Office of the Chief Financial Officer.... 10/1/96 to 9/30/97........ FS Liaison............................................. $86,000.
S. McCourt (FS).................. Natural Resources and Environment........ 10/1/96 to 3/14/97........ Communications Liaison................................. None.
B. McDonald (FS)................. Office of the Secretary.................. 6/1/97 to 8/31/97......... Civil Rights Action Team............................... None.
S. Medlyn (FS)................... Public Affairs Specialist................ 10/1/96 to 12/7/96........ Office of Communication................................ None.
J. Morris (FS)................... Office of the Secretary.................. 4/1/97 to 7/19/97......... Civil Rights Action Team............................... None.
Z. Okrak (FS).................... Office of the Chief Financial Officer.... 10/1/96 to 9/30/97........ FS Liaison............................................. $72,000.
B. Preston (FS).................. Natural Resources and Environment........ 10/1/96 to 9/30/96........ FS Liaison............................................. None.
C. Pytel (FS).................... Assistant Secretary (ADM)................ 3/16/97 to 9/30/97........ Acting Deputy Assistant, Secretary for Administration.. $70,563.
G. Renteria (FS)................. Office of the Secretary.................. 6/2/97 to 8/1/97.......... Civil Rights Action Team............................... None.
V. Ross (FS)..................... Office of the Secretary.................. 3/27/97 to 9/30/97........ Civil Rights Action Team............................... None.
S. Segovia (FS).................. Office of the Secretary.................. 7/1/97 to 9/30/97......... Civil Rights Action Team............................... None.
G. Sundstrom (FS)................ Hazardous Waste Management............... 10/1/96 to 9/30/97........ FS Liaison............................................. $83,544.
T. Sherwood (FS)................. Office of the Chief Financial Officer.... 10/1/96 to 9/30/97........ FS Liaison............................................. $56,000.
F. Shon (FS)..................... Office of the Secretary.................. 3/27/97 to 6/27/97........ Civil Rights Action Team............................... None.
P. St. Peter (FS)................ Office of the Secretary.................. 7/1/97 to 11/21/97........ Civil Rights Action Team............................... None.
D. Stennis (FS).................. Office of the Secretary.................. 4/1/97 to 7/19/97......... Civil Rights Action Team............................... None.
L. Turner (FS)................... Natural Resources and Environment........ 10/1/96 to 7/17/97........ Support................................................ $15,000.
B. Velde (FS).................... Hazardous Waste Management............... 10/1/96 to 9/30/97........ FS Liaison............................................. $93,909.
K. Waldvogel (FS)................ Hazardous Waste Management............... 10/1/96 to 9/30/97........ FS Liaison............................................. $79,239.
M. Warren (FS)................... Natural Resources and Environment........ 10/1/96 to 11/8/96........ Support................................................ $4,127.
S. Yaddof (FS)................... Coop. State Research, Educ. and Ext. 5/1/97 to 9/30/97......... Support................................................ $31,000.
Service.
J. Zeller (FS)................... Office of the Secretary.................. 7/7/97 to 8/23/97......... Civil Rights Action Team............................... None.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DETAILS UNDER 30 DAYS--FISCAL YEAR 1997
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Dates Purpose Reimbursed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Reginald Pasteur (AMS)............... ASA-CRAT.................................... 3/97-4/97...................... Complaints Backlog........................................ ..............
Charles Rush (AMS)................... FAS......................................... 6/30/97 to 7/29/97............. Career Enhancement opportunity............................ ..............
Judy Hawkins (GIPSA)................. APHIS....................................... 29 days........................ APHIS Medfly.............................................. $2,929
Kenny Layne (GIPSA).................. APHIS....................................... 28 days........................ APHIS Medfly.............................................. 2,827
Lynn Luster (GIPSA).................. APHIS....................................... 28 days........................ APHIS Medfly.............................................. 3,078
Robert Starr (GIPSA)................. APHIS....................................... 30 days........................ APHIS Medfly.............................................. 4,263
Lauretta Miles (OIG)................. USDA/Office of Small and Disadvantaged 10/14/97-11/14/97.............. To provide 30-day detail assignment to perform clerical ..............
Business Utilization. and administrative duties.
Ghulan Sambal (RHS).................. Office of the Secretary, Assistant Secretary 30 days........................ Civil Rights Implementation Team (CRIT)................... ..............
for Administration.
Cherry Smith (RHS)................... Office of the Secretary, Assistant Secretary 21 days........................ Civil Rights Implementation Team (CRIT)................... ..............
for Administration.
Vermell Wheeler (RHS)................ Office of the Secretary, Assistant Secretary 30 days........................ Civil Rights Implementation Team (CRIT)................... ..............
for Administration.
Jada Johnson (FNS)................... OSEC........................................ 1/21/97-2/21/97................ Secretarial Support....................................... ..............
G. Crawley (FS)...................... Office of the Secretary..................... 6/1/97 to 6/30/97.............. Civil Rights Action Team.................................. ..............
J. Comanor (FS)...................... Natural Resources Conservation Services..... 9/1/97 to 9/30/97.............. Support................................................... ..............
G. Dyer (FS)......................... Office of the Secretary..................... 6/1/97 to 6/3/97............... Civil Rights Action Team.................................. ..............
S. Dykes (FS)........................ Office of the Secretary..................... 4/28/97 to 5/25/97............. Civil Rights Action Team.................................. ..............
G. Edmondson (FS).................... Assistant Secretary, ADM.................... 10/1/96 to 12/26/96............ Support................................................... ..............
J. Gavin (FS)........................ Office of the Chief Information Office...... 9/29/97 to 9/30/97............. Support................................................... ..............
N. Hall (FS)......................... Office of the Secretary..................... 3/24/97 to 4/18/97............. Civil Rights Action Team.................................. ..............
S. Hooper (FS)....................... Office of the Secretary..................... 3/27/97 to 3/31/97............. Civil Rights Action Team.................................. ..............
L. Lewandowski (FS).................. Policy Analysis and Coordination Center..... 10/1/96 to 10/31/96............ Purchase Card Automation Project.......................... ..............
L. Lewandowski (FS).................. Policy Analysis and Coordination Center..... 3/3/97 to 3/31/97.............. Purchase Card Automation Project.......................... ..............
L. Peressini (FS).................... Office of the Secretary..................... 6/1/97 to 6/30/97.............. Civil Rights Action Team.................................. ..............
C. Reynolds (FS)..................... Office of the Secretary..................... 5/1/97 to 5/30/97.............. Civil Rights Action Team.................................. ..............
S. Risbrudt (FS)..................... Office of the Secretary..................... 10/1/96 to 10/18/96............ Support................................................... ..............
J. Synder (FS)....................... Natural Resources and Environment........... 10/1/96 to 10/31/96............ Support................................................... ..............
J. Synder (FS)....................... Office of the Deputy Secretary.............. 11/1/96 to 11/12/96............ Support................................................... ..............
M. Warren (FS)....................... Natural Resources and Environment........... 9/29/97 to 9/30/97............. Support................................................... ..............
J. Worley (FS)....................... Office of Civil Rights...................... 10/1/96 to 10/31/96............ Support................................................... ..............
J. Zeller (FS)....................... Office of the Secretary..................... 9/15/97 to 9/30/97............. Civil Rights Action Team.................................. ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
supplemental nutrition program for women, infants, and children (wic)
The Administration is seeking an increase of $145.5 million for
fiscal year 1999 to ``meet the long-standing bi-partisan commitment to
funding in the WIC Program at a full participation level of 7.5
million.'' Further, the budget indicates that this requested increase
for fiscal year 1999 mainly offsets expected food and administrative
cost increases.
Question. On what basis has the Administration determined that 7.5
million represents the ``full participation'' level for the WIC
program?
Answer. Our estimate is based on Census data and medical evidence
which suggests that 9 million women, infants and children were fully
eligible for WIC in 1996, the most recent year for which we have
figures. In a fully funded program we would not expect that all
eligibles would participate. However, with funds available,
participation reached 7.5 million last January, and has hovered just
below that figure ever since. On that basis, the Administration has
determined that 7.5 million represents the full participation level for
WIC.
Question. The fiscal year 1998 appropriations Act granted the
Secretary of Agriculture the authority requested in the President's
budget to allocate WIC funds outside the regulatory funding formula.
How are WIC funds made available for fiscal year 1998 being allocated
to states and how does that allocation differ, by state, from the
statutory/regulatory WIC funding distribution formula?
Answer. At this point, we have not used the flexibility granted to
us by the Appropriations Act. We requested it as a contingency to
ensure that WIC funds went where they were most needed. We estimate
that the total available fiscal year 1998 funds will be adequate to
bring States to stability funding with only a small amount left over
for distribution to States that have received less than their fair
share of funds. Therefore, we do not anticipate that it will be
necessary to utilize the additional flexibility.
Question. Mr. Secretary, you indicate in your prepared testimony
that efforts continue to reduce the overall cost of WIC food packages
by 10 percent by 2002. When did this effort begin and what reductions
have we achieved to date in the overall cost of WIC food packages?
Answer. We established this goal in the Government Performance and
Results Act Strategic Goals development process. This goal was
mentioned in those sent to the Congress last fall.
As far as specific reductions to date, WIC cost containment is one
of the more remarkable success stories in government. In fact, food
costs were lower in 1997 (at $31.66 per person) than they were in 1987
(at $32.68 per person). This is true despite 10 years of general
inflation in the economy and immense growth in the program. This was
achieved in large part because, in 1997 nearly $1.3 billion was saved
from infant formula rebates.
Our efforts to improve WIC management and to reduce food package
costs are expected to help improve the overall quality of WIC. Many
States have achieved notable successes in efficient and effective
management, and as their practices are adopted and adapted by other
States, program quality will improve along with cost efficiencies. WIC
is a mature program and simply needs some fine tuning. If we can keep
food costs low we can serve more participants with the same money. That
is our strategic goal.
Question. You also indicate in your testimony that the Department
is working with states to expand other promising cost control
activities and is undertaking a series of management reforms to improve
WIC program integrity. Would you summarize the cost control activities
and management reforms which have been implemented?
Answer. We are committed to improving WIC management and have
several initiatives underway to reduce errors and save money. For
example, now that WIC is a mature program we are beginning to see
evidence of errors in eligibility determinations similar to food stamps
and school lunch. Therefore we are proposing to require that all States
obtain income documentation before certifying individuals to
participate. That is not currently a Federal requirement and not all
States ask for income documentation at certification. We are also
reviewing our income verification requirements to see if they need
strengthened or brought in line with food stamps and school lunch.
Another area that we are working on concerns nutrition risk. We are
working with the States and the medical community to standardize
enforcement of WIC nutritional risk criteria. WIC statute allows only
individuals at nutritional risk to participate in the program. Finally,
we know WIC has some problems with unscrupulous vendors, the same
stores trying to cheat the Food Stamp Program. We will be issuing
regulations to improve vendor management and reduce overcharging. Our
efforts to improve WIC management will be coordinated with the
Administration's government wide error reduction initiative.
integrated pest management
The fiscal year 1999 budget requests increased funding in support
of the Department's commitment to encourage the adoption of Integrated
Pest Management (IPM) on 75 percent of the Nation's crop land by the
year 2000.
Question. Where do we stand in meeting this goal? When did this
initiative begin and what percent of the Nation's crop land was under
IPM at that time? What percent was under IPM at the end of fiscal year
1997? What percent is projected to be under IPM practices at the end of
fiscal years 1998 and 1999?
Answer. Consensus has emerged that IPM systems should be measured
along a continuum, ranging from no to high levels of IPM adoption. The
Department's 1994 report, Adoption of Integrated Pest Management in the
United States, measured adoption along a continuum, and this approach
was refined by Consumers Union in its 1996 report, Pest Management at
the Crossroads. These analyses estimated that 70 percent of crop
acreage is managed using IPM systems. However, according to the
Consumers Union estimates, 38 percent of these systems were at the low
end of the IPM continuum. Our goal is to develop and help growers
implement IPM strategies that permit them to move from the low end of
the continuum to the high end of the continuum, moving incrementally
toward biologically based IPM systems.
The overall percentage of U.S. crop acres under IPM in 1997
remained at the 70 percent level, and will likely remain constant in
1998. However, we remain convinced that the increased investments
proposed in the President's budget request for fiscal year 1999 will
permit us to reach the 75 percent adoption goal by 1999 or 2000. More
importantly, we believe that these investments will accelerate the
adoption of IPM systems at the medium and high end of the continuum. We
believe that increasing adoption of pest management systems at the high
end of the IPM continuum will benefit all Americans by increasing
profitability, protecting water quality and farm worker safety, and
enhancing the wholesome quality of our Nation's food supply. We believe
that an accelerated effort is warranted to develop and help growers
implement pest management strategies that will help them reduce
reliance on high-risk pesticides and enhance the sustainability of
their operations.
Question. Please provide a summary of the total USDA
appropriations, by agency and account, invested in the Integrated Pest
Management Initiative in each of fiscal years 1993 through 1998 and
included in the fiscal year 1999 budget request.
Answer. Three agencies provide direct support for the Integrated
Pest Management Initiative (IPM): the Agricultural Research Service
(ARS), the Cooperative State Research, Education, and Extension Service
(CSREES), and the Economic Research Service (ERS). Funding amounts from
fiscal year 1993 to fiscal year 1999 are as follows:
INTEGRATED PEST MANAGEMENT INITIATIVE
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
1998 1999
1993 1994 1995 1996 1997 estimate budget
----------------------------------------------------------------------------------------------------------------
ARS Area-wide IPM Research.. $3.100 $3.800 $3.801 $3.772 $5.915 $5.944 $6.444
CSREES:
Research and Education
Activities:
IPM Research Grants. 4.457 3.034 2.731 2.731 2.731 2.731 8.000
Pest Management .......... .......... .......... 1.623 1.623 1.623 4.200
Alternatives.......
Expert IPM Decision .......... .......... .......... 0.177 0.177 0.177 0.260
Support............
Extension Activities: 8.200 8.459 10.947 10.783 10.783 10.783 15.000
IPM Application........
ERS IPM Research............ 0.200 0.200 0.500 0.500 0.500 0.500 0.500
-----------------------------------------------------------------------------------
Total, IPM Initiative. 15.957 15.493 17.979 19.586 21.729 21.758 34.404
----------------------------------------------------------------------------------------------------------------
integrated pest management
Question. Please prioritize the fiscal year 1999 proposed funding
increase for integrated pest management (IPM) and IPM-related
activities.
Answer. The increases proposed for IPM and related activities
reflect USDA's goal of helping U.S. agriculture implement IPM practices
on 75 percent of the nation's crop acreage by the year 2000, and to
help producers respond to the challenges they will face as the result
of Food Quality Protection Act (FQPA) implementation. Each research and
extension program that supports IPM activities is coordinated to
support major IPM goals. To further the development of a coordinated
and integrated effort, USDA has created a new Office of Pest Management
and Policy (OPMP) to serve as the focal point within the Department for
pest management and pesticide regulatory issues.
Proposed IPM and IPM-related activities in the fiscal year 1999
Budget focus on this integrated and coordinated approach are summarized
below. All of these would be considered high priority within the
Department's 1999 budget.
IPM Initiative.--Activities proposed under this multi-faceted
initiative are built around producer-identified needs for applied
research and education projects using pest control technologies that
are ready for large-area trials and adoption. These regional or area-
wide projects will be supported by proposed increases of approximately
$10 million for CSREES and ARS.
The initiative also include a proposed increase of $2.7 million for
research on alternatives to pesticides that may be lost to producers as
EPA proceeds to implement FQPA and on a decision support system that
will help identify crop-pest combinations where alternative controls
are most critical.
Pesticide Use Data Collection and Analysis.--Net increases of $2.7
million are proposed for pesticide use and food consumption data. USDA
is the sole or primary source for this data. Information on actual use
and consumption patterns is needed to conduct more accurate risk
assessments. These programs include the Continuing Survey of Food
Intakes by Individuals (CSFII) carried out by ARS, the Pesticide Data
Program under AMS, and pesticide use survey and analysis conducted by
ERS and NASS, respectively.
Pesticide Registration, Clearance, Assessment, and Training.--Net
increases of $4.8 million are proposed for programs to support the
registration process with information and analyses on the costs and
benefits of current and alternative pest management strategies at the
local, regional, and national scales; programs to gather data on
pesticide residues for new and safer minor-use products, and for
applicator training to build confidence in the system that relies on
well informed pesticide applicators. Accurate data and analysis are
essential to help policy-makers understand the implications of pest-
control decisions.
Question. For fiscal year 1998, 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 advisory committees, panels, commissions
and task forces funded in each of fiscal years 1997 and 1998, 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. Final decisions have not been made with regard
to funding for each advisory committee in fiscal year 1998. We will
submit further cost estimates by committee when they become final.
[The information follows:]
USDA Advisory Committees
Policy area and committee title 1997 actual
Food, Nutrition and Consumer Services: National Advisory
Council on Maternal, Infant and Fetal Nutrition.....................
==============================================================
____________________________________________________
Food Safety:
National Advisory Committee on Meat and Poultry Inspection $26,060
National Advisory Committee on Microbiological Criteria
for Foods............................................... 22,213
--------------------------------------------------------------
____________________________________________________
Total, Food Safety...................................... 48,273
==============================================================
____________________________________________________
Research, Education and Economics:
Forestry Research Advisory Council........................ 5,337
National Agricultural Research, Extension, Education, and
Economics Advisory Board................................ 299,149
Strategic Planning Task Force on Research Facilities...... 99,200
USDA/Hispanic Association of Colleges and Universi..................
USDA/American Indian Higher Education Consortium....................
--------------------------------------------------------------
____________________________________________________
Subtotal, CSREES........................................ 403,686
==============================================================
____________________________________________________
National Nutrition Monitoring Advisory Council................ 17,420
National Genetics Resources Advisory Council.................. 4,140
Dietary Guidelines Advisory Committee......................... 5,376
--------------------------------------------------------------
____________________________________________________
Subtotal, ARS........................................... 26,936
==============================================================
____________________________________________________
Census Advisory Committee on Agriculture Statistics........... 37,900
==============================================================
____________________________________________________
Total, REE.............................................. 468,522
==============================================================
____________________________________________________
Marketing and Regulatory Programs:
Advisory Committee on Foreign Animal and Poultry Diseases. 20,385
General Conference Committee of the National Poultry
Improvement Plan........................................ 7,511
National Animal Damage Control Advisory Committee......... 17,928
USDA/1890 Task Force...................................... 12,000
--------------------------------------------------------------
____________________________________________________
Subtotal, APHIS......................................... 57,824
==============================================================
____________________________________________________
National Organic Standards Board........................................
--------------------------------------------------------------
____________________________________________________
Subtotal, AMS.....................................................
==============================================================
____________________________________________________
Federal Grain Inspection Advisory Committee................... 17,472
==============================================================
____________________________________________________
Total, MRP................................................ 75,296
==============================================================
____________________________________________________
Farm and Foreign Agricultural Services:
Agricultural Policy Advisory Committee for Trade.......... 14,119
Ag. Tech. Adv. Comm. for Trade in:
Animals and Animal Products........................... 14,110
Fruits and Vegetables................................. 14,110
Grains, Feed and Oilseeds............................. 14,110
Sweeteners............................................ 14,110
Tobacco, Cotton and Peanuts........................... 14,110
Technical Advisory Committee for Edward R. Madigan
Agricultural Export Excellence Award Board.............. 14,110
--------------------------------------------------------------
____________________________________________________
Subtotal, FAS......................................... 98,779
==============================================================
____________________________________________________
Advisory Committee on Beginning Farmers and Ranche..................
Emerging Markets Advisory Committee.................................
--------------------------------------------------------------
____________________________________________________
Subtotal, FSA.....................................................
==============================================================
____________________________________________________
Total, FFAS............................................. 98,779
==============================================================
____________________________________________________
Natural Resources and Environment:
Task Force on Agricultural Air Quality Research........... 40,707
National Commission on Small Farms........................ 77,245
--------------------------------------------------------------
____________________________________________________
Total, NRE.............................................. 117,952
==============================================================
____________________________________________________
Office of the Chief Economist: Commission on 21st Century
Production Agriculture..............................................
==============================================================
____________________________________________________
Total, Advisory Committee Limitation.................... 808,822
Question. Why is the Department proposing to eliminate this
limitation for fiscal year 1999?
Answer. The Department has proposed that this limitation be lifted
in order to provide greater flexibility in managing advisory committees
to support the efficient operation of USDA programs.
Question. Please provide a list of the advisory committee, panel,
commissions, and task forces, by agency, included in the fiscal year
1999 budget request, and the amount assumed for each.
Answer. The advisory committees, panels, commissions and task
forces proposed for fiscal year 1999 are similar to those already
funded and includes at least one new committee, the Secretary's Small
Business Advisory Committee. Final decisions have not been made
regarding the proposed funding for each advisory committee. I will
provide the cost estimates by committee when they become final.
office of the inspector general
Question. What amount has been deposited in the Department of
Justice and/or Treasury Department Assets Forfeiture Fund in each of
fiscal years 1996, 1997, and 1998 as a result of investigation in which
the USDA Office of Inspector General (OIG) participates?
Answer. The Department of Justice and Treasury do not inform us of
how much has been actually deposited in their funds as a result of our
investigative actions. We do know that over $11 million in assets has
been seized for the funds as a result of our actions since receipt of
our authority--over $7 million for the Treasury Fund and approximately
$3.5 million for the Justice Fund.
Question. Why isn't a memorandum of understanding between the OIG
and the U.S. Department of Justice and/or Treasury in place to allow
USDA to receive an equitable share of these resources?
Answer. The memorandum of understanding between the Office of the
Inspector General and the U.S. Department of Treasury has been
finalized and is currently in the process of being signed.
Question. The fiscal year 1999 budget requests and increase of
$21.7 million for a law enforcement initiative to allow the Office of
Inspector General to crack down on fraud and waste in Food Stamps and
other USDA programs. Would receiving payments from forfeited assets
reduce the need for increased appropriations for these activities? If
so, by how much?
Answer. OIG is authorized to receive proceeds from asset
forfeitures as an additional tool in carrying out our law enforcement
mission. Payments received from forfeiture assets would not reduce the
need for the increased appropriations as detailed in the initiative
because the laws on the use of forfeiture funds limit their use and
specifically prohibit them from being used for personnel compensation
which is about 80 percent of our agency's costs.
Question. The fiscal year 1999 budget requests increased funding
for the Office of Inspector General to crack down on fraud and abuse in
USDA programs, particularly the Food Stamp and nutrition programs. Is a
funding increase also proposed for the Food and Nutrition Service
compliance activities? If not, why?
Answer. A funding increase of $150,000 is being proposed for the
Food and Nutrition Service to enable the compliance branch to conduct
``sweeps'' in 8 States.
brucellosis
Question. The Department's fiscal year 1999 explanatory notes
indicate that APHIS anticipated that all 50 States will reach
brucellosis Class ``Free'' Status by the end of 1998. Will bison
carrying brucellosis and wandering beyond the Yellowstone National Park
boundaries affect the achievement of this class ``free'' status?
Answer. As long as the surrounding states comply with the
conditions of the Interim Bison Management Plan (which requires States
and the National Park Service to prevent the movement of bison from
Yellowstone National Park and Brucellosis Management Areas) and
maintain active brucellosis surveillance programs, the Yellowstone
bison should not affect the achievement of Class ``Free'' status in all
50 states.
information technology services
Question. We understand USDA continues to have in place its
moratorium on significant information technology investments that was
established back in November 1996 with a waiver process to make
acquisitions. Also restrictions under this moratorium have been
tightened to allow for IT investments to be made only for Year 2000
projects and emergency needs.
With only about half of fiscal year 1998 remaining, what impact
will the moratorium have on USDA's IRM expenditure plans this fiscal
year?
Answer. According to the Chief Information officer the moratorium
has caused agencies to redirect their fiscal year 1998 expenditures
from non-mission-critical systems towards Year 2000 compliance. The
moratorium may not affect the total IRM expenditures for USDA because
of this redirection towards Year 2000 programs and the continued need
for operations and services for existing systems.
Question. As of this hearing, how many waivers were requested under
the moratorium for fiscal year 1997 and fiscal year 1998, and what was
the total dollar amount of waivers approved each fiscal year?
Answer. Agencies can and do submit waiver requests which cover
expenditures in more than one fiscal year because the waivers are
submitted for multiple year projects. Since the moratorium began in
November 1996, 127 waivers were requested in fiscal year 1997 for
approximately $283.7 million and approximately $210.5 million was
approved for fiscal years 1997, 1998 and 1999 expenditures. We have
received 36 waivers during fiscal year 1998 for $143.6 million and
approved approximately $133 million for fiscal years 1998 and 1999
expenditures.
Question. In light of the IT moratorium, what major investments
have been pushed back to fiscal year 1999 and beyond?
Answer. Because of the moratorium, agencies have made the decision
to come forward only with those investments which meet the emergency or
Year 2000 criteria for approval. The Office of the Chief Information
Officer cannot categorically state which investments have been deferred
because of the moratorium.
Question. We are hearing that USDA may have spent more than $200
million in fiscal year 1997 with plans to spend about $250 million in
fiscal year 1998. If the numbers are anywhere near this, the confidence
we have in the moratorium may be eroded.
If USDA continues to spend hundreds of millions on IT investments
even while under a strict moratorium on such investments, how effective
in your opinion has the moratorium been? Please elaborate on your
answer.
Answer. While USDA has continued to make some investments while
under the IT moratorium, those investments have been scrutinized
carefully by the Office of the Chief Information Officer to ensure that
they met the requirements of the moratorium. Any investments made were
to support mission-critical programs. Since the moratorium has become
more stringent, IT investments are made only for emergency situations
or to support USDA's Year 2000 program. The CIO assures me that the
moratorium has been effective in ensuring that our expenditures for IT
were limited to those that are absolutely necessary to carry out USDA
programs.
USDA has had its moratorium on IT purchases in place since November
1996. Originally this moratorium applied to all IT acquisitions over
$250,000, with exceptions for renewals to existing contracts and
support services contracts for existing systems to become Year 2000
compliant. However, waivers were being granted. We understand that more
recently that the threshold was lowered to all IT acquisitions over
$25,000, and that starting at the end of fiscal year 1997, waivers were
only being granted for emergencies and those directly related to
ensuring Year 2000 compliance.
Question. What was the total number of moratorium waiver requests
submitted in fiscal year 1997 and what was the total dollar amount of
these?
Answer. During fiscal year 1997 there were 127 waivers requesting
approximately $283.7 million.
Question. What was the total amount dollars and number of waivers
approved in fiscal year 1997?
Answer. During fiscal year 1997, 113 waivers requesting
expenditures of approximately $210.5 million were approved for fiscal
years 1997, 1998 and 1999.
Question. With tighter restrictions put in place for fiscal year
1998, what has been the total number of waivers requested, in terms of
numbers and dollars, in fiscal year 1998 to date?
Answer. Since October 1, 1997, we have received 36 waiver requests
totaling $143.6 million.
Question. Also, what has been the total number of waivers approved,
in terms of numbers and dollars, in fiscal year 1998 broken out by
those granted to meet emergencies, those directly related to ensuring
Year 2000 compliance and others?
Answer. Ten waivers have been approved in fiscal year 1998 for
emergencies, totalling $6.7 million in fiscal year 1998 funding and
$1.4 million in fiscal year 1999 funding.
Eighteen waivers have been approved for Year 2000 compliance,
totalling $122.4 million for fiscal year 1998 funding and $2.9 million
in fiscal year 1999 funding. The waivers for year 2000 compliance
include incremental costs for making systems compliant, as well as
costs for upgrading systems, for which a portion of those costs can be
attributable to year 2000 compliance.
Since no other grounds for approval of waivers exist, all waivers
granted fall into the above categories.
Question. In light of the waivers granted for Year 2000 compliance,
how do these waivers compare to what the agencies estimate they will
need to spend to fix systems and make them year 2000 compliant?
Answer. USDA agencies estimate that the incremental cost for Year
2000 repairs for fiscal year 1998 will be $58 million. This total is
less than the amount of waivers approved for Year 2000-related work
because the Forest Service Project 615 initiative has been granted a
waiver for Year 2000 compliance in fiscal year 1998, but only a portion
of those costs can be attributed solely to year 2000 compliance.
Question. What are the Department's overall planned expenditures
for information technology in fiscal year 1997, fiscal year 1998, and
fiscal year 1999? Please provide specific expenditures, by agency and
account. What are the Department's actual expenditures in each of
fiscal years 1997 and 1998 by agency and account? What planned
expenditures were not made in each of fiscal year 1997 and 1998 as a
result of the moratorium?
Answer. In February 1996, based on the 1997 proposed President's
Budget, USDA estimated that it would spend $1.253 billion in
information technology during fiscal year 1997. The February 1998
report indicated that during fiscal year 1997, $1.080 billion was
actually spent on IT. We believe that this reduction is in large
measure due to the impact of the moratorium.
In February 1997, USDA estimated that it would spend $1.239 billion
in information technology during fiscal year 1998. The February 1998
report indicates that USDA plans to spend $1.211 billion during fiscal
year 1998. Our experience indicates that this estimate will further
decline after the fiscal year is complete and actual expenditures are
reported. We believe that this reflects the effectiveness of the
moratorium in reducing USDA expenditures for IT.
The Chief Information Officer has issued a call letter to the
agencies, asking them to update last year's report ``USDA Agency
Information Technology Expenditures by Budget Account''. I expect to be
able to provide this information to the Committee in early April.
Question. Identify what each agency plans to spend in total during
fiscal year 1998 and fiscal year 1999, and of that what it plans to
spend under the following information technology spending categories;
(1) equipment purchases and leases, (2) software purchases and leases,
(3) supplies, (4) personnel costs, (5) commercial support services, (6)
other services (i.e. primarily commercial telephone and data service),
and (7) Intra-Governmental Services?
Answer. I will ask the Chief Information Officer to provide the
information for the record.
[The information follows:]
The following information is from the Department's OMB Circular A-
11 report. This report includes actual expenditures for fiscal year
1997, and estimated expenditures for fiscal year 1998 and fiscal year
1999. The estimated expenditures are subject to review and approval
according to requirements of the moratorium.
Question. Provide a list of major technology initiatives underway
or planned at the Department. In doing so, provide what has been spent
to date on the initiative, what will be spent on the initiative in
fiscal year 1998 and fiscal year 1999, and the total estimated life-
cycle costs of the initiative.
Answer. The following table outlines our major technology
initiatives. Specific spending and life-cycle costs will be provided to
the Committee by early April.
Integrated Systems Acquisitions Project (ISAP).--ISAP will
establish a strategic framework for implementing the next generation of
information systems in the Animal and Plant Health Inspection Service
(APHIS). In the fall of 1995, a contract for computer products and
services was awarded. APHIS has begun a five-year phased transition to
the new environment of software, hardware, telecommunications and
support services. Before starting formal implementation, APHIS is
sponsoring transition activities to prepare for the new architecture.
Total obligations from fiscal year 1997 through fiscal year 1999 are
estimated to be $26 million.
Project 615.--Through hardware and software acquisition, Project
615 will refresh the Forest Service's (FS) office automation technology
and provide that agency with geographical information systems (GIS)
technology. This will give FS the infrastructure to change its
management of forests and rangelands from a single timber focus to a
multiple ecosystem focus. Through Project 615's series of contracts, FS
will establish an open systems environment. The full application phase
began in fiscal year 1997, and by the end of fiscal year 2000 all FS
employees are expected to be on line with the new technologies. Total
obligations from fiscal years 1997 through 1999 should reach an
estimated $400 million.
Food Stamp Program Integrated Information System (FSPIIS).--In the
Food and Consumer Service (FCS), the FSPIIS is a comprehensive,
integrated, on-line, menu-driven information system to support
administration of the Food Stamp Program. Through GSA's Federal
Information System Support Program and the Small Business
Administration's 8(a) Program, the FCS is acquiring software
development and maintenance for the system. FSPIIS extensions and
interfaces are being implemented to support Electronic Benefits
Transfer (EBT) and Electronic Data Interchange (EDI). Business Process
Reengineering (BPR) methodologies were employed to determine requisite
business functions during fiscal year 1994. These business functions
are currently supported by EDI and EBT. From the BPR came also an
initiative to consolidate food stamp forms, which should dramatically
reduce State and project area reporting burdens, in terms of both the
number of reporting points--sites--and events. Total obligations from
fiscal year 1997 though fiscal year 1999 should equal about $17
million.
Service Center Implementation.--Under the leadership of the Service
Center Implementation Team, initiatives are underway to consolidate
county offices into local USDA service centers equipped with
communications and computer-related technology to save costs, improve
program delivery, and provide one-stop service to customers. This is a
joint effort by the Farm Service Agency, Natural Resources Conservation
Service and Rural Development. The implementation will support
integrated voice and data communications infrastructures, reengineered
business processes, data sharing within current agency systems, and a
common computing environment to serve all agencies operating in any
given service center. The communications systems currently being
installed will cost approximately $100 million. The reengineering
efforts are underway and will continue next year. The estimate of the
cost for the first phase of the common computing environment at the
field level to be approximately $30 million in fiscal year 1998 and $70
million in fiscal year 1999. Approximately $10 million will be required
for pilot and demonstration sites in fiscal years 1998 and 1999.
Field Automation and Information Management (FAIM).--The Food
Safety and Inspection Service's FAIM initiative is a project to
automate improved business processed for the agency and to provide an
agency-wide information management and sharing network. Total
obligations from fiscal year 1996 through fiscal year 1999 should equal
about $45 million.
Dedicated Loan Origination and Servicing System (DLOS).--In
amending the Housing Act of 1949, Congress in 1988 mandated that the
then Farmers Home Administration escrow taxes and insurance. To comply,
the Rural Housing Service has purchased a commercial mortgage loan
origination and servicing system known as the Dedicated Loan
Origination and Servicing System. It has an estimated total obligation
from fiscal years 1996 through 1999 of $20 million.
The Foundation Financial Information System (FFIS) is a major
initiative sponsored by the Office of the Chief Financial Officer to
replace USDA's core accounting system. FFIS implementation is underway.
FFIS is designed to help us meet a strategic departmental objective:
implementing a single, integrated financial management information
systems in USDA, in compliance with OMB guidance and USDA financial
standards. We are looking at costs, planned schedules, performance and
management to ensure that FFIS is successfully completed. We will
provide the Committee cost information as we complete this review.
This Committee has been trying to get the Department to develop an
information systems architecture for the last several years and do so
prior to making major investments. We understand that early last year
the Department developed the initial version of such an architecture,
but one that needed much additional work.
ccc adp
Question. Section 161 of the FAIR Act of 1996 amended the Commodity
Credit Corporation (CCC) Charter Act to significantly limit the use of
CCC funds. 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) was limited to $170 million in fiscal year 1996, and $275
million for the six-year period including fiscal years 1997 through
2002. What was the total amount of CCC funds used in fiscal year 1997
for ADP?
Answer. Fiscal year 1997 CCC ADP obligations were $36,146,007,
leaving a balance of $238,853,993 from the authorized cap of $275
million.
Question. What is the total amount of CCC funds USDA plans to spend
in fiscal year 1998 and fiscal year 1999 for ADP?
Answer. Fiscal year 1998 and fiscal year 1999 CCC ADP budget
obligations in the President's fiscal year 1999 budget are estimated to
be $106,549,000 and $76,401,000, respectively.
Question. What ADP initiatives will be supported in fiscal year
1998 and fiscal year 1999 with the CCC funds?
Answer. During fiscal year 1998 one initiative partially funded by
CCC is the USDA Service Center Initiative. fiscal year 1998 funds will
be used to complete Phase I of the LAN/WAN/Voice project. Phase I,
carried over from fiscal year 1997, will provide integrated phone and
local and wide area data communications for the State and county
offices. Phase II LAN/WAN/Voice activities funded in fiscal year 1998
include e-mail, satellite dishes for distance learning and circuit
upgrade equipment for the Service Centers. CCC funds for the Common
Computing Environment (CCE) pilot demonstration sites, hardware and
software, digital orthophotography, and Business Processes
Reengineering/Improvement projects, training, and studies are also
included in the fiscal year 1998 budget. NRCS and RD will also be using
their funds to support the CCE.
Several initiatives are funded in both fiscal year 1998 and fiscal
year 1999. Contractor support is needed for application development and
programming, including Year 2000 modifications, in support of continued
FSA State and county office program delivery. Funds are also included
for the continuing implementation of FSA's portion of the FFAS
integrated financial management system, CORE, which will feed the
Department's Foundation Financial Information System for preparation of
consolidated financial statements and reports. Hardware and software
maintenance, upgrades, replacement and operational support for FSA
legacy systems remain a need.
Assuming successful pilot installations in fiscal year 1998, CCC
funds are included with funds from other Service Center agencies, in
late fiscal year 1998 and fiscal year 1999 to procure, deploy, and
install the initial components of the nationwide implementation of CCE,
including employee training to use the new equipment and software.
Procurement priorities of actual CCE components will be consistent with
business requirements resulting from reengineered business processes
and supportive of administrative convergence.
Question. What has the Department done since last year to build its
information systems architecture into a tool that USDA could use to
plan Information Technology(IT) investments and ensure that any new
systems meet the Department's business and information needs of the
21st century?
Answer. The USDA Information Systems Technology Architecture was
reviewed by a contractor under the OCIO's Independent Verification and
Validation (IV&V) Program. While the IV&V findings were generally
positive regarding USDA's first effort, there were several
recommendations that USDA will incorporate into the implementation and
management of the architecture. OCIO developed a high-level project
plan which currently is being expanded with detailed tasks and
milestones.
Last Year, USDA received a grade of ``D'' from the House Government
Reform and Oversight Subcommittee on Government Management, Information
and Technology for its efforts to address the Year 2000 problem and
bring systems into compliance.
Question. What steps has the Department taken to improve its grade
and ensure that it will be ready with its information systems to move
into the next millennium?
Answer. I have taken strong management action to effectively
respond to the challenges of year 2000 remediation. During the past
year, USDA has established a Year 2000 Program Office, under the Chief
Information Officer, with Senior Executive Service leadership to manage
the Year 2000 issues Department-wide. The Chief Information Officer
(CIO), Under and Assistant Secretaries have been given the
responsibility for ensuring that USDA's mission-critical systems
nationwide are Year 2000 compliant by March 1999. I directed each
Agency Administrator to appoint a Year 2000 Senior Executive Sponsor
who reports directly to the Administrator and establish Year 2000
project teams. Year 2000 is a critical element in the performance
standards of the Senior Executive Sponsor in order to establish
accountability
Additionally, USDA has issued a procurement moratorium requiring
CIO approval of any IT procurement over $25,000; under this moratorium,
purchases can only be approved on an emergency basis or when the
acquisition is directly related to Year 2000 remediation. The CIO has
sole signatory authority under the moratorium, which will remain in
place throughout fiscal year 1998 and fiscal year 1999 to assure that
the Year 2000 is the Department's information technology priority.
Question. What is the status of the Department's efforts in
readying the systems to be Year 2000 compliant?
Answer. USDA continues to make steady progress in the remediation
of mission critical systems. Currently, 41 percent of USDA's 1,319
mission critical systems are Year 2000 compliant and we anticipate that
the remaining mission critical systems, which will be required for use
in the Year 2000, will be compliant by no later than March 1999. All
agencies have reassessed their systems to ensure compliance with the
new deadlines, and some agencies have redirected or reprogrammed
resources to accelerate completion of the remediation effort.
Question. How much does USDA plan to spend, by component agency,
this fiscal year and in fiscal year 1999 to fix the Year 2000 problems
at USDA?
Answer. USDA plans to spend $58 million this fiscal year and $27
million in fiscal year 1999 to fix the Year 2000 problem.
I will provide the agency information for the record.
[The information follows:]
[Cost in thousands]
------------------------------------------------------------------------
Fiscal year--
Agency -------------------------
1998 1999
------------------------------------------------------------------------
Foreign Agricultural Service.................. $170 $170
Farm Service Agency--KC....................... 6,190 1,580
Farm Service Agency--HQ....................... 200 200
Risk Management Agency........................ 380 380
-------------------------
Farm and Foreign Agricultural Services.. 6,940 2,330
=========================
Food and Nutrition Service.................... 2,200 670
-------------------------
Food, Nutrition and Consumer Services... 2,200 670
=========================
Food Safety and Inspection Service............ 400 200
-------------------------
Food Safety............................. 400 200
=========================
Agricultural Marketing Service................ 1,500 790
Animal and Plant Health Inspection Service.... 7,407 3,962
Grain Inspection, Packers and Stockyards 1,100 300
Administration...............................
-------------------------
Marketing and Regulatory Programs....... 10,007 5,052
=========================
Forest Service................................ 11,700 3,500
Natural Resources Conservation Service........ 7,849 8,611
-------------------------
Natural Resources and Environment....... 19,549 12,111
=========================
Agricultural Research Service................. 1,521 1,171
Cooperative State Research, Education and ........... ...........
Extension Service............................
Economic Research Service..................... 260 260
National Agricultural Statistics Service...... 120 60
-------------------------
Research, Education and Economics....... 1,901 1,491
=========================
Rural Development............................. 1,950 1,000
=========================
Support Programs: Departmental Administration 540 500
\1\..........................................
=========================
Offices:
National Appeals Division................. ........... ...........
Office of the Chief Financial Officer--NFC 8,980 1,000
Office of the Chief Information Officer-- 5,942 2,490
NITC.....................................
Office of Communications.................. 50 200
Office of the Chief Economist............. 3 4
Office of the Inspector General........... ........... ...........
Office of Budget and Program Analysis..... ........... ...........
Office of the General Counsel............. ........... ...........
-------------------------
Subtotal................................ 14,975 3,694
=========================
Totals.................................. 58,462 27,048
------------------------------------------------------------------------
\1\ Includes: Administrative Law Judges, Board of Contract Appeals,
Civil Rights, Human Resources, Office of the Judicial Officer,
Operations.
Question. Who is charged with the overall responsibility and
accountability at USDA for ensuring that the Department's mission
critical information systems are Year 2000 compliant and what are the
Department's Year 2000 milestones.
Answer. The Chief Information Officer and the Year 2000 Program
Executive have the overall responsibility for the planning, oversight,
and evaluation of USDA's effort to achieve Year 2000 compliance. The
Under and Assistant Secretaries and Agency Heads have been empowered
with the programmatic, budgetary, managerial, and technical
responsibility for ensuring that USDA's mission-critical systems
nationwide are Year 2000 compliant by March 1999 in their respective
areas.
Milestones for completion of the various phases of remediation have
been established based on guidance from the General Accounting Office
and the Office of Management and Budget. September 1998 is the
milestone for completion of the renovation phase for repaired systems;
January 1999 is the milestone for completion of validation for all
mission critical systems; and, March 1999 is the milestone for
completion of the implementation phase for all mission critical
systems.
Question. What assurances can you give this Committee that the
Department will fix its mission-critical information system Year 2000-
related problems in sufficient time for adequate testing and validation
to occur, and that the necessary steps can be taken in sufficient time
so that USDA's operations and customers are not adversely affected?
Answer. As I mentioned previously, responsibilities for Year 2000
compliance have been firmly designated at multiple levels within USDA.
Plans have been developed to achieve compliance by March 1999. In
addition, the Office of the Chief Information Officer is establishing a
verification and validation process to bring independent third party
review of selected critical systems in terms of Year 2000 compliance.
A USDA-wide mainframe testing environment is being established at
the National Information Technology Center in Kansas City. The test
environment is expected to be fully operational in July 1998. An
additional mainframe test environment has been established and is
currently operational at the National Finance Center (NFC) in New
Orleans. It will be used to test NFC based applications.
Question. Obviously, one of the Department's biggest efforts in the
IT area is the Service Center Procurement effort.
A. How much has the Department obligated each fiscal year since
fiscal year 1995 for this effort? Please show it by funding source for
each fiscal year.
B. How much is the Department requesting in fiscal year 1999 for
the Service Center IT procurement by funding source and how much in
additional funding will it cost to fully fund this effort?
Answer. The Department's investment in achieving a shared
information system for the USDA Service Center agencies includes:
Business Process Reengineering (BPR), which defines the business
requirements for enabling technology; telecommunication infrastucture,
better known as the Local area network/Wide area network/Voice (LAN/
WAN/Voice) Project; Base data acquisition, digital ortho photography
and soils digitization; and a capital investment in hardware and
software, the Common Computing Environment (CCE). The total investment
in each of these areas for fiscal year 1996 through fiscal year 1999 is
shown in the table that follows.
Most of the costs for these initiatives are being funded from base
level agency resources. However, an increase of $30 million is
requested in fiscal year 1999 under the salaries and expense account of
the Farm Service Agency. Based on the BPR Business Case, the
Department's Executive Information Technology Investment Review Board
(EITIRB) approved a $350 million investment for the Service Center CCE
be added to the IT investment portfolio of the Department. The $110
million investment in fiscal year 1998 and 1999 includes approximately
$100 million for the CCE ``procurement''. Approximately $250 million
will be needed between fiscal year 2000 and fiscal year 2001 to
complete the acquisition of the CCE equipment and software for the
Service Centers. The funding sources for future years have not been
determined at this time.
[The information follows:]
USDA SERVICE CENTER SHARED INFORMATION SYSTEM
----------------------------------------------------------------------------------------------------------------
Fiscal year--
---------------------------------------------------
Activity 1998 1999
1996 actual 1997 actual planned proposed
----------------------------------------------------------------------------------------------------------------
I. Business Process Reengineering (BPR):
Unallocated............................................. ........... ........... ........... $10,800
CCC..................................................... ........... $6,542 $4,900 ...........
FSA..................................................... ........... 468 950 ...........
NRCS.................................................... ........... 1,500 2,897 3,000
RD...................................................... ........... 118 1,150 ...........
OSEC.................................................... $800 ........... ........... ...........
---------------------------------------------------
Subtotal.............................................. 800 8,628 9,897 13,800
===================================================
II. LAN/WAN/VOICE (L/W/V):
Unallocated............................................. ........... ........... ........... 6,637
CCC..................................................... 68,500 ........... 20,257 2,275
FSA..................................................... 1,800 743 269 88
NRCS.................................................... ........... 8,530 2,300 ...........
RD...................................................... 2,400 1,400 541 ...........
---------------------------------------------------
Subtotal.............................................. 72,700 10,673 \1\ 23,367 9,000
===================================================
III. BASE DATA ACQ:
CCC..................................................... 22,000 ........... 6,000 ...........
NRCS.................................................... 8,000 17,500 13,750 15,050
---------------------------------------------------
Subtotal.............................................. 30,000 17,500 19,750 15,050
===================================================
IV. Common Computing Environment (CCE):
CCC..................................................... 4,200 ........... 20,500 15,000
FSA..................................................... ........... ........... 500 30,000
NRCS.................................................... ........... ........... 17,200 16,250
RD...................................................... ........... ........... 4,100 7,000
---------------------------------------------------
Subtotal.............................................. \2\ 4,200 ........... \2\ 42,300 68,250
===================================================
Total:
Unallocated............................................. ........... ........... ........... 17,437
CCC..................................................... 94,700 6,542 51,657 17,275
FSA..................................................... 1,800 1,211 1,719 30,088
NRCS.................................................... 8,000 27,530 36,147 34,300
RD...................................................... 2,400 1,518 5,791 7,000
OSEC.................................................... 800 ........... ........... ...........
---------------------------------------------------
Grand total........................................... 107,700 36,801 95,314 106,100
----------------------------------------------------------------------------------------------------------------
\1\ The $9 million in fiscal year 1999 include $4 million to complete the installation phase by December 1998.
The remaining $5 million are to cover maintenance costs.
\2\ Of these amounts, $4.2 million in fiscal year 1997, $9.3 million in fiscal year 1998, and $1.25 million in
fiscal year 1999 are for pre-acquisition studies, evaluations, and pilot testing.
Question. We understand that the Department has turned to
contractors to perform oversight responsibilities for IT projects, the
Independent Verification and Validation (IV&V) process. Given the
change in philosophy to contract out for oversight of IT projects using
the IV&V process:
A. What savings have been achieved for the Department in terms of
reduced staff since contractors now have some of the workload?
B. What other quantifiable benefits have resulted from these
IV&V's?
C. What has been spent to date and is obligated for conducting
IV&V's, and what projects have been reviewed to date?
Answer. Please let me make an important clarification. Oversight
responsibilities for IT projects remain in the Department, specifically
in the Office of the Chief Information Officer, and are not contracted
out. The purpose of our Independent Verification and Validation program
is to conduct un-biased reviews and analyses of IT plans, management
approaches, technical alternatives, requirements and cost-benefit
studies. We feel very strongly that these independent reviews,
conducted before we make multi-million dollar investments in IT, will
assist us in identifying strengths and weaknesses, alternatives or
requirements which we did not consider, or alternative courses of
actions which may help us to maximize benefits and minimize risks.
The IV&V program is designed to help us acquire, on a short-term
basis, expertise which is not readily available internally. Typical
task length is 45-90 days. We look at the breadth of both the
government and private sector experience when we select an IV&V
contractor.
A table identifying costs and benefits of the IV&V Projects will be
submitted for the record.
[The information follows:]
Dollars
IV&V project/benefits obligated
Service Center Implementation--LAN/WAN/Voice Initial Review
(fiscal year 1997). Completed. Identified problem areas
and suggested resolutions which, when applied, allowed
USDA to lift the nation-wide suspension on installations.. $50,000
Service Center Implementation--LAN/WAN/Voice Follow-On Review
(fiscal year 1997). Completed. Evaluated USDA's
implementation of suggestions from initial review.
Verified that new approaches are work-
ing....................................................... 10,000
Service Center Implementation--Review of Year 2000 Plans
(fiscal year 1997). Completed. Evaluation of service
center agency Y2K plans, based on contractor-developed
criteria, consistent with GAO guidance. Conducted in
conjunction with USDA Y2K program office.................. 45,000
Service Center Implementation (fiscal year 1998). Completed.
Evaluation of Service Center implementation plans to
identify and rank candidate components for future IV&V
studies................................................... 27,000
Service Center Implementation--Common Computing Environment
(fiscal year 1998). Completed. Verified and validated
cost/benefit analysis and technical alternatives. Provided
additional insights, based on experience, which will be
useful in conducting laboratory and pilot tests........... 115,000
USDA IT Architecture (fiscal year 1998). Completed. Contractor
validated USDA's current baseline against industry
standards and found no major problems; provided
recommended future actions, based on an OMB-approved
methodology............................................... 220,000
USDA Foundation Financial Information System (fiscal year
1998). Currently underway to: evaluate project plans,
schedules and projected costs; evaluate USDA requirements
versus software capabilities; review strategies and plans
for future implementations and upgrades................... 150,000
Three years ago this Committee noted the growth in geographical
information systems (GIS) technologies and their application in the
private sector. As a result, the Committee encouraged the Secretary to
pursue the possibility of a multi-agency, multi-disciplinary approach
to better involve federal, state, and local governments in developing
uniform GIS applications. We understand that USDA has several agencies
involved in developing geographical information systems (GIS) and
associated projects such as digital orthophotography and data
digitization.
Question. Please provide a list of USDA agencies engaged in GIS
projects, a description of these projects, and total estimated life-
cycle costs for each project.
Answer. The agencies involved in GIS development are: Forest
Service, Natural Resources Conservation Service, Farm Service Agency
and Rural Development.
Question. What have each of these agencies spent over the last 5
individual years on GIS technologies and related expenditures?
Answer. Spending for GIS-related hardware, software, and geospatial
data is integrated into the A-11 reports submitted by each agency
without specific breakout.
Question. What does USDA plan to spend in fiscal years 1998 and
1999 on GIS systems?
Answer. The Chief Information Officer will provide you with
information on expenditures and life-cycle costs by early April.
Question. What progress has USDA made to establish a multi-agency,
multi-disciplinary approach to develop uniform GIS applications?
Answer. USDA is working with the Open GIS Consortium (OGC), which
represents most of the major information technology companies. We have
representation on the Board of Directors as well as management and
technical committees and help guide industry in making decisions which
foster interoperability and enable the development of common GIS
applications. Recently the OGC issued a standard for representing point
and line geographic features and they have demonstrated the ability for
competing vendors to access and use each others geospatial data, over
the internet, without having to go through a time consuming and
expensive download and conversion process. We are working with industry
to develop other standards for geographic features and GIS technology
that will foster interoperability.
As industry completes and adopts these standards, various agencies
and disciplines will be able to develop more uniform applications which
make use of each other's information without having to recreate or
convert that information.
Question. What steps has USDA taken to ensure that activities
related to developing GIS are not duplicated across government agencies
and are systematically accomplished?
Answer. The Federal Geographic Data Committee (FGDC) continues to
be the primary committee which ensures that GIS activities are
coordinated among government agencies. USDA is an active participant at
the Steering Committee level as well as the many subcommittee and
working group level. USDA also has an Agriculture Geographic Data
Committee which meets periodically to coordinate GIS activities within
the Department.
The three Service Center Agencies--Farm Service Agency (FSA),
Natural Resources Conservation Service (NRCS), and Rural Development--
have formed a partnership to develop and implement a uniform GIS
solution for Service Center offices. This involves a common set of
shared geospatial data layers, common hardware and GIS software, and
joint training.
The Forest Service and NRCS periodically meet to coordinate their
efforts in GIS and geospatial data development and data sharing. A
number of projects are underway to development geospatial data and GIS
applications in a uniform manner to avoid duplication of efforts.
management
Question. In several places within the budget, the term
administrative convergence is mentioned and that the Department is
coordinating the functions of the different field service agencies to
provide a more seamless and efficient delivery system. We see that this
is being done only for the Service Center agencies, i.e., the Farm
Service Agency, Natural Resource Conservation Service and Rural
Development, but nevertheless USDA reports that by 2002, the proposal
would result in a 22 percent reduction in administrative staffing from
1997. Savings by 2002 would equal $127 million/per year.
How many administrative staff did the USDA Service Center agencies
have in 1997 broken out by headquarters, state, and field office level,
and what did this staff cost?
Answer. I would be glad to provide that information for the record.
[The information follows:]
STAFF YEARS
----------------------------------------------------------------------------------------------------------------
Technical
Mission area Headquarters Finance Regional Center/ States Total
Office \1\ Office Institute \2\
----------------------------------------------------------------------------------------------------------------
NRCS.................................. 118 .......... 91 171 613 993
FSA................................... 393 940 ......... 88 338 1,759
RD.................................... 224 472 ......... ............. 404 1,100
-------------------------------------------------------------------------
Total........................... 735 1,412 91 171 1,347 3,852
----------------------------------------------------------------------------------------------------------------
\1\ The column headed Finance Office includes the St. Louis operations of Rural Development and the Kansas
Operations of the Farm Service Agency.
\2\ The column headed Technical Center/Institute includes the Aerial Photography unit of the Farm Service Agency
in Salt Lake City.
The estimated savings of $127 million annually represents only the
savings resulting from the reduction of 2,314 staff years between 1993
and the year 2002, assuming an average staff year cost of $55,000. It
does not include the savings to be realized through the elimination of
duplicate systems, business process re-engineering and better
coordination of activities. Nor does it include the cost acquiring and
installing the common computing environment, any relocation of
personnel or other costs associated with consolidation. Assuming an
average staff year cost of $55,000, the fiscal year 1997 cost of the
3,852 administrative positions in the three mission areas is a little
over $200 million.
Question. What is the total number of administrative staff for USDA
broken out by headquarters, state, and field office levels?
Answer. The following table contains the information.
USDA Administrative Staff
1997
Location estimate
Headquarters...................................................... 4,298
Regional.......................................................... 4,353
State............................................................. 1,457
Field Offices..................................................... 4,600
-----------------------------------------------------------------
________________________________________________
Total.......................................................14,708
Question. With the significant amount of savings estimated for the
Service Center agencies alone, what would the amount of savings be if
all USDA agencies were included in the administrative convergence
initiative? Does the Department have any current plans for expanding
the administrative convergence effort across the Department?
Answer. The administrative convergence initiative would be
difficult to apply to other agencies that are not operating out of the
USDA Service Centers. At this time we do not have plans to expand this
effort across the Department. However, I would like to note that
administrative units for each mission area were combined as part of the
USDA reorganization a few years ago.
modernization of administrative processes program
For years now, USDA has funded the Modernization of Administrative
Processes (MAP) program, but now we see that USDA is no longer funding
this program.
Question. What was spent in total on this program since its
inception?
Answer. From fiscal year 1993 through fiscal year 1997, the MAP
Program spent $13 million. For fiscal year 1998, $4.2 million have been
planned which will bring the total MAP expenditures to $17.2 million.
Question. What were the results of this program?
Answer. Prior to it termination, the program had seven active
projects to improve USDA's administrative functions: (1) Purchase Card/
Convenience Check, (2) Procurement System Modernization, (3) Human
Resources Management (personnel system) Modernization study, (4) Time
and Attendance, (5) Telecommunication Services, (6) Information
Resources Management Analysis, and (7) Civil Rights Complaints
Processes to include both Program and Equal Employment Opportunity
processes.
The Purchase Card project (an automated system for tracking,
reconciling, and paying government credit card purchases up to $2,500)
has begun implementation USDA-wide and is planned to be completed by
March 1999. Both the Purchase Card/Convenience Check and the
Procurement System Modernization projects have been combined. Cost
avoidance is expected to exceed $29 million annually when fully
implemented. Pilot testing of the Telecommunication Services project
(to automate and consolidate USDA's telecommunications needs to allow
central billing, reconciling, and equipment inventory management) began
in February 1998. This project has been expanded to include a baseline
telecommunications inventory in support of Year 2000. This project is
expected to complete its evaluation by July 1998. The IRM Analysis
project (to analyze USDA's IRM program regarding those IRM business
processes that support the Department's technology program) was
completed September 1998. It will serve as the basis for future
modernization projects. The Human Resources Management Modernization
study was completed September 30, 1997, and provided recommendations
for 10 different modernization projects. The Time and Attendance
project was identified as a top modernization project. Currently,
commercial-off-the-shelf software packages are being pilot tested to
determine their application to USDA's time and attendance requirements.
A final report on the results will be issued May 1998. A potential cost
avoidance of $39 million is expected. The Civil Rights program and EEO
complaint processes' redesign were completed September 1998 as part of
the Civil Rights Implementation Team efforts. Currently, automated
tracking systems are being developed to support these Civil Rights
processes.
Question. Why did USDA terminate this program?
Answer. While it is true that USDA terminated the MAP program
Office in Departmental Administration, the MAP projects were not
terminated. All of the active modernization were transferred to the
respective offices within Departmental Administration and to USDA's
Office of the Chief Information Officer. These ongoing modernization
projects are still funded by the Department's Working Capital Fund.
______
Questions Submitted by Senator Gorton
regional research
Question. It is apparent from this budget that the President and
USDA have not made regional research a priority. Using Washington state
as an example, how can you explain the need to cut essential research
for the nation's leading apple, hops, dry peas and lentils and second
leading potato, grape and asparagus producers in the United States?
Answer. As a part of the Administration's efforts to balance the
budget and direct spending to higher priority areas, projects earmarked
for specific institutions were proposed for elimination. Research
funding distributed by formula under the Hatch Act to Washington State
University could be used to continue aspects of these projects if they
are deemed to be of a high priority at State or local levels.
Additionally, researchers could apply for funding under the National
Research Initiative competitive research grants program or obtain
funding from State and local governments and/or private sources, such
as industry, to continue these projects.
Question. Last year USDA and the President cut regional research,
much like we have witnessed in this budget. Why, after Congress
reinstated all of the regional-based research our agriculture
communities require, were these projects again eliminated?
Answer. The elimination of projects earmarked for specific
institutions is consistent with the Administration's efforts to balance
the budget and direct spending to higher priority areas and its policy
of awarding research, education, and extension projects through a
competitive, merit-review process. It is possible that funding
distributed under the Hatch Act, or funding from the National Research
Initiative competitive research grants program, State and local
governments and/or private sources, such as industry, could be used to
continue aspects of these projects if they are deemed to be of high
priority at State or local levels.
ars location closure
Question. Another specific question for the State of Washington--
why was the Prosser Research Station zeroed out for the second year in
a row?
Answer. The President's budget requires the reallocation of
existing resources to finance new, high priority research needs. A
number of projects carried out in ARS research stations at Prosser,
Washington; Mandan, North Dakota; Orono, Maine and Brawley, California,
were identified as less critical. As a result, a cost-effective
decision was made to terminate and redirect resources to new research
initiatives and recommend closure of these research stations.
______
Questions Submitted by Senator Burns
u.s. agricultural exports for 1998
Question. Now that I have launched into my sermon of what I
consider to be the evils of this Administration's agricultural trade
policy, I would appreciate it, Mr. Secretary, if you would provide the
Committee with an outline of what you foresee in the export of American
products for the coming year.
Answer. The current fiscal 1998 forecast for U.S. agricultural
exports is $58.5 billion, up $1.2 billion from 1997 and second only to
the 1996 record of $59.8 billion. Compared with 1997, the only major
products expected to show a year-over-year drop in export value are
soybeans and meal. U.S. export volumes for soybeans and products should
rise due to strong foreign demand; however, prices are down sharply
reflecting a strong recovery in domestic and foreign oilseed stocks.
A large increase in sales to Latin America is forecast. Little
change is expected for exports to Europe, Canada, the Middle East, and
the Newly Independent States of the former Soviet Union. The forecast
for Asia reflects slower export growth to Japan and reduced prospects
for U.S. exports due to the financial crisis. The adverse impact of the
Asian crisis on U.S. agricultural exports in 1998 was conservatively
estimated at $500 million in December. We will be releasing a revised
export forecast for 1998 on February 23, which should include a more
thorough assessment of the effects of the Asian financial crisis on
this year's export performance.
export enhancement program
Question. Would you please outline what you see as the standards by
which you would consider using Export Enhancement Program (EEP) funds
for the coming year?
Answer. There is no single standard for deciding when to use EEP.
Congress has given guidance that it should be used both for trade
policy reasons, such as responding to EU subsidies, and for market
development. We will use EEP when we believe it's the appropriate tool
to meet those objectives. With the recent developments in Asia, credit
guarantees under the GSM-102 program seem to be the most useful tool to
protect U.S. export markets. We are aware of EU subsidy actions, and we
are watching them closely. But, we don't think the situation warrants
use of EEP at this time.
foreign market development program
Question. Would you provide the Committee with the exact amount
that has been allocated in this budget for the Foreign Market
Development Fund? I would like it broken down in terms of the amount
appropriated for this coming year and for any dollars considered to be
carry over from previous fiscal years.
Answer. The budget includes $22.0 million in new appropriated funds
for the Foreign Market Development Cooperator Program in fiscal 1999.
It is currently estimated that an additional $6.7 million of carryover
funds also will be available to support Cooperator marketing activities
in 1999. Thus, the total USDA contribution to support the program is
currently estimated at $28.7 million. While the level of new
appropriated funding requested in the budget is somewhat lower than in
previous years, the budget assumes a higher level of cost-share
contributions from Cooperator organizations which will help to offset
the reduced Federal contribution.
asian financial reforms
Question. Taking into account the fact that many of the Asian
countries which have recently experienced economic chaos will or have
received funds from this country and your Department in particular. And
considering that these same countries have a number of barriers in
place against the importation of American agricultural products, could
you give the Committee some idea of the talks that are proceeding
between this Government and the governments of those countries which we
have recently given funding to in order to stabilize their currencies
and economies?
Answer. We are in frequent communication with many of the countries
that have received IMF assistance in terms of assessing their credit
needs and as part of on-going bilateral discussions. We do not want to
underestimate the fact that the Asian countries that have received the
IMF assistance are also important U.S. agricultural export markets. To
obtain IMF assistance, recipient countries agreed to improve market
access and adopt more transparent trading regimes, steps which are also
beneficial to U.S. agricultural exports.
For example, effective February 1, Indonesia reduced agricultural
tariffs on over 500 agricultural items to five percent and on April 1,
BULOG's monopoly on Indonesian wheat imports ends. Regarding South
Korea, the good news is that a condition of the IMF assistance package
is that Korea adopt a more open and transparent trade policy. Korea
notified the WTO of revision to its Food Additive Code which should
bring Korea into more conformance with international codes. In
addition, we understand that Thailand has also reduced tariffs on
certain agricultural items.
wildlife services
Question. Again this year Mr. Secretary, the budget proposes a
redirection in funding for the Wildlife Services Agency, the former
Animal Damage Control. For the past three years I have worked in the
Interior Appropriations bill to get additional funds for the agency
from the Fish and Wildlife Service. It is my feeling that if they are
the reason the wolves have come into the area, then they need to pay
additional dollars for control. Are you aware that in 1994 the Fish and
Wildlife Service provided $100,000 for predation reports related to the
wolves in the Yellowstone National Park in Idaho? Four years later and
10 times as many wolves in the area, Fish and Wildlife Service is
continuing to provide that same level of funding.
Answer. Yes, I am aware of the funding situation. Cooperation
between the Department of Interior's Fish and Wildlife Service (FWS)
and APHIS' program for Wildlife Services (WS) in dealing with gray wolf
recovery has been good. An interagency agreement between WS and the FWS
calls for each agency to contribute $100,000 per year to support WS'
Wolf Management Specialist and program efforts to deal with wolf
predation on livestock.
Question. Could you explain the reasoning behind the reduction in
the budget for Wildlife Services?
Answer. The 50/50 cost sharing proposal is made in an effort to
encourage cooperators to contribute a fair share of funding toward
cooperative Wildlife Services activities in each State. This proposal
is made in consideration of States in which cooperator contributions
are equal to or greater than Federal contributions, as this approach
greatly enhances the value of Federal funds invested. By encouraging a
minimum 50 percent cooperator contribution level, the Agency can
accomplish a more equitable distribution of Federal funds, can
accomplish the same level of program activity with less Federal
funding, and can consider future needs and new cooperative agreement
proposals on a more programmatic and equal basis.
Question. Do you see where the proposed change in the joint
budgetary venture will have any affect on the important wildlife damage
control program?
Answer. This proposal is made in anticipation of cooperators
increasing their contributions to a minimum 50 percent cost sharing
level. When this is accomplished, total cooperative funding levels and
therefore cooperative program activities, would not be affected by this
proposal. If, however, cooperative funding levels do not increase as
needed to increase the 50 percent minimum, Federal contributions would
be reduced to a 50 percent maximum contribution level. This action
would affect a variety of cooperative program activities in 33 states,
based on fiscal year 1996 Federal/cooperative contribution data.
Question. Are you aware Mr. Secretary, that the 1931 Act which
provides you with the Authority for the Wildlife Services Agency, has
set a ratio for these programs in the States? (If he is not aware of
this, how can he proceed with this proposal for a 50/50 split?)
Answer. No, I am not aware of such restrictions. The 1931 Act
authorizes control and related experiments and investigations regarding
predatory and other wild animals, and provides that the Secretary of
Agriculture may cooperate with States, individuals, public and private
agencies, organizations, and institutions, but does not include
specific details or ratios regarding this cooperation.
forest service roads
Question. Mr. Secretary earlier this year when you announced the
moratorium on road construction in roadless areas in our National
Forests, your web page announced that there would be a series of public
hearings on this in the west. Yet just today I was informed that you
have done away with these public meetings. Do you consider it sound
public policy to propose a dramatic change of this nature, with only a
thirty day comment period and with no public meetings involved in the
public process?
Answer. As a result of early public and Congressional comment on
the proposed interim rule establishing an 18 month moratorium on road
construction in certain roadless areas and on the Department's advance
notice of proposed rulemaking on road management, the Department has
decided to extend the public comment period on the proposed road
moratorium for an additional 30 days. There are also plans to hold at
least 25 public forums across the country.
land acquisition
Question. Your department, namely the Forest Service, has been
discussing the possibility of purchasing a private property and a
conservation easement north of Yellowstone National Park. In fact, 3
million has been included in the supplemental LWCF account for this
property. (6.5 million within the Forest Service and 6.5 million within
BLM) Last month, the White House Council on Environmental Quality
hosted a meeting with livestock producers and animal health authorities
from various states to discuss this issue and how it relates to the
management of the brucellosis infected Yellowstone National Park Bison
herd. At the meeting, federal authorities stated this land acquisition
would be a major part of the solution to the bison situation. How does
this land acquisition address eradication of the disease, something
your department has advocated for decades?
Answer. Acquisition of portions of the Royal Teton Ranch is only
one part of the solution of the bison management problem. Land
acquisition does not specifically address eradication of brucellosis.
Support for acquisition of the ranch goes far beyond benefits to bison
management. The focus of this project is to protect key winter ranges
and migration corridors for several species of wildlife that move
across the Yellowstone National Park boundary. These lands provide
habitat for bighorn sheep, mule deer, elk, antelope, grizzly bear,
mountain lion and bison.
Question. Your agency's discussion about the land north of
Yellowstone National Park do not simply deal with an acquisition of
fee-title. The proposed package includes purchase of land, exchange of
lands and an conservation easement for wildlife. The details of these
are not clearly defined. I have two questions:
How is the Gallatin National Forest going to pay for the increased
amount of responsibilities of the new land, especially in light of
Region One's current budget constraints?
Answer. I understand that there will be additional costs associated
with processing the land purchase and exchange cases. The Forest
Service will pay for these costs through the current land acquisition
management request. Future management costs are difficult to estimate.
It is the agency's sense that the consolidated land ownership patterns
will result in cost savings and the additional acreage will not have a
major impact on the funding needs of the Gallatin National Forest.
Question. And: How do you plan on including the Montana
Congressional Delegation and the Governor in these discussions?
Answer. The Department has been working with State agencies, other
Federal agencies, the landowner and others to define the property to be
acquired. It is my understanding that State officials clearly
understand the proposal. We are certainly willing to meet with the
Montana delegation to discuss details of the acquisition.
brucellosis
Question. It is my understanding that APHIS agreed to move a trap
for bison management in the West Yellowstone area (specially on Horse
Butte). This would require a financial commitment for the relocation
and operation of the trap. Please provide the Committee and update on
this trap relocation efforts and the financial commitment management
around this facility?
Answer. The State of Montana and the Forest Service (FS) have
selected a site for relocating the trap to the West Yellowstone area.
In December 1997, the State of Montana received a draft permit for
setting up and operating the trap. To date, the draft permit has not
been signed by the State. The State of Montana has several concerns
with the permit. Conditions of the permit include the requirement of a
2 week-long survey on eagle nests in the area and restrictions on the
trap's usage to certain days and hours of operation. The permit also
requires the trap operations to cease in mid-April. Once the permit is
signed, APHIS expects operations to commence within 3 weeks. Two weeks
will be needed to conduct the survey on area eagle nests and 1 week
will be needed to relocate the trap.
So far this winter, the demand for a trap in this area has not been
great. The low level of demand is due to the mild winter and the
absence of bison in the area. To date, only six bison have been located
in this area and removed.
The cost of relocating the trap is estimated at about $11,000.
APHIS will most likely contract this work. APHIS also expects to
contract for trap maintenance and snow removal. It is expected that the
State of Montana will have operational control over the facility with
Forest Service providing site security and APHIS providing personnel.
APHIS may decide to contract personnel coverage with the State. The
cost of operating the trap is difficult to predict and would depend on
a number of factors including the weather conditions in a given winter,
the number of bison in the area, and the number of staff-hours needed
to operate the trap. In a mild winter, operating costs at the trap
could be close to $100,000 (assuming the work is contracted to the
State) and in a more severe winter, costs could total up to $150,000.
Question. As you know, restrictions or threat of restrictions by
other State animal health authorities is becoming increasingly more
important in terms of brucellosis. The National Eradication Program
created not only a Federal position of eradication and management of
the disease, but also encouraged State animal health authorities
involvement. In fact, Montana has very specific State statutes on herds
which are exposed to brucellosis. What role is your department taking
in educating States about activities which relate to disease exposed
herds (bison and elk) within the Greater Yellowstone?
Answer. To educate the states, APHIS has contracted with the
Livestock Conservation Institute to issue newsletters to the states
regarding the status of the National Eradication Program and activities
within the Greater Yellowstone Area (GYA). In addition, APHIS recently
sent a letter to all state veterinarians to inform them of the status
of activities in the GYA.
Question. I am aware of the actions being taken to manage
brucellosis disease within the Greater Yellowstone Area. However,
please provide to the Committee a specific list of actions the federal
agencies are taking to eradicate brucellosis within Yellowstone
National Park and Teton National Park.
Answer. APHIS continues to work with and assist the National Park
Service and the State of Montana with the implementation of the Interim
Bison Management Plan and the development of a long-term bison
management plan. APHIS participates on the Greater Yellowstone
Interagency Brucellosis Committee and assists with preparing the
Environmental Impact Statement (EIS) on brucellosis in the Park. The
EIS is expected to be finalized in the third or fourth quarter of
fiscal year 1998.
In addition, APHIS provides personnel to assist with liaison
activities, planning, bison capture, testing and sampling, and research
activities. Several ongoing research projects are being funded in
fiscal year 1998 including projects to evaluate the transmission of
brucellosis in bison within Yellowstone National Park and study the
safety and efficacy of the RB51 vaccine on bison.
Question. In 1997, Secretary of the Interior Bruce Babbit
commissioned a report by the National Academy of Science regarding
brucellosis. What comments has the Department of Agriculture made about
this document and did your department provide any comments during the
public comment period by the National Academy of Science? Please
provide those to the comment.
Answer. No comments have been provided by the Department of
Agriculture on the National Academy of Science report regarding
brucellosis in the GYA.
______
Questions Submitted by Senator Stevens
wildfire programs
The Millers Reach Fire caused more private property damage than any
previous rural fire on record in Alaska. 161 families were totally
burned out of their primary homes. Over 260 families were forced to
seek some form of temporary or permanent assistance to make it through
the winter. When I visited fire fighters on the scene, I was told that
at least one volunteer fire fighting unit close to the source of the
fire was unable to roll out due to mechanical problems and concern
voiced by the State over their level of training.
America's rural volunteer firefighters provide some $36.8 billion
annually in estimated benefit to taxpayers. However the
Administration's budget for this worthwhile program is the same as last
year's level of only $2 million. Of that Alaska received only $40,000
to cover roughly one-fifth of the nation's land mass.
Question. Will your agency want to ensure that the Volunteer Fire
Assistance program is equipped and capable of training volunteer fire
departments so that they are able to contain fires in rural areas
before the fires get out of control?
Answer. In addition to the $2 million Volunteer Fire Assistance
Program, which provides technical and financial assistance directly to
local organizations, the budget provides $21.5 million to State
forestry departments for their wildfire programs. This includes an
annual average of $115 million worth of Federal Excess Personal
Property loaned to the States. Finally, the Forest Service and the
Interior agencies devote substantial fire protection and suppression
resources to the Federal lands in the State of Alaska.
bear creek fees
Recently the Juneau Empire ran a story about your intention to
raise fees associated with visiting Bear Creek, in Alaska, to $50 per
person.
Question. Is there a Record of Decision on either an Environmental
Assessment of an Environmental Impact Statement to implement these fees
at Bear Creek?
Answer. I presume that this is a site in the Recreation Fee
Demonstration Program which was authorized by the 1996 Interior
Appropriation. I support the program as a means of providing funding
for the maintenance and reconstruction needs of the recreation program.
As you know the backlog in this area is much greater than we, or the
Congress, have been able to fund. User fees provide a welcome
supplement to annual appropriations. I am not familiar with the
specific situation at the location you are concerned about and have
asked the Forest Service to provide additional information.
[The information follows:]
By Bear Creek, we presume that the question refers to the Pack
Creek Bear Viewing Recreation Fee Demonstration Area. An Environmental
Assessment of the Pack Creek Bear Viewing Area was completed in 1989
which, among other management changes, initiated a reservation fee of
$10 per permit. This fee was imposed to discourage people from
obtaining permits and then not using them. Pack Creek has a very
limited capacity of only 24 people per day. Thus, ``no-shows'' quickly
limit the number of people who can actually visit this extremely
popular area.
In 1996, with the advent of the Recreation Fee Demonstration
Program, both the Forest Service and the Alaska Department of Fish and
Game (which co-manages the area since they manage the adjacent lands)
scoped the topic of a joint use fee with the public. Most State funds
for managing the area had been withdrawn by the Legislature, and Forest
Service funding was continuing to decrease. The scoping evaluated
several different price structures and cost recovery possibilities
through implementation of a use fee. Under the demonstration fee
authority, we have adopted a fee of $50 per person per day for the peak
viewing season with a lower rate in the off prime, or ``shoulder''
seasons of April and May. The agencies elected to phase in fee
increases to the $50 level if initial visitor responses were favorable.
The agencies signed a cost-share agreement in which the net receipts
are split 50/50 after the cost of the reservation system is deducted.
Visitors receive a permit that clearly identifies the two agencies and
are told the funds go to both agencies for management of the site when
they make their reservation.
In 1997, the first year in which the interagency fee was
implemented at Pack Creek, the fee was $20 per person per day in the
shoulder season and $36 per person per day in the peak season. Seniors
and juniors receive a discount. The customer response cards showed very
strong support for the fee and management of the area. Some customers
expressed willingness to pay more due to their high satisfaction with
their visit. Despite the new fee, site use went up 11 percent overall
from 1996, with increases of 7 percent and 22 percent in the peak and
shoulder seasons, respectively.
The current fee structure will remain in place in 1998 and is still
below the target recovery rate of 70 percent. Current fees recover
about 42 percent of the costs to manage the area. Positive customer
service card responses indicated to both agencies that an increase to
$50 per person per day for only the peak season was reasonable. Fees
for the shoulder season will remain at $20 per person per day and
senior and junior discounts will continue as before. The $50 fee will
not take place until 1999 and will have been phased in over three
years. Advance notice has been given our outfitter/guide permittees so
that they will have ample time to incorporate the revised fees into
their business plans. It appears that the $50 fee for the peak season
is set at a level that provides reasonable returns to both agencies and
it also appears to have solid support from the public.
Question. The fees are raised 500 percent--from $10 to $50--Have
you raised fees a similar percentage in ALL National Forests?
Answer. Again, I am not familiar with the specific charges at each
of the demonstration fee sites. I have asked the Forest Service to
provide the information.
[The information follows:]
Nationally the Recreation Fee Demonstration Program is testing a
wide variety of fees at a limited number of selected sites across the
country. In fiscal year 1997, there were 40 projects charging fees.
They ranged from single campgrounds to multi-State area trailhead
parking fees. The Demonstration program is not an Agency-wide fee
system at this time. It is testing an authority which expires on
September 30, 1999 under current law. These fees are being tested on a
very small fraction of the total National Forest System. In most cases,
the fees being charged are new fees at locations or facilities which
were previously free. Since these projects increased from no fee at all
to something, the percentage increase cannot be calculated. Fees are
being determined at the project level using methods such as fair market
value analysis, surveys of potential users, and cost recovery.
Fee demonstration prices vary widely from unique project to unique
project. Most developed site projects and dispersed area parking fees
include annual passes in the $20 to $30 range. Annual passes at a
highly developed project in Arizona are $90. If the public is willing
to pay an outfitter and guide company $1,700 for a one-week Heritage
Expedition trip through Hells Canyon in Idaho, a modest Forest Service
recreation fee would hardly be noticed.
Pack Creek is a unique experience with substantial costs associated
with protecting both the people and the bears. The fees are a test and
public comments are being gathered to provide Congress with the
information necessary to evaluate the Recreation Fee Demonstration
Program.
rural utilities programs
Question. Alaska's rural communities suffer from wide spread
unemployment coupled with deplorable sanitation and water supply, and
expensive diesel generated power issues. Recently key members of your
staff visited Alaska to assess conditions first hand.
Please state for the record what is being done by your Department
to help address Alaska's rural utilities and power generation problems?
Answer. I am aware of the sanitary conditions you spoke of and I
understand that we are financing a significant number of projects in
Alaska's rural communities and there are applications and plans
underway for additional financing. I understand the recent visit of my
staff was associated with oil spills related to fuel storage. I believe
that we are going to be able to assist in correcting these problems
through our community facilities program. I am told by my staff that
discussions are underway to determine the most appropriate means of
financing the effort in about 15 villages.
I understand that we are also currently reviewing applications
totalling about $30 million for electric cooperatives in Alaska.
______
Questions Submitted by Senator Bennett
rural credit
Question. In your personal opinion and based on your research, how
critical is the need for enhanced credit for rural non-agricultural
activities?
Answer. Access to credit is vital to growth and development, and
opportunities to provide greater access to credit for rural areas need
to be explored. Several studies, including the rural credit study which
the Department completed last year in response to a requirement of the
1996 Farm Bill, have concluded that rural financial markets are work
reasonably well. However, these studies also note that there are gaps
in the market, particularly for isolated rural areas. There are, as
well, problems that many rural borrowers have in qualifying for credit.
This is why the Department needs to maintain a strong role in helping
rural borrowers obtain credit. For example, the Department's Business
and Industry loan guarantee program offers rural borrowers access to
credit by allowing private lenders to make loans they would otherwise
be unwilling or unable to make because of the amount of perceived risk
or lending limitations. The Department also provides technical
assistance and outreach. In addition, it provides credit at rates and
terms that can be met by applicants who lack the repayment ability for
commercial loans. Where there are opportunities to make more credit
available to rural areas, either by improving the Department's programs
or through other means, I believe we should give serious consideration
to at least exploring those opportunities.
Question. Do you agree that adequate credit for non-agricultural
projects in rural localities is critical for the economic health of
these areas?
Answer. It is absolutely a critical component of the economic
health of rural areas.
Question. Do you and the United States Department of Agriculture
support the three-year pilot proposal being considered by Senator
Bennett to expand the authority of the Farm Credit System and Farmer
Mac by allowing them to buy business and industry type loans from banks
in rural areas?
Answer. We have not developed a position on the proposal, but I
think it is certainly something worth exploring.
______
Questions Submitted by Senator Craig
redirection of ars funding
As you know from the years we served together in the House of
Representatives, I have long been a supporter of agricultural research.
To your credit, since you took the helm at USDA, ARS has expanded its
mission and continues to produce the highest quality research in the
field. Producers in my state, and their suppliers, have grown dependent
upon the work being done by ARS scientists to develop new crop
varieties and pest resistance. This work is conducted around the
country, including four ARS stations in Idaho. I was pleased to lean
that the President's budget request includes a $32 million increase for
ARS--pleased until I saw where the money was to be spent.
The President's budget request cuts important funding for ARS
research in a wide range of crops, including: soybeans, potatoes, rice,
cotton, small fruits, and sugar, among others. In place of these
important research activities, ARS dollars are being siphoned off to
fund environmental projects such as the Presidential Environmental
Initiative for Global Change, the Presidential Initiative on South
Florida Ecosystem Restoration, and programs in watershed health and
environmental quality.
Question. How can this administration justify cutting important
crop research--research directly responsible to the challenges facing
America's farmers and producers--to fund ``feel good'' environmental
programs? Are there not better sources of funding for these programs
than ARS, such as EPA?
Answer. Environmental issues such as global change, watershed
health, and environmental quality are directly relevant to crop
production and are recognized by commodity groups as important concerns
for the USDA research agenda. Because ARS does not have enough funds to
address all the necessary required research, it became necessary to
assign priority, and to redirect funds from projects which are less
urgent. The projects proposed for closure are not limited to production
agriculture, but also include certain environmental research projects
that are less critical. ARS' strategic plan, gives a high priority to
production agriculture. Part of the funds obtained through project
closures would be redirected to environmental research that is directly
relevant to crop production. ARS does not have direct influence on the
budget and program of EPA. Although many EPA programs do concern
agriculture indirectly and involve ARS research to varying degrees,
much of the high priority environmental research ARS needs to undertake
is not currently being pursued by EPA.
food safety initiative
The President's request for ARS also includes $8 million in support
of the Presidential Initiative for Food Safety.
Question. Will the money be spent on new ARS facilities dedicated
to food safety?
Answer. The $8 million for ARS in support of the Presidential
Initiative for Food Safety will not be spent on new ARS facilities
dedicated to food safety.
Question. How does USDA propose to incorporate this new work with
the ongoing efforts being conducted at research universities across the
nation?
Answer. ARS food safety research is coordinated with and
complements that of ongoing efforts being conducted at research
universities across the Nation.
ARS works closely with CSREES to explore how the two agencies can
effectively coordinate the food safety research agenda, identify
opportunities for collaborative research between Federal agency
scientists and university scientists, and to identify unique research
facilities and expertise of each set of performers.
The longer term nature of Federal funding complements that of the
university research programs. The multi-year sustained programs of the
Federal laboratories support research initiatives that establish the
basis for the continued biological understanding of pathogens and the
technological advances necessary to develop the means to assure food
safety and meet the expectations of the American consumer. The combined
efforts of both Federal Government and academia are necessary because
food safety research must solve the problems resulting from a plethora
of technological practices, an array of animal and plant species and
varieties, a range of climatic and regional differences, and a vast
array of food products and consumer practices.
Question. Has USDA considered the option of matching these ARS
funds with CSREES monies to establish a series of national food safety
research centers?
Answer. Because ARS already has facilities for conducting the
necessary food safety research, and the critical mass of scientific
expertise and structure to lead the necessary food safety research
programs, ARS has not considered the option of matching these ARS funds
with CSREES monies to establish a series of national food safety
research centers.
wildlife services
Question. The President's request would decrease APHIS funding for
wildlife services operations by more than $3.4 million or 17 percent.
The Department's budgetary justification explains that this cut would
bring the Federal/State cost sharing into ``equilibrium'' with each
contributing 50 percent. I am reminded that in 1992 the funding was
divided between the Federal and State governments at 75 percent Federal
and 25 percent State, and 65 percent Federal and 35 percent State in
1997. I am disturbed by this trend and would like to know if any
specific target cost share ratio is mentioned in the program's organic
legislation, the Animal Damage Control Act of 1931. If not, would the
Secretary explain how the Department reached the 50 percent figure?
Answer. The 1931 Act authorizes control and related experiments and
investigations regarding predatory and other wild animals, and provides
that the Secretary of Agriculture may cooperate with States,
individuals, public and private agencies, organizations, and
institutions, but does not include specific details or ratios regarding
this cooperation.
The 50/50 cost sharing proposal is made in an effort to encourage
cooperators to contribute a fair share of funding toward cooperative
Wildlife Services activities in each State. It is more in line with
cost sharing programs like brucellosis, boll weevil, and fruit fly
eradication. This proposal is also made in consideration of States in
which cooperator contributions are equal to or greater than Federal
contributions, as this approach greatly enhances the value of Federal
funds invested. By encouraging a minimum 50 percent cooperator
contribution level, the Agency can accomplish a more equitable
distribution of Federal funds, can accomplish the same level of program
activity with less Federal funding, and can consider future needs and
new cooperative agreement proposals on a more programmatic and equal
basis. The specific activities and the degree to which activities would
be affected, is dependent upon changes in funding levels in each
affected state.
Question. Has the Department conducted any study into the impact
this change would have in existing Wildlife Services operations?
Answer. This action could affect a variety of cooperative program
activities in 33 States based on fiscal year 1996 Federal/cooperative
contribution data. The specific activities and the degree to which
activities would be affected is dependent upon increased cost-share
funding levels in each affected state.
nutrient analysis in child nutrition programs
Question. As you know, authority for the bulk of child nutrition
programs expires this year and each will need to be reauthorized. In
light of this, and the Department's and Congress' strong past
commitment to these programs, do you not agree that we should take
steps to eliminate the requirement for the use of weighted averages
when conducting nutrient analysis?
Answer. The School Lunch Act requires that schools serve lunches
and breakfasts that are consistent with the goals of the Dietary
Guidelines. However, how schools achieve this goal, and how we measure
their success, is an somewhat technical matter. I understand that Under
Secretary Watkins has waived the requirement to use weighted averages
when conducting nutrient analysis through July 2000 while she reviews
this issue.
Question. Does the Department support this fundamental change and
can you commit to removing the use of weighted averages from future
Departmental policies?
Answer. I prefer not to make any commitments at the present time
until after I have seen the results of the Department's review of this
issue.
______
Questions Submitted by Senator Bumpers
farm safety net
The 1996 Farm bill made substantial changes in farm programs and
altered the government's role in the farm sector. Over the past couple
of years, times have been good for farmers. Markets, for the most part
have been strong. On top of that, taxpayers have been paying out
billions of dollars in Freedom to Farm payments that farmers would not
have earned under previous programs because assistance, then, was tied
to the market.
Farm net income hit a record high of $60 billion in 1996. Estimates
for the year just ended have already fallen by $5 billion from the year
before. As the fixed Freedom to Farm payments glide to extinction and
commodity prices regain their historical pattern of unreliability, I
fear what may be on the horizon.
Question. The USDA Budget Summary and your remarks make several
references to the need to improve the farm ``safety net''. Would you
provide your thoughts on the short and long term stability of the farm
economy?
Answer. Some perceive that the 1996 Farm Act will lead to increased
volatility in grain markets. It is generally argued that increased
planting flexibility, fixed payments, and the elimination of acreage
reduction programs and the Farmer-Owned Reserve will contribute to more
volatility in grain prices (and planted acreage). In the short term,
absent a stocks policy, there is the potential for greater volatility.
However, in the medium to longer term, increased planting flexibility
afforded by the 1996 Farm Act provides the opportunity for producers to
respond to market imbalances more quickly and in a more timely fashion
than was possible under previous laws. Commodity loans, credit
assistance, crop insurance and other elements of the farm safety net
can help producers respond and adjust to these changes.
Question. What level of risk will farmers hold if the ``safety
net'' items you propose are not enacted?
Answer. All of the proposals we have made involve some degree of
risk reduction in several areas of the farming enterprise. Loan
extensions would help reduce price risk in marketing, insurance
proposals reduce yield and revenue risk, and loan proposals help in the
area of asset acquisition during years of crop disaster and/or
abnormally low market prices.
Question. Are some commodities, farm groups, or regions of the
country at higher risk?
Answer. Areas of the country that have limited options for
producing alternative crops when prices are low for a particular crop
may face greater risks than regions in which alternatives are greater.
Producers who can select among several crops have the opportunity to
profit from favorable market conditions in several markets. A producer
who has only one cropping alternative has less opportunity to avoid
low-priced markets. For these producers, availability of risk reduction
tools is essential.
Crops which are subject to higher risk may include those for which
markets are very thin. For traditional producers of these crops,
profitable market conditions may suddenly attract a significant
temporary increase in acreage and a corresponding reduction in price,
leaving those producers with lower than expected revenues during years
in which the initial expected price is high. These producers are also
in need of risk reduction tools, especially if cropping alternatives
are limited.
Question. Of the ``safety net'' items you propose, which do you
feel to be the most important and why?
Answer. Several proposals have been made to strengthen the safety
net for farmers. Maintenance of an effective safety net to help our
farmers and ranchers better manage risk has been a major priority for
the past two years. Last year, we proposed some modest improvements in
the safety net which were not acted upon by the Congress. These
included provisions to permit extension of the terms of marketing
assistance loans during periods of extraordinary market disruption, and
the expansion of revenue insurance. These proposals deserve full
consideration by the Congress.
Important proposals in this year's budget include full funding of
crop insurance with a shift in sales commissions for agents from
discretionary to mandatory spending. This would consolidate all program
spending into a single account and eliminate the possibility of the
program being restricted by a limited appropriation of discretionary
funds. This change will make the program more reliable for those
producers who depend on crop insurance as a tool to manage risk.
Another important proposal in the current budget is in the area of
farm loan eligibility. Currently, once a farmer receives debt
forgiveness, he/she is ineligible for future loans except annual
operating loans in cases where the debt forgiveness was in the form of
a write-down. This is a stricter standard than private lenders use.
It's wrong, and I will send Congress emergency legislation as soon as
possible to address the problem. This change would help some of the
producers most in need of our assistance.
diversity in production/industry infrastructure
Question. Another feature of the 1996 Farm Bill was the planting
flexibility it provided. It was recently reported that in your own
state of Kansas, cotton production has expanded by a fourfold increase.
Do you see a radical change in crop planting patterns?
Answer. U.S. plantings of the principal crops in 1996 increased to
the highest level since the mid-1980's--up about 16 million acres from
1995--and stayed at that level in 1997. The increase in plantings for
1996 primarily occurred for corn, wheat, sorghum and soybeans. Cotton,
oats, and sunflower acreage declined. Plantings of principal crops in
1997 remained at 1996 levels. Producers adjusted the mix of crops on
their farms, but, on average, did not expand acreage as they did in
1996.
The biggest acreage shifts in 1997 was the 6.7-million-acre
increase in soybean planted acreage. Soybean producers never had any
acreage controls associated with their crop, but to the extent that
acreage limitations for other crops limited the expansion of soybean
acreage, the 1996 farm law could have been partially responsible for
the acreage increase. Very strong oilseed prices, modifications of farm
rotations to include more soybeans, favorable planting conditions for
soybeans, and problems getting other crops planted also led to this
soybean acreage surge. Record acreage of soybeans in the Lake States,
Corn Belt and Northern Plains displaced corn and wheat plantings in
this region.
Plantings of sorghum declined in 1997 because the crop was not
replanted after failed acres of other crops. Cotton acreage declined
for the second consecutive year because a cool, wet spring limited
plantings and more favorable net return prospects for several competing
crops. Cotton acreage fell throughout the country, except for a small
increase in the Southeast, as a recent buildup in the cotton
infrastructure of the region has supported acreage there and some area
planted to corn in 1996 returned to cotton.
Winter wheat acreage dropped to the lowest level since 1978. Most
States that expanded their wheat acreage in 1996 in response to rising
prices scaled back wheat plantings the following year. Also limiting
winter wheat plantings were late soybean and sorghum harvesting in
1996, disease concerns in the eastern Corn Belt, and dry weather in
other regions of the country. Farmers planted the second highest spring
wheat crop in modern times following the 1996 60-year high.
These changes in cropping patterns over the last two years are
probably the result of commodity prices, weather conditions, and new
legislation. While the new legislation expanded flexibility from prior
laws, changes in plantings such as those described here likely could
have occurred under the more limited planting flexibility provisions of
the 1990 law.
Question. Since, for example, cotton production requires cotton
gins and other fixed facilities to further process the raw commodity,
what are the economic implications in rural areas for increased
diversification?
Answer. Increased economic diversification in rural areas is
generally beneficial for rural economies. In a global economy, where
rural communities are subject to the effects of large scale economic
forces beyond local control, survival may depend on having a wider
range of economic options. This is true within the agricultural sector
as well as in the general economy. Using the example of cotton, if
global events result in reduced cotton prices for an extended period,
producers are in a better position to survive if they have cropping
alternatives to provide income. The local economy is more stable if
alternative income sources are available.
This does not mean all are better off in an increasingly diverse
local economy. Excess processing capacity may develop in an area if
crop production shifts occur in response to price changes. If these
changes become permanent, investment in fixed facilities such as cotton
gins would need to be re-evaluated. Investment risk may be higher for
some processors, but on balance, rural communities are healthier if
economic choices are available.
Question. Are changes in farmer planting decisions likely to have a
lasting effect on supporting services and erosion of the existing
agricultural industry infrastructure?
Answer. Farmers' planting decisions can affect supporting services
if the services are tied to a specific crop. If decisions become
permanent, this can cause an erosion of existing agricultural industry
infrastructure along with expansion of new infrastructure to support
alternative crops. However, acreage shifts tend to occur in response to
price changes from year to year, and in agriculture it is unusual for
prices to remain high or low for too long, so infrastructure often is
not greatly affected. Two examples from the last two years are wheat
and soybeans. Farm level wheat prices climbed to over $5.75 per bushel
in the spring of 1995, and acreage increased by around 6 million acres
in 1996. The resulting lower prices helped to reduce plantings by 4.5
million acres in 1997, and winter wheat seedings this fall were the
lowest since 1973.
High soybean prices persisted through most of 1996 and 1997 and
lead to the large increases in soybean acreage. Plantings in 1998 are
expected to reach record levels. However, prices are forecast to return
to below $5.50 for 1998/99, a price level that will likely have a
significant effect on plantings in 1999.
The new farm law, while giving farmers much greater latitude to
shift to alternative crops, also provides the means to allow producers
to respond quickly when prices signal a market imbalance, so it is
unlikely that the new law will lead to a permanent shifting from
traditional cropping patterns.
dismantling of farm program delivery
Question. In light of the changes inherent in the 1996 Farm Bill,
there has been an ongoing debate about the future of USDA's county-
based delivery system. Every year, we see the number of Farm Service
Agency staff positions fall and with them, obviously, the level of
service to our farmers. Fears have been expressed that the 1996 Farm
Bill and the related decline in USDA's delivery system contain a hidden
agenda to make certain that once the system is seriously impaired,
future farm programs won't even be possible. How many staff positions
at the county level will be eliminated in fiscal year 1998 and how many
do you plan to reduce in fiscal year 1999?
Answer. In fiscal year 1998 there has been an estimated reduction
in non-Federal county office staffing of 564 staff years through
buyouts, RIF's, voluntary early outs and attrition. Proposed staffing
reductions for fiscal year 1999 would reduce county office staffing by
another 855 staff years.
Question. Will your projected reduction in fiscal year 1999 change
if the assumed user fees for FSA and NRCS are not adopted, and if so to
what level?
Answer. Yes, if proposed user fees are not enacted in fiscal year
1999, the estimated total FSA non-Federal county staffing reduction
would be 1,078--an increase of 223 staff years from the 855 estimated
staff year reduction in the proposed budget. If direct appropriations
were substituted in lieu of user fees to fund the 223 non-Federal
county office staff years, then the reduction would remain at 855
FTE's. For NRCS, the staff year reductions in the absence of the
budgeted user fee revenues would be in the range of 175 to 200 staff
years.
Question. How much difficulty are you experiencing in managing
staff reductions because some county offices contain both federal and
non-federal positions?
Answer. FSA currently has in operation two different personnel
systems for employees in county offices. One system covers employees
with Federal civil service status and the other system covers non-
Federal positions. Due to the difference in systems, there are a few
obstacles that the agency faces in managing reductions. Non-Federal FSA
employees cannot compete for FSA Federal vacancies on an equal footing
with Federal employees. Non-Federal employees who are in RIF status are
not entitled to assistance and priority placement under the Career
Transition Assistance Program. At this time, FSA is required by law to
establish separate supervisory reporting procedures for non-Federal and
Federal employees located in the same county office. These differences
combined with the varying levels of staffing reductions needed between
Federal and non-Federal FTE's have created new types of personnel
problems. As you know, I favor converting non-Federal county employees,
with their career tenure, to Federal civil service status.
Question. Do you think all county positions should be federalized
and why?
Answer. Yes, I favor converting FSA non-Federal county committee
employees, with their career tenure, to Federal civil service status.
Conversion of FSA non-Federal employees to Federal civil service status
would eliminate the difficulties FSA currently has in operating two
different personnel systems for employees in county offices. These
difficulties include the fact that non-Federal FSA employees cannot
compete for FSA Federal vacancies on an equal footing with Federal
employees, non-Federal employees who are RIF'ed are not entitled to
assistance and priority placement under the Career Transition
Assistance Program, and FSA is required by law to establish separate
supervisory reporting lines for non-Federal and Federal employees
located in the same county office. I also favor conversion of these
employees because I believe the accountability of these employees in
the areas of civil rights and access to credit is not as direct as if
they were Federal employees. We are working on that legislation.
Question. You have stated that you will not close any county
offices until you have consulted with Congress, but doesn't the ongoing
decline in county-level personnel affect the continued viability of
certain county offices and therefore determine the closing of offices
on a de facto basis?
Answer. The substantial decline in county office employment does
affect the capacity or ability of certain county offices to remain
open. As these situations become more apparent, a normal option for FSA
is to combine two or more headquarters' offices into a shared
management operation where one office remains the headquarters office
while the other county office or offices become full or part time
suboffices. FSA will continue to close and consolidate county offices
only with consultation of local FSA county committees, the Secretary,
and Congressional delegations. We will consider any closure decisions
in light of cost effectiveness and quality of service to the producer.
Question. To what extent do you think we can continue the decline
of USDA services at the county level until we have reached a point of
no return?
Answer. The Department has entered into a contract with an outside
consulting firm to conduct a study of the farm and rural program
delivery system of the county based agencies, FSA, NRCS, and RD, to be
completed by September 1,1998. The study will clearly identify the
purposes agency operations are intended to achieve, provide an
independent assessment of agency workload estimates, consider the
prospective impact of administrative convergence on county office
operations, identify criteria for determining the highest value use of
office staff, evaluate office operations efficiencies gained so far,
and assemble a profile of the USDA customer base as defined by
eligibility for program benefits. Finally, the study will identify
alternative decision systems or organizational structures for matching
USDA resources with customer needs and preferences. We will see what
steps we can take, if any, to improve the efficiency of our program
delivery system. That may involve further staffing reductions, but not
beyond the point of providing producer service.
water resource conservation in east arkansas
For the past several years, this subcommittee has provided special
funds for work on ground water resource issues in Eastern Arkansas. In
the fiscal year 1999 budget proposal for the Corps of Engineers, $11.5
million and $2.5 million is provided for the Grand Prairie and Bayou
Meto projects respectively. These two items are contained in the
budget, I believe, in large part because of my personal appeal to the
President and because of his knowledge of the dire crisis we are soon
to face in the lower Mississippi River basin due to failing ground
water supplies. These projects are sizable, which explains the need for
the Corps of Engineers to participate. These is also a component for
these projects which must rest with USDA. The funding we have provided
to date moves us in that direction, but there is much more to do.
Question. Will you work with the Corps of Engineers to determine an
adequate, shared level of participation regarding this project?
Answer. Yes, sir we will.
Question. Will you commit USDA resources to help insure that your
Department will play a proper role in protecting these water resources?
Answer. USDA has been devoting considerable resources in this area
over the past ten years. In addition, USDA recently established the
South Central Water Management Center located in Little Rock, Arkansas
as a National Water Management Center which demonstrates our commitment
to protecting our water resources.
Question. Following consultation with the Corps, will you report
back to this committee on appropriate levels of funding needed by USDA
to work appropriately and timely with the Corps of Engineers?
Answer. Yes, when the information becomes available, we will report
back to you. USDA has been working closely with the Corps on several
studies over the past several years. We understand that the plans were
recently completed for the Grand Prairie and Bayou Meto which will
assist in identifying the work to be done and the resources needed to
implement.
civil rights
You and your staff appear to be receiving high marks in the area of
civil rights. I notice that the budget request for fiscal year 1999
contains a number of items among various agencies designed to bolster
your civil rights activities.
Question. What is the current backlog of civil rights cases and
complaints?
Answer. There are currently 1,426 active employee complaints, and
889 active program complaints.
Question. How old are those pending cases?
Answer. Many of the backlog cases date back to the early 1990's
because USDA disbanded the program complaints unit and there was no
specific unit in existence with the responsibility to resolve these
cases. We estimate that the median program complaint has been in the
system for 710 days.
Question. What is the statute of limitations for civil rights cases
regarding client and personnel complaints?
Answer. The statute of limitations is 2 years from the date of
incident for cases under the Equal Credit Opportunity Act. Additional
time can be allowed on a case by case basis if instructed by civil
court action.
Question. Have any civil rights complaints been processed if the
statute of limitations had expired, and if so, what standards are used
to make the determination to proceed?
Answer. None have been processed since the Department of Justice
made the decision.
Question. Are new complaints being filed at a more or less rapid
rate than those of several years ago?
Answer. The annual number of cases varies from year to year. The
average was about 350 cases from 1992 through 1994, and the 1995 and
1996 filings were 171 and 237 respectively. 447 cases were filed in
1997, which is the highest total in recent years.
Question. Is the rate of frivolous claims changing from previous
levels, and if so, please explain?
Answer. USDA accepts and processes program complaints when it is
determined that there is sufficient information and jurisdictional
basis to process them. There is no evidence to suggest the new
complaints to be any different from the older ones.
Question. Does the Office of Civil Rights have the authority to
award program dollars related to a civil rights claim without the
concurrence of the program agency or the Office of General Council?
Answer. Under the delegation of authority from the Secretary to the
Assistant Secretary for Administration, the Office of Civil Rights has
the authority to award any remedy a court could enter when
discrimination has been found, including monetary damages. Agency
concurrence is not required as the authority comes from the Secretary.
However, OGC reviews all decisions of the Office of Civil Rights for
legal sufficiency and must concur in legal authority and factual basis
before an award of damages is given.
Question. Are the civil rights complaints that are filed with the
national office being referred to the appropriate state or county
offices for resolution in a timely manner?
Answer. When a program complaint is filed with and accepted by the
Office of Civil Rights, a notification letter requesting an agency
response is concurrently sent to the civil rights staff of the alleged
agency, which is in turn responsible for referring the case to the
appropriate state or county offices.
Question. Are there any pending civil rights claims in the national
office of which the appropriate state agency head is not aware? If so,
why?
Answer. To the best of my knowledge, no pending civil rights claims
are in the national office that the appropriate state agency head is
not aware of.
Question. How much coordination occurs between the Office of
General Council and the Office of Civil Rights?
Answer. The Office of Civil Rights and OGC coordinate daily on
matters regarding resolution of discrimination complaints. OGC reviews
files and proposed decisions, participates in negotiation discussions,
and gives feedback to the Office of Civil Rights. The Office of Civil
Rights makes the determinations. OGC makes sure the determinations are
in accordance with the law.
Question. Would you please provide an update of these activities at
the end of June?
Answer. We will provide an update of these activities to you at the
end of June.
ars/research/state partnerships
The budget request for fiscal year 1999 deletes all funding for ARS
programs that was not included in the fiscal year 1998 budget request.
I am concerned about the signal this might be sending research
communities in our states who had anticipated a continuing partnership
with USDA's research agency. For example, the University of Arkansas
donated the land upon which the ARS Rice Germplasm laboratory was built
and I know the University has plans of working with ARS on various
research projects. In other cases, ARS scientists are commonly assigned
to positions on the campuses of land-grant colleges.
Question. Do you think it is appropriate for ARS to continue its
association with land grant research activities?
Answer. ARS values its long-standing collaboration with the land
grant research system and believes that American agriculture is best
served through this well-developed partnership. The two systems
complement each other and, through various coordination and review
mechanisms, minimize duplication. The missions of the two systems
reinforce their distinctions i.e., ARS has a national mission,
characterized by long-term, high risk research, while the land grant
institutions generally focus on State and regional problems. This
combined overall effort has demonstrated great effectiveness. Examples
are the area-wide pest management programs and the national water
quality research initiatives. These ARS-led efforts have been highly
successful because of ARS' ability to draw upon both Federal and State
research resources and personnel.
Question. Do you agree that deleting funds that otherwise would
have been added to the ARS base, which would have been the common
practice, damage the expectations of the state research communities
that ARS will continue to stand as a reliable partner?
Answer. Decisions to redirect ARS budget resources to higher
priority areas can have negative effects on some ARS-State research
cooperative arrangements. We try to minimize any disruptive effects on
our university partners by providing advance notice of our plans and,
when there are opportunities to do so, use the funds that will be
redirected to higher priority work to enter into new ARS-university
cooperative research projects.
Question. Since the fiscal year 1999 request includes an increase
for plant germplasm research, why were the funds for the rice germplasm
lab deleted?
Answer. All fiscal year 1998 fund increases that were not proposed
in the President's budget are proposed for redirection in fiscal year
1999. If these reductions are approved, the funds will contribute to
the increase proposed for ARS plant genome research, a program that
will benefit crop production, including rice.
trade/asian financial crisis
Reports of the financial condition in Asia suggest trouble for U.S.
exports to that region, including shipments of meat and poultry.
Additionally, it is reported that some of our trade competitors claim
that U.S. methods to hold onto Asian markets are unfair and use of the
WTO has been threatened.
Question. What actions have you taken and expect to take to
stabilize our position in Asian markets?
Answer. As serious as the Asian crisis' estimated trade impacts
are, we must remember that they are projections, not a foregone
conclusion. We are developing a comprehensive strategy for responding
to the crisis to reduce its impacts on U.S. exporters and producers.
USDA has already announced the first component of this strategy--a
sharp increase in the availability of GSM-102 export credit guarantees
to those countries most in need, namely South Korea and Southeast Asia.
This will help ease the liquidity constraint that is at the heart of
this crisis.
In addition, we are considering the possibility of offering
concessional credits, under Title I of Public Law 480, to Indonesia to
help them meet their food import needs. USDA has also been supportive
of efforts by the IMF to promote structural reforms in these countries
which we believe will ultimately strengthen their economies and make
them better customers for U.S. agricultural products.
Question. What commodities are most at risk?
Answer. In fiscal 1998, two thirds of the export loss is projected
to be in high-value products, led by horticultural products, red meats/
poultry, and processed foods. These are the most price and income
sensitive U.S. agricultural exports and will be affected first. In
fiscal 1999, losses are expected to grow substantially in bulk
commodities, such as grains and oilseeds, as Asian economies slow and
competitors benefit from a stronger U.S. dollar.
Question. What is the U.S. response to threats that our practices
in regard to Asia violate international trade laws?
Answer. We understand there has been some criticism of the CCC
export credit guarantees made available for South Korea and Indonesia
during the financial crunch. Frankly, we are surprised by this
criticism as the urgent need for trade financing in Asia to support
reform efforts and return the region to growth and stability is well
understood. Our GSM-102 credit guarantee programs in the region are
intended to provide adequate access to financing for imports of food
and other critically important agricultural products--not to ``grab''
markets.
Further, there has been a long history of the use of GSM-102
program in the region. Our export credit guarantees support commercial
bank financing at commercial interest rates. There are no subsidies
involved. The credit guarantees available to South Korea represent
about 25 percent of total U.S. agricultural exports to that market,
while the guarantees extended to Indonesia represent about one-half of
total U.S. agricultural exports.
trade/poultry/eu chlorine issue
On October 28, 1997, Senator Cochran and I wrote you on the subject
of poultry exports to the EU. In that letter we expressed concern that
the EU was excluding our products due to the U.S. industry practice of
using chlorine as an accepted anti-microbial treatment. We were further
concerned by reports that some EU member nations were accepting product
from our competitors who did use chlorine and, even more blatantly,
that some EU nations used it themselves. Your response of December 22
reported that no resolution on the chlorine issue had been reached, but
that you were proceeding with a number of options, including
establishment of a scientific study with the EU on the use of anti-
microbial treatments.
Question. What is the status of the EU ``Equivalency Agreement'' on
veterinary practices?
Answer. The EU Agriculture Council is scheduled to vote on the
U.S.-EU Veterinary Equivalency Agreement on March 16. We are expecting
a positive outcome.
Question. What is the status of working with the EU on the chlorine
issue?
Answer. In the Veterinary Equivalency Agreement, the EU committed
to undertake a scientific study on the use of anti-microbial
treatments, including chlorine. The experts, which include a person
from the United States, have begun their research, and we expect this
study to be completed by mid-1998. If the results are positive, the
Commission has agreed to submit legislation to Member States, reversing
EU policy.
Question. When do you see U.S. poultry exports resuming normal
access to the EU?
Answer. In the Veterinary Equivalency Agreement, we were successful
in negotiating improved conditions for trade for poultry, although in
the near future this will only benefit poultry producers who do not use
anti-microbial treatments. Several U.S. establishments are in a
position to meet the new conditions and could begin exporting poultry
as soon as the Agreement is implemented. In addition, we are confident
that the EU study will show that the use of anti-microbial treatments
is an effective and safe method of lowering the bacteria counts for
poultry.
Question. How is the poultry export problem with the EU comparing
to other livestock product access?
Answer. The Agreement will open new opportunities for red meat
exports and preserve most pre-existing trade in products such as
petfood, dairy products, fishery products, and egg products. In
addition, the United States may be able to recoup some of its lost
trade in poultry despite the differences in the U.S. and EU positions
on the use of anti-microbial treatments. The Agreement eliminates many
of the onerous requirements that the poultry as well as other
industries would have to meet to export to the EU. Without this
Agreement, U.S. exports of certain products could be blocked from the
EU market unless U.S. industries invested in costly adjustments to
their facilities to comply with each EU internal market requirement.
trade/step 2 cotton
Question. Language was contained in Section 728 of the conference
report to accompany the fiscal year 1998 appropriations bill that
allowed for adjustments to the Step 2 Cotton certificate program to
help ease an unforeseen problem regarding import quotas for cotton. The
Step 2 procedure was enacted in the 1996 Farm Bill and capped at $701
million over the life of the Farm Bill. Now that the problem is
resolved, we note in the budget submission a proposal to reduce the
amount available for the Step 2 procedure by $100 million in offsets
for other administration priorities in the fiscal year 1999. Explain
why this action would not be harmful to U.S. cotton producers given the
volatility of foreign markets, especially in Asia?
Answer. It is quite possible that the proposed spending level of
$140 million will not be appreciably below the amount that would
otherwise have been spent in fiscal year 1999 without this cap.
We simply do not know how much money would have been required for
payments under the upland cotton marketing certificate program without
the cap. Based on the pricing estimates assumed in the budget projected
marketing certificate expenditures would be about $250 million for
fiscal year 1999.
However, history would be another guide in estimating the need for
funding in this program. Over the life of the marketing certificate
program, beginning in fiscal year 1992, the Commodity Credit
Corporation has spent about $750 million on these payments. That
averages about $125 million per year.
Thus, the proposed spending level of $140 million may or may not
prove to be enough. If it is enough, i.e., if U.S. prices turn out to
be not as far out of line with the rest of the world's cotton prices as
we had assumed, then there will be absolutely no harm to farmers from
the proposed reduction in authorized spending. If the original estimate
of $250 million was closer to being right, then the program will be
able to only partially address the non-competitive position in which we
will find ourselves.
Should the latter prove to be the case, any harm to farmers will
still be minimal. The effectiveness of these payments in stimulating
export sales is quite low. A working assumption used by our USDA cotton
estimates committee is that a 1-percent change in the cotton price will
cause a change in cotton exports of about 1 percent. The certificate
payments so far this year may have brought about a reduction in cotton
export prices of between 0.7 and 1.5 percent. That would translate into
an increase in exports of between 50,000 and 100,000 bales, out of the
6.9 million bales we are expecting to export. That impact is not very
significant for farmers.
For 1999, the impact might be a reduction in exports of 100,000 to
150,000 bales if the proposed reduction is adopted, as compared to
exports without the spending cap. Farmers are not held harmless, but
the impact is small.
Question. Although the Step 2 payments are not, per se, part of the
so-called ``Freedom to Farm'' payments, (after all, Step 2 payments are
tied to market conditions, not a simple give-away) do you not believe
that many cotton farmers will not see this action as a breach of what
little ``farm safety net'' was left in the 1996 Farm Bill?
Answer. The spending cap on upland cotton marketing certificates
could have a slight impact on exports of cotton. However, the impact is
likely to be small. The savings from the spending cap are likely to be
applied to other programs of the Department which can benefit cotton
farmers, including crop insurance and conservation cost-share programs.
It is not a certainty at all that the rearrangement of spending
priorities will result in a net loss to cotton farmers.
trade/cuba markets
Following Pope John Paul's trip to Cuba, there has been discussion
about liberalizing trade with that nation. Prior to the trade sanctions
with Cuba, U.S. agriculture was a big winner. If trade were reopened,
rice trade, especially, with Cuba would present U.S. producers with
wonderful opportunities. This would especially be true for producers in
the mid-South with ready transportation down the inland waterways and
across the Gulf of Mexico.
Question. What is your outlook for opening trade with Cuba?
Answer. We encourage the leadership in Cuba to provide to its
citizens the political, economic, and social freedoms they deserve.
Once these rights are restored to the Cuban people, we will embrace the
opportunity to renew trade.
Question. Because of the importance Cuban trade holds for
agriculture, are you taking a personal role in any discussions
regarding trade liberalization?
Answer. U.S. agricultural exports are of great importance to the
U.S. agricultural economy and our farmers and ranchers. We want to
increase our exports where ever possible but, in the case of Cuba, I
have not entered into any negotiations regarding trade liberalization.
user fee proposals
The budget proposes $624 million in new user fees. Clearly, this is
problematic for many reasons. The authorization committee may not
approve them, if we tried to enact them the House Ways and Means
Committee might Blue Slip our bill, and without them, we start out $624
million in the hole. User fee proposals are no stranger to this
subcommittee, but their rate of acceptance is not high. User fees need
to be carefully crafted to ensure that, if appropriate at all, they are
borne by the groups best and most properly suited to absorb them.
Question. Do you believe the meat and poultry companies will absorb
these costs?
Answer. We do not estimate that the industry will absorb all of the
cost of the user fees for meat, poultry, and egg products inspection.
Question. Do you believe the fees will be passed on to the
consumers when companies are more likely to try and keep retail prices
down below their competition?
Answer. We estimate that most of the fees will passed on to
consumers in the form of higher retail prices. The overall impact on
retail prices would be less than one cent per pound.
Question. How do you justify the FSIS fees ($573 million) which
will most likely be borne by livestock producers at this time of low
prices, poor markets, and other problems facing small farmers?
Answer. We do not estimate that the impact of the user fees will be
passed down to producers in the form of lower prices paid. We estimate
that most of the fees will passed on to consumers in the form of higher
retail prices. The overall impact on retail prices would be less than
one cent per pound.
Question. Has an analysis been performed regarding the other
proposed user fees to determine the impact the fees will have on the
groups most likely to bear the cost of the fees? If not, why? If so,
what did it reveal?
Answer. When the Administration's user fee proposal is transmitted
to Congress, we will provide you with our analysis of the proposal's
economic impact.
food assistance surveys and evaluations
Question. The conference agreement for the fiscal year 1998
appropriations bill contained a House provision that transferred the
survey and evaluation function of the Food and Consumer Service to the
Economic Research Service. The fiscal year 1999 proposal moves them
back.
Please explain the rationale for moving them back?
Answer. The Administration believes that the surveys and evaluation
function for the Food Assistance Programs should remain with the Food
and Nutrition Service (FNS), the agency that administers these
programs. These surveys and evaluations are most effective when
conducted in conjunction with food assistance program operations.
Question. What problem, if any, have you encountered with them at
ERS?
Answer. I have the highest regard and respect for the Economic
Research Service and its people. As I stated in my response to a
written question from Senator Cochran, ERS has done an admirable job in
administrating and conducting the fiscal year 1998 research and
evaluation program for the food assistance programs.
Question. Why is it reasonable for ERS to conduct research for some
USDA activities and not others?
Answer. ERS' mission is to conduct research to support USDA's
programs, including the Nation's food assistance and nutrition
programs. Historically, ERS has conducted an applied research program
on food assistance and nutrition issues. The agency has published
numerous research findings that have helped policy officials understand
the impacts of these programs on participants and the economy. Despite
ERS' long history of collaborating with universities on important
research issues, it has not had the opportunity to administer a large
scale extramural research program.
delta regional commission proposal
Question. The USDA budget submission contains a request for an
additional $20 million for Empowerment Zones and Enterprise Communities
(EZ/EC) assistance. At the same time, the President's budget request
for the Appalachian Regional Commission (ARC) includes $26 million for
expansion into the Lower Mississippi River Delta as a new arm of the
ARC to be known as the Delta Regional Commission (DRC).
Has the proposal to create the DRC been shared with you? If not,
will you review it? Upon review of this proposal, will you submit to
this subcommittee your views if the proposal would duplicate USDA
programs or if it simply would be better administered by USDA?
Answer. I have not had the opportunity to review the proposal, but
I will do so.
advisory committee cap
The fiscal year 1998 appropriations act contains a provision that
limits all advisory and related committees of USDA to $1 million.
Question. What functions have been provided using this sum?
Answer. I will provide for the record a listing of those advisory
committees, panels, commissions and task forces that we plan to fund
within the $1 million limitation.
[The information follows:]
usda advisory committees
Food, Nutrition and Consumer Services:
National Advisory Council on Maternal, Infant and Fetal Nutrition
Food Safety:
National Advisory Committee on Meat and Poultry Inspection
National Advisory Committee on Microbiological Criteria for Foods
Research, Education and Economics:
Forestry Research Advisory Council
National Agricultural Research, Extension, Education, and Economics
Advisory Board
Strategic Planning Task Force on Research Facilities
USDA/Hispanic Association of Colleges and Universities
USDA/American Indian Higher Education Consortium
National Nutrition Monitoring Advisory Council
National Genetics Resources Advisory Council
Dietary Guidelines Advisory Committee
Census Advisory Committee on Agriculture Statistics
Marketing and Regulatory Programs:
Advisory Committee on Foreign Animal and Poultry Diseases
General Conference Committee of the National Poultry Improvement Plan
National Animal Damage Control Advisory Committee
USDA/1890 Task Force
National Organic Standards Board
Federal Grain Inspection Advisory Committee
Farm and Foreign Agricultural Services:
Agricultural Policy Advisory Committee for Trade
Ag. Tech. Adv. Comm. for Trade in:
Animals and Animal Products
Fruits and Vegetables
Grains, Feed and Oilseeds
Sweeteners
Tobacco, Cotton and Peanuts
Technical Advisory Committee for Edward R. Madigan Agricultural Export
Excellence Award Board
Emerging Markets Advisory Committee
Advisory Committee on Beginning Farmers and Ranchers
Natural Resources and Environment:
Task Force on Agricultural Air Quality Research
National Commission on Small Farms
Office of the Chief Economist:
Commission on 21st Century Production Agriculture
Question. What problems has it posed for the Department?
Answer. Advisory committees and panels provide the Department with
the means to involve the public in our decisionmaking processes by
providing reports and recommendations. The cap limits the flexibility
we have in USDA to establish and operate committees that assist in the
effective and efficient operation of USDA programs. Because of the
limitation, most of the committees have been forced to reduce
activities, for example, hold fewer meetings or delay reports. In
addition, the limitation makes it difficult to deal with new issues
like the Secretary's National Commission on Small Farms and the
Commission on 21st Century Production Agriculture while still providing
adequate support for ongoing activities.
Question. What are some of the additional activities you would have
performed without this limitation?
Answer. The cap has caused delay in the establishment of some
committees such as the Commission on 21st Century Agriculture
Production and the proposed Secretary's Small Business Advisory
Committee. As I indicated previously, many committees have
significantly reduced meetings and delayed reports in an effort to live
within the cap. The flexibility to use additional resources as
necessary would enable the committees to provide additional input to
the Department's decisionmaking process.
organic standards
Question. For several years, I have heard much dissatisfaction with
the delays in publishing proposed rules for National Organic Standards.
Now, these rules have been published but public acceptance seems
questionable due to inclusion of irradiation, human sludge, and other
components of production and processing that may or may not be
appropriate elements of an organic standard. I understand you have
responded by providing an extension for comments?
Answer. Yes. The comment period for the National Organic Standard
Program was extended 45 days from March 16, 1998, to April 30, 1998.
Question. Did this reaction surprise you?
Answer. No. Organic standards have been of great interest to a wide
audience that feels strongly about the issues addressed in the proposed
rule.
Question. When do you think it is feasible to expect publication of
a final rule?
Answer. We are working diligently to analyze the comments, which
are about 4,000 at this time, and will release a final rule by January,
1999.
hatch/smith-lever flexibility
Question. The budget request makes reference to a provision that
would allow shifting of funds between the Hatch and Smith-Lever
accounts. Was this approach shared with the land-grant colleges and
extension system prior to announcement of the budget? If so, what was
the reaction? In view of all the overall reduction in formula funds, do
you think that this proposal will simply worsen the scramble for
limited funds by these constituencies?
Answer. In the Administration's concept paper detailing
recommendations related to reauthorization of the research title of the
Farm Bill, and specifically in testimony presented July 22, 1997,
before the Subcommittee on Forestry, Resource Conservation, and
Research of the Committee on Agriculture of the U.S. House of
Representatives, we addressed this issue. The Administration proposed
to amend the Smith-Lever extension formula program and redirect up to
10 percent of total research and extension formula funds to any
research or extension purpose, with an approved plan of work. The goal
of this amendment is to provide Federal funding to states in a more
flexible manner so states can meet high priority needs and to permit
states to better leverage their resources. Our proposal would increase
this flexibility of states (at their discretion, not direction of the
Federal agency) to redirect funds between these formula programs to 25
percent by 2002.
Aspects of this concept have been discussed by individual
universities for several years, and by the broader community in the
context of studies such as that completed by the National Research
Council in 1996 on ``Colleges of Agriculture at the Land Grant
Universities.'' Reactions to the Concept have been mixed both within
and among institutions.
The Administration believes increased flexibility to the
institutions would help in managing proposed reduction in the formula
programs.
loss of ag chemicals/pesticide data program
A few years ago, I spoke in this hearing room about my concerns of
a train wreck on the horizon when we lose use of many agricultural
chemicals with no worthwhile replacements. Every year, I hear from
producer groups asking for special emergency registrations of
pesticides to protect their crops from some new or debilitating
infestation. Now, the new Food Quality Protection Act places more
substances under review.
Question. What is USDA doing to help overcome the potential crisis
when production grinds to a halt for lack of useful pesticides or
fertilizers?
Answer. To prevent the potential loss of important crop protection
pesticides, we are working closely with EPA to ensure that they have
the data necessary for developing accurate risk equations needed for
the reregistration pesticides under the Food Quality Protection Act
(FQPA). In addition, multi-Agency USDA programs, such as IR-4,
Integrated Pest Management, Pest Management Alternatives Program, and
the National Agricultural Pesticide Impact Assessment Program, provide
vital registration information on existing active ingredients, new
products including new and safer pest management technologies. By the
use of these data, registrants and the EPA are providing safer pest
management alternatives to producers and consumers through science-
based decisions.
Question. To what extent does the Pesticide Data Program remain
important in helping keep products on the market?
Answer. The Pesticide Data Program (PDP) is a critical component of
the recently enacted Food Quality Protection Act (FQPA), which directed
the Secretary of Agriculture to provide improved data collection of
pesticide residues. The FQPA further expanded the use of risk
assessments by eliminating the ``Delaney'' clause that required zero
risk to consumers from carcinogens associated with pesticides. The
elimination of this provision enables the registration of pesticides
where the actual levels of residue would present ``no reasonable harm''
to consumers from carcinogens. Consequently, EPA will be able to use
the PDP data, on actual residue levels, for a greater variety of
pesticides important to American agriculture.
For 1999, the budget includes additional funding to maintain
statistically valid sampling and to establish a rapid response
capability to service EPA data needs. With the implementation of FQPA
there is an increased demand for providing the EPA pesticide residue
data for minor-use pesticides on rapid basis. EPA will need the data to
conduct dietary risk assessment reviews for over 9,000 tolerances over
the next 10 years as required by FQPA. Without the data, EPA will be
required to make conservative assumptions about pesticide levels that
could result in overestimation of risk and loss of registrations for
economically important pesticides. The increased funds will permit
increased sampling of specific commodities at a faster rate.
global warming/rice producers
Question. Rice producers in my state are being informed that the
Global Warming Treaty may impair their operations due to the reported
``contribution'' of greenhouse gases released by decaying rice stubble
in flooded rice fields. Are you aware of such claims?
Answer. We are aware of certain research documenting that rice
fields are a source of the greenhouse gas methane generated by
decomposition of plant materials in wet or flooded soils.
Question. If there is any validity to this ``contribution'' to
Global Warming, will USDA enter into the discussion in support of
American farmers?
Answer. Yes, in fact USDA has been involved in both the scientific
study of agricultural sources of greenhouse gas emissions and the
negotiations of the United Nations Framework Convention on Climate
Change. Research conducted by the Agricultural Research Service
suggests that methane emissions from rice fields is reduced by limiting
the period of time when the fields are flooded, without affecting rice
yields. USDA employees participate in an interagency team headed by the
Department of State which determines the U.S. positions on climate
change negotiations, and USDA was represented on the U.S. delegation to
the Third Conference of Parties to the Framework Convention in Kyoto,
Japan. USDA is currently intensifying its involvement in these issues
by strengthening its Global Change Program Office, which will insure
that American farmers and ranchers are represented in those
discussions. The President's budget for fiscal year 1999 proposes a
funding increase of $10 million for climate change activities, and $3
million of that total is targeted towards development of new technology
for mitigation of climate change impacts on agriculture, including
reduction of greenhouse gas emissions from agricultural lands.
crop insurance sales commissions
Question. During consideration of the fiscal year 1998
appropriations bill, there was discussion of the proper level to
provide as reimbursement to insurance companies to pay for sales
commissions. The authorized amount was in excess of $200 million and
you argued for a level closer to $150 million. In the end, the
conferees agreed on a level in the $180 millions. You note that the
past year has provided gains for the insurance industry.
If the sales commission funding is not transferred to mandatory
accounts, what level will you think appropriate for fiscal year 1999?
Answer. If no change is made in current law which requires that
sales commissions be funded as discretionary spending, $208 million
would need to be appropriated for that purpose for 1999. But, I
strongly recommend that Congress enact the legislation which the
Administration will submit in the very near future to change the law to
shift this expense to the mandatory account and make certain other
changes in the program.
underwriting gains
Question. Do you think the higher than normal insurance gains
should affect the amount we make available?
Answer. I believe that insurance gains, which reflect the level of
risk taken by private companies, should be treated separately from
administrative and operating expenses which reflect costs incurred for
delivering the program.
boll weevil
Question. A couple of years ago, we developed a loan program to
help farmers move more rapidly into the boll weevil eradication
program. This program was necessary because of the delay in
appropriating a level of APHIS grant funds that states low on the list
were being kept at a marketing disadvantage under states with lower
costs due to complete eradication. It was never our intention that the
loan program would replace the grant program. Rather, the loan program
was designed to accelerate the entire eradication process. How do you
justify allowing some states the lower cost of eradication by use of a
grants program when neighboring states will have to rely on loans?
Answer. We agree that the FSA loan program is critical to
accelerating the entire boll weevil eradication process, because it
allows growers to spread the significant start-up costs over several
years, resulting in more affordable annual contributions to their
programs. We have taken the opportunity to look for cost effective ways
to manage program operations. For example, we have recently
discontinued cost-sharing in virtually all areas in which the weevil
has been eradicated to make available so much funding as possible for
active eradication zones. Grower organizations in all states with
active eradication program had been receiving an equitable cost-share
percentage. However, as the momentum for expansion has increased, the
amount of acreage involved has also increased dramatically resulting in
each area receiving a smaller percentage of Federal grant funds than in
prior years. Grant funds simply are not available in the amounts needed
to accelerate the program. In fact the loan program makes more total
funds available for program expansion than have been under the
traditional appropriations and grants approach. Because of the
tremendous benefits cotton growers can gain from boll weevil
eradication, we believe that they will choose to take advantage of the
loan program.
loan subsidy costs
Question. You state that savings will be achieved in loan programs
due to declining interest rates. However, due to reforms that lock in
program levels over a fixed number of years, it appears that loan
subsidy cost is actually increasing. For example, the water and sewer
loan program in fiscal year 1998 required a subsidy of only $67 million
to achieve a program level of $691 million. For fiscal year 1999, a
program level of $764 million will require $126 million in subsidy,
nearly twice that of last year.
How do you explain your statement of lower costs for loan programs
with the example of higher subsidy costs?
Answer. Perhaps I should clarify my statement. What I said was that
due to decreasing interest rates resulting from the economic expansion,
the budget authority required to administer these programs is 40
percent less costly than it was in 1993. Your observation regarding the
higher subsidy costs for fiscal year 1999 is correct, but that stems
from a provision enacted in the Balanced Budget Act of 1997. This
provision attempted to fix the problem of widely fluctuating program
levels caused by differences in interest rates assumed in the economic
assumptions and the actual interest rates in effect at the beginning of
the fiscal year. This fix also locked in the budget year interest rate
in the out years which means that the out-year interest rates will not
be decreasing as they have previously. Since most loan programs have
low disbursements in the initial year and higher disbursements in the
out-years, the effect is to increase the subsidy cost. Conversely, in
an era of increasing interest rates, the subsidy cost will be lower.
animal welfare act
Question. What is the Administration's position on legislation
(H.R. 594, the Pet Safety Protection Act) proposed by Rep. Canady (R-
FL) and Rep. Brown (D-CA)?
Answer. The Administration is continuing to review this bill and
has not finalized a position at this time.
Question. What effect would enactment of H.R. 594 have on
agricultural, medical, and related research?
Answer. The bill would allow research dogs and cats to come only
from licensed breeders, publicly owned and operated pounds and
shelters, individual donors who have bred or raised the animals or who
have owned them for at least 1 year prior to donation, or other
research facilities. The bill would eliminate ``random-source'' dog and
cat dealing--an activity in which only 32 dealers nationwide are
involved at this time.
Question. To what extent would enactment of H.R. 594 curtail the
occurrence of fraud, theft, and mistreatment of animals?
Answer. We are very pleased that over the last few years, we have
succeeded in revoking the licenses of the most non-compliant Class B
dealers, and we have dramatically improved compliance by the remaining
32 Class B dealers by inspecting their operations quarterly and tracing
selected animals back to their original sources. In fact, in fiscal
year 1997, Animal Care officials were able to complete 95.5 percent of
their tracebacks of animals sold into research--up from approximately
40 percent in fiscal year 1993. We firmly believe that our efforts have
significantly reduced the potential for USDA licensees to steal or
otherwise fraudulently obtain animals. Presumably, disallowing random-
source dealing altogether would reduce that potential even further.
Of course, we must note that the bill would not affect the wide
variety of other situations not covered by the AWA in which fraud,
theft, and mistreatment of animals can occur. Examples would include
theft of privately owned hunting or security dogs or abuse or neglect
of animals by individual pet owners.
Question. Would eliminating USDA regulation of Class B ``random
source'' dealers under the Animal Welfare Act, the objective of H.R.
594, result in savings, and if so, by what amount?
Answer. Not necessarily. It is important to note that a number of
Class B dealers have signalled intent to convert to Class A (breeder)
operations or have already done so, so if Class B dealers were to be
eliminated, some of these savings would be offset by costs to regulate
these same individuals as Class A dealers. In addition, H.R. 594 would
require pounds and shelters to be licensed and comply with
recordkeeping and certification requirements, which would further
offset any savings achieved by eliminating Class B dealers.
______
Questions Submitted by Senator Byrd
water 2000
Question. Please provide me with a status report on the U.S.
Department of Agriculture's (USDA) progress in achieving the goals of
Water 2000 in West Virginia in 1997.
Answer. In fiscal year 1997, 13 water projects were financed by RUS
in West Virginia. These 13 water systems served 11,600 people. Out of
the 11,600 people served, 5,600 received clean water for the first
time. The other 6,000 people had their water systems improved so they
could continue to provide clean water.
Question. What progress does the agency expect to make on the goals
of Water 2000 in 1998?
Answer. In fiscal year 1998, we estimate that 8,500 more rural
people in West Virginia will receive clean water through RUS financed
water systems.
Question. What progress does the agency expect to make toward the
goals of Water 2000 with respect to the President's fiscal year 1999
budget request?
Answer. In fiscal year 1999, we estimate that an additional 9,319
rural people in West Virginia will receive clean water through RUS
financed water systems.
national center for cool and cold water aquaculture
Question. Please provide me with a status report on progress on the
National Center for Cool and Cold Water Aquaculture.
Answer. The following describes progress on the National Center for
Cool and Cold Water Aquaculture (NCCCWA):
--The mission of the NCCCWA is to enhance aquaculture production of
cool and coldwater finfish. The NCCCWA's priority research
program areas will include genetics and breeding, fish health,
nutrition, and production systems. Work will focus on trout and
other salmonids. Other potential species include hybrid striped
bass and other cool and cold water species.
--The NCCCWA will combine its scientific expertise with that of the
Freshwater Institute and the Leetown Science Center (LSC) of
the Biological Resources Division of the U.S. Geological
Survey, and with the marketing, genetics, and other scientific
expertise of West Virginia University (WVU), in a collaborative
and comprehensive program that should contribute greatly to the
economic potential of West Virginia and of the Nation.
--ARS and LSC enacted an Interagency Memorandum of Understanding MOU)
on September 30, 1996, to facilitate cooperation between NCCCWA
and the LSC. LSC and ARS are presently developing accessory
agreements for the MOU to provide more detail on cooperation in
research and sharing of facilities and resources. LSC has
agreed to provide space and facilities for ARS scientists to
conduct aquaculture research the NCCCWA construction is
underway.
--Extreme drought conditions in 1997 resulted in significantly
reduced spring water supplies and stream flow in the vicinity
of LSC. The drought condition called into question whether
natural water resources would always be sufficient to provide
for the future needs of both the Fish Health Laboratory (FHL)
and NCCCWA without impacting local residents. Consequently, the
present plan is for the NCCCWA design to include the capability
to recirculate, with appropriate treatment, up to 50 percent of
the water supplied to the building. This capability will also
provide for greater control over water quality for research
purposes and will obviate the need to develop Bell and Link
Springs. Preliminary projections are that the capital costs of
the recirculation capability will be essentially equivalent to
the cost savings resulting from not developing the Bell and
Link Springs. Operating cost projections are presently being
formulated. LSC and ARS have also agreed to develop a
comprehensive, joint water management plan.
--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 and $6 million in fiscal year 1998 for
construction of the NCCCWA. Total estimated construction costs
are $12 million. Annual operating costs are estimated at $4
million.
--The design for the NCCCWA is currently being developed. A site plan
has been prepared. Conceptual designs have been prepared for
the laboratory/office building and the tank/aquaria building.
Aesthetics will be an important component of the design to
ensure that the facility blends well with the surrounding
environments. Final drafts of the Program of Requirements and
the Investigative Report have been completed.
--On October 20, 1997, ARS purchased a 217-acre farm adjacent to the
Leetown site to provide for additional watershed protection.
The purchase price was $600,000.
--The fiscal year 1998 Congressional appropriation of $250,000 for
the NCCCWA's first program funding will be used to recruit a
highly-qualified scientist to serve as Research Leader; to
begin carrying out a cooperative research program with FHL; and
to oversee final design and construction of the facility.
appalachian soil and water conservation laboratory
Question. With the completion of the five-year mission plan for the
Appalachian Soil and Water Conservation Laboratory, please provide me
with a list of research programs that will be undertaken in the future.
Answer. The proposed research programs to be undertaken in the next
five years are:
(1) Management of hilly grassland in Appalachia for sustainable
production;
(2) Renovation and improvement of underutilized, abandoned or
disturbed hill lands with browsing livestock;
(3) Agroforestry systems for the Appalachian region; and
(4) Improving forage legumes for Appalachian grasslands.
Question. Please provide the funding level required for each
program.
Answer. To fully develop these programs and operate the Laboratory
at full capacity would require the addition of four to five scientists
for an estimated total of $1.2 to $1.5 million.
appalachian fruit research laboratory
Question. With the completion of the five-year mission plan for the
Appalachian Fruit Research Laboratory, please provide me with a list of
research programs that will be undertaken in the future.
Answer. The mission of the Appalachian Fruit Research Laboratory is
to develop the science, technology and genetic base needed to enhance
productivity and fruit quality, minimize adverse effects on the
environment and solve critical problems of temperate fruit production,
protection, harvesting and marketing in the Eastern U.S.
In response to this mission, the current program is focused on the
development of (1) knowledge of the critical molecular processes in
fruit development and ripening; (2) genetic materials with improved
pest resistance, cold hardiness and fruit quality; (3) integrated
cultural and pest management systems that reduce pesticide/herbicide
use and increase production efficiency; (4) harvesting, handling and
postharvest disease controls that increase shelf life and market value.
Question. Please provide the funding level required for each
program.
Answer. To fully develop these programs and operate the Laboratory
at full capacity would require an additional four to five scientists
for an estimated total of $1.2 to $1.5 million.
potomac headwaters land treatment project
Question. Please provide me with a report on the Potomac Headwaters
Land Treatment Project. What is the status of the funding for this
project?
Answer. In fiscal year 1997, $2,416,300 funded 116 contracts. In
fiscal year 1998, $3,130,000 went to this project which will fund
approximately 150 additional contracts.
Question. What is the participation rate of eligible farmers in the
program?
Answer. The participation rate has been greater than anticipated
when the project was originally planned. There are approximately 340
poultry producers in the watershed. Currently 255 have requested
assistance.
staffing reductions
Question. I understand that the proposed Farm Service Agency (FSA)
fiscal year 1999 budget will result in an additional reduction of 1,000
FSA jobs. What effect will these reductions have on the FSA's mission?
Answer. The proposed fiscal year 1999 non-Federal county office
staffing level of 9,980, a decrease of 855 staff years from fiscal year
1998, will challenge us to perform the ongoing operations and program
activities for the 1996 Act with an adequate level of customer service.
However, in proposing these reductions, difficult choices had to be
made in balancing the budget for fiscal year 1999.
These staff reductions may hinder program delivery and service to
producers in locations already minimally staffed as a result of
previous agency downsizing. Assistance to sister agencies, conservation
associations and others may also have to be reduced.
In order to effectively manage the resources remaining in the field
offices, FSA may be required to achieve some office closures or
consolidation beyond those previously planned. However, I've asked that
actions to close and consolidate any additional county offices be made
only with consultation of local FSA county committees, my office, and
Congressional delegations. The Department has entered into a contract
with an outside consulting firm to conduct a study of the county-based
agencies, and we expect to be able to use the results of the contractor
study in guiding our actions to achieve any required office closures
through a solid independent workload analysis of the county-based
agencies.
Question. What effect will these reductions have on the FSA's
mission in West Virginia?
Answer. Historically, the methodology for allocating personnel
reductions among States has been based primarily on current and
projected workload by State. Until the proposed budget is agreed upon
and specific reductions are determined for a State, it will be
difficult to furnish specific impacts for a particular State. However,
it is likely that an approximate 855 non-Federal county office employee
reduction will result in new shared-management arrangements and/or
closures of some offices. As I mentioned, the Department has entered
into a contract with an outside consulting firm. The study is to be
completed by September 1,1998, and may provide insight on how any
future staffing reductions might be distributed.
Question. What actions is the FSA taking to accommodate individuals
wishing to remain in the FSA's employment, or to otherwise soften the
individual disruptions caused by the reduction in force?
Answer. For Federal employees, FSA extends full career transition
assistance under the Career Transition Assistance Program. This
includes priority placement rights, provision of job information and
counseling on resume preparation, administrative time for using career
transition resource services and facilities, and official time for
interviews.
For non-Federal employees, FSA extends re-employment priority
rights to all RIF'ed employees for two years. This affords RIF'ed
employees with re-employment priority for any comparable vacancy in the
State in which they were employed.
FSA is aggressively pursuing ways to soften the impact of FTE cuts.
FSA will continue to use buyouts and early outs wherever possible to
minimize the number of involuntary separations. FSA is also retraining
employees to learn new skills to assume any vacant positions in the
Agency.
______
Questions Submitted by Senator Leahy
emergency conservation program
Question. The Northeast is still trying to recover from the worst
ice storm this century. Although the Farm Service Agency, Natural
Resources Conservation Service and the Forest Service have been working
with farmers, woodlot owners, maple producers and apple orchards, I am
concerned that the Department's ability to help Vemonters rebuild from
this atypical disaster is limited. Although there was over $8 million
in damage on Vermont farms, Farm Service Agency programs have only
requested $1.5 million from the Emergency Conservation Program because
the majority of the damage does not fit within the constraints of ECP.
Will the Department be flexible in using USDA programs to assist
Vermonters and others recover from the storm?
Answer. Our disaster program authorities provide us with
significant flexibility in providing assistance to producers with
losses due to natural disasters. We are working with producers affected
by severe weather conditions in the Northeast and elsewhere and will
propose any necessary changes in authorities and funding levels as
expeditiously as possible.
Question. What programs, other than ECP, can be used to help the
region rebuild and diversify their economy over the next 5 or 10 years?
Answer. FSA lending programs, particularly the emergency loan
program, can play a critically important role in helping producers
recover from losses resulting from natural disasters. Many other
programs, including initiatives of the Fund for Rural Development and
other rural development loan and grant programs, can help rural areas
support and strengthen diversified economies.
unobligated disaster funds
Question. Does the Department have unobligated funds from previous
disasters that may be reprogrammed to address ice storm damage?
Answer. We are unable to determine at this time the extent of
additional funding we may need for emergency assistance in the
Northeast and elsewhere. We are reviewing current funding obligations
to determine whether any funds remain available. But it is clear that
unobligated balances in our emergency programs are extremely limited.
environmental quality incentives program
Question. The Department requested an additional $100 million in
fiscal year 1999 for the Environmental Quality Incentives Program. How
does the Department intend to distribute this additional funding among
cost share payments, incentive payments and technical assistance?
Answer. The additional funds will be used to provide increased
assistance to meet the President's Clean Water Initiative and to
increase assistance to limited resource and Native American farmers and
ranchers as recommended by the USDA Civil Rights Action Team. A
prescribed distribution to education and financial assistance has not
yet been determined, but 10 percent is anticipated at this time for
technical assistance.
Question. How will the Department prioritize this funding amongst
states and watersheds?
Answer. While a process for prioritizing funding has not been
finalized, we will consider the recommendations of NRCS State
Conservationists, in consultation with their respective State Technical
Committees, NRCS Regional Conservationists, and recommendations
received from other governmental and non-governmental entities with
interest and expertise in water quality and natural resource concerns.
Question. With this increase can we anticipate an increase in
funding for states with long waiting lists of farmers who want to adopt
conservation practices or for states that have devoted significant
state resources to match the federal program?
Answer. It is likely that States with significant natural resource
and environmental problems with a recognized demand for program
assistance will receive increased funding. Leveraging of State or other
funds has been a consideration when allocating funds and will continue
to be so that we maximize environmental benefits per program dollar
expended.
resource conservation and development
Question. The fiscal year 1998 Agriculture appropriation bill
included an $18 million increase for the Resource Conservation and
Development Program. How was this funding distributed across the RC&D
councils and what criteria were used?
Answer. In fiscal year 1998, Congress appropriated $34,377,000 to
the Resource Conservation and Development Program, an increase of $5
million. As outlined in the operating plan submitted to the Congress on
December 18, 1997, $2.5 million will fund up to 25 newly authorized
RC&D areas, and $1.45 million will provide additional funding for the
existing 290 RC&D areas. The remaining $1.05 million will establish a
Challenge Grant Fund for one year for authorized areas.
conservation farm option
Question. It is my understanding that the Department is finalizing
the proposed rule for the Conservation Farm Option (CFO) program. When
will it be published?
Answer. The CFO proposed rule should be published by late March,
1998.
Question. Given the protracted development of the rulemaking, there
is some concern that full use of the authorized funding levels for the
program will not be made. Has the Department projected the demand for
the program and how will the program be implemented once the rulemaking
process is completed?
Answer. Yes, the Department has projected the demand for the
program. Once the proposed rule is published, a call for proposed pilot
project areas will be conducted. Selection of the actual pilot areas
will follow. As soon as the final rule is published, eligible
participants within the selected pilot areas may apply for program
benefits.
Question. What are the six regions where the pilot program will be
implemented and how will the states be selected for participation?
Answer. The six regions are the six NRCS regions which cover the
entire United States. A call for proposed pilot project areas will be
conducted nationwide. Generally, pilot project areas within states will
be proposed for selection in the CFO. Selection of pilot project areas
will be made by the Chief, NRCS.
farmland protection program
Question. The Farmland Protection Program (FPP) reached its
authorized ceiling of $35 million in fiscal year 1998. Since 1997, how
many requests for FPP funding has NRCS received?
Answer. NRCS has not received any formal requests for FPP since
fiscal year 1997, as requests for proposals to participate in the
program will not be made until March 1998.
Question. How does this compare with the number of requests you
have funded and what is the projected need for the program?
Answer. It is anticipated that new requests will far exceed the
number of requests made in fiscal year 1997 as the funding available
will be $18 million for fiscal year 1998, as compared to $2 million
last year. The projected future funding need for the Farmland
Protection Program far exceeds the program's current funding level.
This is estimated at approximately $100 million per year.
Question. Has the Department identified other programs that may be
able to address this remaining need?
Answer. The FPP is unique in that NRCS works with Tribal, State and
local entities to leverage program funding and thus maximize the
Federal funds available. Therefore farmland protection programs in the
different states will continue to do limited work with individuals in
this area of conservation. The department has not identified any other
additional federal funds from other programs to address the remaining
FPP needs.
clean water and watershed restoration initiative
Question. The Clean Water and Watersheds Restoration Initiative
includes assistance for 1,000 rural watersheds. How will these be
selected for assistance?
Answer. Although the guidelines for selecting the 1000 rural
watersheds hasn't been completed, the foundation for addressing our
nations water quality issues is through a locally-led process. A key
component in the selection process will naturally include the condition
of water quality in the watershed. It is expected the $20 million NRCS
budget proposal will address 350 watersheds.
conservation operations
Under the Conservation Operations budget, NRCS includes $20 million
for incentive payments to those States that are successful in
increasing the level of non-Federal contributions to the conservation
effort. In Vermont, the state agriculture department has funded a
program to match federal funds in order to increase the cost-share
payment to farmers and attract farm operations that otherwise would not
be able to participate in the program. In fiscal year 1999, the
Governor has requested $750,000 for this program, almost three-quarters
of the federal funding level in Vermont.
Question. Is this the type of success NRCS will be looking for
distribution of the additional $20 million?
Answer. The budget proposal of $20 million will be internally
allocated to NRCS state offices based on an as yet to be determined
threshold of contributions from state and local entities for such
activities as GIS and soil survey digitization. These funds are not
intended to be used as grants to state and local entities.
Certainly, the Vermont program is an outstanding example of the
initiative that states can take to leverage federal funds. The support
that the Governor of Vermont and the State Legislature are providing to
conservation is exemplary. State efforts such as this result in an
increase in conservation on the land and improvement in the
environment. Multiplying the Vermont experience across the country will
have a significant impact on our environment. Definitely, states that
have successful programs in place should be rewarded while at the same
time other states should be provided an incentive to initiate suitable
leveraging efforts. NRCS will include both of these factors in an
equitable system to distribute the $20 million.
Question. The Conservation Operations budget also gives special
consideration to those States that expand their use of geographic
information systems and purchase additional digital orthophotography.
In 1995, the Vermont Center for Geographic Information was presented
with an award to ``maintain, support and integrate decision support
systems for agricultural, rural development, and natural resources
initiatives * * *'' (USDA letter signed by Wardell Townsend, October
34, 1995) Although the Vermont Center worked with USDA over the next
year to actually receive the award, no funding has ever been forwarded
to Vermont. Although I find it very troubling that USDA would award a
grant and then not follow through on the promise, I am pleased to see
that the Department recognizes the importance of these projects in the
fiscal year 1999 budget.
Will the Department consider funding the Vermont project under the
Conservation Operations budget in fiscal year 1999? If not, how will
the Department fulfill its obligation to the Vermont Center for
Geographic Information?
Answer. I am aware of the Vermont concerns. We are exploring the
opportunity of making the Vermont project a USDA Business process re-
engineering project as part of the Service Center Implementation Team
activities.
option 1-b
Question. The Department's preferred option for milk marketing
order reform is the so-called ``Option 1-B.'' But your proposal notes
that this option would put dairy farmers out of business. Therefore you
have proposed some so-called transition payments to ease the pain as
you phase in Option 1-B. Your proposal states that, with the exception
of the upper mid-west, dairy farmers would face reduced income under
Option 1-B. Even farmers in the upper mid-west would be better off
under Option 1-A in terms of income. The economists for Agri-Mark dairy
believe that Option 1-B will cost dairy farmers over $360 million per
year in net income. Vermont's Commissioner of Agriculture believes that
Option 1-B will mean that half of Vermont's farmers go out of business.
Without local, fresh supplies of milk consumer prices could skyrocket
with each snow storm in the Midwest. Would you reexamine your preferred
position to take into account the recommendations of the National
Commission on Small Farms, which I will officially offer as a comment
to this marketing order proposal?
Answer. One of the main purposes of issuing a proposed rule is to
receive public input on the proposals contained in the rule. All
comments submitted to the Department will be reviewed and considered.
Based on this review, the Department will then issue a final rule. The
National Commission on Small Farms report has been identified as a
proposed rule comment and will be considered when developing the final
rule.
Question. Would you look at Agri-Mark's analysis and provide me
with a detailed explanation of how, if at all, USDA's analysis would
differ. I recognize this request, and my next request, cannot be done
overnight and I would simply request that this be done soon.
Answer. We have requested input from the public on the proposed
rule. Once Agri-Mark's comments are submitted to the Department, they
will be given full consideration. Because of ex parte restrictions, I
will not be able to give you a detailed explanation of how Agri-Mark's
analysis may differ from USDA's analysis. I can assure you though that
when received, full consideration will be given to Agri-Mark's
analysis.
Question. Would you reexamine your preferred marketing order
position (1-B) to take into account the recommendations of the National
Commission on Small Farms which I will officially offer as a comment to
this marketing order proposal?
Answer. One of the main purposes of issuing a proposed rule is to
receive public input on the proposals contained in the rule. All
comments submitted to the Department will be reviewed and considered.
Based on this review, the Department will then issue a final rule. The
National Commission on Small Farms report has been identified as a
proposed rule comment and will be considered when developing the final
rule.
Question. I would like you to examine how many small farms might go
out of business under Option 1-B, as compared to Option 1-A. I am aware
some dairy farmers will go out of business regardless, but I would like
to know how many more would go out of business under Option 1-B, as
compared to 1-A, and what circumstances would affect that issue.
Answer. It is difficult to predict the impact on farm numbers under
either Option 1-B or Option 1-A. However, the proposed rule does
request input from the public regarding the impact of this proposal on
small businesses. We will examine the full impact of any action
addressed in the proposed rule.
Question. I recognize that there are limits to being able to
predict such outcomes and that other factors, such as interest rate
levels, can have a significant impact. Please identify other factors
which you think would play a role in this matter.
I believe it is imperative that greater focus be placed on keeping
small, local dairy farmers in business.
Answer. Other factors, such as interest rates, have an impact on
our ability to predict outcomes from any proposed action. However, the
proposed rule does request input from the public regarding the impact
of this proposal on small businesses and regarding the price level and
phase-in programs. Any additional information we receive will be fully
considered in our evaluation of the impacts of the proposed rule.
fund for rural america
Question. I was fortunate enough to have played a part in
authorizing the 1996 Farm Bill--a bill that broke new ground in
providing assistance to our rural communities. A case in point is the
Fund for Rural America, which was established in the bill. The Fund
directs $300 million over three years to help solve the problems facing
rural areas. Due to a technical error, the $100 million that was
intended for use in 1998 will not be available unless a correction to
the law is made. Secretary Glickman, what steps are being taken to
ensure there is no gap in the Fund for Rural America for 1998?
Answer. The Department shares your concern about the 1-year hiatus
in Fund for Rural America funding. We asked for a language correction
and the issue is embedded in discussions about the Farm Bill Research
Title. However, should the correction no be made, we plan to minimize
any break by spending 1999 monies early in the fiscal year. For
example, we currently plan to make the final first round Center Grant
awards in October, 1998, with additional project grants through the end
of the calendar year.
Question. If funding is not provided in 1998, how will that affect
projects that receive ``Center'' grants or other multi-year awards out
of the 1997 funding cycle?
Answer. The projects receiving funding out of the 1997 funding
cycle would not be affected by the hiatus in 1998. This is because the
projects in question were fully funded for the life of the project at
the time of award. Therefore, they have funds to continue the
activities despite the delay in 1998 funding. However, the break will
delay award of center grants from summer to fall. The scheduling
adjustments we are making will limit the impact of no 1998 funding to a
4-6 month lag rather than a full year lag.
Question. When will the announcement on 1997 awards be made?
Answer. All 1997 awards were completed March 24, 1998.
Congressional offices were notified immediately prior to award in case
Members wanted to contact constituents directly. A complete list of the
awardees will be released along with press information and individual
project summaries in late March or early April.
supplemental nutrition program for women, infants and children (wic)
Question. Your budget indicates that WIC is ``fully funded.''
However, WIC directors believe that not all eligible applicants in all
states will be able to be served by WIC. Please explain the status of
the WIC funding request in terms of being able to serve all eligible
applicants within a reasonable degree of certainty. I recognize USDA
has to make projections so that absolute certainty would be difficult
to determine.
Answer. Our full funding projection model starts with Bureau of
Census estimates of income-eligible infants and children and uses
Department of Health and Human Services data useful in estimating those
at nutritional risk. We estimate income eligible pregnant women, and
then apply nutritional risk factors to each group, and finally make
certain projections as to the proportion of those eligible who will
actually seek WIC benefits. We are confident that our 1999 funding
request is adequate to serve 7.5 million participants a month. As that
has been our target for several years, during which time the economy
has improved markedly, we are confident that it is a reasonable
estimate of full participation.
______
Questions Submitted by Senator Dorgan
rural economic area partnership (reap) zone
In 1993 President Clinton made a commitment to establish a high-
level interagency working group on Community Development and Economic
Empowerment which would specifically address the need to send more
Federal economic development resources to rural areas with serious out-
migration problems.
Question. Please describe USDA's participation in the interagency
working group development as part of this Presidential commitment.
Answer. The Department of Agriculture is one of 22 Departments and
Agencies that are a part of the Community Empowerment Board which
provides overall coordination for implementation the Empowerment Zone/
Enterprise Commodity Initiative.
Question. What specific steps has USDA taken to fulfill the
President's commitment to reinvigorate economics in rural areas
affected by out-migration?
Answer. USDA and the Small Business Administration help pull
together a One-Stop Capital Shop to serve the Rural Economic Area
Partnership (REAP) Zones of North Dakota as well as all of North Dakota
(one of only five nationwide). In addition, Rural Development
assistance to participating North Dakota REAP counties has risen
sharply. The 14 county area encompassed within the two REAP zones
averaged $1.68 million a year in Rural Development funding dollars (not
including single family housing) during 1991-94. For 1996 and 1997 the
annual average of Rural Development assistance to the REAP counties is
approximately $12.5 million annually.
Question. Please describe the activities USDA will engage in fiscal
year 1998 to advance this policy priority.
Answer. USDA's Rural Development mission area is committed to
helping improve the economy and quality of life in all of rural
America, including areas where out-migration and job loss has torn
asunder the fabric of the rural economy. Our financial programs in 1998
will continue to support essential public facilities and services as
water and sewer systems, housing, health clinics, emergency service
facilities and electric and telephone service. We will promote economic
development by supporting loans to businesses through banks and
community-managed lending pools. We will offer technical assistance and
information to help agricultural and other cooperatives get started and
improve the effectiveness of their member services. And we will provide
technical assistance to help communities undertake community
empowerment programs, such as the REAP demonstration areas in North
Dakota.
Question. Due to the obvious application of USDA's rural
development mission area programs relating to this initiative, please
describe your willingness to take a lead role in helping the
interagency working group develop practical, real proposals and actions
that will transform the President's commitment into real opportunity in
rural areas.
Answer. USDA has always been willing and enthusiastic to take a
lead role in developing practical and real proposals to support rural
development.
ars facility closures
Question. The Appropriations Committee made it clear in Public Law
105-83 that it did not concur with the Department's proposed closure of
ARS facilities and, further, that the strategic planning process in the
Federal Agriculture Improvement and Reform Act relating to all USDA
research facilities be completed before any further closures are
contemplated. Now the Department, in the fiscal year 1999 budget, has
again proposed closures. What is the rationale for the closure in light
of the direction already clearly delineated in the fiscal year 1998
funding bill?
Answer. The fiscal year 1999 Federal budget submitted by the
President recommends a number of new initiatives to address changing
priorities facing agriculture and the American consumer. Food safety,
global climate, nutritional requirements, emerging infectious diseases
in a global community, genome maps of critical agricultural products
etc. represent critical challenges that must be addressed as we move
into the next century. The constraints of Federal spending remain in
place. The Administration and the Congress continue to target Federal
spending and revenue savings in all budget deliberations.
The research budget proposed for ARS reflects an increase of $32
million over the current year. However, the Department is focusing on
many priority agricultural issues that must be addressed now by our
research scientists. This requires that ARS terminate ongoing projects
and reallocate these resources to the new or expanded initiatives as
recommended by the President. In this effort a number of projects
carried out at Prosser, Washington; Orono, Maine; Brawley, California
and Mandan, North Dakota were identified as less critical. Given these
programmatic decisions, management considerations lead to
recommendations to terminate and redirect resources to new research
initiatives and close the mention research stations. We believe there
is adequate information for Congress to act on these relatively
straight forward recommendations at this time without formal input from
the Strategic Planning Task Force.
centralized servicing center
Many North Dakotans have registered serious complaints about
service at the St. Louis Rural Development Centralized Servicing
Center, including that financial records were muddled and files
misplaced.
Question. In the case of the Rural Housing centralized service, can
you articulate how centralization in this case has been beneficial to
the customer?
Answer. The Centralized Servicing Center (CSC) is providing state-
of-the-art servicing comparable with any other system available to
homeowners across the nation. Our system is unique because of the
Congressionally mandated ``supervised credit'' that must be available
to our borrowers to preserve home ownership though economic or other
hardships individuals and families may experience. For this reason, we
have had to modify the private sector serving software we purchased to
ensure these servicing options were handled in a consistent and
efficient manner. These servicing features include: 7 day a week, 24
hours voice response for detailed information on loans; nationwide
consistency for servicing, including payment assistance, moratorium,
reamortization and other services; centralized cash management
providing fiduciary control; a monthly statement sent to each borrower;
escrow of taxes and insurance; and expanded (7:00 am-6:00 pm) customer
service representatives to handle more complex issues for our
borrowers.
Beginning in October of 1997, RHS centralized over 700,000 loans
from 1,200 offices nationwide to one facility in St. Louis. We
currently have approximately 800 field offices. This was a massive
undertaking. We have experienced some difficulties with backlogs in our
mailroom which has delayed payment assistance and other services. This
problem has been rectified and our response time has improved
dramatically. Additionally, we have and are continuing to modify our
software and other support systems to handle additional concerns and
provide the best customer service to our borrowers.
Question. How many staff have been added to the Center, and how
does this number compare with the number of personnel that previously
handled housing program inquiries in the field offices?
Answer. Prior to the Centralized Servicing Center (CSC), there were
approximately 3,300 staff years performing single-family loan
origination and servicing in the field. As a result of a move to
centralize the loan servicing process, 900 staff years in the field
were deployed for other critical Rural Development activities, 600
staff years were transferred to the CSC, 600 staff years were
eliminated, 600 staff years still remain in the field to conduct loan
origination and 600 staff years remain in the field to conduct post CSC
acceleration and liquidation including management and disposal of
inventory properties.
Subcommittee Recess
Senator Cochran. We do not have any more requests for
recognition from other Senators, so this concludes today's
hearing. We appreciate very much your cooperation with our
subcommittee.
Our next hearing will be on Tuesday, February 24, at 10
a.m. in this room, room SD-138, of the Dirksen Senate Office
Building. We will hear then from departmental witnesses with
respect to the Department's research, education, and economics
programs.
Until then, the subcommittee stands in recess.
[Whereupon, at 12:13 p.m., Tuesday, February 10, the
subcommittee was recessed, to reconvene at 10:04 a.m., Tuesday,
February 24.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, FEBRUARY 24, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:04 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Gorton, Burns, and Bumpers.
DEPARTMENT OF AGRICULTURE
STATEMENT OF I. MILEY GONZALEZ, UNDER SECRETARY,
RESEARCH, EDUCATION, AND ECONOMICS
ACCOMPANIED BY:
EILEEN KENNEDY, ACTING DEPUTY UNDER SECRETARY, RESEARCH,
EDUCATION, AND ECONOMICS
DENNIS KAPLAN, BUDGET OFFICE
National Agricultural Statistics Service
STATEMENT OF DONALD BAY, ADMINISTRATOR
Agricultural Research Service
STATEMENT OF FLOYD P. HORN, ADMINISTRATOR
Economic Research Service
STATEMENT OF SUSAN OFFUTT, ADMINISTRATOR
Cooperative State Research, Education, and Extension Service
STATEMENT OF BOB ROBINSON, ADMINISTRATOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
This morning our subcommittee continues its hearings to
review the budget request submitted by the President to fund
the Department of Agriculture and related agencies. This
morning we are pleased to have an opportunity to review the
budget request of the Agricultural Research Service; the
Cooperative State Research, Education, and Extension Service;
the Economic Research Service; and the National Agricultural
Statistics Service.
Miley Gonzalez, who is Under Secretary of Research,
Education, and Economics, is with us and is accompanied by
Eileen Kennedy, Donald Bay, Floyd Horn, Susan Offutt, and Bob
Robinson. Dennis Kaplan is here representing the Budget Office
for the Department. We welcome you and we thank you for your
cooperation with our subcommittee.
This is probably one of the most important areas for
agriculture that the Department administers. If we do not
maintain our capacity to improve productivity on our farms; if
we do not maintain access to research, which is what extension
provides through its programs for farmers and agriculture,
landowners, then we are not going to be able to compete in the
global marketplace. We are not going to be able to maintain the
high quality of our foodstuffs for American consumers at
reasonable prices.
So for all of these reasons, the funds that are provided
for these programs are essential if we are to continue to enjoy
the benefits of our agricultural economy. It provides a lot of
jobs, of course. It means a lot in many other ways to us.
That is one reason why I am personally disturbed that the
budget request this year is $63 million below last year's
funding level. I am disturbed by that, concerned by it, and,
frankly, amazed that the President would submit a budget that
underfunds these programs to that extent. I hope our hearing
this morning will shed some light on why the budget is
submitted in that way.
There are some very important programs for which funding is
proposed to be cut. The sum of $26 million is cut in Hatch Act
and Smith-Lever formula funds. These go directly to our State
universities and colleges that are involved in research. A
reduction of $41 million in special grants, and a number of
other proposed funding decreases and terminations are included
in this budget submission.
We are going to look very carefully at it, and I am sure
that this subcommittee is going to make some changes in the
President's budget request in this area. But you can help us
understand where those changes should be considered and why the
budget is submitted in this form.
Before going to our panel of witnesses, I recognize the
distinguished ranking member of this subcommittee, my good
friend from Arkansas, Senator Bumpers.
PREPARED STATEMENT OF SENATOR BUMPERS
Senator Bumpers. Mr. Chairman, thank you very much. In the
interest of time, I will waive the reading of my opening
statement and insert it in the record.
My statement would very much echo what you have just said.
I am mightily concerned about a number of issues in this
budget. We will get into those during the question and answer
session.
[The statement follows:]
Prepared Statement of Senator Bumpers
I am pleased to welcome Secretary Gonzalez before this
subcommittee. This is your first visit before this panel we look
forward to your comments. I also want to welcome the other agency
heads. And, it is always good to see Mr. Kaplan whose long-time
assistance to this subcommittee has been invaluable.
In spite of these words of welcome, I must admit that my sentiments
with the overall budget submission in the research mission area are a
little less generous. I have stated publicly, on many occasions, that I
feel we are not committing enough resources to agricultural research.
Compared to the money we spend on research on how to make things
explode better and bigger, our dedication in meeting the demands of an
ever growing, ever hungry world pale. Over the course of American
history, the American farmer has done more to improve the quality of
life through an improved quality and abundance of food than any other
sector of the economy. But increased production is necessary to keep up
with an ever growing population. In addition, our growing population is
also responsible for urban sprawl converting more and more farm acreage
into housing developments, greater demands on our water and wildlife
resources, and higher expectations for food safety. In short, the
American farmer is expected to do more with less and only agricultural
research can make that happen.
The budget proposal for agencies included under the heading of
Research, Education, and Economics reflects a request of $1.826
billion. This is a net decrease of $47 million, or 2.5 percent, below
the fiscal year 1998 level. I recognize that the budget proposal
implies an overall increase for research and development by about $7
million with the reductions in other areas such as facilities. However,
we must consider the budget proposal in total and remember that the
mission of USDA's research, education, and economics agencies is tied
to the basic premise I have just outlined that we must make American
agriculture do more with less. Whether the funding is for agricultural
competitive, formula, or facility programs, the programs are designed
to work together with an overarching purpose of keeping the American
farmer and, by extension, the American consumer at least one step ahead
of the increasing demands and challenges ever snapping at our heels.
Unfortunately, this budget submission asks us to continue providing the
American farmer less, to the tune of about $47 million.
I also feel compelled, again, to point out that our problems with
this budget are not limited to what it does not include, but also
because of what it does include. The budget request from USDA contains
hundreds of millions of dollars in assumed user fees. I realize that
those fees are not directly tied to the agencies before us today, but
those assumptions will have an impact on our ability to meet the
demands of our research efforts. The importance of what we do here is
too great for playing budget parlor games. We have a responsibility to
protect the U.S. agricultural research base. We are serious about it
and we know that if we don't step forward, no one else will. There is
simply too much at stake.
I also want to offer a few comments on the apparently continuing
battle between the Congress and USDA on setting the research agenda.
For as many years as I can remember, the budget request to this
subcommittee would always zero out most, if not all, of the CSREES
Special Grants. Now, the struggle seems to have been elevated and we
find that the programs Congress elected to fund through the
Agricultural Research Service, too, have been zeroed out. It appears
that in addition to in-house research, USDA is willing only to fund
research through competitive grants, which means USDA wants to fund
research only to those institutions and researchers that USDA feels is
important. It seems a little odd that if USDA funds priority research
it is called being competitive and if Congress funds priority research,
it is called pork barrel spending.
I realize that USDA makes use of peer review and other scientific
community-based groups to set funding priorities and to determine which
projects will get attention and which will not. However, it seems that
USDA accepts the premise that only they have access to research
stakeholders who have any sense of research priorities. With all due
respect to my many friends in the research community, let me point out
that scientists tend to spend much of their time looking through
microscopes. Sometimes, it is important to have a more global view of
research priorities which can be lost in the often discipline-specific
world of science. I suspect that if you ask an agronomist where the
research priorities are, he would likely suggest in the field of
agronomy. If you ask the same question of a specialist in animal
science, you would get a different answer.
Obviously, there are many specific areas of agricultural research
that are very important to me. They may or may not be identical to
priorities of Senator Cochran or other members of the subcommittee.
However, the process we undertake here is to come together in an
agreement that allows us all to form a consensus of research
priorities. It would be welcome for USDA to join us in that process
rather that suggest only they hold the keys to research.
As I mentioned, there are many specific areas of research in which
I hold great interest. I will not go into all of them now. Instead, I
look forward to the comments of our guests and the opportunity to ask
them questions later during this hearing.
Introduction of Witness
Senator Cochran. Mr. Gonzalez, we have copies of your
statement and others' statements. We appreciate having those
and they will be printed in the record in full. Please proceed
with any remarks you consider helpful to the subcommittee.
Fiscal Year 1999 Budget Request
Dr. Gonzalez. Thank you, Mr. Chairman. It is a pleasure to
be here with you this morning to talk about the fiscal year
1999 budget request that we have submitted for research,
education, economics, our mission area at USDA, and to
recognize the team of folks that work with me in this
particular mission area. I just would like to begin by
underscoring some of the important points that you made.
We are very much engaged in this conversation in terms of
the importance that we consider this mission area to have at
USDA because of the continuing changing environment out there
in agriculture production and all the systems that support
that. So we are pleased to be here to work with you, and look
forward to continuing the discussion in terms of where we are
going with our budget.
I would also say that, as you indicated, we think that this
is one of the most important mission areas within USDA and
within the Federal agencies, specifically because of the type
of approach that we will take to supporting our agricultural
production systems.
I have been here for just a short time and I wanted to take
a few minutes to talk a little bit about my impressions with
regard to the mission area and the USDA budget. We have begun
the dialog in discussion with a number of our partners
internally to again highlight the importance of what we believe
is this particular mission area with regard to research,
education, economics, and extension.
As you may know, I have a background in agriculture, both
from the production standpoint as well as an educator in
agricultural education and extension for a number of years. So
this particular mission area, as I considered coming to serve
in this capacity, was of particular importance to me, knowing
that the things that we do at REE and within USDA really
provide the basis and foundation for much of the things that
will happen, not only in our current circumstances, but also as
we look forward to identifying the kind of scientific knowledge
and extension programs that will fortify agriculture in the
future.
The combination of fundamental and applied research and
statistics, coupled with the higher education and extension
programs that we have, I believe yield a powerful partnership
that serves agriculture well and will continue to do that. Our
research must continue to be cutting edge that will benefit all
of our citizens. We plan to communicate these objectives that
we have as a part of our strategic plan to everyone, not only
those that are already involved in the food and fiber system,
but all of our clients.
We have an opportunity to draw on the distinct differences
that we have within our four agencies and also on those
similarities as we look forward to supporting the work of the
other agencies within USDA and certainly as we work across
Federal Departments to support the work that is done in other
areas.
REE-funded physical and biological research provides the
scientific foundation for a vast array of advances that are
being made in agriculture and related industries. We are
committed to strengthening those linkages between the basic and
applied research that also serve the broader Governmentwide
research agenda.
REE brings to this larger agenda excellent cutting edge
research that complements similar excellence found elsewhere,
in Government, at colleges and universities, and in the private
sector.
Mr. Chairman, we welcome the opportunity to work with you
and with the administration to promote these linkages through
funding of research directed at broader priorities and
initiatives. Let me emphasize that the budget that we have for
our agencies was created through an ongoing conversation with
many of our stakeholders, both in and out of Government. We
have made an effort, all of us at this table, to go out and
visit with a number of our constituents in the research
community, the producer and commodity groups, the members of
associations that are focused on environmental, food safety,
and nutrition concerns, to gain a better understanding of their
needs.
We are committed to listening and to the extent possible
being responsive to the concerns and recommendations voiced by
our stakeholders. I believe that we have met our responsibility
to formulate a budget that is responsive to those concerns and
interests to the extent possible.
The REE mission area has had to deal with some important
issues and concerns regarding the high priority areas that we
have addressed in this budget request. The REE budget request
for fiscal year 1999 is $1.826 billion, a net decrease of $47
million, or 2.5 percent from the fiscal year 1998 budget.
Within this total, the allocation for research and development
actually increases by $7 million, or about 1 percent.
The REE agency budgets were developed in the context of the
administration's commitment to achieving a balanced budget for
fiscal year 1999 and within that context and taking into
consideration the almost infinite number of worthy goals and
problems REE could address, I believe the budget in total
funding and specific initiatives represents a sound and
balanced portfolio of public investment.
We have had to make difficult decisions to reduce and
redirect resources or terminate valuable projects in order to
fund others of higher priority within those established goals.
I think it is important to reiterate that the return on
public investment in agriculture research and development is
very high. The decline in the percentage of disposable personal
income that we spend on food, sustained over many decades, is
due in large part to the increases in agricultural productivity
resulting from investments in research and development.
Between 1948 and 1994, productivity in U.S. agriculture
grew at an annual rate of 1.9 percent, as compared to 1.1
percent for nonfarm businesses and 1.3 percent for
manufacturing.
High-Priority Initiatives for Fiscal Year 1999
Mr. Chairman and members, I would like to focus on four of
the high-priority initiatives that we have identified in this
budget proposal: food genome, food safety, pest management, and
civil rights. These initiatives are all closely aligned with
the general goals of our strategic plan and contribute to the
achievement of several of those goals.
Food Genome Initiative
Among the major challenges the Nation will face in the 21st
century are the need for increased high-quality food
production, a cleaner environment, and renewable chemical and
energy resources. The President's food genome initiative, a
Governmentwide initiative in which USDA is playing a major
role, will help achieve a safe and abundant food supply, meet
the needs of a growing population worldwide, and ensure global
competitiveness of the U.S. agricultural industries in a more
environmentally sensitive manner.
The food genome strategy will vastly expand our knowledge
of genomes of species of importance to the food and
agricultural sector. REE is carrying out considerable genetic
research, but it does not nearly meet the need. Therefore, as
part of the President's initiative REE is requesting $40
million for food genome research, an increase of $19 million
over the estimated $21 million for fiscal year 1998.
Food Safety Initiative
Food safety is another of the initiatives that is of
importance to us in this particular budget. The administration
has taken major strides to improve our current food safety
systems. The recent implementation of HACCP is radically
changing our meat and poultry inspection systems, which reside
in another of our mission areas. The research proposed in the
fiscal year 1999 budget will bring us farther in generating new
knowledge to identify cost-effective technologies for
prevention and detection of existing and newly emerging
pathogens.
The fiscal year 1999 budget includes a total of $26 million
in increased funding across ARS, CSREES, and ERS. The majority
of the funds will focus on developing improved pathogen
prevention and detection methods and other bioscience research
in both ARS and CSREES. ERS requests funds to better assess the
costs of foodborne illness and to apply economic analysis in
the development of more cost-effective control methods.
Pest Management Initiative
The third initiative is pest management. Producers tell us
that they need the research community to develop the science
and technologies that will allow them to control pests in an
environmentally responsible manner and to meet increasingly
stringent food safety standards while remaining economically
viable.
Last October, in response to these concerns, the Department
established the Office of Pest Management Policy within ARS.
The fiscal year 1999 pest management initiative encompasses
USDA's multiyear integrated pest management initiative that
relates directly to the Department's national goal for the
adoption of IPM practices on 75 percent of U.S. cropland by the
year 2000. The initiative includes increases to support
enhanced research in biocontrol alternatives to pesticides and
new control technologies, as well as transfer of the new
technologies to producers. This is a very important and
critical element in this process.
Civil rights Initiative
The last initiative that I would like to address this
morning is civil rights. In December 1996, Secretary Glickman
launched a major initiative to address the wide range of civil
rights problems and concerns within the Department. The fiscal
year 1999 REE budget for the agencies represents a serious
response to these concerns that were raised by the Secretary,
the USDA Civil Rights Action Team, as well as the National
Commission on Small Farms.
The budget also reflects a recognition that the best future
for agriculture is one that benefits from a diverse and
talented scientific and technological work force. We have
additional details about this particular initiative in our
budget proposals.
These are the highlights of the four initiatives that span
the agencies within REE. Fuller discussion of agency components
of these initiatives can be found in the agencies' explanatory
notes.
Fiscal Year 1999 Proposed Funding Levels
The Agricultural Research Service fiscal year 1999 budget
request of $813 million is slightly lower than the $824 million
for fiscal year 1998. Embedded in that decrease is a net
increase of $32 million in research. Funding for the national
research initiative under CSREES' budget request has increased
by $33 million, to a total of $130 million, an increase of 34
percent. We realize, of course, that within that budget we also
have a decrease of $9 million to a level of $850 million for
the total agency budget.
ERS Budget
The Economic Research Service budget decreases from $72
million to $56 million in fiscal year 1999. ERS conducts
research and analysis on the efficiency, efficacy, and equity
aspects of issues related to agriculture, food safety,
nutrition, and the environment and rural development.
NASS Budget
NASS' budget declines by $11 million due to the cyclical
nature of the required census of agriculture funding.
In summary, I want to reiterate that, in the context of a
balanced budget, the REE budgets reflect a continued strong
commitment to investment in agricultural research, statistics,
education, and extension. If U.S. agriculture is to continue to
be dynamic and provide leadership in a very competitive global
economy and if the American public is to continue to enjoy the
high quality, safe, and nutritious products of agriculture that
you spoke about a few minutes ago, then our national commitment
to increasing the investment in research, education, extension,
must continue.
We want to work closely with you and with the
administration as we continue to increase our investment in
that area, and we look for opportunities to share thoughts and
discussion with you following today's hearings. We would, at
this point, welcome any discussion and questions that you might
have for the REE team.
Thank you, Mr. Chairman.
Prepared Statements
Senator Cochran. Thank you very much, Dr. Gonzalez.
Is it your wish that any of the other members of your panel
make a statement at this point? My thought is we do have copies
of statements.
Dr. Gonzalez. We do have and they have been submitted for
the record. I think what we would be ready to do is answer and
discuss any of the questions that you might have.
[The statements follow:]
Prepared Statement of Dr. I. Miley Gonzalez
Mr. Chairman, Members of the Committee, I am pleased to appear
before you to discuss the fiscal year 1999 budgets for the Research,
Education, and Economics (REE) mission area agencies. I am accompanied
by Acting Deputy Under Secretary, Dr. Eileen Kennedy, and the
Administrators of the four mission area agencies: Dr. Floyd Horn,
Administrator of the Agricultural Research Service (ARS); Dr. Bob
Robinson, Administrator of the Cooperative State Research, Education,
and Extension Service (CSREES); Dr. Susan Offutt, Administrator of the
Economic Research Service (ERS); and Mr. Donald Bay, Administrator of
the National Agricultural Statistics Service (NASS). Each Administrator
has submitted written testimony for the record.
This is the first opportunity I have had to appear before this
subcommittee since being confirmed as Under Secretary last July. Before
we focus on the budget, I would like members of the Subcommittee to
know that your advice is welcomed. We look forward to working with you
to enhance and strengthen the already strong programs of the Research,
Education, and Economics mission area of USDA. I would like to take
just a moment to share with you my impressions of the mission area
programs and where I think they lead us as we consider the REE budget
for fiscal year 1999. I have a background rooted in Agriculture, as a
producer and an educator. Since assuming the responsibilities as Under
Secretary I have come to believe that Research, Education and Economics
is the most critical Federal mission in agriculture because the
continued success of agriculture in the world is dependent on
knowledge. The combination of fundamental and applied research and
statistics coupled with higher education and extension yields a
powerful partnership that serves agriculture well.
The public demands that agriculture provide an affordable,
nutritious, and safe food supply, and in doing so, conserve natural
resources and assure social and economic progress in rural areas. I am
committed to the REE mission area meeting these goals. Our research
must continue to be the cutting edge for the benefit of all Americans.
We plan to communicate these objectives to all Americans and not just
those in the food and fiber sector.
The creation of the REE mission area in 1994 brought together the
research, education, statistics, analysis and social sciences and
captured the synergies across those functions and disciplines. We can
see the fruits of the mission area structure in such diverse program
areas as food safety and Integrated Pest Management (IPM).
Drawing on their distinct and complementary capacities, the REE
agencies play critical roles in supporting the work of the agencies of
other USDA mission areas. REE funded physical and biological research
provides the scientific foundation for a vast array of advances being
made in agriculture and related industries. For example, in 1997 ARS
research resulted in 59 new varieties and 89 new germplasm lines of
agricultural and horticultural crops released for use by farmers,
ranchers, and home gardeners. REE's statistical and analytical programs
enhance understanding of markets and market conditions. Working with
USDA's Rural Development mission area, last year ERS prepared a report
on rural credit which concluded that, in general, rural financial
markets work reasonably well in serving the needs of rural America.
NASS recently assumed responsibility for conducting the Census of
Agriculture that will provide valuable information about farm
operations and the local economies of which they are a part. REE's
education and extension programs work to strengthen the capacity of
institutions serving minorities. CSREES awarded more than $1.4 million
in grants to 13 Hispanic-Serving Institutions in 1997 to carry out
programs needed to educate students capable of enhancing the nation's
food and agricultural scientific and professional work force.
REE is committed to strengthening the linkages between the basic
and applied agriculture research REE conducts and supports and the
broader government-wide and national research agenda. REE brings to
this larger agenda excellent cutting-edge research that complements
similar excellence found elsewhere in government, at colleges and
universities, and in the private sector. We welcome the opportunity to
work with Congress and the Administration to promote these linkages
through funding of research directed at broader priorities and
initiatives.
The President's Food Genome Initiative, for which we are providing
leadership, proposes just such a collaborative effort involving
multiple Federal agencies and researchers in the academic community and
the private sector. Such collaborations I believe, must and will,
become the model that the research community adopts to address
pressing, complex issues. Such approaches are effective and efficient
and create partnerships in which all participants contribute to a
common goal.
Working together, the REE agencies are finding that implementation
of the Government Performance and Results Act of 1993 is providing a
valuable process for enhancing the effectiveness of our programs. Last
fall you received our strategic plans. REE and agency plans were
generally well received, getting particularly high marks for their
outcome-orientation. Last spring when we began work on the budget under
discussion, the mission area used the five general goals common to our
strategic plans to structure our discussion of proposed adjustments and
increases. The process facilitated our looking across the agencies to
see how the parts fit together and how they could be more effectively
coordinated, while maximizing the unique contributions of each agency.
More recently, developing performance plans helped us
systematically consider and describe, in the context of the strategic
plans, what we were committed to accomplishing in fiscal year 1999.
Within a short time you will receive the departmental performance plan
with the four agency performance plans. I believe you will find these
plans valuable in reviewing our current program and assessing our
proposed budget from the outcome-oriented perspective of the five goals
of our strategic plans--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. We welcome your suggestions for making
future plans more useful.
I want to emphasize that the agency budgets were created through
on-going conversations with our many stakeholders in and out of
government. Over the course of the year, all of us at this table and
many others from REE have met with people from the research community,
producer and commodity group representatives, and members of
associations focused on environmental, food safety, and nutrition
concerns, to gain an understanding of their needs and recommendations
as they relate to national needs and our programs. The National
Agricultural Research, Education, Extension, and Economics Advisory
Board, with its very diverse membership, also has provided valuable
recommendations on the REE strategic plan and a draft performance plan,
both of which have implications for the shape and content of these
budgets.
We are committed to listening and, to the extent possible, being
responsive to the concerns and recommendations voiced by our
stakeholders. Clearly, funding constraints do not allow us to be as
responsive to individual stakeholders as they or we might like. In
general, I believe that we have met our responsibility to formulate a
budget that is responsive to the concerns and interests of our diverse
stakeholders. As importantly, it is a clear expression of our judgment
of where the needs for Federal budget resources are the greatest.
ree's fiscal year 1999 budget
I would like to turn now to the fiscal year 1999 budget for the
agencies of the Research, Education, and Economics mission area. First,
I will discuss overall budget issues and then focus on several
important initiatives that address high priority issues and problems.
The REE budget request for fiscal year 1999 is $1.826 billion, a
net decrease of $47 million or 2.5 percent from fiscal year 1998.
Within this total, the allocation for research and development actually
increases by $7 million or about 1 percent. The REE agency budgets were
developed in the context of the Administration's commitment to
achieving a balanced budget in fiscal year 1999. Within that context
and taking into consideration the almost infinite number of worthy
goals and problems REE could address, I believe the budget, in total
funding and specific initiatives, represents a sound and balanced
portfolio of public investments. In developing the budget, we have had
to make difficult decisions to reduce and redirect resources or
terminate valuable projects in order to fund others of higher priority
within the established goals.
I believe it is important to reiterate that the return on public
investment in agricultural research and development is very high. The
decline in the percentage of disposable personal income we spend on
food, sustained over many decades, is due in large part to increases in
agricultural productivity, resulting from investments in research and
development. Between 1948 and 1994 productivity in U. S. agriculture
grew at an annual rate of 1.9 percent compared to 1.1 percent for non-
farm businesses and 1.3 percent for manufacturing. Investments in
research have also resulted in new understanding of the linkages
between agriculture production and environmental conditions leading to
new environmentally friendly production practices and technologies.
Similarly, new discoveries about the ecology of human pathogens has led
to an improved capacity to prevent and detect food-borne contaminants
and to support the development of Hazard Analysis and Critical Control
Point (HACCP) regulations. New understanding of both the nutrient
content of foods and the nutritional needs of people has been central
to our developing healthy dietary guidelines.
ree fiscal year 1999 initiatives
I would like to focus on four high priority initiatives proposed in
the REE agency budgets--the Food Genome, Food Safety, Pest Management
and Civil Rights Initiatives. These initiatives are all closely aligned
with the general goals of our strategic plans and contribute to the
achievement of several goals.
Among the major challenges the nation will face in the 21st century
are the need for increased high quality food production, a cleaner
environment, and renewable chemical and energy resources. The
President's Food Genome Initiative, a government-wide initiative in
which USDA plays a major leadership role, will help achieve a safe and
abundant food supply, meet the needs of a growing population worldwide
and ensure the global competition of the U.S. agricultural industries
in a more environmentally sensitive manner.
The Food Genome Strategy will vastly expand our knowledge of
genomes of species of importance to the food and agricultural sector.
The research will focus on efforts to understand gene structure and
function which is expected to have considerable payoff in crop species
ranging from rice to corn and animal species ranging from cattle to
swine to poultry. Early efforts in the USDA food genomics work will
concentrate on identification of economically important traits that
increase yield, quality and disease resistance in plants, minimize the
need for pesticides, and protect the environment.
The REE mission area has chaired the Interagency Working Group on
Plant Genomics involving the Office of Science and Technology Policy,
the Department of Health and Human Services, the Department of Energy
and the National Science Foundation. In this role, REE brought together
commodity group representatives and leading scientists to solicit their
views. REE is in the final stage of developing a concept paper on
USDA's role in Food Genomics that will provide a blueprint for future
research. The paper will build on the genome research program already
conducted under ARS and CSREES and will describe how the REE program
will complement the food genome program within the National Science
Foundation.
REE is carrying out considerable genetic research but it does not
nearly meet the need. Therefore, as part of the President's initiative
REE is requesting $40 million for food genome research, an increase of
$19 million over an estimated $21 million in the fiscal year 1998
budget. The request would increase ARS's research program by $3.0
million to a total of $14 million. CSREES's would increase $16 million,
with $6 million added to the current $10 million in the National
Research Initiative and an additional $10 million in a new competitive
Food Genome Research Program under proposed legislation.
Food safety is the second initiative I would like to address. Even
though the U. S. food supply is one of the safest in the world,
millions of citizens become ill each year due to foodborne pathogens.
In addition, there is growing concern associated with the consumption
of foods containing known or potentially harmful levels of natural
toxins, such as aflatoxins.
The Administration has taken major strides to improve our current
food safety systems. The recent implementation of HACCP is radically
changing our meat and poultry inspection system. Research proposed in
the fiscal year 1999 budget will bring us further in generating new
knowledge to identify cost-effective technologies for prevention and
detection of existing and newly emerging pathogens.
As part of the President's Food Safety Initiative, REE is currently
co-chairing a National Science and Technology Council working group to
develop a comprehensive and coordinated government-wide food safety
research agenda. This coordinated research agenda, to be completed in
May, should prove valuable in facilitating greater coordination across
the research agencies and guiding the formulation of the fiscal year
2000 budget.
The REE component of the Food Safety Initiative in the fiscal year
1999 budget includes a total of $26 million in increased funding across
ARS, CSREES, and ERS. The majority of the funds will focus on
developing improved pathogen prevention and detection methods and other
bioscience research in ARS and CSREES. ERS requests funds to better
assess the cost of foodborne illness and to apply economic analysis in
the development of more cost effective control methods. CSREES would
also receive funding to expand education efforts for those involved in
the food production system from farm to table.
The third initiative I would like to discuss is pest management.
Effective pest management is an ever present and challenging facet of
agriculture production. Increasing public value placed on environmental
quality and growing public concern about food safety, only heighten the
challenge of effective pest control. Producers tell us they need the
research community to develop the science and technologies that will
allow them to control pests in an environmentally responsible manner
that also meets increasingly stringent food safety standards and is
economically viable. That message is as clear this year as in the past.
Enactment of the Food Quality Protection Act of 1996 (FQPA) adds to the
need for research to develop biological controls and other technologies
and production practices that effectively control pests while
minimizing environmental stress and food contamination.
Last October, in response to this need, the Department established
the Office of Pest Management Policy in ARS. This office will provide a
coordinated Departmental approach to minor crops pesticide use,
including coordinating USDA's response to EPA's data needs as it
implements FQPA. Several of the programs with requested increases in
the ARS and CSREES budgets would be coordinated by this office that is
focusing principally on FQPA related issues.
Another component of the fiscal year 1999 pest management
initiative is USDA's multi-year Integrated Pest Management initiative
that relates directly to the Department's national goal for the
adoption of IPM practices on 75 percent of U.S. cropland by the year
2000. The initiative includes increases to support enhanced research on
biocontrol alternatives to pesticides and new control technologies, as
well as to transfer the new technologies to producers. While
considerable progress has been made in reaching the IPM goal, the gap
between the discoveries made by the scientific community and the
transfer of those discoveries and associated technologies to the
producer is significant. Both the ARS and the CSREES budgets include
funding requests to work with producers to test new technologies and
practices and facilitate their adoption. These increases are critical
to our harvesting the fruits of our investment in research to enhance
environmental quality and food safety through producer adoption of IPM
technologies and practices.
The last initiative I would like to address is civil rights. In
December 1996 Secretary Glickman launched a major initiative to address
a wide range of civil rights problems and concerns in the Department.
The fiscal year 1999 REE agency budgets represent a serious response to
these concerns raised by the Secretary, the USDA Civil Rights Action
Team (CRAT), as well as the National Commission on Small Farms. The
budget also reflects a recognition that the best future for agriculture
is one that benefits from a diverse and talented scientific and
technological work force. With this principle in mind, the CSREES
budget includes increased funding for the 1890 and 1994 Land Grant
colleges and universities that primarily serve minority populations. If
agriculture is to attract those students, it must provide them the best
opportunities to gain the knowledge and experience they need at the
university or college they attend.
The ERS, NASS and CSREES budgets also include requests for
increases that would support new activities that are responsive to the
information and technology needs of historically underserved
populations. The ERS's budget includes a request for funds to analyze
the information needs, particularly market information needs, of small
farms, many of which are disproportionately minority owned.
Complementing this ERS increase, CSREES will initiate an integrated
research, extension, and education competitive grants program for new
technology development and transfer to small farms. Proposed
legislation is being submitted for this new integrated program. The
NASS budget includes funds to collect data on pesticide use in nursery
and greenhouse crops, where farmworker exposure is potentially high.
These budget requests, most of which are part of the Department's Civil
Rights Initiative, reflect a heightened awareness of our obligation to
design and implement programs that are responsive to the needs of all
our customers, including those historically underserved.
These are the highlights of four initiatives that span the agencies
within REE. Fuller discussion of agency components of these initiatives
can be found in the agencies' Explanatory Notes.
ree agency fiscal year 1999 budgets
I would like to turn briefly to the budgets of the four REE
agencies. The Agricultural Research Service (ARS) fiscal year 1999
budget request of $813 million is slightly lower than the $824 million
in fiscal year 1998. Embedded in that decrease is a net increase of $32
million in research, facilitated by a decrease of $43 million in
buildings and facilities improvement funds. The budget also includes
redirection of approximately $35 million in current programs to fund
new high priority program initiatives. 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 developmental research carried out in
many public and private institutions. Drawing on its own and other
fundamental research, ARS also conducts research to solve specific
problems of national and regional importance and to meet the research
needs of other USDA agencies.
The ARS fiscal year 1999 budget includes increases as part of the
President's Human Nutrition Research Initiative. With every passing
day, we learn more about the critical role of nutrition in promoting
health and the number of diet-related diseases that could be mitigated
with good nutrition. It is hard to overestimate the potential payoff to
individuals in improved well-being and to the nation in enhanced
economic productivity if all Americans were to adopt healthy diets. Due
in part to this understanding, questions of nutritional outcomes are
increasingly being integrated in all the ARS research programs. The
increases in fiscal year 1999 funding support both fundamental research
on the relationship of nutrition to development and enhanced data on
nutrient content of foods and dietary patterns. The ARS budget also
includes increases for climate change and Pfiesteria, as part of the
President's Climate Change Technology and Clean Water and Watershed
Initiatives.
The fiscal year 1999 budget proposes $36 million for the ARS
building and facilities program, a decrease of $43 million from the
fiscal year 1998 level. As the Subcommittee knows, the Strategic
Planning Task Force on Research Facilities mandated in the 1996 Farm
Bill has been established and has met several times. The Task Force is
progressing in its work, which will be completed by May 1999 when it
issues a report of its findings. In the meantime, we believe we must
provide support for several projects with critical and immediate needs.
The ARS budget includes a total of $17.7 million in funding for
three of its Regional Research Centers located at Peoria, Philadelphia,
and New Orleans. All three centers are major research facilities built
in the 1930's and need major infrastructure replacement and
modernization. Another $9.1 million is requested for animal disease
centers located at Plum Island, New York, and Ames, Iowa. Current
biosafety and biocontainment standards and regulatory issues relating
to environmental quality and energy conservation, are among many
concerns that indicate both facilities are in very serious need of
modernization. All of these planned renovations, as well as those for
the Beltsville Research Center, the National Agricultural Library, and
Grain Marketing Research Laboratory in Manhattan Kansas, are the
product of careful planning over several years. The increase of $4
million for construction of the Melaleuca Research and Quarantine
Facility at Ft. Lauderdale, Florida, reflects the Administration's
continuing commitment to restoration of the Everglades ecosystem and
was designated by the Administration's South Florida Ecosystem Task
Force as a top priority.
The Cooperative State Research, Education, and Extension Service's
(CSREES) budget decreases by $9 million to $850 million in fiscal year
1999. Funding for the National Research Initiative (NRI), the
Department's hallmark competitive research grants program, is increased
by $33 million to $130 million, an increase of 34 percent. The
Administration continues to believe the competitive research grant
programs, such as the NRI, provide the most effective mechanism for
eliciting and supporting the most meritorious science focused on high
priority research issues and conducted within the vast research
community across the country. The increases in the NRI will emphasize
expanded research in food genomics as part of the Administration's Food
Genome Initiative, food safety in support of the President's
Interagency Food Safety Initiative, and environmental quality. Focusing
the NRI increases on these three areas of investigation indicates the
importance the Administration places on these research programs. In
providing critical funding to the research, education, and extension
programs of the Land Grant Universities and other universities and
organizations across the country, CSREES continues to play a central
role in helping generate new knowledge and technology and in
facilitating the transfer of that knowledge and technology to those who
ultimately use it.
Consistent with the President's commitment to improving our
children's well-being, the fiscal year 1999 budget includes an increase
in CSREES's Children, Youth and Families At Risk (CYFAR) program.
Designed to empower youth, parents, and community leaders to take
responsibility for their own lives and that of their communities, the
additional funding will restore CYFAR to its fiscal year 1995 level.
The Economic Research Service's budget decreases from $72 million
to $56 million in fiscal year 1999. 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. The decreased funding level
reflects the return of the food program studies to the Food and
Nutrition Service. The fiscal year 1999 proposed budget supports new or
enhanced research of $1.5 million on the impact of electric utility
deregulation on rural areas, market information needs of small farms
(as part of the Civil Rights Initiative), and food safety (as a part of
the President's Interagency Food Safety Initiative.)
The National Agricultural Statistics Service (NASS) budget declines
by $11 million due to the cyclical nature of required census of
agriculture funding. With authorization to conduct the census passed
into law, NASS is currently conducting the 1997 Census. Fiscal year
1998 is the peak funding year for this cycle of the census of
agriculture, accounting for the decrease in the proposed fiscal year
1999 NASS budget. All data are collected in this fiscal year. As of
late January, NASS had received approximately 1.2 million completed
forms. The NASS budget includes proposals for three surveys, including
a new aquaculture census that for the first time will provide national
and state level data on aquaculture production.
The new, more market-oriented agriculture policy in the 1996 Farm
Bill makes NASS's statistical data program more essential than ever.
NASS's 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 global market. Annually, NASS prepares 400 reports
on more than 120 crops and 45 livestock items.
summary
In summary, I want to reiterate that, in the context of a balanced
budget, the REE budgets reflect a continued strong commitment to
investment in agricultural research, statistics, education, and
extension. If U.S. agriculture is to continue to be dynamic and provide
leadership in a very competitive global economy, and the American
public is to continue to enjoy the high quality, safe and nutritious
products of agriculture, then our national commitment to increasing the
investment in research, education, and extension must continue. 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 Donald M. Bay
Mr. Chairman and members of the Committee, I appreciate the
opportunity to submit a statement for this Committee's consideration of
the fiscal year 1999 budget request for the National Agricultural
Statistics Service (NASS). This agency was created in 1862 to provide
factual information about the Nation's food and agricultural industry.
Beginning in fiscal year 1997, NASS also has responsibility for the
census of agriculture which was formerly conducted by the Bureau of the
Census in the Department of Commerce.
Since the first crop reports were issued 135 years ago, tremendous
change has taken place within the agricultural industry. However, each
new season brings renewed interest in what will happen. What will
farmers plant given the growing list of crops? How will weather affect
crop yields? What changes are occurring in the livestock, poultry, and
aquaculture industries? The need for relevant, accurate, timely, and
impartial statistical information on United States agriculture has
grown during this information age as NASS is constantly faced with
demands for more data. The transfer of the census of agriculture
certainly enhances the quality and quantity of agricultural statistics
available, as well as further strengthens NASS's State-Federal
partnership.
This State-Federal cooperative program began 80 years ago and has
successfully consolidated both staff and resources, thus eliminating
duplication while meeting both State and Federal data needs through a
single agency. This unique partnership also makes it possible to
establish and maintain national standards to produce consistency in
surveys conducted throughout the United States, while at the same time
meeting the special needs of each individual State and county. Serving
local agricultural data needs through NASS's 45 field offices which
cover all 50 States further strengthens NASS's support of the five
goals and outcomes stated in the Research, Education, and Economics
(REE) mission area strategic plan.
The Nation's food and fiber industry employs one out of every six
employees in the United States. The basic food and fiber statistical
information provided by NASS supports all facets of the industry from
producers through handlers, processors, wholesalers, retailers, and
ultimately, food prices for consumers. Voids in relevant, timely,
accurate data contribute to wasteful inefficiencies throughout the
entire production and marketing system.
NASS estimates provide important information in support of the
export of agricultural commodities. NASS estimates also contribute to
providing fair markets where buyers and sellers alike have access to
the same official statistics. This prevents markets from overly
reacting to ``inside'' information which might unfairly influence
market price for the gain of an individual market participant.
With the passage of the Federal Agriculture Improvement and Reform
Act of 1996, a question might be asked as to how this legislation
affects the NASS program. The first crop report was issued in 1842 in
response to the need for producers and processors to know the expected
supply of basic food commodities so that markets could properly reflect
the true situation throughout the country. Today, with the end of most
government price intervention mechanisms, commodity prices are even
more heavily influenced by market information which NASS supplies. For
that reason, the demand for agricultural statistics is increasing as
producers make production decisions based solely on market information.
Empirical evidence indicates that an increase in information improves
the efficiency of commodity markets. Information on the competitiveness
of our Nation's agricultural industry will become increasingly
important as producers rely more on the world market for their income.
NASS's agricultural statistics are used throughout the agricultural
sector to evaluate supplies and determine competitive prices for world
marketing of U.S. commodities, which directly supports Goal 1 of the
REE Strategic Plan: Through research and education, empower the
agricultural system with knowledge that will improve domestic
production, processing, and marketing to successfully compete in the
global market.
Through new technology, the products produced in the United States
are changing rapidly, which also means that the agricultural statistics
program must be dynamic and able to respond to the demand for coverage
of newly emerging products. For example, genetic engineering technology
will be producing thousands of new varieties such as BT corn and
cotton, and Roundup ready soybeans. Data users are already requesting
information which would accurately measure the impact of these new
varieties.
Not only are NASS statistical reports important to assess the
current supply and demand of agricultural commodities, but they are
also extremely valuable to farm organizations, commodity groups, and
public officials who analyze agricultural policy, foreign trade,
construction, and environmental programs, research, rural development,
and many other activities. NASS numbers are scrutinized very closely by
producers, agribusinesses, industry analysts, economists, investors, as
well as government policy makers. As a result of this analysis, major
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 as periodic printed
reports, as well as on the Internet. They are also available annually
in USDA's Agricultural Statistics, and major data series are available
in the Statistical Abstract of the United States.
Beginning in fiscal year 1997, NASS received funding to conduct the
census of agriculture every 5 years, On February 2, 1997, 68 of the 79
Bureau of the Census employees working on the census of agriculture
program officially transferred to NASS. This makes it possible to truly
consolidate the existing NASS survey activities with the census of
agriculture. The transfer of the responsibility for the census of
agriculture to USDA streamlines Federal agricultural data collection
activities and is expected to improve the efficiency, timeliness, and
quality of data provided. The enactment of Public Law 105-113, the
Census of Agriculture Act of 1997, has now officially transferred the
authority for the census to USDA.
Statistical research is conducted to improve methods and techniques
used in collecting and processing agricultural data. This research is
directed toward providing higher quality census and survey data with
less burden to respondents, producing more accurate and timely
estimates to data users, and increasing the efficiency of the entire
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 new 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. Considerable new
research will be directed at improving the next census of agriculture
to be conducted in 2003.
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 on a cost-reimbursable
basis.
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 crops, livestock, prices, and other agricultural activities each
year. Periodic surveys are conducted during the growing season to
measure the impact weather, pests, and other factors have on crop
production. Frequent surveys are also needed for 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; farm real
estate values and land rental rates; prices paid by farmers for inputs
and services; cold storage supplies; agricultural labor and wage rates;
agricultural chemical usage; crop production cultural practices; and
other data related to the agricultural economy.
The census of agriculture provides national, State, and county data
for the United States on the agricultural economy every 5 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 helps
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 local detailed data provided by the census of
agriculture which facilitates locality-based policy and business
decisions supports Goal 5 of the REE mission area Strategic Plan:
Empower people and communities, through research-based information and
education, to address the economic and social problems facing our
youth, families, and communities.
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 different 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 situation with apples.
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 productivity and 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. NASS's pesticide use
survey program supports both Goals 2 and 4 of the REE Strategic Plan
which relate to ensuring an adequate food and fiber supply and the
promotion of food safety, and enhancing the quality of the environment.
NASS conducts a number of special surveys as well as 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 135 special surveys in fiscal year 1997 covering
a wide range of issues such as farm injury, nursery and horticulture,
farm finance, fruits and nuts, vegetables, and cropping practices.
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. This past year, NASS provided assistance to Argentina,
Bulgaria, China, Colombia, Dominican Republic, Ethiopia, Kazakhstan,
Mexico, Morocco, Nicaragua, Poland, Rumania, Russia, South Africa, and
Ukraine.
NASS annually seeks input on improvements and priorities from the
public through: displays at major commodity meetings, 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 customers and
stakeholders.
fiscal year 1999 plans
The fiscal year 1999 budget request is for $107,190,000. This is a
net decrease of $11,130,222 from the fiscal year 1998 current estimate.
The census of agriculture budget request for $23,741,000 includes a
net decrease of $12,586,000. This amount reflects a reduction of
$13,328,000 due to the cyclical nature of the census. The $23,741,000
includes the aquaculture census, the Agricultural Economics and Land
Ownership Survey, census pay costs, and the census share of increased
CSRS retirement costs. Fiscal year 1999 is the fifth and final year of
the census of agriculture cycle. Activities in this year include final
review of the census data, preparation of results for publication, and
conduct of the horticultural specialties and irrigation special follow-
on studies.
For fiscal year 1999, NASS has requested a 1-year increase of
$500,000 and 2 staff-years to conduct an aquaculture census. This would
provide, for the first time, detailed State and national data about
aquaculture production. Aquaculture is a fast emerging domestic
industry responding to the expanding demand for seafood. The
aquaculture census would collect data on type of production systems,
type of products sold, species being raised such as food fish, shell
fish, bait fish, oysters, clams, salmon, catfish, trout, fish eggs,
fingerlings, and ornamental fish.
An increase of $100,000 and 1 staff-year is requested for 1999 to
do the preparatory work needed to conduct the Agricultural Economics
and Land Ownership Survey. This special survey was begun following the
1959 Census of Agriculture and has been repeated at about 10-year
intervals. It provides the only State-level comprehensive data on
agricultural land ownership, financing, and inputs by both farm
operators and landlords. The fiscal year 1999 funding would provide for
field testing an integrated program that eliminates duplication with
the joint NASS/Economic Research Service's annual economic survey.
An increase of $1,400,000 and 10 staff-years is requested to
conduct a pesticide use survey of the horticulture and greenhouse
industries. NASS has successfully implemented comprehensive pesticide-
use surveys that cover the major field crops, fruits, and vegetables
grown in the United States. However, such data are lacking for the fast
growing nursery and greenhouse industry. This industry, like the fruit
and vegetable industry, employs a large number of hired workers.
Therefore, it is especially important that this growing industry be
included in the comprehensive reports on pesticide use as required
under Section 1491 of the 1990 Farm Bill. Collection of these pesticide
use statistics also supports a recommendation included in USDA's Civil
Rights Action Team Report that addresses the needs of farm workers.
An increase of $1,435,000 for pay costs and $390,300 for retirement
costs is requested.
NASS is realizing a decrease of $1,463,000 and 17 staff-years as a
result of efficiencies in the agricultural estimates and research
programs gained in assuming responsibility for the census of
agriculture. This reduction reflects efficiencies which will be
realized in the agricultural estimates program as a result of the
census of agriculture. Efficiencies will be realized in the NASS annual
estimates program in the areas of list frame development and
maintenance, data collection, and data dissemination activities.
This concludes my statement, Mr. Chairman, and I will be happy to
respond to any questions.
______
Prepared Statement of Dr. Floyd P. Horn
Mr. Chairman and Members of the Subcommittee, I appreciate this
opportunity to present the Agricultural Research Service's budget
recommendations for fiscal year 1999. I would like to state at the
outset that I am very pleased with the research proposals in this
budget and the research initiatives recommended by the Administration.
They are directed at some of this Nation's most serious problems
involving food safety, human health, agricultural productivity, and the
environment.
In fact, because of their importance to the Nation, the
Administration has endorsed several of ARS' proposed research thrusts
as ``Presidential Initiatives,'' in food safety, human nutrition, and
environmental health.
I would now like to turn to our budget recommendations for fiscal
year 1999.
fiscal year 1999 budget estimates
The ARS fiscal year 1999 budget recommends a research funding level
of $776,828,000. This represents an increase of $32,037,000 over the
fiscal year 1998 appropriations level. The fiscal year 1999 budget
reflects funding increases for several new and expanded research
initiatives as well as resources to finance critical operating costs.
It also includes terminations of a number of selected research projects
totaling $35 million to provide resources to finance the new research
which is necessary to address the Nation's changing agricultural needs.
new and expanded research initiatives
The budget proposes $51,220,000 for new and expanded research
initiatives to meet critical health and safety, nutrition, economic and
environmental issues as follows:
Food Safety.--On January 25, 1997, the President announced a
National Food Safety Initiative. As part of a multi-agency food safety
program ARS is recommending an increase of $13,970,000 for pre- and
post-harvest food safety. Food safety is a major concern of American
consumers and remains a top priority of ARS. The Department is
committed to ensuring the safety of our food supply.
The proposed increases in pre-harvest food safety will be used to
develop new disinfection methods for improved sanitation of animal
production facilities and waste handling systems. The recommended
increases will also be used to develop new technology which will reduce
the growth of pathogens on livestock and poultry during transport.
Post-harvest operations of slaughtering and processing can be a
source of pathogen contamination of meat and poultry products.
Similarly, pathogen contamination can occur during the processing of
fruits and vegetables. In the area of post-harvest food safety, ARS is
recommending additional research to develop: new handling systems and
pathogen decontamination technologies for use in conjunction with
packaging, storing, and processing fresh fruits and vegetables;
chemical and physical agents to control pathogens (such as Salmonella
and E. coli 0157:H7) in fresh produce; alternatives to heat-based
preservation technologies that will preserve the fresh qualities of
fruits and vegetables.
Human Nutrition.--For the second year increases are proposed for a
Human Nutrition Initiative. What and how much people eat affects how
they grow, develop, and age. Dietary intake is linked to risks for
development of a variety of common, chronic diseases that are disabling
and life threatening. For diseases linked strongly to diet, the cost of
medical treatment and care exceeds $200 billion per year.
ARS is recommending an increase of $10,500,000 in human nutrition
research. As part of the Initiative on Human Nutrition, the proposed
increases will be used toward developing the means for promoting
optimum health and well-being. Specifically, research will be conducted
on the effects of diet on the immune system; the dietary patterns of
human performance; and the role of nutrition throughout the life cycle
(e.g., the relationship between diet and bone growth and cognitive and
neurological development; the nutritional requirements that are needed
to delay the onset of diseases associated with aging; and the factors
that lead to obesity in children). The proposed increases will also be
used to update the National Nutrient Databank, a database of the
nutrient content of foods. Congress provided $5 million in 1998 for the
Continuing Survey of Food Intakes by Infants and Children (CSFII). The
budget proposes to redirect $3.5 million of this 1998 CSFII funding to
other fundamental diet, nutrition, and nutrition-related disease
research. In addition, $1.5 million would be used to expand the CSFII
to increase the sampling size necessary to include population groups
requiring special attention as EPA implements the Food Quality
Protection Act of 1996.
Environmental Quality and Natural Resources.--The preservation of
the Nation's natural resources has become increasingly critical.
Because of its importance, ARS is recommending a total increase of
$17,250,000 which supports several areas of research emphases.
Of the total recommended increase, $7,000,000 is targeted toward
the President's Climate Change Technology Initiative. ARS's role in the
initiative is directed at agricultural greenhouse gas emissions and the
use of biomass for energy. The proposed increases will be used to
identify and mitigate sources of greenhouse gas emissions, and to
further develop plant feedstocks for biofuels.
In addition, $3,500,000 is proposed for research which will provide
new information on pest biology, the impacts of pest control strategies
on crop and animal production systems, and pest control technologies
which provide additional safety and effectiveness while providing
increased protection to the natural environment. The technologies which
will be developed will provide the basic pest control components for
implementing effective and sustainable Integrated Pest Management (IPM)
programs. Part of this proposed increase will be used to establish the
Office of Pest Management Policy which will serve as USDA's focal point
for pesticide issues.
ARS is recommending $2,000,000 of additional funding to augment
existing resources to accelerate efforts to find alternative solutions
to methyl bromide. Grower groups will work with ARS to develop the
priorities for a competitively awarded program focused on crops or uses
most threatened by the loss of methyl bromide.
ARS is also recommending an increase of $2,000,000 for research on
waste management problems associated with large animal production
systems. The proposed increases will be used to address manure
management, and animal well-being and behavior in confined animal
production systems.
An increase of $2,000,000 is proposed for research on Pfiesteria as
part of the President's Clean Water and Watershed Restoration
Initiative. The recent outbreaks of Pfiesteria in the Chesapeake Bay
tributaries have focused public attention on the potential role of
agriculture in the degradation of these waters. The proposed funding
will be used to develop new management practices to reduce the movement
of nutrients and pathogens to surface and ground waters, and new
methods for handling, storage, and field application of manure.
Technologies will also be developed to detect and identify Pfiesteria,
and to determine whether fish or shellfish affected with Pfiesteria are
safe for human consumption, rendering, or other processing for use in
livestock and poultry feed.
Finally, ARS is recommending an increase of $750,000 for research
in support of the South Florida Ecosystem Restoration. ARS is
requesting funds to accelerate research to resolve the ecological,
hydrological, and agricultural constraints on sustainable production in
South Florida, and to develop biological control agents that control
Melaleuca and other exotic or invasive plant species in the Everglades
National Park.
Emerging Infectious Diseases.--During the past ten years, emerging
and reemerging infectious diseases and exotic pests have become a major
health concern. The globalization of trade, increased international
travel, changing weather patterns, uncontrolled population growth of
cities, highly intensive agriculture, and changes in farm practices are
responsible. Once introduced, exotic (non-native) organisms can explode
into epidemic proportions due to the absence of natural control agents
and lack of resistance by host animals.
ARS is recommending an increase of $6,000,000 for this important
research. Of this proposed increase, $3,700,000 will be used to develop
diagnostic tests, novel genetic vaccines, and immune strategies to
prevent outbreaks and the spread of exotic animal diseases (e.g.,
Johne's disease, Babesiosis, Vesicular Stomatitis, Bovine Spongiform
Encephalopathy, Porcine Reproductive Respiratory Syndrome, Avian
Influenza, and Anaplasmosis. Research will also be conducted on the
development of technologies to protect livestock and humans against
zoonotic diseases (e.g., tuberculosis, brucellosis, toxoplasmosis,
trichinosis, and cryptosporidiosis).
The remaining $2,300,000 will be directed at preventing the
introduction of emerging plant diseases and pests. Invasive, noxious,
and weedy plants are a serious problem in the U.S. that annually cause
billions of dollars in damages to the agricultural, recreational, and
tourist industries. Research will be conducted to develop new
strategies to combat wheat scab, karnal bunt, salt cedar, and sorghum
ergot. In addition, the means to rear large numbers of new insect
biological control agents will be developed. Remote sensing technology
will also be developed to identify new or expanding weed infestations.
Food Genome Research.--ARS is recommending an increase of
$3,500,000 in support of the Food Genome Initiative and the
preservation of genetic resources which are necessary to ensure that an
adequate supply of food and fiber will be available at a reasonable
cost in the future. The investigations will focus on agriculturally-
important crops and livestock and their associated microbes.
Specifically, the proposed increases will be used to map genomes of
agriculturally important plants, animals, and microbes to advance
breeding programs. Research in this area will contribute to food
production efficiencies and ensure the continued availability of
genetically diverse collections of plant and animal germplasm.
Essentially, all the crops and livestock raised and used for food,
fiber, ornamentals, and industrial feed stocks originated outside the
United States, so the system of renewable resource production is highly
dependent on germplasm introduced from other countries, some of which
is endangered. Once lost, the germplasm cannot be fully reconstructed,
so that sources of productive capacity and efficiency, and resistance
to pests, pathogens, and environmental stress may be lost forever. A
major and growing problem is the loss or ``narrowness'' of the gene
pools of crop and livestock species.
ARS is also requesting the restoration of $913,000 for Evaluation
Studies. These investigations provide a basis for policy and funding
decisions in support of the mission area's research, education and
economics programs.
ARS is also recommending $14,498,000 to finance the anticipated
Federal pay raises and Civil Service Retirement System costs. These
funds are critical to the ongoing operations of the Agency.
project terminations
The fiscal year 1999 Budget recommends $34,594,000 of reductions in
base programs, consisting of fiscal year 1998 proposed project
terminations restored in the 1998 Act, as well as Congressionally-added
projects. The ongoing projects that have been identified for
termination have been deemed less critical to continue in light of
higher priority research needs and limited resources. The savings
achieved will be redirected to finance the agricultural research
initiatives recommended in the President's budget.
building and facilities
The modernization and replacement of ARS' major research centers
and laboratories remains one of the Agency's highest priorities.
Continuing with the renovation and replacement of the Agency's research
facilities is critical if ARS is going to fulfill its mission and carry
out its programs.
In fiscal year 1999, ARS recommends under its Building and
Facilities account a total of $35,900,000 for the following projects:
Beltsville Agricultural Research Center, Beltsville, Maryland.--
Established in 1910, the Center is widely recognized as one of the
largest agricultural research facilities in the world. The Center
carries out programs in natural resources and environmental sciences,
plant and animal productivity, post-harvest research, and human
nutrition. ARS is requesting $2,500,000 to continue the modernization
of the Center's facilities which began in 1988. Specifically, the funds
would be used for the design and construction of a new poultry
production facility as well as finance a number of miscellaneous small
projects.
National Agricultural Library, Beltsville, Maryland.--Built in
1968, NAL is the largest agricultural library in the world and one of
four national libraries. NAL houses a collection of more than 2.2
million volumes in 50 different languages. In 1991, a comprehensive
facility condition study of NAL was conducted. Numerous mechanical,
electrical, and architectural deficiencies were identified. In fiscal
year 1999, ARS is requesting $1,200,000 to begin construction of the
first phase of the air handling unit replacement.
National Animal Disease Center, Ames, Iowa.--The Center is the
primary USDA facility for conducting research on animal diseases that
are of economic importance to U.S. agriculture. Constructed in 1961,
the facilities are antiquated and in need of modernization. ARS is
requesting $5,600,000 to initiate rehabilitation of the 80 buildings
and supporting infrastructure of the Center. In fiscal year 1999, the
funds would be used for design and construction plans for repair
projects, including the repair of the contaminated waste collection
piping system and treatment plant for infectious agents.
ARS Regional Research Centers, Peoria, Illinois; Philadelphia,
Pennsylvania; and New Orleans, Louisiana.--The regional research
centers were constructed in the late 1930's. All major building
systems--heating, ventilation, air conditioning, electrical, roofs, and
infrastructures (i.e., paving, steam and water lines, and waste
treatment disposal systems)--have either reached or passed their useful
life expectancy. ARS is requesting $8,400,000 for its Center in Peoria.
The funds will be used to continue the modernization program.
Similarly, ARS is requesting $3,300,000 and $6,000,000 for
modernization programs at the Philadelphia and New Orleans Regional
Research Centers, respectively.
Grain Marketing and Production Research Center, Manhattan,
Kansas.--The Center conducts research on a broad range of technical
problems in domestic and international marketing, handling, and storage
of grains. In 1990, a facility condition study identified numerous
deficiencies in all of the Center's buildings. ARS is requesting in
fiscal year 1999, $1,400,000 to continue with the renovation program.
Plum Island Animal Disease Center, Greenport, New York.--Plum
Island conducts state-of-the-art research on foreign animal diseases
which are an ongoing threat to the U.S. It is the only facility in the
Nation authorized by Congress to carry out such research. In 1989, ARS
developed a long range plan for the repair and maintenance of the
Center's 23 buildings and supporting infrastructure. In fiscal year
1999, ARS is requesting $3,500,000 to continue with the phased plan to
renovate and modernize the Center.
Melaleuca Research and Quarantine Facility, Ft. Lauderdale,
Florida.--The exotic weed tree Melaleuca, introduced in the 1930's, now
covers tens of thousands of acres of South Florida's fragile wetlands.
Melaleuca can be controlled with the aid of biological control agents
from Australia. ARS is proposing $4,000,000 for the construction of a
Melaleuca research and quarantine facility in support of this research.
Construction of this facility has been designated by the
Administration's South Florida Ecosystem Restoration Task Force as one
of its highest priorities to ensure the restoration of the Everglades
National Park.
closing remarks
ARS' challenge is to bring the most advanced research and
technologies to bear on some of this Nation's most recent and difficult
problems, in food safety and health, human nutrition, agricultural
productivity and the environment. In a larger sense, its challenge is
to continue solving problems for agriculture, its producers and
consumers, and meet the food and fiber requirements of a growing
population in a way that is safer, more efficient, and more nutritious.
ARS has completed a 2\1/2\ year long process of developing a new
Strategic Plan that embodies the spirit and letter of the Government
Performance and Results Act of 1993. The new plan focuses on the
outcomes of the Agency's research activities, organized around the five
broad goals identified in the Strategic Plan of the Research,
Education, and Economics mission area. The new strategic plan went into
effect on October 1, 1997, and the Agency developed its first Annual
Performance Plan, as required by GPRA. The Annual Performance Plan
describes what ARS will accomplish in fiscal year 1998 and fiscal year
1999 in measurable terms that will demonstrate progress towards
reaching the Agency's goals.
Mr. Chairman, this concludes my prepared remarks. I will be happy
to answer any questions you may have.
______
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 1999 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
ERS's appropriation for 1998 of $71.6 million consists of the 1997
appropriation level ($53.1 million) and an increase of $18.5 million to
evaluate food stamp, child nutrition, and WIC programs. ERS continues
implementation of its streamlining strategy and plans to maintain staff
in 1998 at its current level of 554 full-time equivalents. ERS
continues to make full use of early-out and buy-out authorities. Since
October 1993, the ERS staff has been reduced by 241 full-time
equivalents, including reductions in 1998 through 19 buyouts. In the
future, ERS must manage its staff levels to maintain its non-salary
program of agricultural data purchases and cooperative university
research necessary to support its analytical program.
The agency's request for 1999 is $55.8 million, a net decrease of
$15.8 million over 1998. The decrease consists of five parts: a $1.3
million increase for pay raises and contributions to the CSRS
retirement fund; a $0.9 million increase for estimating the benefits of
food safety; a $0.3 million increase to meet the analytical information
needs of small farmers, niche marketers, other casualties of an
industrializing agricultural sector; a $0.2 million increase to assess
the potential impacts of electric utility deregulation; and an $18.5
million decrease for evaluations of food stamp, child nutrition, and
WIC programs. When he signed the Agriculture Appropriations bill, the
President stated that, ``I am concerned about the provision of this
bill that alters the administration and funding for research on
nutrition programs serving the poor and disadvantaged. The research
needs of these important programs should continue to be addressed in
the context of the programs' administration.'' This budget follows
through on these concerns and restores funding for WIC, Food Stamps,
and Child Nutrition research to the Food and Nutrition Service.
Food Safety.--ERS proposes an interagency research effort to
strengthen our understanding of the costs of foodborne illness and the
benefits and costs of programs and policies to improve the safety of
the Nation's food supply. This initiative is designed in accordance
with the President's Food Safety Initiative, and is based on activities
underway as part of this initiative.
National Estimates of Foodborne Illness and their Economic Costs
from Sentinel Site Survey Data.--The initiative includes funding for
eight regional data collection efforts. We will work with staff of the
Centers for Disease Control and Prevention to develop new estimates of
the national incidence of foodborne disease, the distribution of
illness among subpopulations, and morbidity and mortality rates for
specific illnesses. We will use these new data to refine our estimates
of the costs of illness from specific foodborne diseases, to narrow the
confidence intervals for specific cost-of-illness measures, and to
evaluate the distribution of these costs among subpopulations.
Risk/Benefit Assessment of Pathogen Control Options.--The
initiative also includes funding for expanded risk assessment. To
perform benefit/cost analysis of control options for improving food
safety, economists need data from other scientific disciplines. The
best way to further this multidisciplinary exchange is to set up a
formal collaboration among groups of scientists. Economists from ERS
will work with scientists from other USDA agencies, FDA, CDC and
academia to bring a systems view to their analyses of options for
pathogen control from farm to table. The goal is to provide economic
analysis of pathogen control options to determine which controls are
most cost-beneficial. Application of risk modeling to food safety is a
new field. Risk assessment models (such as fault-tree analysis and
probabilistic-scenario analysis) could be used to identify where
pathogens gain entry into the food chain and where control efforts
would be most cost-effective. By incorporating the results of risk
assessment in our economic analysis of pathogen control options, we
will further enhance our understanding of the economic consequences of
specific food safety policies (such as HACCP, safe handling labels, and
consumer education).
Completion of activities outlined in this initiative will yield
improved economic assessment of policies and programs designed to
improve the safety of the Nation's food supply. This will result in
improved economic performance of the food sector, as the costs of
achieving food safety goals and the attendant economic burden on
farmers, processors, distributors, and retailers are minimized. This
will also result in increased cost savings to consumers and the general
economy as the research results are used to maximize the public health
benefits of public and private efforts to improve food safety.
Information Needs of Small Farmers.--ERS proposes to organize and
lead an interagency research activity to comprehensively assess the
USDA's role in providing analytically based information on agricultural
markets to small, limited-resource, and socially disadvantaged farmers,
in the context of an interagency market information program.
Specifically, the study will determine: (a) whether and how the
agricultural market information needs of domestic producers and
marketers vary by scale of operation, organizational structure, or
demographics; (b) whether, given this new knowledge, it appears that
USDA market information programs provide information that meets some
subgroups' needs better or worse than others, and if any revealed
differentiation in service is warranted; (c) the extent to which
private sector analytical and information services do or can serve
various subgroups' needs for market information; and (d) whether and,
if so, in what manner ERS and other USDA agricultural market
information programs require reform or modification to accommodate the
new public sector role in a modern agricultural economy. Subsequently,
plans would be designed and implemented to reform and/or modify these
programs in the manner suggested by the assessment.
In 1996 and 1997, ERS conducted a general assessment of the market
for agricultural market information. While this study examined the use
and value of information across several broad categories of public and
private sector clientele, resources have not been available to conduct
sampling to assess how utility and value might vary within groups as a
function of size, economic class, or other features. Additional
resources are a necessary prerequisite for any assessment aimed at
segmenting the information client population to assure public service
to unique and potentially underserved subgroups (e.g., small or
disadvantaged farms, direct marketing firms, independent firms in
otherwise highly coordinated industries, etc.).
The proposed effort will be planned by ERS, with input from an
advisory group representing CSREES, WAOB, OCE, AMS, FSA, and FAS. ERS
will perform the market research needed to assess the performance of
its own and USDA's agricultural market information programs, with focus
on the nature of the information generated and its utility to clients
of different sorts, sizes, economic classes, and demographic
characteristics. Following market data collection, analysis, and
interpretation, the full set of agencies producing agricultural market
information will need to be involved directly in the implementation of
resultant recommendations.
By providing a sound understanding of how commodity market
information needs vary among different sizes and types of agricultural
producers and marketers, the study will assure that USDA's commodity
market information programs are nondiscriminatory with respect to
producers' and marketers' scales of operation, income brackets, races
or ethnicities, and geographic locations (for locations characterized
by small or disadvantaged enterprises). It will prevent small, niche,
limited-resource and socially disadvantaged clients from ``falling
through the cracks'' as commodity market information programs respond
to the changing structure of American agriculture. It will thus allow
these producers and marketers to be competitive by assuring them easy
access to scale-appropriate, market-empowering information, regardless
of their disassociation with large, integrated, or vertically
coordinated markets where information is otherwise more readily
available or affordable. This, in turn, assures a more robustly
competitive sector overall. Without the study, attempts to accomplish
these results would have to rely on anecdotes and supposition. With it,
USDA will be armed with the knowledge required to ensure information-
related competitiveness for small and disadvantaged, along with large
and advantaged, market participants, as the American agricultural
sector continues its divergent path towards a small number of large,
highly commercial operations, and a large number of small and diverse
operations.
Electric Utility Deregulation.--ERS proposes an interagency
research activity with USDA's Rural Utilities Service (RUS) and the
Department of Energy to expand REE's capacity to assess the potential
impacts of electric utility deregulation on USDA's rural utility loan
programs, the competitive position of rural businesses and communities,
the viability of alternative power generation systems, and the well-
being of rural customers.
ERS has considerable expertise and data available on rural
industries, households, and communities, and has experience developing
economic models and policy analysis on a wide range of issues. However,
ERS currently lacks expertise and information on the electric utility
industry sufficient to model deregulation's effects on rural utility
customers in various regions of the country. With an expanded program,
ERS and its cooperators will be able to assess the potential impacts of
deregulation on USDA's rural utility loan programs, the competitiveness
of rural businesses and communities, and rural households.
The products of this research will enable RUS to better evaluate
the likely effects of electric utility deregulation on the financial
health of rural electric cooperatives, and, as a result, the
prospective quality of the RUS loan and loan guarantee portfolio. The
products of this research also will provide USDA with important
information about the prospective effects of electric utility
deregulation on farmer electric costs, electric costs for consumers in
rural America, and on rural economic development. This information will
be available to support the work of RUS and USDA as they participate in
developing Administration policy on electric deregulation.
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 four
divisions and an Office of Energy. 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 contributions to mission area goals
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. ERS will continue to 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 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. This research helps government
officials design more efficient and cost-effective approaches to
promote food safety. Specifically, the ERS research program provides
detailed and up-to-date appraisals of the benefits of safer food, such
as reducing medical costs and costs of productivity losses from
foodborne illnesses caused by microbial pathogens. In addition, ERS has
undertaken new research on the costs to industry and consumers of
alternative food safety policies, including assessment of the
distribution of costs across the food industry and across demographic
groups.
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 systematically examines 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 studies 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 considers 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 energy and environment area, the ERS Office of
Energy provides departmental leadership, oversight, coordination, and
evaluation for energy and energy-related policies and programs
affecting agriculture and rural America.
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. ERS 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, including the fairly widespread rebound in
population growth in non-metropolitan counties. The relevant analyses
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.
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 Dr. B.H. Robinson
Mr. Chairman and Members of the Committee, I appreciate the
opportunity to present the proposed fiscal year 1999 budget for the
Cooperative State Research, Education, and Extension Service (CSREES),
one of four agencies in the Research, Education, and Economics (REE)
mission area of USDA.
CSREES provides leadership for and cultivates partnerships in
research and education among USDA, the land-grant university system,
and other research and education institutions.
CSREES advances and integrates agricultural research and education
through our partnership with the land-grant universities. In this
partnership, 75 universities work in close cooperation with CSREES,
employing more than 9,500 scientists, 9,600 extension educators, and
engaging nearly 3 million volunteers supporting activities in the 50
states (3,150 counties), the District of Columbia, and six territories
(Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern
Marianas, and Micronesia). The scientific and education resource base
of the 1890 Historically Black and the 1862 land-grant universities is
expanded through the participation of scientists and educators from the
29 Native American land-grant institutions, and from non-land-grant
institutions and the private sector.
The programs supported by CSREES and carried out through our
university partners play a central role in meeting what I believe to be
two fundamental challenges facing agriculture today. The first
challenge is to achieve long-term sustainability in agricultural
production while simultaneously maintaining competitiveness and
profitability, minimizing negative environmental effects, and
developing and improving strong communities. The second challenge is to
respond to broad public concerns for a safe, nutritious, and accessible
food supply.
To meet these challenges, our programs reflect the five Strategic
Goals to which the REE mission area is committed: (1) an agricultural
production 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 are the framework for the CSREES Strategic
Plan, the fiscal year 1999 GPRA performance plan and, of course, the
fiscal year 1999 President's budget request for CSREES.
I would like to present several examples of outstanding research,
education, and extension accomplishments resulting from support
provided through our programs as they relate to the five REE/CSREES
Strategic Goals. I believe that these ``success stories'' clearly show
that the activities conducted by the land-grant university system and
other partner institutions significantly contribute to the ability of
U.S. agriculture to maintain its worldclass competitive edge. The
Committee may be interested to know that CSREES and its university
partners are collaborating on the development of a World Wide Web site
that contains impact statements to showcase how programs supported by
the USDA/land-grant university partnership benefit U.S. agricultural
research and education; this site is available for public access at
http://www.reeusda.gov/success/impact.htm. Although many activities
conducted by our partners contribute to multiple goals, the following
examples are aligned under the Strategic Goals to which they make the
most significant contribution:
Goal 1: An Agricultural Production System that is Highly Competitive in
the Global Economy
In cattle, 30-40 percent of pregnancies are lost during the first
40 days of gestation. Research supported by the National Research
Initiative and conducted at the University of Missouri and Texas A&M
University has identified a protein, interferon-tau, which is produced
by the developing embryo prior to implantation and acts as a
biochemical signal to the mother's uterus to establish pregnancy in
cattle and sheep. This protein, when given to nonpregnant cattle or
sheep, extended the length of their reproductive cycle. Current studies
are focusing on the potential use of the protein as a fertility drug to
minimize early embryonic losses associated with insufficient production
of the protein.
Goal 2: A Safe and Secure Food and Fiber System
Funding provided under the Smith-Lever 3(d) Food Quality and Safety
program was used to develop and sponsor two National HACCP (Hazard
Analysis and Critical Control Point) Education Conferences on ``Forming
Partnerships from Farm to Table.'' The conferences were designed to
build and enhance partnerships among government, academia, industry,
and consumers, and brought together state core teams who received
training and education enabling them to develop and implement state
planning strategies for HACCP training. Conference planning and
coordination was a cooperative effort between Texas A&M University,
Virginia Polytechnic Institute and State University, and Kansas State
University.
Goal 3: Healthy, Well-Nourished Population
The nutritional status of participants in a program supported by
Smith-Lever 3(d) Expanded Food and Nutrition Education Program (EFNEP)
has improved due to intensive nutrition education instruction from the
University of Massachusetts Extension Nutrition Educators. A behavior
survey of more than 2,500 EFNEP participants indicated that behavior
changes included: a 57 percent increase in recommended fruit
consumption, a 34 percent increase in vegetable consumption, and 47
percent increase in the consumption of foods to meet the Recommended
Daily Allowance for vitamin C. Improved nutrition practices resulting
from this Massachusetts program included preparing foods without salt,
reading nutrition labels for fat and sodium content, and ensuring that
children eat breakfast.
Goal 4: Greater Harmony Between Agriculture and the Environment
An early project awarded under the USDA Food and Agricultural
Sciences National Needs Graduate Fellowships program to North Carolina
State University resulted in five exceptional graduate students'
completing Doctoral degrees. The accomplishments of this project have
been realized as these students are now employed in positions
significantly impacting the food and agricultural sciences. These
students are President of a soil and water engineering consulting
company in Kentucky; Associate Professor at Texas A&M University, an
Extension Specialist in Agricultural Engineering; President of a
consulting company in Washington that deals with the impact of forestry
programs on water quality and soil erosion; Chief Engineer for a State
district in Florida; and Soil/Water Engineer for a consulting firm in
California.
Goal 5: Enhanced Economic Opportunity and Quality of Life Among
Americans
The Blackfeet Reservation comprises 1.2 million acres of rangeland
in northwestern Montana. The location of the reservation limits the
feasibility of alternative agricultural enterprises. The reservation
has the range resources to greatly expand the number of individually-
owned cattle heads, and human resources to expand the number of
ranchers. In the first 5 years of the program, with funding from the
Smith-Lever 3(d) Extension Indian Reservation Program, Montana
Cooperative Extension Service agents have assisted 38 young producers
in acquiring over $220,000 in youth agriculture loans, in the purchase
of 385 head of cattle, and in the formation of business plans, as well
as livestock production. These livestock should increase aggregate
tribal income by at least $20,000 per year while herds are being
expanded. Assuming eventual net incomes of $30,000 per year, these
ranchers represent an increase in the aggregate tribal income of over
$1 million per year. Such income will contribute to improved quality of
life for the ranchers and for their immediate and extended families.
Income stability and improved quality of life will provide an example
for family members and others. A cadre of successful private operations
will foster increases in such enterprises. Successful marketing
strategies will develop cooperative efforts.
Continuing its implementation of GPRA, CSREES is working with our
State partners to develop annual performance plans with stated goals
and targets; implement programs and projects designed to achieve or
work toward achievement of goals; collect and assemble data at the
State, regional, and National level; and integrate this information to
assess accomplishments and extend the planning process.
CSREES is entering its fourth year after the merger of two former
agencies, the Cooperative State Research Service and the Extension
Service, and we continue to be successful in enhancing critical
linkages between research and extension. Our land-grant university and
other partners conduct fundamental and applied research to gain the
knowledge needed to address problems in the development and
sustainability of agriculture and forestry and in the overall quality
of life of our citizens. Programs conducted by the Cooperative
Extension System use this research-based guidance as the basis for
practical decisionmaking by producers, individuals, families, and
communities.
The Administration is proposing that a new authority be established
for an Integrated Research, Extension, and Education Competitive Grants
Program. In fiscal year 1999, we are requesting $4 million for a Small
Farms Initiative under the Integrated Research, Extension, and
Education Competitive Grants Program. The Small Farms Initiative will
benefit socially disadvantaged groups through the integration of
research and education by supporting: (1) targeted research, outreach,
and technology transfer/adoption to meet the needs of this diverse
clientele; (2) needs assessments; (3) improved access to information
for and delivery of programs to small farms; and (4) development of a
small farms information system.
The Administration has also proposed new legislation for a Food
Genome Initiative, to be funded in fiscal year 1999 at a level of $10
million. The Initiative will be coordinated with NRI grants and ARS
research activities. This Initiative represents a targeted investment
in the National Food Genome Strategy, which has two major components.
In the first component, the Plant Genome Initiative, USDA would be the
lead Federal agency, working with the National Science Foundation and
the Department of Energy, to focus on crop species of major,
agriculturally important plants. In the second component of the
National Food Genome Strategy, the Animal Genome Initiative, scientists
would be able to take advantage of ongoing work at the National
Institutes of Health on the Human Genome Initiative to improve our
understanding of animal genes, their genetic capabilities, and their
genetic structures. These efforts will permit development of new
genetic technologies for improvement in yield, composition, and quality
of the domestic agricultural output.
fiscal year 1999 budget request
The budget submitted to Congress by the President requests
$849,840,000 for the Cooperative State Research, Education, and
Extension Service. This request is a decrease of $9.1 million or
approximately 1 percent, from the current appropriation, and comprises
specific program increases and decreases. Highlights of the proposed
increases in the fiscal year 1999 CSREES Budget are:
food safety
An increase of $3 million is proposed in fiscal year 1999 for the
second year of the Food Safety Special Research Grants Program which
supports the President's National Food Safety Initiative. We thank the
Congress for providing $2 million to initiate the program in fiscal
year 1998. In 1999, research supported under this program will target
select populations, such as children, the elderly, immunocompromised,
or those suffering from chronic disease, who may be more vulnerable to
foodborne illness and will address both biological and behavioral
science issues, including food handling and safety practices,
purchasing and storage patterns among populations, and factors
increasing risk of food-borne illness. These efforts will underpin the
education activities supported by the Food Safety Education Program
under the Smith-Lever 3(d) funding mechanism for which we are proposing
an increase of $5 million. Funding provided for the Food Safety
Education Program will enable CSREES, in cooperation with ARS and other
Federal agencies, to increase producer, processor, and consumer
awareness, understanding, and information regarding food safety.
pest control
The CSREES fiscal year 1999 budget proposes an increase of $15.5
million for our research and extension-related pest control programs in
contribution to USDA's Integrated Pest Management (IPM) Initiative, a
multiagency effort to develop strategies to bring 75 percent of the
nation's cropland under integrated pest management practices by the
year 2000. Increases are proposed for the following programs: Pest
Management Alternatives; Expert IPM Decision Support System; research
and extension Integrated Pest Management; IR-4 Minor Crop Pest
Management; Pesticide Applicator Training; and extension Pesticide
Impact Assessment. The ability of the Nation's agricultural production
system to keep pace with domestic and global demand for food and fiber
depends on access to safe, profitable, and reliable pest management
systems. Farmers and pest managers have fewer chemical control options
available to them than they did at the beginning of the decade, and
this trend is likely to continue at an accelerated rate. In addition,
the Food Quality Protection Act will have significant impact on pest
management systems in the United States over the next decade. ``Minor
use'' crops (high value crops grown on relatively few acres) will be
particularly hard hit. It is essential that farmers and pest managers
be provided with new pest management tools and better information to
remain competitive in today's global marketplace and assure consumers
access to a wide range of safe, affordable food. To meet this challenge
effectively and efficiently, the CSREES pest-related programs will be
coordinated with the activities of the USDA Office of Pest Management
Policy along with other IPM-related activities undertaken by the
Department.
sustainable agriculture
An increase of $2 million is proposed for the research and
education component of the Sustainable Agriculture Research and
Education (SARE) Program. This increase will allow expansion of the
knowledge base related to more sustainable practices. Many of the
projects supported by SARE emphasize helping farmers and ranchers save
money through grazing system improvements that also protect our natural
resources. Fiscal year 1998 marks the ten-year anniversary of Federal
funding for the SARE research, education, and extension program. In the
past decade, SARE has funded approximately 1,200 projects, most of
which were led by university researchers working in concert with
farmers, ranchers, and extension educators. In honor of the ten-year
anniversary of SARE, a conference entitled, ``Building on a Decade of
Sustainable Agriculture Research and Education,'' will be held March
5--7 in Austin, Texas. The conference will bring together researchers,
farmers and ranchers, agricultural extension agents and other
educators, sustainable agriculture advocates, and other partners for
informative sessions on sustainable agriculture and tours of farm and
community, projects that are helping to bring about a more sustainable
food system in central Texas. I believe that this conference is a
fitting tribute to the impact the SARE program has had on U.S.
agriculture.
national research initiative
The budget proposes to fund the NRI at $130 million, an increase of
$32.8 million. The NRI is the USDA's largest competitive grants program
that provides a critical investment for the future of American
agriculture. We appreciate the Congress providing additional funding
for the NRI in 1998. Agricultural research is needed to assure a
sustained and bountiful harvest of agricultural products. It is also
needed to meet the ever-changing preferences and demands of consumers,
domestic and global, and to keep up with increases in both the
population and economic status of people.
The NRI invests in those areas of research with the greatest
potential for expanding the knowledge base needed to address issues
that will face the agricultural and forestry enterprise. The NRI
supports a broad spectrum of mission-linked agricultural research that
results in practical outcomes.
The increase in the NRI will therefore focus on these key areas:
food genome research, food safety, and environmental quality. Increased
food genome research is needed to improve plant and animal species to
increase yields, reduce inputs such as fertilizers, pesticides and
antibiotics, decrease production costs, and improve quality and safety.
Also of particular concern to the American public is the safety of the
food supply. The NRI responds to this need by expanding the science
base for the Hazard Analysis and Critical Control Point (HACCP)
approach to meat and poultry inspection to reduce food-borne illness
due to microbial pathogens. The health of the environment also is a
major concern to Americans. Research supported by the NRI leads to
improved production practices and contributes to improved water
quality, better soil quality and fertility, and sustained ecosystem
health.
research, education, and economics information system
An increase of $1.2 million is proposed for REEIS to work on the
system design and launch development of the REEIS prototype. This also
will entail the enhancement of several current databases to make them
more useful to REEIS users. An information needs assessment will be
conducted in order to align REEIS products and services with
information requirements of the agencies and their partners.
The Research, Education, and Economics Information System--REEIS--
will be a valuable mechanism for helping the REE agencies meet the
accountability standards mandated by GPRA and for enabling us to
provide better delivery of comprehensive research, education,
extension, and economics information to USDA, REE agencies, and our
partners. The first REEIS National Steering Committee meeting was held
in June 1997, and I am very pleased with the progress that resulted
from that meeting. As a result of the Committee recommendations, an
information audit of existing REE databases is being conducted. The
first phase of the audit produced an on-line catalog of the major
databases and provided specifications, through interviews with database
managers, to conduct an assessment of additional databases or
information which should be included. The second phase of the audit
will build the data dictionary and provide specifications for a
controlled vocabulary to facilitate coordinated user access to REEIS
databases. Initial implementation activities are expected to be
essentially completed by the end of the year 2000.
The second National Steering Committee meeting is scheduled for the
week of February 23. Members of the National Steering Committee, the
REE mission agencies and State partner institutions have been provided
copies of the specifications for the needs assessment and controlled
vocabulary. The Committee will review and approve progress to date and
formulate the action plan and strategies for future tasks such as
specifications for the REEIS system design and collection of
accountability data.
usda civil rights initiative
A proposed increase of $9.3 million is included to address
recommendations made in the USDA Civil Rights Action Team (CRAT) report
of February 1997 to strengthen USDA's research and educational
assistance to the socially disadvantaged and to address the needs of
farmworkers. Increases are proposed for: (1) the Extension Indian
Reservation Program to expand the presence of extension agents on
Indian Reservations; (2) the 1890 Facilities Program to improve the
quality of research, extension, and teaching facilities on the campuses
of 1890 Institutions so that they are more comparable to facilities
generally found on the campuses of 1862 land-grant universities; and
(3) the Extension Services at 1994 Institutions to bring needed
educational programs normally addressed under the broad mandate of the
Cooperative Extension System to people served by Native American
institutions. The Administration also is proposing that: (1) funding
levels for the Hispanic Serving Institutions higher education program
and the 1890 institutions research and extension formula programs be
maintained at the fiscal year 1998 levels; and (2) as discussed
earlier, a Small Farms Initiative be implemented under new legislation
to be established through the reauthorization of the research title of
the Farm Bill for an Integrated Research, Education, and Extension
Competitive Grants Program. The Small Farms Initiative will support
multi-functional research and education activities to address the
resource constraints of small farms.
children, youth, and families at risk
The budget proposes that funding for the Children, Youth, and
Families at Risk (CYFAR) program under Smith-Lever 3(d) be increased by
$446,000 to restore it to the 1995 level. This program is one of
several National Initiatives of the Cooperative Extension System which
represent the System's commitment to respond to important problems of
broad national concern. CYFAR funds are distributed to each State and
awarded competitively. Every State has identified youth at risk as a
priority, and most of the efforts focus on community collaborations,
initiating school age child care programs, and strengthening science
and technology programs. Projects supported by CYFAR are empowering
youth, parents, and community leaders to take responsibility for their
own lives to reduce environmental risk factors.
water quality
An increase of $296,000 is proposed to restore funding under the
Water Quality research program to the level provided in fiscal years
1995-1997. In 1996 new projects were initiated as Agricultural Systems
for Environmental Quality to focus on watershed-scale agriculture
production systems that reduce pollution of soil and water while
maintaining productivity and profitability. This increase will address
these and other water quality issues, such as hypoxia oxygen depleted
waters--and Pfiesteria, a problem recently reported in some tributaries
of the Chesapeake Bay, and specific water-borne diseases such as
Cryptosporidium, which continue to be of a high priority at local,
regional, and National levels.
binational agricultural research and development (bard)
The United States-Israel Binational Agricultural Research and
Development Fund was established in 1977, but low interest rates and an
increase in the cost of research have impeded the ability of BARD to
adequately meet the needs of each country's producers and consumers.
The Administration is proposing a $1.5 million increase for BARD to
continue support of research of mutual interest between the U.S. and
Israeli agricultural research communities. These funds will supplement
the interest derived from existing BARD endowment funds and will be
matched by funding from the Israeli government.
global change/uv-b monitoring
An increase of $567,000 is proposed for the Global Change/UV-B
Monitoring Program to restore funding to the fiscal year 1997 level.
This program supports the USDA UV-B (ultraviolet-B) Monitoring Program,
a component of the U.S. Interagency UV-B Monitoring Network Plan of the
United States Global Change Research Program. This increase will be
used to bring the network closer to complete operational status for
obtaining ground level UV-B radiation applicable to locations of
importance to agriculture, forestry, and natural resources.
Sustained Funding Support:
The Animal Health and Disease Research formula program is proposed
for funding at the 1998 appropriation level, as are most of those
Special Research Grants that concentrate on problems of national and
broad regional interest beyond the scope and resources of the formula-
based programs, including Critical Issues, Minor Use Animal Drugs,
National Biological Impact Assessment, Rural Development Centers, and
Pesticide Impact Assessment.
In continuation of the Department's commitment to helping limited
resource farmers and other socially disadvantaged populations, funding
is maintained at the 1998 levels for extension formula distribution to
the 1890 Institutions, the Evans-Allen research formula program, the
1890 Capacity Building Grants Program, the Hispanic-Serving
Institutions Education Grants Program, the Tribal Colleges Education
Equity Grants Program, and the Tribal Colleges Endowment Fund.
Our fiscal year 1999 Higher Education Programs portfolio is also
maintained at the 1998 funding level of $26.1 million. The portfolio
includes the aforementioned Capacity Building Grants, Hispanic-Serving
Institutions Education Grants, and Tribal Colleges Education Equity
Grants Programs and the Tribal Colleges Endowment Fund, along with the
Institution Challenge Grants Program, the Graduate Fellowship Grants
Program, and the Multicultural Scholars Program.
Funding is also maintained at the 1998 levels for Smith-Lever 3(d)
programs for Water Quality, Rural Development, and Sustainable
Agriculture, as is funding for the Renewable Resources Extension Act
Program.
Decreases and Eliminations:
In support of the Administration's goals to reduce the Federal
deficit and focus its resources on high priority national issues, the
fiscal year 1999 CSREES Budget proposes decreased funding for several
programs.
The Administration strongly supports a mixed portfolio of formula-
based and competitive funding but we find that a different approach is
needed, in this era of limited resources, for addressing high priority
National issues while simultaneously balancing the budget. We have
proposed decreases for several of the formula programs in the 1999
budget to generate resources needed to address issues of broad public
concern that cut across State lines or other boundaries. Formula
decreases include $15.062 million for the Hatch Act research funds;
$615,000 for the McIntire-Stennis cooperative forestry research funds;
and $10.740 million for the Smith-Lever 3(b) and (c) extension funds.
States have maximum flexibility to fund specific programs through
formula funds, thus the proposed decreases should have the least impact
in those areas States identify as high priority. The flexibility of the
States in the use of the Hatch Act and Smith-Lever 3(b) and (c) formula
funds will be enhanced if the Administration's recommendation that the
States be given authority to use a percentage of these funds for either
research or extension activities is implemented in the reauthorization
of the research title of the Farm Bill.
Decreased funding or the elimination of funding is proposed for
several other programs. These programs could be supported by the States
through the reallocation of formula funds, or by State, local
government, and/or private sources if they are deemed to be high
priority at the State or local level. Decreases totaling $2.5 million
are proposed for the Aquaculture Centers Program and the Expanded Food
and Nutrition Education Program (EFNEP). The Supplemental and
Alternative Crops; Critical Agricultural Materials; Rural Health and
Safety; Farm Safety; and Agricultural Telecommunications programs are
proposed for elimination, saving $7.6 million.
CSREES has also proposed that State-specific or other earmarked
Special Research Grants totaling $43.867 million; earmarked research
Federal Administration projects totaling $8.866 million; and earmarked
extension Special Projects under Direct Federal Administration totaling
$6.113 million be eliminated because they are not high priority and
National in scope. Alternate funding from formula programs, State and
local government, and private sources could be used to continue these
efforts if they are considered high priorities at the State or local
levels.
In conclusion, the President's fiscal year 1999 Budget Request for
CSREES reflects the commitment of the Administration to further
strengthen the problem-solving capacity of Federally-supported
agricultural research, extension, and higher education programs. I
appreciate the support of the Committee and look forward to working
with you and your staff during the upcoming budget process.
______
Biographical Sketches
i. miley gonzalez
I. Miley Gonzalez was nominated by President Clinton as the Under
Secretary of Agriculture for Research, Education, and Economics on July
9, 1997. He was confirmed for that position by the U.S. Senate on July
31, and sworn in on August 5.
Gonzalez provides oversight of the research, education and
economics programs at USDA. He manages the Agricultural Research
Service, the Cooperative State Research, Education, and Extension
Service, the Economic Research Service, and the National Agricultural
Statistics Service.
Before his appointment as Under Secretary, Gonzalez served on the
National Agricultural Research, Extension, Education, and Economics
Advisory Board--a 30-member group authorized by the 1996 Federal
Agricultural Improvement and Reform (FAIR) Act to advise the Secretary
and land-grant colleges and universities on agricultural research,
extension, education, and economics policy and priorities. As the Under
Secretary, Gonzalez is an ex-officio member of the group which will
provide consultation on other FAIR Act legislation, including the Fund
for Rural America.
Before joining USDA, Gonzalez served as associate dean and director
for academic programs in the College of Agriculture and Home Economics
at New Mexico State University (NMSU). From 1994-96, he was assistant
dean and deputy director of the Cooperative Extension Service. Prior to
that he served as professor and head of the Department of Agricultural
and Extension Education at NMSU for three years.
Gonzalez worked on the Hispanic Association of Colleges and
Universities/USDA leadership team, representing NMSU.
Before joining the faculty at NMSU, Gonzalez was an assistant
director of International Agriculture Programs in the College of
Agriculture at Iowa State University from 1988-91. In the early 1980's,
Gonzalez served as a state 4-H specialist at Pennsylvania State
University and participated in extension program activities.
His administrative experience began in 1976 at the University of
Arizona as assistant director in the Office of Resident Instruction in
the College of Agriculture. He has private sector experience in
marketing, management, and production agriculture in both the U.S. and
Mexico and worked on a cattle ranch in Venezuela. Gonzalez started his
professional career as a high school vocational agriculture teacher in
1970 and taught at Parker High School on the Colorado River Indian
Reservation in Parker, AZ.
He has taught numerous undergraduate and graduate courses including
guest lectures in Spanish. His teaching has focused on problem-solving
techniques, program planning and evaluation, curriculum development,
and beginning teacher and extension agent training.
Gonzalez has served on numerous evaluation and task force teams at
the local, national, and international levels. His research and
scholarly activities have focused on the areas of international
development, extension education, adult and non-formal education,
technology transfer, and leadership development and training.
He has received numerous awards and honors from various
professional groups, teachers, institutions and many other
organizations such as 4-H and the FFA. He earned the American Farmer
Degree in FFA and has received the Distinguished Service Award from the
American Association of Agricultural Education for both domestic and
international work in the western region.
He was born in Ysleta, TX, on July 30, 1946, grew up on a small
farm and livestock operation in San Simon, AZ, and managed farming and
marketing operations in northern Mexico. Gonzalez attended the
University of Arizona where he received both a B.S. and M.S. in
agricultural education from the University of Arizona and a Ph.D. in
agricultural and extension education from Pennsylvania State
University.
______
eileen kennedy
WASHINGTON, Nov. 7, 1997--Agriculture Secretary Dan Glickman today
announced the appointment of Dr. Eileen Kennedy as Acting Deputy Under
Secretary for Research, Education, and Economics, effective November
10.
``Eileen Kennedy has provided sound policy advice, analysis, and
research on USDA's food assistance and nutrition programs,'' said
Glickman. ``Her ability to work with diverse groups to develop research
driven dietary guidance will serve USDA well in her new role. Her keen
insight and extensive background in research and education will prove
invaluable as USDA sets research and education priorities that are
responsive to the needs of the American people.''
Kennedy will work with the Under Secretary for Research, Education,
and Economics, I. Miley Gonzalez, to provide oversight of the research,
education, and economics mission. She will help to manage the
Agricultural Research Service, the Cooperative State Research,
Education, and Extension Service, the Economic Research Service, and
the National Agricultural Statistics Service.
Prior to her appointment, Kennedy served as the Executive Director
of the USDA Center for Nutrition Policy and Promotion. She managed the
Center and provided technical direction for policy research and applied
nutrition for USDA's nutrition programs.
Before joining USDA in 1994, Kennedy was a visiting professor at
Tufts University, School of Nutrition. From 1981 to 1994, Kennedy
worked for the International Food Policy Research Institute here as a
senior research fellow. She also worked as a visiting professorial
lecturer at Johns Hopkins School of Advanced International Studies from
1987 to 1990.
Dr. Kennedy is currently a member of the United Nations Advisory
Group on Nutrition as well as a member of the Institute of Medicine's
Board on International Health.
She received her B.A. degree from Hunter College in New York, NY,
and her two M.S. degrees, one in Foods and Nutrition from Pennsylvania
State University and one in Nutrition from Harvard. Kennedy received
her Doctor of Science degree from Harvard University.
Implementation of ARS' Fiscal Year 1998 Program Increases
Senator Cochran. That is perfectly satisfactory with us.
Let me ask the first question and then I am going to yield
to my colleagues for any questions that they have. Looking at
the budget request specifically for ARS--Dr. Horn has submitted
a statement discussing that aspect of the budget request--but
it confuses us to this extent: that the funding levels for ARS
activities are proposed to be increased from the fiscal year
1998 level, mostly for the purpose of adding staff,
professional research scientists, at ARS facilities throughout
the Nation, but you are proposing to execute increased staffing
levels and at the same time requesting that all of those
increases provided for the current fiscal year, what the budget
calls ``congressional add-ons,'' be eliminated? Some of these
reflect, for example, suggestions that this committee received
as to staffing that was needed in order to fully undertake the
work that was being done at some of these facilities.
I am specifically aware of the warm water aquaculture
research that is being done in Mississippi and in Arkansas, and
we added a couple of research scientist staff positions there.
How are you recruiting and filling those positions at the same
time you are proposing to take the money out of the program
and, therefore, having to cut those same staff positions?
What is the reality of the situation with regard to that?
Dr. Gonzalez. Mr. Chairman, if I may, and I will ask Dr.
Horn to share also with some of the detail. Within the broader
context of the budgeting process, we looked at those areas of
funding of very important and high-priority areas and went
through a discussion to take a look at the shifting of
resources. As a result, as you look at that budget, you will
find some places where there is a definite increase and other
places where we have had a shifting of resources.
But specifically to your question, I think that as we look
at the site specific parts of this agricultural research agenda
that we certainly have some areas where we have continued to
move funding to enhance the work that is being done there and
taken a look at how those things fit within this sort of
limited, if you will, research budget that we are having to
work with.
I will turn to Dr. Horn and ask him to provide any of the
detail for this particular question.
Dr. Horn. I have been very concerned about the decline in
the number of ARS scientists for some time, and in fact as an
agency we are trying to turn that decline around. There were
3,400 scientists when I came to ARS 27 years ago and now we are
under 1,900.
We went through exactly this same process a year ago when
we had some projects and some locations proposed for closure,
and we held back in our recruiting process and the ultimate
result, of course, was restoration of many of the projects and
of all of the four locations that were proposed for closure.
But in that process our number of FTE slots for scientists
actually did decrease by about 100.
So we learned a lesson there and we are proceeding to a
point this year in a different way. We have about 140 vacant
scientist positions in the agency. Seventy of those are
holdovers from prior funds or the result of attrition. Seventy
of those are from the new money that came to us in fiscal year
1998. We are pursuing the recruiting process full bore on all
positions, and we are doing so in the realization that it is
going to be midsummer before many of these will be to the point
where we can interview or commit, and by that time we expect to
have some additional information on what really will become of
this budget.
As you have mentioned, you may impose changes in this
committee and the House may do the same. So our intention is to
continue to recruit, look for the best and the brightest, but
the day will come actually when we have to either say to them,
you have to understand that the funds may not be there for that
position next year, but we will find you a job in ARS, or we
have to stop recruiting.
So our intention is to keep recruiting.
Status of Fiscal Year 1998 Implementation Plans
Senator Cochran. One thing we will do for the record, if
you can help us with this, is submit a listing of all of those
research facilities and the additional funding that was
provided in the appropriations bill for this current fiscal
year and ask for a status report on the execution of the
funding increases provided for fiscal year 1998 for ARS for
those purposes.
We have a list that includes, it looks like, about 30
different facilities across the Nation that are in this same
shape, not just the ones in Mississippi and Arkansas. But you
know, the reason I point these out is that last year the
testimony was very clear that aquaculture is one of the fastest
growing activities in agriculture today in our country, and we
need to find out about diseases and other challenges that are
presented to the aquaculture industry in not only the South,
but other parts of the country as well.
We had a West Virginia aquaculture center, for example,
that was funded. That is another area where we are wondering
how you are filling those positions that were funded last year,
when now you are asking that those funds be terminated and
canceled in this year's budget.
It is an important area. I think you recognize that, Dr.
Horn and Dr. Gonzalez, in your comments before the committee. I
know in Dr. Horn's case, from testimony he presented last year.
And I think this year's testimony also confirms that this is an
important area for inquiry.
Can you confirm that?
Aquaculture Research
Dr. Horn. Yes; it is absolutely true. I believe we are
still importing about 70 percent of our shrimp, for example,
and a lot of our freshwater fish activities not only promote
rural economic development, but it is a new industry and a
burgeoning industry and a very rapidly growing industry. So it
is extremely important to us.
Senator Cochran. Thank you.
Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman.
Dr. Horn, this is something you are not required to know
the answer to. Do you know what rice yields are in this country
compared to, say, 3 years ago?
Dr. Horn. I am glad I am not required to know that.
[Laughter.]
Senator Bumpers. Does anybody on the panel know?
Dr. Horn. Given 3 years ago, I suspect they are more or
less level and perhaps even a bit lower compared to 10 or 12
years ago, due to our research accomplishments.
Senator Bumpers. I think you are absolutely right. I wanted
to hear somebody who monitors those figures. I am not going to
make the same speech here this morning I have made 100 times
about the importance of research on agriculture in this country
and how we are going to feed ourselves in the future.
But I get the impression, with some minor exceptions, a lot
of our yields of food products are pretty static. I think in
1965 we had a static production of corn for the first time in
60 years. Those things ought to be alarming, not only to the
research community, but to those of us who are funding
research.
Now, this brings me to my next question, and that is
following up on what the chairman has just asked you about
agriculture. Mississippi and Arkansas both have state-of-the-
art agriculture research labs and in last year, 1997, we
directed in the 1998 budget that--we just put a direction in
there that in 1999 you would increase, for example, the funding
for the rice germplasm center, which is really vital to
increasing rice yields. We put a provision in there that it
would be increased, I believe $700,000 in 1999, and $400,000--I
am not sure what we put in for the Mississippi aquaculture lab,
but we put an increase of $500,000 for the aquaculture lab in
Stuttgart in my home State.
They are not in here. My next question is, was this
submitted to OMB for inclusion in the President's budget, these
increases that Congress directed last year? I want to be sure
we are on the same wavelength. Do you know what I am talking
about?
Dr. Horn. By the agency?
Senator Bumpers. Yes.
Dr. Horn. Yes; we requested those.
Senator Bumpers. You did request those increases?
Dr. Horn. Yes; we did.
Senator Bumpers. And you got a negative response, I take
it? I mean, they just did not put it in the President's budget
request. Of course, you knew in advance what their reaction was
to this, I assume.
Rice Research
My point, Mr. Chairman and members of the panel, is that
here we have these state-of-the-art research facilities that
cannot function at the proper level, simply because we lack
scientists. And we needed that $700,000 in the rice germplasm
center. The rice germplasm center is the only facility I know
in this country that really has the ability to increase rice
yields.
When I was first elected Governor of my State, I think
yields were averaging less than 100 bushels per acre. Today the
average is probably like 150, but 200 to 220 bushels an acre is
not uncommon. That is all due to research.
I do not know how far you can go, but all I am saying is--
and I have said 1,000 times--of all the research money we spend
in this country, the Pentagon obviously gets the most of it,
the National Institutes of Health is second and that is
entirely proper. I am not going to deliver my sermonette on the
Pentagon. But when I think about it, we are putting I think
$1.8 billion--is that a fair statement--in agricultural
research in this country, it's outstanding to be alarming.
Dr. Gonzalez, do you want to comment on that?
Dr. Gonzalez. Yes; thank you. Mr. Chairman and Senator, I
think that has been part of our discussion internally as well,
the fact that when you compare the share of research moneys for
agriculture, including the extension and education component
that is critical to that continuum, that we are not in the same
ballpark.
It is certainly a discussion that we have begun to talk
about with our agencies and across the mission areas within
USDA, and I think to engage other parts of the research
community so they understand the relationship and the linkage
that we have between agricultural research and some of the
things that they do.
You pointed out NIH; on the NSF side as well. And again, it
is not a matter of getting engaged in a match, if you will, of
those dollars, but that we communicate to all folks that we do
have that opportunity to highlight the success of agricultural
research and how it fits within the broader research agenda.
When we talk about the food genome area, for example, you
were talking about rice. I think there is a component in that
initiative that will also allow us to address some of those
questions that you were specifically addressing a moment ago.
Facilities Task Force
Senator Bumpers. Dr. Horn, let me ask you another question.
The Department has been working on a report by the Strategic
Planning Task Force on Research Facilities, and they were to
determine--they were to prioritize, and I hate that word, but
they were to prioritize Federal research directives. Now, this
report is not finished. One of the principal things it was
supposed to do was to determine which facilities should be
closed, is that correct? Is that a fair statement?
Dr. Horn. Not exactly, Senator Bumpers.
Senator Bumpers. What was the principal purpose of that
task force?
Dr. Horn. It was to evaluate all of the Federal and State
facilities and, in fact, some private laboratories to take a
look at what we have and what we are going to need to have. So
it was to deal with more than just closures. It was to deal
with highlighting as well what is needed into the future.
Senator Bumpers. But that study has not been completed, has
it?
Dr. Horn. No; as a matter of fact, they met yesterday.
Proposed Closure of ARS Facilities
Senator Bumpers. Why is the Department recommending closure
of certain facilities before that study is completed?
Dr. Gonzalez. If I may, and I do not know that I know the
exact answer. But certainly the committee is meeting now. This
is their fourth meeting, and they are looking at, as Dr. Horn
described, the research capacity both from the standpoint of
facilities and the programmatic side. We will have an interim
report by about the middle of June in terms of what we have
done at this point to take a look at both the Federal
facilities, as well as those that are out there in the
university system.
The idea is that we will not finish that report, we will
not have all of those data, until 1999. But within those
constraints in the budget discussion there were some things
that were already on the board that we were looking at in terms
of how to manage the sites and programs that had been
identified for closure prior to this budget session. Those
considerations were part of this ongoing discussion. There may
or may not be some other facilities that they are looking at
that might also fit into a list like that.
But I think part of my discussion with the committee and
with others has been that we are not only looking at the
possibility of closure, but also that we are looking at the
capacity that we have. We have an investment in a variety of
places, depending on the agricultural research that is going
on, that is site specific. So we really have to come back with
some serious answers to these questions that are being raised.
Senator Bumpers. This committee obviously is going to
review your recommendations and look at it very closely,
because my own personal opinion is it is premature for ARS to
be making these decisions right now. I know that the budget
constraints are terrible. Senator Cochran and I have had
private conversations about what a monumental task this
subcommittee has in trying to get this budget--this is the
toughest year I have ever seen on budgeting.
Alternative Pest Controls
Mr. Chairman, I have one final question and I will submit
my other questions for the record. And I would like to direct
this question to you, Dr. Robinson. And that is, what kind of
progress are you making on alternative pest controls and what
kind of progress, if any, is the private sector or the public
sector making in making pesticides and herbicides more benign?
We have an environmental disaster on our hands, and we are
trying to produce more crops at the same time we are trying to
use less pesticide and herbicide. It is a monumental chore, but
I would just like an update on that.
Dr. Robinson. I wish I could give you quantitative
information across the board. Perhaps I can do it in three
ways. We have, as you know, as part of the overall budget
request--and it is the same kind of request we have had in
previous years--a request to increase fairly significantly our
pesticide management, research, and education program. Those
also go in sort of a hand-and-glove manner with many of our
sustainable agriculture programs.
One of the points, a quantitative point, that has been
addressed in a lot of positions before was to reach 75 percent
of agriculture applying IPM practices, which often would
involve the alternative pesticide applications that you speak
of, by the year 2000. Current information suggests that we are
probably somewhere in the neighborhood of 65 to 70 percent. So
75 percent by the year 2000 is not out of the question.
The problem with that, that kind of answer, though, is it
does not go deep enough. There are a lot of definitional issues
with regard to what is and is not the application of an IPM
practice or an alternative pesticide or production practice. So
we like to think of that both in terms of the depth of that
change in agriculture as well as just a percentage count of who
is adopting some kind of practice.
We think that the programs that we have in terms of the
alternative pesticide research programs that are producing--and
it is a slow process--alternatives and in working with EPA in
providing them information in terms of what alternatives are
available or if there are no alternatives, is a useful kind of
collaborative effort as they begin to make their decisions. And
the educational program that we have in extension to move that
research to the farm and the farmer as quick as possible is
going to move in the direction of improving both the depth as
well as the quantitative count of IPM practices on farms by the
year 2000.
That is not going to resolve all the issues, as you well
know. So it is a program that is going to continue to have to
struggle with the issues between interfacing production
agriculture and competitiveness with the environment.
Senator Bumpers. Let me just say that, you know, in the
Department--and not just Agriculture, but everybody--every time
Senator Cochran or Senator Burns or I get a little project for
our State it is considered pork.
Senator Burns. In agriculture that ain't bad.
Senator Bumpers. If ARS comes up with it, it is high-class
research. But I think about a small project I got for the
University of Arkansas back in the eighties to do alternative
pest control research, and they were doing high-class research
when I went there 3 years later. And we funded it every year
for a while.
They have been on their own for some time, I do not know
how many years. They have been on their own now for 2 years. We
are funding it. There may be a little private money from some
of the chemical companies or somebody going into it. But they
are doing top-class research and they are on their own.
Now, I cannot think of a better success story than that. I
make that point just to show that the people sitting on this
side of the table oftentimes have pretty good ideas, too. I
always voted against Senator Proxmire's amendment that
everything had to be let on a competitive basis. That meant
everything went to Harvard and MIT and you name it and the
University of Arkansas got nothing.
If Senator Cochran and I were not here protecting our
States, we would not get anything, I can tell you. But we do
good research, and that is the reason we have that rice
germplasm center down there, which is really critical to the
future of the rice industry.
Well, that is enough.
Senator Cochran. Senator, those were excellent questions
and we appreciate very much your asking them.
Senator Burns.
Senator Burns. Thank you, Mr. Chairman, and thanks to the
folks for coming up here this morning.
When I look over this budget and the request for funds down
there, I was a little dismayed in some areas. And I am glad to
hear that at least the Department on the individual places that
we think is very important they were requested from OMB. I
would assume Miles City and Sydney and those things were in
there.
Production Agriculture
With all the demands that are being placed on our producers
today from environmental, taxes, high cost of operation, it
would seem to me that the thrust of this part of USDA should be
pointed toward production agriculture. I cannot believe that we
have only got 1,900 scientists working in the USDA and ARS
doing research today.
Dr. Horn--or I will ask Dr. Gonzalez: How many of those
1,900 are actively involved in production agriculture?
Dr. Gonzalez. Mr. Chairman and Senator, maybe I will ask
Dr. Horn to respond to that because of the specificity of that
number. But before he does that, if I may, kind of going back
to the question that the Senator asked a minute ago, I think
those are the exact kinds of questions that we've begun to ask.
I talked yesterday to the CARET delegates that are here.
Senator Burns. To the who?
Dr. Gonzalez. The Council for Agricultural Research,
Extension, and Teaching [CARET], that are part of that
university community. A great many producers and commodity
group representatives are in that group.
One of the things I said to them is that we are, again,
readdressing, if you will, the agenda in terms of the
importance of that producer community and to look at----
Senator Burns. It is the only community. As far as this
room is concerned, it is the only part. Everything else lives
off of it. Everything else lives off of it. You take it out of
business and none of us is working.
We can use pretty words, but it just does not make a lot of
sense.
Dr. Horn.
Dr. Horn. I do not think we have anyone that is not working
on a problem at ARS. We really do try to tell all of our
scientists to understand why they are doing what they are
doing, and it is a relatively applied program.
But the answer to your question specifically, about 70
percent of the scientists are involved in production
agriculture. Others are involved in more fundamental programs
that should lead to application and should help producers. But
it is about 70 percent.
Senator Burns. If you line that up against any other
segment of the American economy, you have 1,000 scientists out
there trying to deal with something that every one of us in
this town does three times a day, and that is eat, most of us.
I eat more than that, obviously, but nonetheless.
I just think that our initial thrust--I am just wondering,
when OMB sent it back down was there anybody that raised their
eyebrow and said, what in the world are we doing and what are
our priorities? And is there anybody going back down there that
says, this is unacceptable, this is unacceptable to go at this,
this thing? It is like the aquaculture that they are concerned
about in Arkansas, and I am concerned about that, too. I am
concerned about rice yields. Our wheat has been going down a
long time.
But yet we do not see anything, anything to address that. I
would say, we cannot do research on western ranges or
Mississippi aquaculture or Arkansas rice in Maryland. We cannot
do it, we just cannot do it. And these two Senators to my right
here have just absolutely fought tooth and toenail to put the
research on the ground where it is supposed to be.
And then you come back and you cut extension. You can have
all the knowledge in the world, but we have no way to transfer
that technology, none. So it all goes hand in hand.
Forget about rural development. It may be a feel-good
methodology to take care of something in the neighborhood, but
if you have no production that is where your great development
is, folks. That is what pays the bills. And if you do not think
we do not have a problem, you just go around and explain to
producers in this country why Wheaties is $3.75 a pound in the
grocery store and we cannot get $3 for a 60-pound bushel of
wheat. And then you wonder why we got hurt and why we get awful
sensitive about our producers that are on the land.
And by the way, if you took your researchers out there and
tried to run a farm, ranch, or an aquaculture, I will tell you
what: They would go broke in 15 minutes, and then we are all
out of jobs.
A little ASCS guy is sitting in the ASCS office one time,
he was crying. The guy says: What's the matter? And he said: My
farmer died. Well, they are dying.
It just seems like that our thrust, that somebody in this
Department, the Department of Agriculture, has got to go down
to OMB and say: This is outrageous and completely unacceptable
to a community that is supposed to be advocating something for
production agriculture, because the demands--everybody wants to
pass laws on agriculture, you got to do this, that, and the
other.
You cannot spray, you cannot even take care of your weeds.
You know how hard it is to find weed money? And noxious weeds
runs, spotted nap runs all the way from the highest mountain in
Arkansas to the flats of Arkansas. And by gosh, we cannot get a
little old measly pile of money to develop something for
noxious weeds.
But you go to one of these Grey Poupon parties around here
and white wine, you know, them little finger parties, and you
start talking about weeds and you are standing there talking to
yourself pretty quick.
So we need some advocates down there, folks. We need
somebody that is willing to fight, and I do not see that
happening right now and I am concerned about it.
So I do not have any questions. We are going to look at
this. I am going to work with the chairman. He is concerned
about it. I am concerned about it, and I am going to work very,
very hard in putting those dollars where they will do the most
good, and that is research and production agriculture and the
extension work it takes to get that technology on the farm.
That is where I come from.
I do not have any of them fancy letters behind my name. It
says ``NDBA'' behind mine: No degree, but boss anyway.
I am going to work very, very hard at that. Thank you for
coming today.
Trade Flows
Senator Cochran. Thank you, Senator.
Before I ask another question about the research budget, I
was noticing in the Economic Research Service statement there
is a comment about how the Economic Research Service intends to
spend more time to break down the components of trade flows,
understanding the relationships to international investment and
the strategic behavior of U.S. firms, and investigate the
implications for U.S. consumers of a globalized food
marketplace.
After reading that, it occurs to me that one of the most
challenging aspects of agriculture today is trying to
understand the implications of international economic
conditions. For example in Asia, the Far East, the Pacific Rim,
we are seeing a lot of turbulence in markets there and currency
values are plummeting in places like Indonesia and elsewhere.
Korea is undergoing massive change and dramatic change in its
economic structure there and the banking system.
We sell a tremendous amount, not only of raw agricultural
commodities, but value-added products, in those parts of the
world, and it is a growth area for us. We have seen China
suspend imports of cotton.
Is the Economic Research Service actively engaged in trying
to analyze what is going on there and interpret that for the
benefit of American agriculture? If so, tell us what your
findings are?
Dr. Gonzalez. Go ahead, Susan, Dr. Offutt.
Dr. Offutt. Yes; we are. As you noted, the nature of change
in economies around the world is as important to U.S.
agriculture as anything that happens domestically because of
our dependence on exports. Specifically, we recognize the
importance of the Asian region to further growth in U.S.
exports. With respect to China, ERS has in place a bilateral
technical assistance agreement that will allow us to better
understand Chinese agricultural markets as they themselves
better understand them--in collaboration with the National
Agricultural Statistics Service as well. We have also begun
work on trying to understand the implications of accession to
the World Trade Organization of China, which under some
conditions would actually improve the functioning of the world
marketplace. China might be less likely to be disruptive, for
example, stopping imports without warning. So we certainly are
concerned about the capacity of China because it is clearly the
largest country on Earth, and as it enters the world trading
system it will change the way our exports are dealt with in
markets.
More specifically and more recently on the Asian crisis,
most of the testimony that the Secretary and Under Secretary
Gus Schumacher have given before the Congress is based on the
analysis that ERS has done reflecting our understanding of
changes in demand in the Asian markets, both with respect to
reductions in income that come about when those economies
falter as well as changes in currency values that affect our
competitiveness in a market vis-a-vis, for example, the
Australians, which is a particularly important relationship in
Asia.
We feel it is certainly an important component of our
program to look beyond what happens next week or the week
after, because the forces that shape the prosperity of United
States agriculture are being determined in China and Indonesia
and Malaysia today.
Senator Cochran. Thank you very much.
Reductions in CSREES Research Programs
I notice in the Cooperative State Research, Education, and
Extension Service accounts, what we see in this budget is a
proposal to terminate most special research grants that are
funded for the current fiscal year and, for the first time that
I can remember, to reduce formula funds--the Hatch Act Smith-
Lever, McIntire-Stennis cooperative forestry research, and
others.
What I would like to know is, have you assessed the
implications of what the practical results of all of this would
be in terms of benefits for production agriculture, for
forestry, or for the research that is now supported by these
special research grants? What are the practical consequences?
What if we just approved that and shocked the heck out of
you, the President, and the people who are responsible for
submitting this ridiculous proposal to the Congress? What if we
just shocked you and said, OK. Would you bear the
responsibility for it? Would you go out and explain to people
what this means in practical terms?
What does it mean? Tell us if you can?
Dr. Gonzalez. Mr. Chairman, we have begun that discussion.
In the recent 2 or 3 weeks we have been discussing this with
the university community. We have tried to put this in terms of
the fact that we are looking at making sure, as we continue
this discussion with regard to formula funding and competitive
grants processes, that we balance the portfolio without harming
that base structure that we established over a long period of
time--the investment that we made in the university community
to be able to be competitive.
I think that is part of this discussion. And I appreciate
your question, because it is important that we talk about what
those implications will be and what the impact will be out
there at the local level, which, getting back to the Senator's
question a minute ago, is just fundamental to the total
process.
Postaward Management
Senator Cochran. One thing that disturbs me, for example,
is I do not think you have any analysis on which to base
decisions to stop funding special research grants. I do not
think you conduct, for example, a study, a post-grant study to
evaluate the results of that research; do you? I do not think
there is a process in place in CSREES to do that. Is that
right, Dr. Robinson?
Dr. Gonzalez. Dr. Robinson.
Dr. Robinson. Thank you, Mr. Chairman. We do have a
process, but it is a bit ad hoc and it is not as developed as
it needs to be. And that is true of special research grants and
some of the other grants.
We have spoken within the mission area about the need to
strengthen what we would call postaward management, the ability
to evaluate projects once awarded, whether it involves special
research grants or improving our postaward management process
with the NRI grants or other activities, to ensure that those
projects are addressing and, in fact, are producing the results
that Congress and the administration had in mind.
Senator Cochran. You know, I would not have any argument if
there was a proposal in here to set aside some amount of the
funding in this budget to do just that, because we all know
there are special grants in here that have been funded year in
and year out for 20 years--I am just picking out a number--and
we probably do not know what the practical results have been
from that research. The grant gets funded every year because it
is requested by somebody who is vouching for the program.
But as far as the Department is concerned, they do not
really have any of the facts. They do not really have any of
the detailed facts to make a judgment about whether this is
valuable research, addressing a need and producing results and
should be continued or not.
So why do we not try to maybe, in this appropriations bill,
spell out that this is going to be an initiative that we think
ought to be undertaken so we can make a determination, but not
just right now, this year, in this bill, say all of these
special grants are presumptively ineffective or not producing
the results for which they were earlier intended or expected
and should not be funded?
That to me would be a much more logical and thoughtful way
to proceed, rather than to take the administration's request
and just do away with all of these projects. I do not think
that is wise or thoughtful. I think it is irresponsible to do
that.
What is your reaction to that, Dr. Robinson?
Dr. Robinson. Well, I certainly cannot object to the
statement you laid on the table. Postaward management is an
area the agency needs to develop to the same standard as our
preaward processes.
My sense is the special research grants that are included
in the administration's budget versus those that are
eliminated, are supported because there is fairly firm evidence
that they are addressing national problems or issues and they
are doing it in a way that we are seeing progress.
A few have emerged by virtue of the strength of the
projects and definitely address either national or broad
regional issues. Even then, we do not have the kind of
postaward management assessment that you laid out that would be
most beneficial as we look, not just to next year, but what is
happening to this series of projects.
Mc Intire-Stennis Program
Senator Cochran. I appreciate that very much. As we proceed
to markup after our hearings, I hope that we can establish a
dialog as to how best we address that in this bill, so that we
do not make the mistake of eliminating special grants that we
think are providing real benefits to American agriculture and
American citizens and are justified.
Let me ask you this. I do not know who wants to answer it,
but what specific research is carried out, just for the benefit
of the record, under the McIntire-Stennis research program?
Dr. Gonzalez. Dr. Robinson.
Dr. Robinson. The program carried out under McIntire-
Stennis is through colleges of forestry or forestry and natural
resources in each of the States. It is a formula-based fund
allocation to support in a cooperative way the partnership
between the State and the Federal Government on forestry
research at certified State institutions. This research
complements the research done by the Forest Service through its
many regional labs.
It addresses the needs of forestry, be they farm lot
forestry production or broader scale forestry production,
within the States or regions of this country.
Senator Cochran. Let me ask you one other question for the
record, so we will have this information. I do not suggest that
you have this right now to submit, but please provide the
committee a description of each project funded through the
McIntire-Stennis program, what forestry research is being
supported by ARS and the CSREES, and the level of funding for
each project, and who is conducting the research? That would be
good for us to understand.
Dr. Robinson. We will get that information to you, sir.
[The information follows:]
McIntire-Stennis Cooperative Forestry Research Program
In fiscal years 1997 and 1998, $27,735,000 was appropriated
each year to support the McIntire-Stennis Cooperative Forestry
Program. Funds assist the States in carrying out a program of
forestry research at State forestry schools, and in developing
a trained pool of forest scientists capable of conducting
needed forestry research. Forestry research funded through the
McIntire-Stennis Program focuses on the following nine
categories: (1) Reforestation and management of land for the
production of crops of timer and other related products of the
forest; (2) management of forest and related watershed lands to
improve conditions of water flow and to protect resources
against flood and erosion; (3) management of forest and related
rangeland for production of forage and domestic livestock and
game and improvement of food and habitat for wildlife; (4)
management of forest lands for outdoor recreation; (5)
protection of forest lands for outdoor recreation; (6)
protection of forest resources against fire, insects, diseases,
or other destructive agents; (7) utilization of wood and other
forest products; (8) development of sound policies for the
management of forest lands and the harvesting and marketing of
forest products; and (9) such other studies as may be necessary
to obtain the fullest and most effective use of forest
resources.
A report detailing the projects supported by McIntire-
Stennis funds has been provided to the Committee.
Aquaculture Census
Senator Cochran. In the National Agricultural Statistics
Service proposal, there is a request for an increase of
$500,000 and two staff-years to conduct an aquaculture census
that would provide for the first time detailed State and
national data about aquaculture production. It would be helpful
to us if you could explain--I do not know who is going to
answer. Mr. Bay?
Dr. Gonzalez. Mr. Chairman, I will ask Mr. Bay to respond.
Senator Cochran. Mr. Bay, explain the importance of this
census and who would use the data? What is this for? Is this a
one-time cost or is this going to be an annual census of sorts?
Mr. Bay. Senator, this would be a one-time cost or it would
be a cost every 5 or 10 years depending on what the industry
felt like they needed. It would follow the census of
agriculture, where we pick up very limited information on the
aquaculture industry, and it would make it possible for us to
provide a lot more detail and cover a lot more species that are
not covered by the census of agriculture or the current
agricultural statistics program that we have for catfish and
trout.
Agricultural Research
Senator Cochran. The President in his State of the Union
talked about emphasis on agriculture, making investments in--I
am talking about research generally--proposing increases in
National Institutes of Health research, a lot of emphasis on
that in the speech, talking about the National Science
Foundation and its programs. We see in the budget request a lot
of increases for National Science Foundation programs.
I do not have any objections to any of those. Those are
very important areas of concern. But there is almost short
shrift and no emphasis on the importance of agriculture
research, which is one of our basic needs in our society and
one of the most important economic activities in our society,
providing surplus in trade. The record is unquestionably
impressive in terms of the benefits that flow from agriculture
research.
So it is my hope that we will not lose sight of the
importance of it, that it does not get lost in the shuffle,
which is what my impression is. Here we see a budget request
cutting substantially the funding for research programs done by
the Department of Agriculture, and I do not think this
committee is going to just sit back and say, OK, if that is the
way you want it, Mr. President, we will go along with that. I
think we are going to say: No, not so fast; we need to look at
this very carefully.
That is my attitude. I think there are ways that we can
continue to reap benefits from agriculture research and we
ought to put the emphasis there and not let it get lost in the
shuffle.
Submitted Questions
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:]
Research, Education, and Economics
Questions Submitted by Senator Cochran
food safety initiative
Question. An increase of $26 million is requested for fiscal year
1999 across ARS, CSREES, and ERS for the Food Safety Initiative. How
much has each of the research, education, and economics mission
agencies invested in food safety research and related activities in
each of fiscal years 1997 and 1998?
Answer.
REE FOOD SAFETY INITIATIVE
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
--------------------------------------- Increase
1997 1998 1999
----------------------------------------------------------------------------------------------------------------
Agricultural Research Service............................... $49,647 $54,849 $68,819 $13,970
Economic Research Service................................... 485 485 1,391 906
Cooperative State Research, Education, and Extension Service 6,234 8,765 19,765 11,000
\1\........................................................
---------------------------------------------------
Total REE............................................. 56,366 64,099 89,975 25,876
----------------------------------------------------------------------------------------------------------------
\1\ Funds include the National Research Initiative, the Food Safety Special Research Grant Program, and
Extension Smith-Lever 3(d) Food Safety. In addition approximately $6 million is provided annually through
formula programs and other special research grants for related food safety research.
Question. How is this research being coordinated among the
agencies?
Answer. An interagency working group (IWG) under the National
Science and Technology Council was formed in December 1997 to develop a
food safety research agenda. The group is co-chaired by the Deputy
Under Secretary for Research, Education and Economics within USDA and
the Science Advisor to the Secretary of HHS. Agencies within the
Federal Government involved with food safety research participate in
this IWG; this includes, ARS, CSREES, ERS, FSIS, FNS, and Office of the
Chief Economist in USDA; FDA, CDC, NIH in HHS; and EPA. The IWG has
developed a framework for assessing food safety research which looks at
all the links from farm to table. Currently an inventory of food safety
research across all the agencies is being conducted. This inventory
will lead to an identification of any gaps in the research agenda and
will also serve to ensure that there is no duplication of effort in
research that is currently being conducted on food safety. The IWG
expects to complete the research agenda this summer.
Question. How has duplication of effort been avoided?
Answer. This is the second year of the Food Safety Initiative. The
REE agencies have worked closely with the other agencies, including
FSIS, FDA, and CDC, in the development and implementation of the
initiative. The current activity to develop an integrated food safety
research agenda is one aspect of this overall effort to coordinate
agency activities. This coordination effort has led to a government-
wide program in which the food safety agencies each make distinct and
complementary contributions to the overall initiative objectives.
Question. What have been the results of these investments to date?
Answer. USDA has a long history of serving the research needs of
FSIS, APHIS, FDA, and other agencies responsible for food safety, as
well as more broadly producers, food processors and the public. The
recent release of new techniques that use benign microbes to control or
eliminate Salmonella in poultry promises to help limit the risk of this
serious food poisoning in humans, is just one recent example of how
USDA investment in research is contributing to the safety of the U.S.
food supply. Some other examples from fiscal year 1996 and 1997
include:
--a monoclonal antibody was developed by ARS to identify unacceptably
high levels of glycoalkaloids in potatoes (and tomatoes and
eggplants if needed) which can be toxic to humans. This
technology can and will be commercialize in a test kit form;
--development by ARS of a specific avian immune cytokines which
protects chickens against salmonella serotypes;
--research on E. coli 0157:H7 in production settings has shown that
incidence of shedding of this organism is lower in feedlot beef
animals than in adult cattle in cow-calf heads. Sources of
contamination included often contaminated surface water
supplies. Providing clean uncontaminated water to the animals
would reduce the incidence of E. coli shedding. Related
research on Intimin, an outer membrane protein of E. coli
0157:H7, demonstrated the important role that membrane plays in
infecting newborn calves. This knowledge may lead to ways to
prevent E. coli colonization;
--a Salmonella Risk Assessment Model for Poultry has been released
and is currently being evaluated by processors. The software
program assesses changes in microbiological safety through
processing, storage, distribution, and final meal preparation;
--through cooperative HACCP research with FSIS, APHIS, and the
National Pork Producer's Council, technologies have been
developed that will allow for the production of pigs that are
free of Trichinella spiralis. Periodic monitoring with an ARS
developed blood test will certify that the pigs are Trichinae
free;
--ongoing CSREES supported research with steam pasteurization of
carcasses has proved that this process can consistently meet
the pathogen reduction requirements for E. coli control, which
is to be used as an index for process control. Results on
Salmonella control also demonstrate that steam pasteurization
can achieve the pathogen control standards required by USDA;
--several Pathogen Modeling Programs developed by ARS are widely used
by microbiologists in industry, regulatory agencies, and
educational institutions to estimate the growth or survival of
pathogens during specified processes without expensive
laboratory testing;
--researchers supported by CSREES found that trisodium phosphate is
an effective antimicrobial rinse of catfish fillets. They also
found that atmosphere steam treatment of whole catfish reduced
surface microbial numbers and resulted in the possibility of
extending refrigerated shelf life without adversely affecting
acceptance;
--discovery that certain strains of Aspergillus flavus (that do not
produce aflatoxins) out compete aflatoxin producing strains
thus limiting contamination. Tests using biological control
techniques reduced aflatoxin levels in corn and peanut products
by 90 percent; and
--a number of rapid immunoassay tests have been developed by ARS to
measure drug and chemical residues in red meat and poultry.
These examples are just a few of the discoveries resulting from
USDA's research investments that are contributing directly to making
U.S. agricultural products safe.
food genome initiative
Question. The fiscal year 1999 budget requests a total of $40
million in USDA funding for fiscal year 1999 for a food genome research
initiative. Dr. Gonzalez, you indicated that the President's Food
Genome Initiative is a collaborative effort involving multiple Federal
agencies and researchers in the academic and private sector, and that
you are in the final stage of developing a concept paper on the USDA's
role in Food Genomics. Which other federal agencies are involved in
this effort? Can you briefly distinguish the role of USDA and each of
the other federal agencies involved in this effort? What is the total
level of fiscal year 1999 funding proposed for this initiative, by
federal agency?
Answer. The Interagency Working Group on Plant Genomics (IWG)
included representatives from USDA, HHS, NSF, Department of Energy,
OSTP, and OMB. The chair of the IWG was the Chief Scientist, CSREES/
USDA. The IWG issued its report in January, 1998. A copy of the report
is provided for the record.
[Clerk's note.--The IWG report does not appear in the hearing
record but has been submitted to the committee.]
REE now has a draft Blueprint for Action for the USDA Food Genome
Research which lays out the essential core activities for food genome
research. The USDA Food Genome Initiative will focus on mapping,
sequencing, identifying, and understanding the function and control of
genes responsible for economically important traits in agricultural
plants, animals and associated microbes. In addition to coordinated
efforts in genomic research within USDA's National Research Initiative
in the Cooperative State Research, Education, and Extension Service,
Agricultural Research Service, and the Economic Research Service, the
Initiative will be coordinated fully with other Federal agencies that
are pursuing genome activities, principally through the Interagency
Working Group of the National Science and Technology Council. Thus, the
Initiative will build upon and be coordinated with ongoing genomic
research in model organisms such as the Human Genome Program at the
National Institutes of Health and the Department of Energy (DOE); the
Arabidopsis Genome Research Program at the USDA, the National Science
Foundation (NSF) and Department of Energy; the NSF Plant Genome
Initiative; the DOE Microbial Genome Program; and the Advanced
Technology Program of the U. S. National Institute of Standards and
Technology. Coordinated efforts will reduce potential duplication and
provide for efficiency in moving towards long-term goals.
FOOD GENOME INITIATIVE FUNDING
[Dollars in millions]
------------------------------------------------------------------------
Fiscal year--
--------------------------------------
Agency 1999 1999
1998 President's proposed
estimated budget increase
------------------------------------------------------------------------
Department of Agriculture........ 25 40 15
Agriculture Research Service..... 11 14 3
Cooperative State Research, 14 26 12
Education, and Extension........
National Science Foundation...... 60 60 ...........
Department of Energy............. 0.15 0.15 ...........
--------------------------------------
Total...................... 85 100 15
------------------------------------------------------------------------
Question. Would you please describe the importance of the Food
Genome Initiative, including fiscal year 1999 and future years
objectives and costs.
Answer. The foundation of future gains in agricultural research
will be driven in large part by research conducted under our food
genome initiative. The knowledge gained from this research in genomics
will permit the United States to develop new technologies for
improvements in the yields of major crops, pest and disease resistance,
enhanced quality of agricultural products, and new agricultural
products. The overall thrust of the USDA research is better
understanding of the structure of the entire DNA composition of the
genome of economically important crops and livestock and identification
of how this structure relates to functional properties of these animals
and crops.
The draft concept paper describes the following objectives under
the Food Genome Objective:
--Understand the structural features of the entire DNA make-up of a
genome;
--isolate and discover the biological function of expressed genes;
--identify the role of identified genes in the outward appearance and
performance of economically important plants and animals;
--construct bioinformation systems that integrate data across
species; and
--create new products important to U.S. agriculture using genome
technologies.
The concept paper proposes funding for the Food Genome Program at
$40 million in fiscal year 1999, increasing to $70 million in fiscal
year 2000, and $100 million in fiscal year 2001 and subsequent years.
Question. Is food genome research the initial phase of a longer-
term federal genome research program? What is the blueprint for future
research in the area of genomics and what level of federal investment
will be required?
Answer. The blueprint for research on food genomics is envisioned
as a long term effort. The draft concept paper identifies priorities
and budget requirements for the first three years. The longer term
strategy will be modified based on accomplishments.
The draft concept paper, now out for review and comment, provides a
blueprint for a coordinated REE food genome program involving ARS,
CSREES, and ERS. Specifically the paper describes the current intra-
and extramural programs and their achievements, the overall objectives
of the initiative, and planned activities directed at achieving those
objectives. The proposed level of federal investment is $40 million in
fiscal year 1999, $70 million in fiscal year 2000, and $100 million in
fiscal year 2001 and subsequent years.
Question. The Department's fiscal year 1999 request includes a $30
million increase in the discretionary appropriations for this
initiative and proposes legislation which involves an additional $10
million. What legislative authority is required?
Answer. The Administration proposes a new authority for a
competitive research grants program specifically focused on supporting
research conducted under the Food Genome Initiative.
Question. Please describe the genome research program already
conducted under ARS and CSREES. Please specify the level of funds now
being committed to this research, where this research is being
conducted, and what is being accomplished.
Answer. USDA conducts plant and animal genomics research through
well-developed intramural and extramural programs. These programs are
designed to complement each other in partnership with State
agricultural experiment stations, colleges, universities, other
research institutions or organizations, Federal agencies and
laboratories, private organizations, corporations, or individuals.
The USDA's intramural plant and animal genomic research program has
been conducted by the Agricultural Research Service (ARS) through their
network of laboratories and strategic cooperative agreements with
selected universities and private sector researchers. Substantial
resources have been devoted to molecular genetic map development.
Numerous genetic markers on the maps of cattle, swine, sheep, and
poultry have been developed in ARS laboratories. The same is true for
the genetic maps of a number of important crop species. The ARS has
research projects aimed at the use of molecular genetic markers for the
characterization of germplasm and for the selection of crop varieties
with enhanced pest resistance and product quality. Other ARS programs
are aimed at the isolation and manipulation of genes controlling
disease resistance and stress tolerance in plant and animal species. An
important result of USDA's genomic funding has been the development of
extensive crop and animal genome databases now available on the World
Wide Web hosted by the USDA National Agricultural Library.
In fiscal year 1998, ARS' food genome research is funded at $11.5
million as follows:
Plant Genome Research
Location Funding
Albany, California............................................ $217,100
Ames, Iowa.................................................... 218,100
Beltsville, Maryland.......................................... 161,800
Columbia, Missouri............................................ $217,200
Headquarters.................................................. 2,544,300
Ithaca, New York.............................................. 328,500
--------------------------------------------------------------
____________________________________________________
Total................................................... 3,687,000
Animal Genome Research
Location Funding
Athens, Georgia............................................... $170,800
Ames, Iowa.................................................... 559,000
Beltsville, Maryland.......................................... 2,777,400
East Lansing, Michigan........................................ 926,100
Clay Center, Nebraska......................................... 3,377,800
--------------------------------------------------------------
____________________________________________________
Total................................................... 7,811,100
The USDA's extramural program is managed by the Cooperative State
Research, Education and Extension Service (CSREES) in partnership with
the Land Grant university system and other organizations. Whenever
possible, CSREES provides national leadership by coordinating and
facilitating genome research activities across federal agencies and
regional projects. Under the auspices of CSREES National Research
Initiative (NRI), NRI grants are awarded to genomic projects on
agriculturally important crops, forest trees, and animals.
The NRI Plant Genome program places priority emphasis on cloning
agriculturally important genes; developing new technologies for genome
mapping, gene manipulation, gene isolation or gene transfer in plants;
creation of new germplasm lines or varieties to solve problems of U.S.
agriculture; and software development for databases and bioinformatics.
CSREES, in a joint effort with NSF and DOE, is engaged in an
international cooperative effort in mapping and sequencing the genome
of the model plant, Arabidopsis thaliana. This program, which began in
1996, was the first effort to provide a complete DNA sequence of a
plant, similar to the effort being done by NIH to completely sequence
the human genome and by DOE to sequence microbial genomes. CSREES has
also taken the lead, along with other Federal Agencies, to begin
coordinating U.S. activities with the international rice genome
sequencing programs. Sequencing Arabidopsis and rice as model systems
in plants provides broad coverage of the plant kingdom. Compared to
other higher plants, the genome of Arabidopsis and rice are small,
making whole genome sequencing of these two plants a readily achievable
goal. Arabidopsis and rice can become reference or model genomes for
two major classifications of plants, dicots and monocots, respectively.
It is anticipated that the genomes of Arabidopsis and rice could be
completed in the years 2000 and 2004, respectively, provided that
sufficient funding is available through a USDA Food Genome Initiative.
This research will be vital to facilitate international collaboration
to ensure that data, materials, and technologies are readily available
to U.S. scientists and the larger agricultural community including
growers and producers.
Priority emphasis of the NRI Animal Genetics and Genome Mapping has
been placed upon genomic mapping and organization; gene identification
and interactions; technology development, and economic or quantitative
trait loci and marker assisted selection. CSREES provides leadership
and coordination for a national, coordinated research program to map
the genome of agriculturally important animal species through Regional
Projects of the National Animal Genome Research Program. The program
involves CSREES, ARS, State Agricultural Experiment Stations, and other
universities. CSREES also provides leadership for several other
Regional Projects, all with a national focus, that make major
contributions to animal genomic research such as, Advanced Technologies
for the Genetic Improvement of Poultry; Genetic Improvement of Cattle
Using Molecular Markers; Positional and Functional Identification
Economically Important Genes in the Pig; Integration of Quantitative
Molecular Technologies for Genetic Improvement of Pigs; Genetic Basis
for Resistance to Avian Disease; and Genetic Maps of Aquaculture
Species.
In fiscal year 1998, CSREES funding devoted to food genome research
under the NRI is estimated to be $11.5 million for plant genome
research and $2.9 million for animal genome research for a total of
$14.4 million.
There are many accomplishments in plant and animal genomics to
date. They include: development of genomic maps in corn, soybean,
cotton, wheat, barley, rice, sorghum, loblolly pine, conifers, poplar,
cattle, swine, wheat, poultry, horses, catfish and many other plant and
animal organisms for genetic improvement; Quantitative Trait Loci have
been mapped that target genes of paramount importance to producers and
growers to include tolerance to environmental stress, pest and disease
resistance, milk production and fat deposition, and quality. The USDA
is the world leader in developing technologies used in gene
transformation systems, agricultural bioinformatics, and germplasm
resources for improved genetic enhancement of both plants and animals.
office of pest management policy
Question. How is this Office being funded for fiscal year 1998?
What are the current funding and staffing levels for this Office?
Answer. Funding for the Office of Pest Management Policy (OPMP) for
fiscal year 1998 will come primarily from existing National Agriculture
Pesticide Impact Assessment Program (NAPIAP) funding, including
transfers of existing positions and staff. The funding level for NAPIAP
in fiscal year 1998 is about $1 million. Of the $1 million, about
$400,000 in NAPIAP funds will be used for salaries and other expenses
of the OPMP for the five remaining months of the fiscal year. The staff
of the office currently includes a director, a staff entomologist
transferred from Environmental Protection Agency (EPA), and a staff
plant pathologist transferred from Beltsville NAPIAP. Current plans
call for a total of 10 staff positions, representing all agricultural
sciences. The positions will be filled through recruiting and
transfers.
Question. Why did you determine there was need for a separate
office to focus principally on Food Quality Protection Act-related
issues? Please describe the role of this new office and list individual
programs, by agency, that will be coordinated by this office.
Answer. Although the Food Quality Protection Act of 1996 (FQPA)
requires that the Department establish a ``minor use'' program, the
role of the new office extends beyond minor use issues and is charged
with integrating and coordinating existing USDA pesticide and pest
management programs. The office is also responsible for improving
communications with and strengthening the existing network of grower
organizations and crop specialists at land grant institutions. FQPA has
the potential to dramatically alter pest management systems for many
crops. It is important that the Department provide EPA with high
quality data on current pest management tools and practices to make
better informed regulatory decisions. Furthermore, the Department must
be responsive to the needs of the agricultural community in developing
alternative pest management practices to meet critical needs that may
develop as a result of EPA's regulatory process. In addition to its new
responsibilities, OPMP will assume the headquarters functions of the
NAPIAP program. The state Land Grant component of NAPIAP will remain in
place and continue to serve as the primary pest management data
gathering and analyses arm of the office.
Existing programs include:
Food Consumption Surveys--ARS
NAPIAP--ARS; CSREES; ERS; and Forest Service
Pest Management Alternatives Program (PMAP)--CSREES
Areawide Integrated Pest Management--ARS
Biological Control--ARS; CSREES; APHIS
Pesticide Use Surveys and Analysis--NASS and ERS
Pesticide Data Program--AMS
Integrated Pest Management Research--ARS, ERS, and CSREES
IR-4 Minor Crop Pest Management Program--CSREES and ARS
Pesticide Applicator Training--CSREES
usda responsibilities under the food quality protection act (fqpa)
Question. You indicate that the Food Quality Protection Act of 1996
adds to the need for effective pest management research. Please cite
for the record the requirements of this Act which will require
additional investments by the USDA research, education, and economics
mission agencies and the additional funds proposed for fiscal year 1999
and each future fiscal year to fulfill these requirements.
Answer. The Secretary of Agriculture has been given many new and
enhanced responsibilities as a result of the passage of the Food
Quality Protection Act (FQPA). The Secretary's FQPA-related functions
can be grouped into the following categories:
(1) Explicit USDA functions under the provisions of FQPA.
(2) Explicit USDA functions provided for in FQPA amendments to
FIFRA.
(3) Explicit USDA functions provided for in FQPA amendments to
FFDCA.
(4) Other current law USDA responsibilities that will be enhanced
by FQPA.
explicit usda functions under fqpa
Data Collection--Infants and Children
(1) Consumption Patterns--The Secretary is directed to coordinate
the development and implementation of survey procedures with respect to
food consumption patterns of infants and children. Secretary must
consult with EPA and HHS. (Section 301 (a) of FQPA)
(2) Residue Data--The Secretary is directed to improve data
collection of pesticide residues, to provide guidelines for the use of
comparable analytical and standardized reporting methods, and to
increase the sampling of foods most likely consumed by infants and
children. (Section 301(c) of FQPA)
Data Collection--Pesticide Use
(1) Collection--The Secretary is directed to collect data on the
use of pesticides on major crops and other dietarily significant crops
through surveys of farmers or other sources. The Secretary must make
the data available to EPA. (Section 302 of FQPA)
(2) Coordination--The Secretary is directed to coordinate with EPA
in the design of the surveys. (Section 302(c) of FQPA)
(3) Study & Report--Within 1 year of enactment, the Secretary must
carry out a study, in consultation with EPA, and report to Congress on
the current status and potential for improvement of Federal agency
collection of pesticide use information. The study must include an
analysis of options available to increase the effectiveness of the
collection, the costs and burdens placed on agricultural producers and
other pesticide users, and the effectiveness in tracking risk reduction
by those options. (Section 305 of FQPA)
Integrated Pest Management
The Secretary is directed to implement research, demonstration, and
education programs to support adoption of IPM and to make information
on IPM widely available to pesticide users. Federal agencies must use
IPM techniques and promote IPM through procurement and regulatory
policies, and other activities. (Section 303 of FQPA)
ii. explicit functions under fqpa amendments to fifra
Minor Use Crop Protection Incentives
(1) Definition--FQPA creates several incentives for the
registration of minor pesticide uses. The Secretary is responsible for
determining whether a pesticide use will qualify as a minor use based
upon the total acreage on which the pesticide is used. Alternatively,
the Secretary will consult with EPA in determining whether a pesticide
use will qualify as a minor use due to the lack of sufficient economic
incentive to support its registration. (Section 2(ll)(1) & (2) of FIFRA
as added by section 210(a) of FQPA)
(2) Exclusive Use Period--The Secretary is required to consult with
EPA in determining whether particular minor uses will qualify a
pesticide for extension of the registration data exclusive use period.
(Section 3(C)(1)(F)(ii) of FIFRA as amended by section 210(b) of FQPA)
USDA Minor Use Program
(1) USDA responsibilities related to minor uses:
The Secretary is directed to assure the coordination of the
responsibilities of USDA related to minor uses of pesticides including:
(a) IR-4 Project (established to develop registration data for
minor uses).
(b) National Pesticide Resistance Monitoring Program (Established
by section 1651 of the FACT Act.)
(c) Support for IPM research.
(d) Consultation with growers to develop minor use data.
(e) Assistance for minor use registrations, tolerances, and
reregistrations with EPA. (Section 32(a) of FIFRA as added by section
210(i) of FQPA)
(2) Minor Use Data Grants and Revolving Fund--The Secretary is
directed to establish and operate a grant program to provide matching
funds for the development of data to support minor use pesticides. Any
data that is developed as a result will be jointly owned by USDA.
(Section 32(b) of FIFRA as added by section 210(i) of FQPA)
Identification of Public Health Pests
The Secretary is directed to coordinate with the Administrator of
EPA to identify pests of significant public health importance. (Section
28(d) of FIFRA as added by section 236 of FQPA)
iii. explicit functions under fqpa amendments to ffdca
Dietary Surveys
The Secretary is directed to conduct surveys to document dietary
exposure to pesticides among infants and children in order to provide
information for use by the Administrator in the establishment of
pesticide residue tolerances. (Section 408(b)(2)(C) of FFDCA as amended
by section 405 of FQPA)
Actual Use Data
The Secretary may collect and provide aggregate pesticide use data
for consideration by the Administrator when assessing chronic dietary
risk in establishing a pesticide residue tolerances. (Section
408(b)(2)(F) of FFDCA as amended by section 405 of FQPA)
Consumer Right to Know
The Secretary is required to consult with EPA and HHS in the annual
publication of information for public display by retail grocers
relating to the risks and benefits of pesticide residues and
recommendations to consumers for reducing dietary exposure. (Section
408(o) of FFDCA as amended by section 405 of FQPA)
iv. current law usda responsibilities that will be enhanced by fqpa
Various provisions of current law, although not directly amended by
FQPA, will continue to require the involvement of the Secretary of
Agriculture. In several cases, the role of the Secretary may even be
enhanced as a result:
Establishment of Tolerances (Maximum Residue Levels)
FQPA requires the consideration of various risk factors and data as
part of the decision making process involved in issuing a tolerance
under the new law. Much of the information and data on which these
decisions will be based is to be collected by the Secretary. The data
collected and provided by the Secretary will be extremely important to
registrants and pesticide users seeking the establishment of tolerances
for various pesticides. (Section 408 of FFDCA as amended by section 405
of FQPA)
Emergency Exemptions
Section 18 of FIFRA authorizes EPA to exempt the use of certain
pesticides from registration requirements in order to handle local
emergency situations. The FQPA adds a new requirement that each such
exempt pesticide use must have a tolerance in place under the FFDCA
when the exemption is granted. As stated, the Secretary will provide an
increasingly important function with respect to the approval of all
tolerances, which will be most critical in the case of tolerances
associated with Section 18 emergency exemptions to meet local needs
that must be issued within a short period of time in order to be
useful. (Section 18 of FIFRA; Section 408 of FFDCA as amended by
section 405 of FQPA)
Research Coordination
Section 20 of FIFRA requires EPA to coordinate with the Secretary
in conducting IPM research, which is to receive increased emphasis
under FQPA.
Regulations--Comments by USDA Sections 21 and 25 of FIFRA require
EPA:
(1) to notify and seek comments from the Secretary in advance of
any rulemaking under FIFRA,
(2) to share with the Secretary any proposed or final regulations
in advance of their publication, and
(3) to take into consideration and respond to any comments made by
Secretary with respect to the regulations.
These current requirements will apply to any regulations issued by
EPA to implement the amendments made by FQPA to FIFRA.
Identification of Pests
Section 28 of FIFRA directs the Secretary to cooperate and
coordinate with EPA in the identification of:
(1) Pests that must be brought under control.
(2) Available methods of pest control.
(3) Minor pest control problems, including minor or localized
problems in major crops.
(4) Factors limiting the availability of specific pest control
methods.
The Secretary is also required to prepare an annual report to EPA
containing the above information, indicating crucial pest control needs
based on any shortage of control methods identified above, and
describing research and extension efforts designed to address those
needs. This function will be increasingly important as pest control
products are lost due to the tougher standards established under FQPA.
Conditional Amendments
Section 3(c)(7) of FIFRA requires concurrence by the Secretary with
any determination by EPA of the availability of effective alternative
pesticides for the purposes of making a risk-benefit determination for
a conditional registration of a pesticide use on a minor food or feed
crop.
Recordkeeping
Section 1491 of the 1990 Farm Bill directed the Secretary to
require certified applicators of restricted use pesticides to keep
records of pesticide use, make the information available when
necessary, compile a data base, and publish annual comprehensive
reports in conjunction with EPA. The new data collection requirements
in FQPA (see above) seem to build on this current law requirement by
requiring the Secretary to collect data from farmers and other sources
on the use of all pesticides. One difference, however, is that the new
requirements do not contain the same safeguards and penalties to avoid
misuse of the data collected.
The fiscal year 1999 budget includes the following increases
related to FQPA needs:
Program Increase
IPM Research Grant Program....................................$5,300,000
Pest Management Alternatives.................................. 2,600,000
Extension IPM Application..................................... 4,200,000
Food Consumption Surveys...................................... 1,500,000
Pesticide Use Surveys......................................... 1,400,000
Pesticide Residue Data........................................ 4,200,000
IR-4 Minor Use Program........................................ 1,700,000
NAPIAP Programs............................................... 1,600,000
Applicator Training Programs.................................. 1,500,000
Budget needs beyond fiscal year 1999 will depend on EPA's schedule
and regulatory policy decisions and will be addressed in future budget
requests.
integrated pest management (ipm)
Question. The fiscal year 1999 budget again requests increased
funding for the Integrated Pest Management (IPM), which is the
Administration's initiative to bring 75 percent of the nation's
farmland under IPM practices by the year 2000. Can you give us a status
report on what has been accomplished in that regard to date, what
percent of the nation's crop acreage was under IPM practices when this
initiative began and where we are now, and what the additional funds
you are requesting for 1999 for this project will achieve?
Answer. A consensus has emerged that IPM systems should be measured
along a continuum, ranging from none to high levels of IPM adoption.
The Department's 1994 report, Adoption of Integrated Pest Management in
the United States, measured adoption along a continuum, and this
approach was refined by Consumers Union in its 1996 report, Pest
Management at the Crossroads. These analyses estimated that 70 percent
of crop acreage is managed using IPM systems, however, 38 percent of
these systems are at the low end of the IPM continuum. Our goal is to
develop and help growers implement IPM strategies that permit them to
move from the low end of the continuum to the high end of the
continuum, moving incrementally toward biologically based IPM systems.
The overall percentage of U.S. crop acres under IPM in 1997
remained at the 70 percent level, and will likely remain constant in
1998. However, we remain convinced that the increased investments
proposed in the President's budget request for fiscal year 1998, and
again proposed in fiscal year 1999, will permit us to reach the 75
percent adoption goal by 1999 or 2000. More importantly, we believe
that these investments will accelerate the adoption of IPM systems at
the medium and high end of the continuum. We believe that increasing
adoption of pest management systems at the high end of the IPM
continuum will benefit all Americans by increasing profitability,
protecting water quality and farm worker safety, and enhancing the
wholesome quality of our Nation's food supply. We believe that an
accelerated effort is warranted to develop and help growers implement
pest management strategies that will help them reduce reliance on high
risk pesticides and enhance the sustainability of their operations.
Question. Please provide a list of the fiscal year 1999 IPM funding
increases for the research, education, extension and economics agencies
in order of priority.
Answer. The increases proposed for IPM and related activities
reflect USDA's goal of helping U.S. agriculture implement IPM practices
on 75 percent of the nation's crop acreage by the year 2000, and to
help producers respond to the challenges they will face as the result
of Food Quality Protection Act (FQPA) implementation. Each research and
extension program that supports IPM activities is coordinated to
support major IPM goals. To further the development of a coordinated
and integrated effort, USDA has created a new Office of Pest Management
and Policy (OPMP) to serve as the focal point within the Department for
pest management and pesticide regulatory issues.
Proposed IPM and IPM-related activities in the fiscal year 1999
budget focusing on this integrated and coordinated approach are
summarized below. All of these would be considered high priority within
the Department's 1999 budget.
IPM Initiative.--Activities proposed under this multi-faceted
initiative are built around producer-identified needs for applied
research and education projects using pest control technologies that
are ready for large area trials and adoption. These regional or area-
wide projects will be supported by proposed increases of approximately
$10 million for CSREES and ARS.
The initiative also includes a proposed increase of $2.7 million
for research on alternatives to pesticides that may be lost to
producers as EPA proceeds to implement FQPA and on a decision support
system that will help identify crop-pest combinations where alternative
controls are most critical.
Pesticide Use Data Collection and Analysis.--Net increases of $2.1
million are proposed for pesticide use and food consumption data. USDA
is the sole or primary source for this data. Information on actual use
and consumption patterns is needed to conduct more accurate risk
assessments. These programs include the Continuing Survey of Food
Intake by Individuals (CSFII) carried out by ARS, the Pesticide Data
Program under AMS, and pesticide use survey and analysis conducted by
NASS and ERS, respectively.
Pesticide Registration, Clearance, Assessment and Training.--Net
increases of $4.8 million are proposed for programs to support the
registration process with information and analyses on the costs and
benefits of current and alternative pest management strategies at the
local, regional, and national scales; programs to gather data on
pesticide residues for new and safer minor-use products; to fund the
new Office of Pest Management Policy; and for applicator training to
build confidence in the system that relies on well informed pesticide
applicators. Accurate data and analysis are essential to help policy-
makers understand the implications of pest-control decisions.
______
Agricultural Research Service
Questions Submitted by Senator Cochran
buildings and facilities
The President's fiscal year 1999 budget again proposes to close
down the ARS Prosser, WA; Mandan, ND; Orono, ME; and Brawley, CA
facilities. These are the same facilities proposed to be closed in the
President's fiscal year 1998 budget and the Congress continued to fund.
The Administration has indicated that research facilities are under
review by the Strategic Planning Task Force on Research Facilities
mandated by the 1996 farm bill and that the Task Force is scheduled to
report in April of 1999.
Question. Why prejudge the recommendations of that Task Force by
proposing to close four ARS facilities in fiscal year 1999?
Answer. The fiscal year 1999 Federal budget submitted by the
President recommends a number of new initiatives to address changing
priorities facing agriculture and the American consumer. The research
budget proposed for ARS reflects an increase of $32 million over the
current year. However, the Department is focusing on many priority
agricultural issues that must be addressed now by our research
scientists. This requires that ARS terminate ongoing projects and
reallocate these resources to the new or expanded initiatives as
recommended by the President. As a result, a cost-effective decision
was made to terminate and redirect resources to new research
initiatives and recommend closure of these research stations. These
actions are essential to the President's recommendations and cannot be
delayed for future decisions to be made by the Task Force.
Question. How many people and scientists would be impacted by the
closure of Prosser, WA; Mandan, ND; Orono, ME; and Brawley, CA
facilities? What is the annual operating cost of each of these
facilities?
Answer. All permanent employees impacted by the proposed closures
will be offered a position within the Agency. The number of impacted
employees and the annual operating costs for these facilities will be
provided for the record.
[The information follows:]
------------------------------------------------------------------------
Other
Facility Scientists employees Operating cost
------------------------------------------------------------------------
Prosser, WA................... 9 24 $2,435,000
Mandan, ND.................... 9 25 2,582,600
Orono, ME..................... 3 7 808,500
Brawley, CA................... ........... 4 287,200
------------------------------------------------------------------------
The fiscal year 1999 budget again requests $4 million in initial
construction funding through ARS for a new Melaleuca Research and
Quarantine Facility in Florida. Design and engineering work on this
facility was funded and completed by the Corps of Engineers.
Question. Why request funds for a new facility when the Strategic
Planning Task Force is now reviewing the need for additional
facilities?
Answer. This facility is being built in support of biological
control of the harmful introduced pest weeds, especially the Australian
paperbark tree Melaleuca, which is devastating the Florida Everglades
and causing major economic and environmental damage.
The need for the facility is immediate, based on the large number
of biological control agents for Melaleuca and other high-priority
introduced weeds that ARS and our State cooperators are now processing
through an old, small and technologically inadequate quarantine
facility in North Florida. Should the construction of this facility be
delayed, the goal of safely managing introduced weeds would be set
back, and Melaleuca and the other introduced pests would continue to
spread unchecked, resulting in increased economic and environmental
damage to Florida.
The new quarantine facility that ARS has proposed in south Florida
is to be built in cooperation with the U.S. Army Corps of Engineers and
the state of Florida. Although the primary and immediate use of the
facility is to safety test and process exotic natural enemies of the
paperbark tree Melaleuca, it will also be used for a number of other
purposes. In fact, the portion of the facility that the Army Corps is
interested in will address a number of aquatic and semi-aquatic weed
issues that are important for several of the states in the southeastern
U.S. (Alabama, Mississippi, Louisiana and Texas) and also the western
states of California and Oregon. In addition, the state of Florida
(specifically, the University of Florida Experiment Station at Ft.
Pierce) is interested in the use of this facility to evaluate and
process exotic beneficial agents and to study some pests under highly
contained laboratory conditions. Thus, this facility is expected not
only to help solve critical pest problems associated with Florida
wetlands, but it is also expected to serve agricultural needs
throughout the southeastern U.S. Examples of pest species that may be
the focus of control studies at the new facility would include the
brown citrus aphid, the silverleaf whitefly, thrips palmi, and the pink
hibiscus mealybug. More specifically, the facility is expected to test
and clear beneficial natural enemies of these pests for release into
field sites throughout the U.S. Since many of these pests affect both
field and greenhouse crops, the new technology developed at this new
facility could be utilized in almost every state in the country.
The ARS biological control of weeds program is a partner in the
Everglades Initiative, the National Strategy for Invasive Plant
Management, and the White House initiative on management of Non-native
Invasive Species. The facility is a key part of the nation's long-term
biological control program for introduced pests.
Question. Why does the Administration propose that this project be
transferred from the Corps of Engineers to the Agricultural Research
Service?
Answer. Although the original design funds were appropriated
through the Corps of Engineers, it had always been the intent that ARS
would staff and operate the facility.
Question. Would ARS face any problems or difficulties constructing
a facility based on the design and engineering work of the Corps of
Engineers?
Answer. For project continuity purposes, ARS would likely pursue an
arrangement with the Corps of Engineers for assistance during the
construction phase to facilitate the completion of the project. Since
ARS would be responsible for operating the facility, it is important
that ARS be involved in management and oversight of construction so
that the lab will meet the agency's research needs.
Question. What is the total cost of the project?
Answer. The latest cost estimate from the Corps of Engineers was
$3,143,000 in 1996 dollars. Applying escalation, construction
contingency, and administration costs, the total cost for construction
is estimated at $4 million.
Question. Funding of $2.5 million is requested for fiscal year 1999
to continue the modernization of the Beltsville Agricultural Research
Center. These funds are to be used for the design and construction of a
new poultry production facility as well as a number of other
miscellaneous projects. Please provide a list of each project for which
funds are requested.
Answer. In fiscal year 1999, BARC will use $2.5 million to design
and construct a replacement Poultry Facility for $2.2 million, demolish
facilities for $100,000, and utilize $200,000 for unplanned small
projects and unforeseen cost increases on other modernization projects.
Question. With respect to modernization of the Beltsville
Agricultural Research Center, please provide the Committee with an
update of the costs and projects completed and planned for the
modernization of the Beltsville Agricultural Research Center. Please
give projects and funding required by fiscal year.
Answer. Through fiscal year 1998, a total of $106,616,792 has been
expended on the modernization of BARC. The attached is a listing of
projects that have been completed, initiated, or are proposed through
fiscal year 1999. The funding source for these projects is the Building
and Facility Modernization funding.
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 (USNA) 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 Marshaling 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 Restoration.......................... 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 Maintenance.............................. 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 Obsolete 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......................................... 424,488
--------------------------------------------------------
____________________________________________________
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.................... 3,960,000
========================================================
____________________________________________________
Fiscal year 1996:
Construct Controlled Environment Facility........... 4,700,000
Design/Construct Infrastructure in 300 Area......... 2,000,000
Contingencies....................................... 60,000
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 BARC--East........................... 1,400,000
Fiber Optic Backbone Cabling........................ 700,000
Contingencies....................................... 700,000
--------------------------------------------------------
____________________________________________________
Total............................................. 4,500,000
========================================================
____________________________________________________
Fiscal year 1998:
Construct New Feed Center........................... 1,970,000
Fiber Optic Backbone Cable.......................... 850,000
Contingencies....................................... 380,000
--------------------------------------------------------
____________________________________________________
Total............................................. 3,200,000
========================================================
____________________________________________________
Proposed fiscal year 1999:
Design/Construct New Poultry Barn................... 2,200,000
Demolish Facilities................................. 100,000
Contingencies/Miscellaneous Small Projects.......... 200,000
--------------------------------------------------------
____________________________________________________
Total............................................... 2,500,000
The balance of funds needed beyond fiscal year 1999 is in excess of
$96 million. Due to the uncertainty regarding funding levels in 1999
and beyond, and potential changes to priority projects, the Agency has
not developed a firm phasing plan beyond fiscal year 1999.
Question. The budget requests $1.2 million to begin the first phase
of the air handling unit replacement at the National Agricultural
Library. What additional funding will be required in each future fiscal
year to complete this replacement project?
Answer. Replacement of the air handling units is planned in two
phases. The second phase is planned for fiscal year 2000 and is
estimated at $1.2 million as well.
Question. What additional buildings and facilities work is required
at the National Agricultural Library? Please give projects and funding
required for each, by fiscal year.
Answer. NAL completed a facility study in 1991 that identified
numerous code, mechanical, electrical, and architectural deficiencies
estimated at $18 million in 1998 dollars. In addition, NAL also
commissioned a space utilization study in 1990 and 1991 to investigate
how best to meet competing space needs. As a result of this study, it
became clear that NAL needed more space for collections. The Total cost
for the facilities work will increase based on how much is appropriated
each year and the corresponding rate of inflation.
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 a
sprinkler system; insufficient cooling capacity; lack of temperature
and humidity control; poor air circulation; lack of vacuum breakers;
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.
Due to uncertainty regarding future funding levels, the Agency has
not developed a firm phasing plan beyond Phase 1. Phase 1 was to
address the replacement of boilers, renovations to the first, third,
fourth, and fifth floors, and installation of sprinklers. Of the $6
million requested in fiscal year 1998 only $2.5 million was
appropriated. These funds will be used to renovate the first floor
which will include correcting a variety of architectural, mechanical/
plumbing, and electrical deficiencies. The renovation will also include
a variety of improvements for library users. In fiscal year 2000, the
Agency will request the balance of funds to complete Phase 1. This cost
is estimated at $3.7 million.
Question. The budget requests $5.6 million to initiate
rehabilitation of the 80 buildings and supporting infrastructure of the
National Animal Disease Center. What additional funding will be
required in each future fiscal year to rehabilitate the Center?
Answer. In fiscal year 1992, a Facility Condition Study indicated
that an estimated $140 million (escalated based on fiscal year 1998
implementation) would be required to upgrade the NADC facilities. In
fiscal year 1998, the Agency will take action to update the existing
Facility Condition Study to prioritize remaining needs at NADC. In
fiscal year 1999, ARS will use $5.6 million for the following
modernization projects.
--$1.7 million for design and construction plans for maintenance and
repair projects common to all research activities (electrical,
water and sanitary systems, central heating and cooling plants
and distribution systems, and waste treatment facilities).
--$3.9 million will be for design and construction costs associated
with maintenance and repair of the contaminated waste
collection piping system and treatment plant for infectious
agents.
Because of the different types of diseases today, research at NADC
has changed from Biosafety Level (BSL) 2 to BSL 3. Therefore, it is
necessary to provide adequate BSL-3 facilities at NADC. ISU has
received $3.0 million for the initial phase of the new BSL-3 AG Large
Animal Isolation Facility to complement the Necropsy/Incinerator
Facility. ISU has started preliminary planning for this new facility.
ARS will have to provide ISU with an easement authorizing ISU to have
access to NADC for various tasks related to the design and construction
of this project. This initial phase (approximately 5,000 gsf) will not
satisfy ARS needs, however, it will address APHIS immediate needs.
Ultimately, an additional 15,000 gsf will be necessary to satisfy ARS
needs beginning with, $2 million for planning and design of an addition
to the BSL 3 Large Animal Isolation Facility. Also, $3 million will be
needed for planning, design and construction to perform minimum safety
upgrades to plumbing and mechanical systems to an existing BSL-3 wing
of an Animal Isolation Facility.
Due to uncertainty regarding future funding levels and the update
to the Facility Condition Study currently underway, the Agency has not
developed a firm phasing plan beyond the above. In fiscal year 1998,
the Agency will develop a Master Plan for NADC that will provide the
Agency with a phasing plan and better cost information.
Question. The fiscal year 1999 budget requests $8.4 million to
continue its modernization project at its Center in Peoria, Illinois.
Which projects will be funded with the $8.4 million requested and what
additional funds will be required in each future fiscal year to
complete this modernization effort?
Answer. The $8.4 million in fiscal year 1999, will be used to fund
Phase 3 of the North Wing Renovation project. This includes design and
construction. This will complete the modernization effort of the North
Wing. Additional funds will be needed in future fiscal years to cover
planning, design, construction, and construction management of the
Chemical, Biological, and Administrative Wings as follows:
Fiscal year
2000: Chemical Wing Design.............................. $2,500,000
2001:
Chemical Wing Construction.......................... 20,400,000
Biological Wing Design.............................. 2,000,000
2002:
Biological Wing Construction........................ 16,400,000
Administrative Wing Design.......................... 2,000,000
2003: Administrative Wing Construction.................. 18,900,000
Question. Funding of $1.4 million is requested to continue the
renovation program at the Grain Marketing and Production Research
Center, Manhattan, Kansas. What work will be funded with the $1.4
million requested and what funds will be required in each future fiscal
year to complete this renovation program?
Answer. The $1.4 million requested will complete the funding
necessary for:
1. The estimated construction cost of the Phase 1 and 2
combination--Phase 1 (Mechanical Room, Cooling Tower, Penthouse
additions); Phase 2 (renovate the Central Systems and Equipment), and
2. The construction phase services/construction contingency for
this construction phase.
The funds required in each future fiscal year to complete this
renovation program are:
Fiscal year 2000--$6.4 million for construction, construction
management services and contingency for Phase 3. The scope of work for
Phase 3 consists of: Renovate the laboratory (Sections C, D, B, A, E,
F); Center Core (Sections C and D); North Wing (Sections A and B); and
West Wing (Sections E and F).
Fiscal year 2001--$1.25 million for construction, construction
management services and contingency of Phase 4. The scope of work for
Phase 4 consists of a new roof and lighting protection systems.
Question. Funding of $3.5 million is requested for fiscal year 1999
to continue the phased plan to renovate and modernize the Plum Island
Animal Disease Center, Greenport, New York. Will this complete a phase
of this plan? Please provide the costs and projects completed and
planned, by fiscal year, for the modernization of the Plum Island
Animal Disease Center.
Answer. The $3.5 million in fiscal year 1999 will be used to
construct Phase 1 of the Power Plant; design renovations to laboratory
space and animal rooms; and provide location and Architect-Engineer
support services for modernization projects and other small
miscellaneous projects. Modernization projects completed, or in design
and construction at PIADC are as follows:
Fiscal year 1993
Consolidation (c)....................................... $18,400,000
Fiscal year 1993
Underground Storage Tank Removal/Replacement (c)........ 443,000
Old Wastewater Treatment Plant Repairs (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............................................. \1\ 3,723,000
\1\ Includes APHIS contribution of $1,183,000.
---------------------------------------------------------------------------
Fiscal year 1994
New Wastewater Treatment Plant (c)...................... 1,250,000
Miscellaneous Projects.................................. 741,250
--------------------------------------------------------
____________________________________________________
Total............................................. \1\ 1,991,250
\1\ Includes APHIS contribution of $516,250.
---------------------------------------------------------------------------
Fiscal year 1995
Above-Ground Fuel Tanks (Phase I)(C).................... 1,168,000
Miscellaneous Projects.................................. 747,000
--------------------------------------------------------
____________________________________________________
Total............................................. \1\ 1,915,000
\1\ Includes APHIS contribution of $747,000.
---------------------------------------------------------------------------
Fiscal year 1996
Upgrade Fire Alarm System B-101 (D/C)................... 1,150,000
Above-Ground Fuel Tanks (Phase 2) (c)................... 730,000
Wastewater Treatment Plant Closure/Wetlands Creation (c) 1,200,000
Boiler Plant Design..................................... 500,000
PCB Transformer Replacement (D/C)....................... 51,000
Miscellaneous Projects.................................. 933,000
Emergency Repairs Building 102 (c)...................... 250,000
DOE--Energy Savings Technical Support................... 273,000
Plum Island Harbor Repairs (D/C)........................ 1,647,000
Install Chiller (D/C)................................... 1,267,000
Electric/Telephone Distribution System (D).............. 199,000
--------------------------------------------------------
____________________________________________________
Total............................................. \1\ 8,200,000
\1\ Includes APHIS contribution of $3.2 million.
---------------------------------------------------------------------------
Fiscal year 1997
Above-Ground Fuel Tanks (Phase 3) (c)................... 1,228,000
Underwater Electric Telecommunications Cable (c)........ 2,754,000
Sewage Decontamination Plant (D)........................ 500,000
Miscellaneous Projects.................................. 668,000
Upgrade Pathological Incinerators (D)................... 450,000
Underwater Electric/Telecommunication Cable (c)......... 2,370,000
Wastewater Treatment Plant Improvements (D)............. 230,000
--------------------------------------------------------
____________________________________________________
Total............................................. \1\ 8,200,000
\1\ Includes APHIS contribution of $3.2 million.
---------------------------------------------------------------------------
Fiscal year 1998
Renovate East Service Wing (D).......................... 350,000
Wastewater Treatment Plant Improvements (c)............. 1,000,000
Upgrade Pathological Incinerators Phase 1 (c)........... 3,200,000
Animal Room Utilization Study (S)....................... 150,000
Miscellaneous Projects.................................. 500,000
--------------------------------------------------------
____________________________________________________
Total............................................. \1\ 5,200,000
\1\ Includes APHIS contribution of $3.2 million.
---------------------------------------------------------------------------
Proposed fiscal year 1999
Power Plant Phase 19c................................... 2,700,000
Renovate Animal Wing (D)................................ 300,000
Miscellaneous Projects.................................. 500,000
Sewage Decontamination Plant Phase 1 (c)................ 3,200,000
--------------------------------------------------------
____________________________________________________
Total............................................. \1\ 6,700,000
\1\ Assumes APHIS Contribution of $3.2 million.
---------------------------------------------------------------------------
Proposed fiscal year 2000 and beyond
Sewage Decontamination Plant Phase 2 (c)................ 3,000,000
Power Plant Phase (c)................................... 23,200,000
Miscellaneous Projects.................................. 500,000
Environmental Remediation............................... 1,500,000
--------------------------------------------------------
____________________________________________________
Total............................................. 8,200,000
In fiscal year 1995 future modernization planning was estimated at
$81.0 million. Since that projection, $8.2 million was funded in fiscal
years 1996 and 1997 and an additional $5.2 million in fiscal year 1998.
A reassessment of current infrastructure, environmental and physical
plant repair and maintenance need reflect a future funding need of
$61.0 million as a result of shifts and or changes in project scopes/
costs and the inclusion of appropriate escalation to the midpoint of
construction.
Question. Please provide the Committee with an update of the costs
and projects completed and planned for the modernization of each of the
ARS Regional Research Centers, giving the funds required in each future
fiscal year by project.
Answer. The status of modernization efforts at the four Regional
Research Centers is as follows:
Southern Regional Research Center (SRRC).--The SRRC Modernization
initially 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 was
estimated at $17.8 million, phased over 9 years.
Construction for Phase I of the Chemical Wing 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 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.
With regard to the renovation of the surrounding site, 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 for Phase 2 of the site repair work. In fiscal year
1998, $1.1 million was appropriated for the design of the renovation to
the Industrial Wing. It is expected that construction will occur in
four phases. Phase I in fiscal year 1999 at $6 million, Phase 2 in
fiscal year 2001 at $5.5 million; Phase 3 in fiscal year 2003 at $4.5
million; and Phase 4 in fiscal year 2005 at $4 million.
The remaining sections of SRRC that need to be modernized are the
Administration and Textile Wings.
Eastern Regional Research Center (ERRC).--ARS completed the
Facility Modernization Study for ERRC in fiscal year 1993. 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 nine years.
In fiscal year 1994, ARS funded design of Phase 1 (Service
Building) and Phase 2 (Engineering Research Laboratory in Pilot Plant)
with $595,000 in Repair and Maintenance funds. In fiscal year 1995, ARS
funded construction of Phase 1, and design of Phases 3 through 7, using
$4,175,000 in Repair and Maintenance funds. In fiscal year 1996, ARS
funded construction of Phase 2 using $4,100,000 in Repair and
Maintenance funds. In fiscal year 1997, $4,700,000 was needed to fund
construction of Phase 3, and $4 million was appropriated. In fiscal
year 1998, $5,200,000 was needed to complete funding of Phase 3 and
fund construction of Phase 4, and $5 million was appropriated. The
Agency intends to award construction of Phases 3 and 4 with the $9
million available.
Future modernization phases are planned in fiscal year 1999 ($3.3
million),fiscal year 2000 ($4.4 million),fiscal year 2001 ($3.2
million). These phases will cover the remainder of the Chemical Wing.
An additional phase in fiscal year 2001 for the Service Wing ($1.1
million) and another phase in fiscal year 2002 for the Pilot Plant
($7.8 million) will complete the current plan.
Western Regional Research Center (WRRC).--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 was
$29.6 million phased over a 7-year period.
Phases 1 and 2 were awarded in fiscal year 1990 for $5.9 million.
Phase 3 was awarded in fiscal year 1991 in the amount of $3.4 million.
Phase 4 was awarded in fiscal year 1993 in the amount of $3.0 million.
Phases 5 and 6 were awarded in fiscal year 1993 in the amount of $4.4
million and $3.2 million. Construction for Phase 6 was completed in the
third quarter of fiscal year 1997.
In fiscal years 1994, 1995, and 1997, $1.161 million, $919
thousand, and $4.0 million, respectively, were appropriated for
construction, construction management, and contingency for Phase 7. The
Area funded all necessary fine tuning costs. Construction for Phase 7
is expected to be completed by the first quarter of fiscal year 1999.
In addition, renovation of the Small Animal Facility (West Annex
Building) was completed at a cost of $5.0 million from the Agency's
Repair and Maintenance funds.
Also, 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 (Pilot Plant) which includes
Food Processing Laboratory and Industrial Processing Laboratory. A
program of requirements was concurrently developed using Agency funds,
$180,000, for the modernization of the Pilot Plant and was completed in
fiscal year 1997. 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 $17.6 million.
National Center for Agricultural Utilization Research (NCAUR).--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.
Appropriations to date include the following: Fiscal year 1992--
$1,825,000, planning and design for Phase II Pilot Plant. Fiscal year
1993--$1,545,000 was redirected for Phase IID Modernization. In fiscal
years 1996, 1997, and 1998, $3.9 million, $1.5 million, and $8.0
million were appropriated. In fiscal year 1996, a revised plan was
developed which recommended a three-phased renovation 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 $6.9
million for this segment. Construction was awarded in the fourth
quarter of fiscal year 1997 and will be completed in the third quarter
of fiscal year 1999.
The remaining two segments are: Segment 2 of Phase IID 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. Design will be completed in the
third quarter of fiscal year 1998 with construction awarded in the
fourth quarter of fiscal year 1998. Segment 3 of Phase IID will
renovate additional laboratory, support space, and testing facilities
will be provided to support the Pilot Plant modules. Estimated
planning, design, and construction cost of $8.4 million is requested in
the fiscal year 1999 Budget.
Additional funding needed which has been escalated to the planned
year of implementation is $62.2 million. This will complete planned
modernization efforts at the Center.
Question. How did the ARS use funds appropriated to it for repairs
and maintenance of facilities in fiscal year 1997?
Answer. The fiscal year 1997 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 1997 include:
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 Repair and Maintenance funds
for fiscal year 1998? Please give project and funding.
Answer. The planned use of Repair and Maintenance funds for fiscal
year 1998, by project and funding, will be provided for the record.
[The information follows:]
State/location/project Amount
Nationwide--National Seismic Studies.......................... $253,000
Arkansas, Booneville--Upgrade Sewage Lagoon................... 90,000
Arizona, Phoenix--Renovate Three Labs......................... 171,000
California:
Albany:
Upgrade Mechanical Rooms.............................. 350,000
Exterior Manlift/Accessibility Issue.................. 65,000
Riverside--Upgrade Electrical Service..................... 58,000
Salinas--New Replacement Well............................. 106,000
Delaware, Newark--Remove/Replace Greenhouse Benches and
Sidings................................................... 30,000
District of Columbia, U.S. National Arboretum:
Exterior Lighting......................................... 250,000
Paths, Irrigation, Drainage and Lighting.................. 300,000
Bonsai Courtyard.......................................... 35,000
Auditorium/Lobby Renovation............................... 20,000
Trim and Remove Trees..................................... 25,000
Street Signs.............................................. 22,000
Miscellaneous............................................. 87,633
Florida:
Canal Point--Repair/Modify Various Buildings.............. 250,000
Gainesville:
Replace Fire Alarm System............................. 300,000
Phase 2 Modernization/Renovation...................... 5,900,000
Georgia, Athens:
Elevator/Stair Construction............................... 75,000
300 KV Energy Generator................................... 127,000
Idaho:
Dubois:
Repair 1.5 Mi. of Entrance Road....................... 225,000
Repair Gravel Road.................................... 35,000
Kimberly--Repair Roof Bldg. 2, 3, 4, and 5................ 165,800
Illinois, Peoria:
Replace Cooling Water Tower............................... 125,000
Install Additional Fire Hydrants.......................... 75,000
Replace Steam Traps....................................... 25,000
Upgrade Ventilation Basement/Center Wing/Other Areas...... 65,000
Indiana, West Lafayette:
Fume Hood................................................. 10,000
Install Insulation in Grinding Room....................... 15,000
Iowa, Ames:
Construct Bldg. 5 Improvements............................ 120,000
High Priority Research List 400 NADC Master Plan.......... 617,000
Maryland:
Beltsville Agricultural Research Center (BARC):
Annual Demolition..................................... 300,000
Mod Office Salaries................................... 197,327
Inspection............................................ 51,052
Replace CFC Refrigerants.............................. 20,000
Telecommunications East and West...................... 150,000
Road Repairs.......................................... 100,000
Roof Repairs.......................................... 100,000
Install Deaeratro Bldg. 014........................... 70,000
Replace Storm/Sanitary Lines 3rd St................... 100,000
Convert 10 Boilers to Gas............................. 160,000
Replace Steamlines, Bldgs. 307 and 306................ 150,000
Remove Pipe Chase Asbestos, Bldg. 200................. 150,000
Correct Water Leak, Bldg. 008, Rms. 10 and 12......... 20,000
Install Backflow Prevention on BARC................... 175,000
Install Fall Protection at Sites...................... 70,000
Install Fence at Manure Pit........................... 10,000
Install Smoke Indicator, Bldg 309..................... 10,000
Repair/Replace Granary Docking/Turnheads.............. 15,000
Replace Roof, Bldg. 161............................... 150,000
Replace Roof, Bldg. 301............................... 40,000
Replace Variable Frequency Drives, Bldg. 007.......... 30,000
Correct Drainage, Bldg. 50, GH 2/Section 2............ 10,000
Install O/H Garage Doors, Bldgs. 029, 1124, and 1125.. 70,000
Replace HVAC System, Bldg. 046........................ 45,000
Contingencies......................................... 182,683
Frederick--Upgrade HVAC/Lab Infrastructure Bldg. 1301..... 400,000
National Agricultural Library:
Sprinkler System, Phase II............................ 250,000
Replace Cooling Tower................................. 375,000
Miscellaneous/Emergency Repairs....................... 100,000
Facility Seismic Study................................ 30,000
Clean Air Ducts....................................... 145,000
Michigan, East Lansing:
Sewage Disposal Improvements.............................. 18,000
Replace Roofs............................................. 143,000
Minnesota:
Morris:
Install Fire Alarm System............................. 50,000
Upgrade Micro-Biology Laboratory...................... 45,000
St. Paul:
Glazing on Greenhouse #2.............................. 15,000
Repair Structure of Building.......................... 132,000
Mississippi:
Mississippi State--Replace Telephone System............... 220,000
Oxford--Renovate Chemistry Labs........................... 150,000
Poplarville--Replace HVAC Systems and Lights in Bldgs. 1
and 2................................................... 50,000
Stoneville:
Repair Pond Levees.................................... 88,000
Renovation of Laboratory/Quarantine Facility.......... 100,000
Replace Underground Water Supply...................... 100,000
Missouri, Columbia:
Emergency Exits........................................... 32,000
Retaining Wall............................................ 12,000
Improve Ventilation....................................... 53,000
Repair Concrete........................................... 8,000
Pond Drainage System...................................... 100,000
Montana, Sidney:
Asbestos Abatement........................................ 100,000
Upgrade HVAC System....................................... 840,000
New York, Ithaca:
Replace Fume Hoods, Fans, Stacks.......................... 165,000
Construct Stairway Enclosure, Bldg. 004................... 15,000
Repair Air Handling Unit, Main Bldg....................... 25,000
Ohio, Coshocton:
Repair Air Exchange System................................ 16,000
Historic Survey........................................... 10,000
Repair Lysimeters......................................... 9,000
Oklahoma:
El Reno:
Develop Facilities Historic Preservation Plan......... 100,000
Renovate Existing Cattle Barn......................... 440,000
Lane--Replace Automated Telephone System.................. 30,000
Stillwater--Repair/Renovation of 3 Greenhouses............ 46,000
Woodward:
Design/Analysis for HVAC/Electrical Upgrade........... 45,000
Install UFAS Elevator................................. 44,000
Oregon, Burns--Upgrade Access Road............................ 30,000
Pennsylvania:
Wyndmoor--Replace Underground Storage Tank................ 85,000
University Park--Upgrade/Replace HVAC..................... 30,000
South Carolina, Florence--Replace and Expand Exterior Office
Walls..................................................... 106,000
Texas:
Bushland:
Replace 500 sf. Gas House............................. 25,000
Upgrade for Accessibility............................. 20,000
College Station:
Energy Audit.......................................... 20,000
Replace Electrical Distribution Panels, Bldgs. 11 and
12.................................................. 42,000
Houston:
Comprehensive Energy Audit............................ 20,000
Comprehensive Roof Evaluation......................... 7,000
Kerrville--Repair Polymer Roof Coating.................... 80,000
Temple:
Upgrade Interior Building Ceiling Light............... 130,000
Asbestos Removal...................................... 155,000
Weslaco--Replace Boiler Bldg. 203......................... 20,000
West Virginia:
Beckley:
Master Plan/Deficiency Study/Energy Conservation...... 35,000
Alter Soils Prep Bldg................................. 85,000
Kearneysville--Maintain and Repair HVAC................... 30,000
Wisconsin, Madison--Upgrade Building Access................... 60,000
Agency Unassigned Funds....................................... 412,900
--------------------------------------------------------------
____________________________________________________
Total...................................................18,262,395
Question. The fiscal year 1998 Appropriations Act provides $700,000
in unrequested funding for planning and design of the Jornado Range
Research Center, Las Cruces, NM. Please describe the need for this
Center, the projected schedule for design and construction of the
project, and what additional funds will be required, by fiscal year, to
complete the project.
Answer. The Jornada Experimental Range Program investigates
ecosystem processes, then uses that knowledge to develop best forage-
livestock management practices and strategies for remediation and
protection of desert rangelands. The Jornada programs have outgrown
their temporary quarters on New Mexico State University's main campus.
The scientists are currently housed in mobile trailer facilities. The
laboratory and computer capabilities are inadequate for the research
and information-sharing needs of Jornada's investigators and the
cooperative approach necessary for the success of their program.
The projected schedule for design and construction are as follows:
Start Design, July 1998; Complete Design, December 1999 (18 months);
Start Construction, May 1999; Complete Construction, November 2000 (18
months).
In fiscal year 1999, $6.7 million will be needed for construction,
construction management services, and contingency.
Question. The fiscal year 1998 Appropriations Act provides
$5,200,000 in unrequested funding for planning and design work and
initial construction costs for the Western Human Nutrition Research
Center, Davis, California. Please describe the need for this project,
the schedule for design and construction of the project, and the
remaining funds required to complete the project, indicating the fiscal
year for which the funds will be required.
Answer. The mission of the Western Human Nutrition Research Center
(WHNRC) is to conduct research on human nutritional needs with emphasis
on developing ways to measure these needs and assess nutritional status
in large populations. The research directly supports the National
Health and Nutrition Examination Surveys conducted jointly by USDA,
FDA, and the Centers for Disease Control. WHNRC, created by Congress in
1980, is located in the former Letterman Army Institute of Research
(LAIR) building at the Presidio in San Francisco now called The
Letterman Complex. In October 1994, the Presidio was transferred to the
National Park Service and became part of the Golden Gate National
Recreation Area.
ARS has negotiated an agreement with the National Park Service to
remain in the LAIR facility with about 37,000 gsf. It currently is the
only tenant in the 300,000 gsf building. Beginning in fiscal year 1999,
it is anticipated that the rental cost charged by the National Park
Service will increase substantially from the current rate due to the
Park Service's insistence on recouping facility operating costs.
ARS is currently undertaking a Master Plan Analysis of the proposed
project site at Davis, California, where it plans to construct a
replacement facility on the campus of the University of California.
This analysis is scheduled to be complete by July 1998, with the
remainder of the project schedule contingent upon appropriations
received, as follows: Complete Predesign, December 1998; Complete
Design, January 2000; Award Construction Contract, April 2000; Complete
Construction, April 2002.
The Total project cost (planning, design, and construction) is
estimated to be $17.5 million.
In fiscal year 1998, $5.2 million was appropriated for design and
construction, resulting in a remaining need of $12.3 million in future
years.
Question. The President canceled the $600,000 provided in the
fiscal year 1998 Appropriations Act for the ARS Poisonous Plant
Laboratory (PPRL) in Logan, Utah. Are the current ARS office and
laboratory space and related facilities at this location adequate?
Answer. A new laboratory/office building (approximately 17,000 gsf)
is needed and recommended for the ARS Poisonous Plant Laboratory by the
Agency. The existing lab/office (early 1960's pre-engineered metal
building)has exceeded its expected life and its occupants are crowded
in its 7,500 square feet. The existing building is functionally
inefficient due to the 5 different additions done over its 30-year
life.
Question. Are replacement facilities recommended by ARS?
Answer. Funds for replacement facilities are not included in the
fiscal year 1999 budget. As explained, the existing facilities have
reached their useful life expectancy, and are inadequate for state-of-
the-art research. Long term plans include a recommendation for
replacement of these facilities.
Question. If so, when will these facilities be needed?
Answer. The fiscal year 1999 budget does not propose funding for
this facility.
Question. On March 17, 1997, the Department of Agriculture
submitted a report to the Committee on ARS' insect rearing
capabilities. A copy of that report is submitted for the record. When
will each of the two new facilities which the report indicates are
needed to mass produce high quality and effective agents at
economically acceptable costs be required?
Answer. USDA/ARS recognizes the need to move forward with
construction and completion of the Waimanalo, Hawaii, and Stoneville,
Mississippi, rearing facilities. However, the funding for other
facilities' construction and modernization is more urgent in the fiscal
year 1999 budget request.
Question. What is ARS' recommended schedule for construction of
each of these project?
Answer. Once funds are appropriated, planning and design will be
complete in 18 months. Construction will take approximately 24 months.
Question. Please provide a status report on each of the ARS
buildings and facilities for which funds were provided for fiscal year
1997 and 1998, indicating a current status of the work funded and what
additional funds will be required, if any, to complete the project, by
fiscal year.
Answer. The status of the fiscal year 1997 and fiscal year 1998
Building and Facilities funds, and additional funding required, will be
provided for the record.
[The information follows:]
[Dollars in thousands]
------------------------------------------------------------------------
Appropriation-- Additional
Location/project status -------------------------- funding
1997 1998 needs
------------------------------------------------------------------------
Albany, CA, Chemical Wing: $4,000 ........... ...........
Construction of Phase 7 is
scheduled for completion in the
1st quarter of fiscal year 1999.
This will conclude modernization
of Chemical Wing................
Davis, CA: Design is scheduled ........... $5,200 $12,300
for award in the 2nd quarter of
fiscal year 1998 for completion
by January, 2000. Construction,
which is projected at $15.8
million, is partially funded
with the $3.5 million (within
the $5.2 million) appropriated
in fiscal year 1998.............
Parlier, CA: Design is complete. ........... 23,400 ...........
Construction is scheduled for
award in April, 1998............
Montpellier, France: Construction ........... 3,400 ...........
is fully funded and contract was
awarded March 23, 1998..........
Ft. Pierce, FL: Construction is 27,000 ........... ...........
fully funded and is scheduled
for completion in the 3rd
quarter of fiscal year 1999.....
Edwardsville, IL, Ethanol Pilot 1,500 ........... 19,700
Plant: Fiscal year 1997
appropriation was provided as
grant award to Southern Illinois
Univ. for design of facility.
Construction of facility is
projected at $19.7 million......
Peoria, IL, Pilot Plant: $8.4 1,500 8,000 8,400
million is requested in the
fiscal year 1999 Budget to
complete construction of pilot
plant...........................
Manhattan, KS: $1.4 million 500 ........... 9,300
requested in fiscal year 1999
Budget to complete total funding
required for construction of
Phases 1 and 2..................
New Orleans, LA, SRRC Industrial ........... 1,100 20,000
Wing: Design is scheduled for
completion in December, 1998. $6
million of the total $20 million
required for construction is
requested in the fiscal year
1999 Budget.....................
Beltsville, MD, BARC: $2.5 4,500 3,200 98,000
million is requested in the
fiscal year 1999 Budget for
construction of a new Poultry
Production facility and for
other miscellaneous projects....
Beltsville, MD, NAL: $1.2 million ........... 2,500 17,500
is requested in the fiscal year
1999 Budget for replacement of
air handler units...............
East Lansing, MI: Design is fully ........... 1,800 17,200
funded and contract is scheduled
for award in the 4th quarter of
fiscal year 1998. Construction
of the facility is projected at
$17.2 million...................
Oxford, MS: Fiscal year 1998 ........... 7,000 ...........
appropriation was transferred to
CSREES for award to Univ. of
Mississippi for construction of
Animal Facilities...............
Sidney, MT: Design of 27,780 GSF ........... 606 7,300
lab office and biocontainment
facility is scheduled for award
in the 3rd quarter of fiscal
year 1998. Construction of the
facility is projected at $7.3
million.........................
Las Cruces, NM: Design of 29,000 ........... 700 6,700
GSF lab office building is
scheduled for award in the 3rd
quarter of fiscal year 1998.
Construction of the facility is
projected at $6.7 million.......
Greenport, NY, PIADC: $3.5 5,000 2,000 61,000
million is requested in the
fiscal year 1999 Budget for
construction of Building 101
Incinerator and for
accomplishing CERCLA remediation
activities......................
Grand Forks, ND: Full restoration ........... 4,400 ...........
of Nutrition Center is scheduled
for completion in the 2nd
quarter of fiscal year 1999.....
Wyndmoor, PA: $3.3 million is 4,000 5,000 20,722
requested in the fiscal year
1999 Budget for construction of
Phase 5. Appropriation provided
in Fiscal years 1997 and 1998 is
being used for construction of
Phases 3 and 4..................
Charleston, SC: Construction of 3,000 4,824 7,324
Phase 1 is fully funded and is
scheduled for award in the 4th
quarter of fiscal year 1998 for
completion by the 4th quarter of
fiscal year 2000. Design and
construction of Phase 2 is
projected at $7.3 million.......
Lubbock, TX: Construction is 8,100 ........... ...........
fully funded and is scheduled
for completion in the 1st
quarter of fiscal year 1999.....
Weslaco, TX: Construction of 4,000 ........... 14,108
laboratory, office and
greenhouse is scheduled for
completion in the 1st quarter of
fiscal year 1999. Future
modernization costs are
projected at $14.1 million......
Leetown, WV: Design is scheduled 6,000 6,000 ...........
for completion in January, 1999.
Construction, which is projected
at $12 million, is fully funded.
--------------------------------------
Total...................... 69,100 79,130 319,554
------------------------------------------------------------------------
appropriations law
Question. The fiscal year 1999 budget requests statutory language
to facilitate land exchanges by providing the Agricultural Research
Service authority to pay more than $100 up to 25 percent of the value
of land or interest transferred out of Federal ownership in order to
equalize the value of exchange. Please explain why this language is
needed.
Answer. In the past, ARS has received requests from non-federal
entities, (state, county, and local governments including the
Commonwealth of Puerto Rico) to use Federally-owned land in the custody
of ARS for the construction of new schools, roads, flood control
projects, etc., in exchange for land of equal value. Under ARS' current
authority, the value of the land received in exchange must be within
$100 of the value of the Federally-owned land. This creates an undue
burden on the non-federal entity to find a parcel of land acceptable to
ARS that is equal in value within $100. The proposed change provides
more flexibility for ARS to accommodate land exchange requests from
local jurisdictions.
Question. The fiscal year 1999 budget requests statutory language
to grant easements at the Beltsville Agricultural Research Center,
including for the construction of the Transgenic Animal Facility.
Please explain in more detail why this language is required.
Answer. The Transgenic Animal Facility (TAF) will be constructed by
the University of Maryland (UM) using grant funds received from the
Cooperative State Research, Education and Extension Service. Section
523 of Pub.L. No. 100-202, a joint resolution making continuing
appropriations for the fiscal year 1988, and other purposes, prohibits
the use of appropriations ``for the purpose of the sale, lease, rental,
excessing, surplusing, or disposal of any portion of land on which
[BARC] is located at Beltsville, Maryland, without the specific
approval of Congress.'' Easements are considered disposals, thus this
law prohibits BARC from issuing easements.
Question. Does the Transgenic Animal Facility the University of
Maryland will construct and this language allow the Secretary to accept
replacement of an existing USDA facility?
Answer. The proposed fiscal year 1999 appropriation language
provides the necessary provision for the Secretary to accept the gifted
TAF building as a replacement building for an existing USDA temporary
facility.
Question. Why is the University constructing this facility and not
the USDA?
Answer. The University of Maryland is constructing the facility
because the funds for constructing this facility are University of
Maryland funds, not ARS appropriated funds. This will be a cooperative
venture with USDA.
Question. What will be the annual operating costs of this facility
to the ARS?
Answer. The new facility is currently under design. Therefore, we
are unable to determine the actual operating costs. The current
facility costs approximately $110,000 per year for operation and
maintenance. This is a temporary structure that has outlived its
usefulness. With the construction of a modern facility that is energy
efficient, the operating costs should be reduced.
The fiscal year 1999 budget requests statutory language for the
purpose of appropriately responding to requests to make Federally-owned
land and facilities available for special use and to allow fees to be
charged as authorized by law.
Question. What law authorizes these fees? Please give citation.
Answer. Current laws authorizing ARS to collect fees are as
follows:
--Easement law 40 USC 319, allows us to collect monetary or other
consideration.
--31 USC 9701, provides the Government generally with the authority
to charge fees for Government services and things of value.
--20 USC 196, subsection a, (4), authorizes the Secretary of
Agriculture to charge fees for use of grounds and facilities of
the U.S. National Arboretum.
--GSA Bulletin FPMR D-242, dated June 11, 1997, issued in accordance
with President Clinton's memorandum of August 10, 1995,
entitled ``Facilitating Access to Federal Property for the
Siting of Mobile Services Antennas'', and section 704(c) of the
Telecommunications Act of 1996, PL 104-104, (47 USC 332 note),
provides authorization for agencies to charge and collect site
fees and access fees.
Question. If these fees are authorized by law, why does the
requested appropriations bill language ``authorize'' the agency to
charge fees ``commensurate with the fair market value, for any permit,
easement, lease, or other special use authorization for the occupancy
or use of land and facilities...as authorized by law''? Why doesn't the
language simply permit fees authorized by law to be credited to the
account and available until expended for authorized purposes?
Answer. Since existing authorities to collect fees are distinct and
scattered in law, the language simply authorizes the collection and use
of these fees to assure that there is no question that Congress
intended ARS to collect fees for these purposes, and credit those fees
to its appropriations.
Question. Please give some examples of special use permits which
would be issued by the agency and what fees would be charged.
Answer. ARS is requesting the authority to issue specific use
authorization, such as land use agreements or memorandum of
understanding, for instances where the Federal or non-Federal entity
does not use a standard lease, permit, or easement document. Special
Use Permits is a general term used by some local jurisdictions or non-
federal entities in place of Permits, Revocable Permits, Leases or
Easements. For example, the University of California at Davis issues
Land Use Agreements and CSX Railroad issues Special Use Agreements.
Having authority to issue Special Use Permits would give ARS the
authority to use the documents and terminology preferred by the local
jurisdiction or non-federal entity. Fees, when applicable, would be
based on the fair market value of the land under Special Uses Permit
and would be similar to those currently charged by ARS for Easements.
fiscal year 1999 ars salaries and expenses request
Question. The President's fiscal year 1999 budget recommends a
number of project terminations and elimination of ``Congressional add-
ons'' to fund ``high priority'' research. Why do you consider each of
these projects to be of lower priority?
Answer. The fiscal year 1999 Federal budget submitted by the
President recommends a number of new initiatives to address changing
priorities facing agriculture and the American consumer. The research
budget proposed for ARS reflects an increase of $32 million over the
current year. However, the Department is focusing on many priority
agricultural issues that must be addressed now by our research
scientists. This requires that ARS terminate ongoing projects and
reallocate these resources to the new or expanded initiatives as
recommended by the President. In this effort a number of projects were
identified as less critical. As a result, a cost-effective decision was
made to recommend project terminations and elimination of projects to
fund higher priority research.
Question. What criteria did you impose to determine the projects
and increases proposed for termination?
Answer. In order to provide financing for new and expanded high
priority research in a fiscally constrained budget, it was determined
that the restored projects proposed for termination in the fiscal year
1998 budget as well as all the Congressionally added projects included
in the 1998 Appropriations Act be proposed for reduction in fiscal year
1999.
Question. Please explain what the Department is doing to make sure
that the additional ARS positions and research program increases funded
for fiscal year 1998 but not included in the President's fiscal year
1999 budget are executed?
Answer. ARS is moving forward with implementing the initiatives
funded in the 1998 Appropriations Act. All new positions have been
established. Recruitment actions are underway with vacancy
announcements to open April 6. Research plans for these funded projects
have been established and are underway.
Question. Please provide a status report on the execution of each
of the following funding increases provided to ARS in fiscal year 1998:
--Vomitoxin in Wheat, $500,000;
--Fusarium Head Blight, MN, $500,000;
--Karnal Bunt, KS, $500,000;
--Citrus Tristeza, $750,000;
--Ergot Disease in Sorghum, $300,000;
--Asian Long Horn Beetle, $500,000;
--Apple E.Coli research, PA, $250,000;
--Food Safety Agency Study (National Academy of Sciences), $420,000;
--Hydrology, Canal Point, FL, $500,000;
--Hydrologist, Dade County, FL, $250,000;
--Melaleuca research, $500,000;
--Appalachian Soil and Water Conservation Lab, WV, $250,000;
--Arctic Germplasm Repository, $650,000;
--Coastal Wetlands and Erosion Control, LA, $1,000,000;
--Cotton Genetics, MS, $250,000;
--Cotton Ginning, TX, $500,000;
--Fish Disease, AL, $250,000;
--Food Fermentation, NC, $250,000;
--Formosan Termite, Southern Regional Research Center LA, $5,000,000;
--Grain Legume, WA, $250,000;
--Honeybee, TX, $500,000;
--Hops research, OR, $100,000;
--Lyme Disease, $200,000;
--National Aquaculture Research Center, AR, $500,000;
--National Center for Cool and Cold Water Aquaculture, WV, $250,000;
--National Warmwater Aquaculture Center, MS, $500,000;
--Natural Products, MS, $700,000;
--Northwest Nursery Crops, OR, $500,000;
--Organics Management Research, $500,000;
--Plant Genetics Equipment/Greenhouse, MO, $200,000;
--Poisonous Plant, UT, $100,000;
--Poult Enteritis Mortality Syndrome, GA, $250,000;
--Reproductive Efficiency of Beef Cattle, MT, $250,000;
--Rice Research, Beaumont, TX, $250,000;
--Rice Research, Stuttgart, AR, $700,000;
--Small Fruits, MS, $250,000;
--Small Grains, Raleigh, NC/Aberdeen, ID, $450,000;
--Sugarcane Biotechnology Research, LA, $200,000;
Answer. ARS is in the process of releasing each of these program
increases added by Congress in fiscal year 1998 in the amounts and for
the purposes authorized in accordance with the fiscal year 1998
Appropriations Act. A detailed listing of the distribution of these
increases will be provided for the record.
[The information follows:]
AGRICULTURAL RESEARCH SERVICE--IMPLEMENTATION OF FISCAL YEAR 1998 PROGRAM INCREASES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Funding increase Amount Research location Status/purpose Status of new scientist(s) position(s)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vomitoxin in wheat ($500,000). $500,000 St. Paul, MN...... Negotiations are underway with the 12 Not applicable.
State Consortium to enter into Specific
Cooperative Agreements.
Fusarium Head Blight 500,000 St. Paul, MN...... Funds have been released for research on A Plant Pathologist and Pathologist/
($500,000). Fusarium head blight in wheat and other Microbiologist will be hired.
grain crops. Recruitment actions are underway with
vacancy announcements opening April 6,
1998.
Karnal Bunt ($500,000)........ 500,000 Manhattan, KS..... Funds have been released for research to An Agronomist/Geneticist/or Molecular
improve resistance of wheat varieties to Biologist will be hired. Recruitment
karnal bunt. action is underway with a vacancy
announcement opening April 6, 1998.
Citrus Tristeza ($750,000).... 540,000 Headquarters...... Funds temporarily held at HQ. Funds will Not Applicable.
be used to fund cooperative agreements
on citrus tristeza virus research.
Proposals have been submitted and are
under review.
150,000 Beltsville, MD.... Funds have been released for collection .........................................
of isolates of citrus tristeza virus.
60,000 Orlando, FL....... Funds have been released for Not Applicable.
establishment of full-time program on
Citrus Tristeza Virus.
Ergot Disease in Sorghum 300,000 Headquarters...... Funds temporarily held at HQ. Not Applicable.
($300,000). Negotiations are underway with Texas A&M
and Puerto Rico University to fund
cooperative research on ergot disease.
In-house research is underway in
Lincoln, NE, Frederick, MD, and
Mayaguez, PR.
Asian Long Horn Beetle 400,000 Newark, DE........ Funds have been released to develop An ARS Research Entomologist has been
($500,000). integrated pest management and reassigned to Newark, DE to work on this
biological control technology for Long research.
Horn Beetle. Negotiations are underway
for a Specific Cooperative Agreement
with Cornell University to provide
entomology and integrated pest
management support.
100,000 Headquarters...... Funds temporarily held at HQ. Not Applicable.
Negotiations are underway to enter into
a Specific Cooperative Agreement with
Cornell University as outlined in a
proposal from the University of Vermont
to support taxonomic activities.
Apple E. coli ($250,000)...... 250,000 Wyndmoor, PA...... Funds have been released and research is A Food Technologist/Microbiologist will
underway to determine the source of be hired. Recruitment action is underway
zoonotic pathogens in apples (E. coli) with a vacancy announcement opening
and to identify methods of effectively April 6, 1998.
killing these pathogens.
Food Safety Agency Study (NAS) 420,000 Headquarters...... Funds have been released to fund a grant Not Applicable.
($420,000). with the National Academy of Sciences to
conduct the Food Safety Agency Study.
Hydrology, Canal Point, FL 500,000 Canal Point, FL... Funds have been released and research is An Agronomist and Geneticist or Soil
($500,000). underway to develop high water table Microbiologist will be hired.
management practices for sugarcane Recruitment actions are underway with
breeding and microbiology programs. vacancy announcements opening April 6,
1998.
Hydrologist, Dade County, FL 250,000 Miami, FL......... Funds have been released and research is This position has been filled by an ARS
($250,000). underway to develop a hydrologic model Hydrologist selected to work on this
to define the risk of flooding to the research project.
agricultural community in Dade County.
Melaleuca Res. ($500,000)..... 250,000 Ft. Lauderdale, FL Funds have been released and research is A Research Entomologist will be hired. A
underway to expand current research on position description has been developed
biological control technology for and is currently being reviewed.
Melaleuca in the Everglades. Recruitment action will follow upon
approval.
250,000 Headquarters...... Funds have been released and research is A Research Entomologist will be hired.
underway to develop Melaleuca control at Recruitment action is underway with a
the Australian Biological Control vacancy announcement opening April 6,
Laboratory, Brisbane, Australia. 1998.
Appalachian Soil and Water 250,000 Beckley, WV....... Funds have been released. Research is A Plant or Soil Scientist will be hired.
Conservation Lab. WV underway on the effects of timber Recruitment action is underway with a
($250,000). management and accelerated harvesting on vacancy announcement opening April 6,
forest biosystems. 1998.
Arctic Germplasm Repository 650,000 Pullman, WA....... Funds have been released and research is A Horticulturist/Plant Pathologist or
($650,000). underway on the preservation, Geneticist will be hired. Recruitment
evaluation, regeneration and storage of action is underway with a vacancy
disease free germplasm adapted to announcement opening April 6, 1998.
northern soils. A Specific Cooperative
Agreement with the State of Alaska Plant
Materials Center to support a germplasm
repository at Palmer, AK, has been
completed.
Coastal Wetlands and Erosion 1,000,000 Baton Rouge, LA... Funds have been released and research is An Ecologist/Water Management scientist
Control, LA ($1,000,000). underway on coastal wetlands and erosion will be hired. Recruitment action is
control. Proposals have been submitted underway with a vacancy announcement
by Louisiana State University opening April 6, 1998.
Agricultural Center and the Natural
Resources Conservation Service for
cooperative research with ARS.
Cotton Genetics, MS ($250,000) 250,000 Stoneville, MS.... Funds have been released. Research is A Geneticist will be hired. Recruitment
underway to develop new germplasm that action is underway with a vacancy
will increase the genetic yield announcement opening April 6, 1998.
potential of upland cotton.
Cotton Ginning, TX ($500,000). 500,000 Lubbock, TX....... Funds have been released. Research is Two Agricultural Engineers will be hired.
underway to improve cotton quality Recruitment actions are underway with
through improved harvesting and ginning. vacancy announcements opening April 6,
1998.
Fish Disease, AL ($250,000)... 250,000 Auburn, AL........ Funds have been released and research is A Fish Health Management Scientist will
underway to develop and implement be hired. Recruitment action is underway
methods to detect and prevent losses due with a vacancy announcement opening
to infectious diseases of cultivated April 6, 1998.
fish.
Food Fermentation, NC 250,000 Raleigh, NC....... Funds have been released. Research is A Microbial Ecologist will be hired.
($250,000). underway to improve product quality and Recruitment action is underway with a
safety of brined and fermented vacancy announcement opening April 6,
vegetables while reducing the amount of 1998.
waste generated.
Formosa Termite SRRC, LA 5,000,000 New Orleans, LA... Funds have been released and research is Nine Research Scientists will be hired.
($5,000,000). underway. Proposals have been received Recruitment actions are underway with
from the University of Florida for vacancy announcements opening April 6,
cooperative research on testing existing 1998.
termite control technologies.
Grain Legume, WA ($250,000)... 250,000 Pullman, WA....... Funds have been released and research is A Geneticist will be hired. Recruitment
underway to expand the pea, lentil and action is underway with a vacancy
legume program in basic genetics and announcement opening April 6, 1998.
varietal improvement.
Honeybee, TX ($500,000)....... 500,000 Weslaco, TX....... Funds have been released and research is An Insect Toxicologist and Research
underway on the control of parasitic bee Entomologist will be hired. Recruitment
mites and management of Africanized bees. actions are underway with vacancy
announcements opening April 6, 1998.
Hops Research, OR ($100,000).. 100,000 Corvallis, OR..... Funds have been released and research is Not Applicable.
underway for hops breeding and
collection. Proposals have been received
for cooperative research with Washington
State University.
Lyme Disease ($200,000)....... 200,000 Beltsville, MD.... Funds have been released and Not Applicable.
collaborative research is underway with
Yale University and the states of CT,
RI, MD, NY and NJ to support the
Northeast Regional Lyme Tick Control
Project.
National Aquaculture Research 500,000 Stuttgart, AR..... Funds have been released. Research is Two Aquaculture Research Scientists will
Center, AR ($500,000). underway to conduct a comprehensive be hired. Position descriptions are
program to advance the cultivation of currently being reviewed. Recruitment
emerging warmwater aquaculture species action will follow upon approval.
with economic potential.
National Center for Cool and 250,000 Leetown, WV....... Funds have been released and research is A new scientist will be hired to serve as
Cold Water Aquaculture, WV underway to address high priority Research Leader. Recruitment action is
($250,000). research needs of the nation's cool and underway with a vacancy announcement
cold water aquaculture. The research opening April 6, 1998.
program will be a cooperative and
collaborative arrangement between the
Leetown Science Center, West Virginia
University and the ARS Appalachian Fruit
Research Lab, Kearneysville, WV.
National Warmwater Aquaculture 500,000 Stoneville, MS.... Funds have been released and research is An Aquaculture Production Systems
Center, MS ($500,000). underway on the catfish genetics and scientist will be hired. Recruitment
breeding program. Action is also action is underway with a vacancy
underway to modify the existing announcement opening April 6. 1998.
Cooperative Agreement with the MS Agr.
and Forestry Experiment Station to
increase funding.
Natural Products, MS 700,000 Oxford, MS........ Funds have been released and research is A Research Microbiologist was selected
($700,000). underway to develop natural products and reported for duty in December 1997.
beneficial to agriculture. The existing
Cooperative Agreement with the
University of Mississippi has been
modified to add additional funding.
Northwest Nursery Crops, OR 500,000 Corvallis, Or..... Funds have been released and research is A Plant Physiologist will be hired.
($500,000). underway to develop physiological Recruitment action is underway with a
studies on improving transplant survival vacancy announcement opening April 6,
to stress and to develop cultural 1998.
procedures that lead to improved root
development. Proposals have been
submitted for competitive cooperative
agreements.
Organics Management Research 500,000 Beltsville, MD.... Funds have been released and will be used Not Applicable.
($500,000). to increase cooperative funding to
Rodale Institute, N-Viro International
and the Composting Council Research and
Education Foundation.
Plant Genetics Equipment/ 200,000 Columbia, MO...... Funds have been released. Negotiations Not Applicable.
Greenhouse, MO ($200,000). are underway to purchase equipment to
support Seed Storage and Greenhouse
Facility.
Poisonous Plants, UT 100,000 Logan, UT......... Funds have been released and research is Not Applicable.
($100,000). underway to support poisonous plants
containing pyrrolizidine alkaloids which
cause excessive economic losses for the
U.S. livestock industry.
Poultry Enteritis Mortality 250,000 Athens, GA........ Funds have been released and research is Not Applicable.
Syndrome, GA ($250,000). underway to address the identification
and molecular characterization of agents
causing Poultry Enteritis-Mortality
Syndrome.
Reproduction Efficiency of 250,000 Miles City, MT.... Funds have been released and research is An Animal Physiologist will be hired.
Beef Cattle, MT ($250,000). underway to identify the factors that Recruitment action is underway with a
affect reproduction efficiency of beef vacancy announcement opening April 6,
under range conditions. 1998.
Rice Research Beaumont, TX 250,000 Beaumont, TX...... Funds have been released and research is A Research Chemist will be hired.
($250,000). underway to develop new technologies for Recruitment action is underway with a
evaluating and improving rice milling, vacancy announcement opening April 6,
cooking and processing quality. 1998.
Rice Research Stuttgart, AR 700,000 Stuttgart, AR..... Funds have been released and research is A Research Chemist and Geneticist will be
($700,000). underway to improve domestic rice hired. Recruitment actions are underway
quality needs and breeding methods so with vacancy announcements opening April
the United States can remain competitive 6, 1998.
in the world market.
Small Fruits, MS ($250,000)... 250,000 Poplarville, MS... Funds have been released and research is A Research Entomologist will be hired.
underway to study insect biology and Recruitment action is underway with a
develop improved methods of control in vacancy announcement opening April 6,
small fruit crops in the southeastern 1998.
states.
Small Grains, Raleigh, NC/ 250,000 Raleigh, NC....... Funds have been released and research is A Plant Pathologist will be hired.
Aberdeen, ID ($450,000). underway to control fungal pathogens of Recruitment action is underway with a
small grains. vacancy announcement opening April 6,
1998.
200,000 Aberdeen, ID...... Funds have been released and research is Not Applicable.
underway for improving both barley and
oat genetic stocks.
Sugarcane Biotechnology 200,000 Houma, LA (New Funds have been released and research is A Geneticist/Plant Breeder will be hired.
Research, LA ($200,000). Orleans). underway to expand sugarcane Recruitment action is underway with a
biotechnology and to develop new vacancy announcement opening April 6,
varieties of sugarcane with improved 1998.
quality and field performance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Question. Provide for each of the increases requested for fiscal
year 1999, how and where the new funding will be allotted.
Answer. An Implementation Plan for the requested fiscal year 1999
increases will be provided for the record.
[The information is provided:]
Agricultural Research Service Fiscal Year 1999 Budget Estimate
Implementation Plans
objective i: soil, water, and air sciences--$4,750,000
Watershed Health/Pfiesteria Research--$1,000,000 ($1,000,000 under
Objective III)
--Water Quality, Nutrient Management, and Watershed Health ($1,000,000)
Beltsville, MD, $300,000.--Develop and evaluate management
practices to prevent movement of nutrients and pathogens in manure to
surface and ground water. Data will be used to enhance natural resource
inventory and monitoring programs.
Beltsville, MD, $300,000.--Evaluate and predict where best
management practices to protect surface and ground water quality can be
most effectively used. Data will enhance natural resource inventory and
monitoring programs.
Florence, SC, $300,000.--Develop improved methods for handling,
storage, and application of manure to protect water quality. Data will
be used to support natural resource inventory and monitoring programs.
Beltsville, MD, $100,000.--Develop aquatic plant based systems to
remove excess nutrients from waste and runoff water.
Global Change/Agricultural Practices and Mitigation of Climate Change
Impacts--$3,000,000
Phoenix, AZ, $600,000.--Determine how the availability of water and
plant nutrients will interact with rising temperatures and atmospheric
carbon dioxide levels to affect rates of deposition of atmospheric
carbon in soils of irrigated croplands. Data will enhance natural
resource inventory and monitoring programs.
Ft. Collins, CO, $400,000.--Develop a balance sheet approach to the
modeling of agricultural emissions and sequestrations of greenhouse
gases at the national scale as a basis for evaluating management
practices and policies for reducing greenhouse gas levels and
mitigating climate change impacts.
Athens, GA, $300,000.--Develop and apply technology for monitoring
methane emissions from cattle, livestock waste lagoons, and other
agricultural sources, and accurately document total methane emissions
attributable to agricultural activities. Data will support natural
resource inventory and monitoring programs.
Auburn, AL, $400,000.--Determine the extent of emissions or
sequestration of greenhouse gases associated with various tillage
systems, with and without cover crops, and develop soil management
systems which mitigate against adverse effects of climate change on
soil ``health''.
Temple, TX, $300,000.--Determine how a changing climate and rising
concentrations of atmospheric greenhouse carbon dioxide alter the
carbon cycle on rangelands with emphasis on rates of accumulation of
carbon in vegetation and soils.
Beltsville, MD, $300,000.--Determine the effects of elevated
atmospheric carbon dioxide levels, rising temperatures, and their
interaction on physiological and other factors which influence the
ability of weeds to reduce crop yields under multiple weed management
systems.
Gainesville, FL, $400,000.--Determine how water table management
and other management options can be manipulated to reduce methane
emissions and avoid yield losses due to elevated temperatures in rice
and sugar cane.
Tucson, AZ, $300,000.--Develop basin-scale simulation models of
soil-vegetation-atmospheric fluxes of water and energy suitable for
testing of proposed approaches to mitigation of climate change effects
on the function and productivity of grazed, semi-arid watersheds.
South Florida Ecosystem Restoration--$750,000
Miami, FL, $250,000.--Develop farm-scale model to assess water
quantity and quality for the Everglades restoration plan and assist
action agencies and farmers in selection of Best Management Practices.
Ft. Lauderdale, FL, $500,000.--Evaluation of natural enemies and
assessment of approved natural enemies for Melaleucacontrol including
economic and environmental impact assessment of control measures.
objective ii: plant sciences--$11,300,000
Emerging Infectious Diseases--$2,300,000
--Emerging Plant Diseases ($1,100,000)
Beltsville, MD, $300,000.--Identify, characterize, and develop the
systematics and taxonomy of bunt and smut fungal pathogens.
St. Paul, MN, $300,000.--Characterize the ecology and epidemiology
of wheat scab and improve the genetic resistance of wheat to scab
through conventional breeding and introduction of alien germplasm.
Ithaca, NY, $250,000.--Characterize potato late blight development
and develop integrated control strategies.
College Station, TX, $250,000.--Characterize the biology, ecology,
and epidemiology of sorghum ergot and develop disease management
strategies.
--Biological Control of Existing Weed Infestations ($600,000)
Albany, CA, $300,000.--Evaluate insect biological control agents to
enable effective suppression of Western invasive weeds.
Montpellier, France, $300,000.--Collect, characterize, and process
exotic microbial biological control agents in Eurasia.
--Combating New and Emerging Noxious Weed Pests ($300,000)
Weslaco, TX, $300,000.--Develop remote sensing technology to
identify new or expanding weed infestations at early stages.
--Integrated Management and Maintenance of Lands ($300,000)
Reno, NV, $300,000.--Develop knowledge of natural stand renewal
processes to maximize the reestablishment of desirable native grass and
forage species following control of introduced weeds on rangelands and
riparian areas.
Environmental Quality and Natural Resources--$5,500,000
--Development of Biologically-Active Compounds to Replace Hazardous
Agricultural Chemicals ($2,600,000)
Gainesville, FL, $300,000.--Identify plant emitted volatiles that
naturally attract beneficial insects to control crop pests.
Oxford, MS, $300,000.--Develop safe natural product-based algacides
to selectively remove blue green algae from catfish ponds and eliminate
the problem of off flavor.
Headquarters, $2,000,000.--Competitively awarded grants to develop
alternatives to Methyl Bromide.
--IPM and Areawide IPM ($1,400,000)
Beltsville, MD, $250,000.--Develop a molecular systematic
entomology program to support pest and natural enemy taxonomic
identification and characterization for ARS and APHIS implementation
programs.
College Station, TX, $250,000.--Develop new/improved areawide IPM
technology in support of the boll weevil eradication program now being
conducted by APHIS and grower run foundations.
Stoneville, MS, $250,000.--Develop mass propagation technologies of
beneficial insects for control of arthropods and weed pests, such as
lygus bugs and leafy spurge.
Beltsville, MD, $250,000.--Develop technologies for management of
Entomopharga Maimaiga a fungal pathogen of the gypsy moth in support of
the Forest Service's ``slow-the-spread'' initiative.
Columbia, MO, $400,000.--Develop pesticide resistant natural
enemies in support of new augmentative biological control programs
targeting significant insect and weed pests.
--USDA Office of Pest Management ($1,500,000)
Headquarters, $1,500,000.--Provide coordinated approach to minor
use pesticides; interact with grower groups, and EPA; and provide more
rapid response of FQPA data analysis needs.
Genetic Resources--$3,500,000
--Food Genome Initiative ($2,500,000)
Pullman, WA, $275,000.--Identify genetic Loci in scrapie and other
TSE.
Geneva/Ithaca, $600,000.--Curate genome data bases for NY tomato-
potato, and apple-prome fruits. Sequence rice expressed sequence tags
and curate them and other information in rice genome data base.
Coordinate effort with Japanese rice mapping andsequencing programs.
Reconcile rice map with those for maize-sorghum, and wheat-barley-oats.
Albany, CA, $600,000.--Sequence wheat, barley, and oat expressed
sequence tags, and manage them and other information in genome data
bases. Reconcile maps with those for maize-sorghum and rice.
Columbia, MO, $500,000.--Maintain and manage genome data base for
maize and sorghum. Sequence a select number of maize expressed sequence
tags (probably 200,000 or fewer). Reconcile maize-sorghum maps with
those for rice and wheat-barley-oats.
E. Lansing, MI, $275,000.--Identify quarantine trail loci for
disease and production traits in poultry.
Ames, IA, $250,000.--Sequence soybean, expressed sequence tags, and
manage them and other information in soybean genome data bases.
Reconcile soybean maps with those for other legumes, e.g. peanuts, dry
beans, alfalfa.
--Expansion of the Animal Germplasm Repository Program ($500,000)
Headquarters, $500,000.--Develop GRIN (Genetic Resources
Information Network) data base for animals.
--Expansion of Microbial/Insect Genetic Resources Management Programs
($250,000)
Peoria, IL, $250,000.--Evaluate collections of yeast and fungi for
improved agricultural and industrial applications for food and medicine
utilizing new technologies of genetic analysis.
--Preservation of Plant Genetic Resources ($250,000)
Urbana, IL, $250,000.--Acquire collections of genetic stocks of
maize endangered because of the death or retirement of researchers, and
improve genetic stocks by introgressing mutants into superior, adapted
inbred lines.
objective iii: animal sciences--$14,700,000
Emerging Infectious Diseases--$3,700,000
--Emerging Exotic Infectious Diseases of Livestock ($1,300,000)
Ames, IA, $300,000.--Johne's disease.
Pullman, WA, $300,000.--Develop molecular markers and improved
diagnostic tests to prevent importation of exotic tick-borne diseases
of livestock.
Athens, GA, $500,000.--Develop molecular vaccines and immune
modulatory strategies to prevent outbreaks and spread of exotic poultry
diseases, such as avian influenza.
Headquarters, $200,000.--Build U.S. expertise in emerging diseases
through joint international collaboration to develop new diagnostic
tests and control strategies for exotic pathogens of livestock.
--Emerging Domestic Infectious/Zoonotic Diseases of Livestock
($2,400,000)
Laramie, WY, $600,000.--Develop control strategies for arbo-viral
diseases of livestock, such as vesicular stomatitus, bluetongue and
related viruses which prevent U.S. livestock exports.
Ames, IA, $300,000.--Develop improved vaccine control strategies to
prevent porcine reproductive and respiratory syndrome (PRRS), and gain
an understanding of the epidemiology of the disease.
Ames, IA, $300,000.--Identify causes and develop interventions for
emerging swine enteric diseases, such as transmissible gastroenteritis.
Beltsville, MD, $600,000.--Develop integrated control strategies to
enhance immunity in livestock to drug resistant parasites.
Ames, IA, $300,000.--Develop improved diagnostic tests for
tuberculosis in wildlife and develop novel vaccines.
Pullman, WA, $300,000.--Investigate the role tick-borne rickettsial
bacteria as the cause of abortion in cattle.
Preharvest Food Safety--$3,500,000
--Preharvest Food Safety ($3,500,000)
Beltsville, MD, $900,000.--Develop new disinfection methods and
farming systems for improved sanitation of animal production
facilities, and effective animal waste handling systems that will
prevent the transmission of bacterial and parasitic pathogens to food
producing animals and food crops.
Peoria, IL, $300,000.--Determine how plants and Fusarium fungi
interact during the infection and toxin production processes and how
the fungi maintain resistance to their own toxins in order to develop
tools to interfere with the infection process and production of the
mycotoxins, such as deoxynivalenol (DON).
College Station, TX, $500,000.--Develop techniques for manipulating
the microbial ecology of the intestinal tract of agricultural and
aquaculture animals to prevent the development of antibiotic
resistance, particularly competitive exclusion techniques (probiotics).
Clay Center, NE, $300,000.--Develop information on the dynamics and
ecology of foodborne zoonotic pathogen transmission in cattle and their
environment in order to prevent initial colonization of plants and
animals.
Ames, IA, $300,000.--Develop information on the dynamics and
ecology of foodborne zoonotic pathogen transmission in swine and their
environment in order to prevent initial colonization of plants and
animals.
Athens, GA, $300,000.--Develop information on the dynamics and
ecology of foodborne zoonotic pathogen transmission in poultry and
their environment in order to prevent initial colonization of plants
and animals.
Clay Center, NE, $300,000.--Correlate production practices and
transportation systems used for cattle with post processing
contamination of food products.
Ames, IA, $300,000.--Correlate production practices and
transportation systems used for swine with post processing
contamination of food products.
Athens, GA, $300,000.--Correlate production practices and
transportation systems used for poultry with post processing
contamination of food products.
Preharvest Food Safety (Presidential Initiative)--$4,500,000
Athens, GA, $500,000.--Develop methods to identify pathogens as
they are found in animal waste, define their survival characteristics,
and develop methods to handle and treat poultry manure during
production in order to preclude transmission of pathogens to land and/
or crops for human food.
Athens, GA, $500,000.--Develop methods to handle manure on crop
lands that will prevent transmission of pathogens to run off and
irrigation waters, crops and to food producing animals.
Albany, CA, $500,000.--Develop methods to identify pathogens as
they are found in animal waste, and to define their survival
characteristics, so that systems for sanitation to kill these pathogens
can be developed for production facilities, particularly those of
cattle and swine, to prevent their transmission to human foods.
Riverside, CA, $500,000.--Define the survival and transport of
pathogens from animal manures on crop lands in order to develop methods
that will prevent their transmission to irrigation and drinking waters,
crops and food producing animals.
Beltsville, MD, $700,000.--Develop livestock and crop production
systems to reduce nutrients and minerals that affect algal blooms.
New Orleans, LA, $650,000.--Identify the life history states of
major species oftoxic algae, determine what factors control transitions
between stages, and establish the role of stages in bloom dynamics in
order to form the basis for effective control measures.
West Lafayette, IN, $650,000.--Develop knowledge of animal behavior
and combine with that of other sciences (animal physiology, immunology,
and microbiology) to develop methods for producers to use to help
assure that animals, including poultry, will arrive for slaughter
following transport with fewer pathogens.
Ames, IA, $500,000.--Develop knowledge of animal physiology,
immunology, and microbiology and combine with that of animal behavior
to develop methods for producers to use to help assure that food
producing species will arrive for slaughter following transport with
fewer pathogens.
Environmental Quality and Natural Resources--$2,000,000
--Livestock Management Systems ($2,000,000)
Ames, IA, $600,000.--Identify components of swine diets that
influence odor, and identify alternatives that can reduce odor from
production environments.
Ames, IA, $600,000.--Identify microbial populations responsible for
the generation of major components of volatile odor compounds in fresh
and stored manure.
Ames, IA, $500,000.--Determine dietary fracture and feed management
practices affecting entire microbial populations contributing to
volatile organic odors.
Ames, IA, $300,000.--Develop and evaluate environmental computer
models to predict movement of volatile organic compounds from
production facilities and manure store areas.
Watershed Health/Pfiesteria Research--$1,000,000 ($1,000,000 under
Objective I)
--Aquatic Ecology and Aquaculture ($1,000,000)
Auburn, AL, $250,000.--Develop immunological reagents and rapid
presumptive tests to detect and monitor anti-Pfiesteria antibodies and
antigens in menhaden and other species of cultivated and wild fish to
determine exposure to Pfiesteria.
Auburn, AL, $250,000.--Develop and apply specific mono-clonal
antibodies to identify and detect different species, strains, and life
history stages of Pfiesteria and Pfiesteria-like organisms.
New Orleans, LA, $250,000.--Determine the effects of agricultural
nutrients,including interactions between specific nutrients and other
water quality parameters, on outbreaks and toxicity of Pfiesteria and
Pfiesteria-like organisms.
Auburn, AL, $250,000.--Develop and apply immunodetection methods
for epidemiological studies of coastal areas affected by Pfiesteria and
Pfiesteria-like organisms.
objective iv: commodity conversion and delivery--$9,970,000
Postharvest Food Safety--$3,470,000
--Postharvest Food Safety ($2,220,000)
Athens, GA, $300,000.--Develop an understanding of the etiology of
multidrug antibiotic resistance, including site specific integration
into multidrug resistant plasmids using DNA integrons and elucidate
factors in animal and plant production systems that influence the
development of resistance.
Wyndmoor, PA, $300,000.--Determine how microorganisms associated
with foodborne disease become tolerant to various types of
antimicrobials and to traditional food safety safeguards, such as heat
or cold, low pH, high salt, and disinfectants, and elucidate factors in
processing environments that influence the development of resistance.
Wyndmoor, PA, $400,000.--Develop alternatives to traditional heat-
based preservation technologies that will achieve adequate pathogen
control while preserving the freshness qualities of fruits and
vegetables.
Beltsville, MD, $300,000.--Develop accurate user friendly detection
methods for Cryptosporidia, Toxoplasma, and Cyclospora in animal- and
plant-based foods.
Athens, GA, $300,000.--Develop microbial sampling technologies to
more accurately estimate true pathogen burden of food products for
HACCP.
Wyndmoor, PA, $320,000.--Develop computerized expert systems based
on food pathogen inactivation and survival in order to evaluate both
food processing systems and process controls.
Wyndmoor, PA, $300,000.--Develop sensors to place on food products
that will alert processors and consumers of products not stored safely.
New Technology to Maintain Safety/Quality of Fresh Fruits/Vegetables
($1,250,000)
Albany, CA, $600,000.--Develop knowledge of the attachment and
detachment properties of pathogens on various fruits and vegetables.
Beltsville, MD, $300,000.--Develop new handling systems and
pathogen decontamination technology, including disinfectants and
terminal pasteurization procedures for use in conjunction with packing,
storing and/or processing of fresh fruits and vegetables to maintain
their beneficial attributes.
Wyndmoor, PA, $350,000.--Develop new handling systems and pathogen
decontamination technology, including disinfectants and terminal
pasteurization procedures for use in conjunction with packing, storing,
and processing of fresh fruits and vegetables to maintain their
beneficial attributes.
Postharvest Food Safety (Presidential Initiative)--$2,500,000
Beltsville, MD, $500,000.--For whole and minimally processed
produce define the dose and conditions of treatment for both chemical
and physical agents and technologies which will assure both
microbiological safety and product quality in a cost effective process,
and provide the necessary support for regulatory approvals.
Albany, CA, $500,000.--For whole and minimally processed produce
define the dose and conditions of treatment for both chemical and
physical agents and technologies which will assure both microbiological
safety and product quality in a cost effective process, and provide the
necessary support for regulatory approvals.
Fargo, ND, $500,000.--Identify and quantify toxins for algae, and
develop methods for their detection and quantification in both human
and animal food sources in order to help producers prevent their
occurrence.
Ames, IA, $500,000.--Develop reproducible, sensitive, and accurate
laboratory tests to detect viruses of food safety concern by combining
the necessary basic biological information about the viruses with the
newer biotechnology being used for detection and differentiation of
bacterial and animal genetic material.
Athens, GA, $500,000.--Develop reproducible, sensitive, and
accurate laboratory tests to detect viruses of food safety concern by
combining the necessary basic biological information about the viruses
with the newer biotechnology being used for detection and
differentiation of bacterial and animal genetic material.
Global Change/Biomass for Energy--$4,000,000
--Improve and Expand Feedstocks ($3,000,000)
Lincoln, NE, $600,000.--Develop improved varieties and management
practices for producing switchgrass and other promising grass species
for conversion to ethanol or for combusting to produce electricity.
Madison, WI, $600,000.--Develop processes and machinery for
harvesting, transporting, and storage of crop residues and dedicated
energy crops, and to develop processes for biomass separation into
efficient energy and coproduct streams.
St. Paul, MN, $600,000.--Develop improved varieties and management
practices for producing alfalfa and other promising legume species for
conversion to ethanol or for combusting to produce electricity.
Tifton, GA, $600,000.--Develop more productive varieties and
improved management practices for switchgrass and other grasses with
potential for conversion to ethanol or combustion to produce
electricity.
Mississippi State, MS, $600,000.--Develop persistent and productive
legume/grass mixtures for biofuel production, which minimize nutrient
inputs and energy requirements for nitrogen fertilizer production and
application.
--Increase Biofuel and Biochemical Conversion Efficiency ($1,000,000)
Peoria, IL, $1,000,000.--To accelerate work to develop efficient
processes for converting crop cellulose and hemicelluloses to ethanol,
and to develop high-valued coproducts that will substitute for
petrochemical derived industrial products.
objective v: human nutrition--$10,500,000
Presidential Initiative--$10,500,000
--Nutrient--Gene Interactions ($2,400,000)
Boston, MA, $300,000.--Determine the regulation of the synthesis of
fatty acids in response to oxidative stress and how the regulation is
responsive to diet.
Little Rock, AR, $900,000.--Determine the precise relationship
between nutrients in the diet and the development of cognition
inchildren at the molecular level.
Grand Forks, ND, $650,000.--Identify the regulatory genes that are
responsive to trace minerals in the diet with the aim of determining
the regulatory genes of importance.
Houston, TX, $550,000.--Genetic evaluation of fat metabolism in
children.
--Diet and Immune Function ($1,400,000)
San Francisco, CA, $500,000.--Define the relationship between
nutrition and the induction of the synthesis of immunoglobulins.
Boston, MA, $250,000.--Determine changes in the immune response
that occur throughout the aging process and determine if dietary
antioxidants can delay or prevent such changes.
Beltsville, MD, $250,000.--Define the role of phytonutrients to
increase the immune response by looking at the induction of T-cell
lymphocytes in response to foods of plant origin.
Little Rock, AR, $400,000.--Determine foods in the diets of young
children that have a positive effect on growth and development.
--Role of Nutrition throughout the Life Cycle ($1,550,000)
Houston, TX, $1,000,000.--Define the relationship of nutritional
status at various stages of childhood to the long term needs for
nutrients and the risk of nutritionally related diseases.
Boston, MA, $550,000.--Develop an understanding of the relationship
between diet and the development of vascular dementia in the elderly.
--Update the National Nutrient Databank ($650,000)
Beltsville, MD, $650,000.--Utilize key foods approach to update the
National Nutrient Databank by analyzing the nutrient content of those
foods that supply the bulk of the important nutrients in the American
diet.
Diet and Human Performance--$2,400,000
Beltsville, MD, $500,000.--Adapt or develop methods for measuring
the emerging class of putative phytonutirents which considers regional,
seasonal, and maturity at harvest and can be used in field-evaluation
of dietary patterns of health.
San Francisco, CA, $750,000.--Define specific effects of energy
intake on the impact of protective factors in foods on human
performance.
Little Rock, AR, $400,000.--Define material on child dietary
components that affect cognitive development in children.
Houston, TX, $250,000.--Study ethnic differences in the effect of
diet on body composition in children.
Grand Forks, ND, $500,000.--Establish influence of mineral-
containing or mineral-influenced phytonutrients on marker for human
performance.
Increasing the Scope of Food Nutrition Survey Efforts--$850,000
Beltsville, MD $550,000.--Expand the scope of the Continuing Survey
of Food Intakes by Individuals to include the NHANES measures
ofbiological/functional indicators of nutritional status within
individuals.
San Francisco, CA, $300,000.--Assess the biological impact of the
food assistance program to improve the cost-effectiveness of proper
dieting.
Development of Food Consumption Methods--$1,250,000
Beltsville, MD, $500,000; Boston, MA, $250,000; Little Rock, AR,
$500,000.--Develop analytical methods that will be used to determine
the concentration of phytonutrients in food. Efforts will concentrate
onthose components suspected of having health promoting properties,
particularly in carotenoids, flavonoids, glucosinylates and phenolic
compounds.
Note.--In fiscal year 1998, an appropriation of $5 million was
provided to conduct a supplemental children's survey to the current
1994-96 Continuing Survey of Food Intakes by Individuals (CSFII). In
fiscal year 1999, ARS recommends the use of these resources as follows:
Beltsville, MD, $1,500,000.--Increase the CSFII sample size to
include population groups that will require special attention as
pesticide registration decisions are made under the Food Quality
Protection Act.
Little Rock, AR, $450,000.--Identify markers of nutritional well-
being for use in epidemiological evaluations of disease risk.
Little Rock, AR, $250,000.--Elucidate roles of phyto- and
micronutrients in improving cognitive development.
Boston, MA $450,000.--Examine the roles of anti-oxidants in
maintaining cognitive function in the elderly.
Boston, MA, $250,000.--Conduct epidemiological studies focused on
the nutritional factors needed to prevent or delay diseases associated
with aging, such as Alzheimer's disease, cardiovascular disease, and
cancer.
Grand Forks, ND, $700,000.--Determine biological functions of ultra
trace elements, such as boron, aluminum, and manganese.
San Francisco, CA, $700,000.--Improve the understanding of
relationships between diet and chronic disease by evaluating commonly
consumed phytonutrients' roles in minimizing oxidative damage and
reducing cancer risk.
Houston, TX, $700,000.--Determine how nutrients and other dietary
constituents, including phytonutrients, act to turn on the synthesis of
proteins that are required for metabolism as an essential step in
developing meaningful dietary advice.
emerging diseases and exotic pests
Question. The fiscal year 1999 budget proposes a $6 million
increase for emerging diseases and exotic pests. What is now being
spent for research on emerging diseases and exotic pests?
Answer. Emerging diseases and exotic pests are an increasing
problem in the United States. USDA believes that this problem is linked
to expanding intercontinental transport of goods and people, and that
we should anticipate further increases in the rate of emerging diseases
and exotic pests in the future. In fiscal year 1998, ARS is spending
$5,244,800 on emerging diseases and exotic pests of plants in addition
to what is being spent on these pest problems through research reported
under Areawide Integrated Pest Management (IPM) and IPM component
research.
Question. Please provide for each of fiscal years 1997 and 1998 a
summary of the funding provided and a brief description of the research
funded and where it is being conducted.
Answer. A summary of the funding, research and research locations
for fiscal years 1997 and 1998 will be provided for the record.
[The information follows:]
------------------------------------------------------------------------
Fiscal year--
Research area -----------------------------------
1997 1998
------------------------------------------------------------------------
Vomitoxin/Fusarium Head Blight...... $275,100 $1,273,500
Karnal Bunt......................... 218,100 714,200
Citrus Tristeza..................... \1\ 1,513,700 \1\ 2,457,100
Ergot Disease in Sorghum............ ................ \2\ 300,000
Asian Longhorn Beetle............... ................ 500,000
-----------------------------------
Total......................... 2,006,900 5,244,800
------------------------------------------------------------------------
\1\ In fiscal year 1997, Total includes a Specific Cooperative Agreement
with the University of Florida ($386,000). In fiscal year 1998,
approximately $1.1 million will be used to fund competitive research
proposals.
\2\ Total includes Specific Cooperative Agreements with Texas A&M
University ($80,000) and Kansas State University ($30,000).
Vomitoxin/Fusarium Head Blight
Peoria, IL.--1997 and 1998, Scientists in Peoria are characterizing
the genetics and biosynthesis of vomitoxin, and studying the biological
control of vomitoxin production.
St. Paul, MN.--1997, Scientists in St. Paul are characterizing the
genetic resistance and identification of genes involved in head blight.
St. Paul, MN.--1998, Scientists in St. Paul are continuing the
research begun in 1997 and are initiating a $500,000 extramural program
to support a national consortium to enhance plant germplasm to limit
disease and toxin production. This research is being conducted to
describe disease development and spread, and to develop new control
strategies. With an additional $500,000 appropriation, scientists at
St. Paul will initiate research to evaluate the epidemiology of this
disease, and describe pathogen ecology and pathotype variability.
Karnal Bunt
Frederick, MD.--1997 and 1998, Scientists in Frederick are
conducting research on pathogen characterization, detection, and
identification, and on disease epidemiology under field conditions.
Manhattan, KS.--1998, Scientists in Manhattan are evaluating the
genetics of host plant resistance, and are conducting studies on the
enhancement of host plant germplasm.
Citrus Tristeza
Fresno, CA.--1997 and 1998, Scientists in Fresno are conducting
studies on disease epidemiology and identification of management
strategies for tristeza under California production conditions.
Orlando, FL.--1997 and 1998, Scientists in Orlando are conducting
studies on virus characterization, germplasm enhancement, disease
control strategies, pathogen detection/identification methods, and
virus-vector relationships.
Beltsville, MD.--1997 and 1998, Funds are used to maintain a
worldwide collection of citrus tristeza virus strains. In 1998, the
operation of the collection activities were increased and Headquarters
held funds ($500,000) are being used to support intramural and
extramural competitive grants program that is addressing priority
research objectives of the citrus tristeza problem.
Ergot Disease in Sorghum
Beltsville, MD.--1998, Headquarters held funds ($300,000) are
temporarily being allocated to: Mayaguez, PR, for research on chemical
control, disease epidemiology, and germplasm evaluation and enhancement
of Ergot resistant varieties; to Lincoln, NE, for pathogen detection
and monitoring, evaluation of disease spread, and to determine
alternate host plants; and to Frederick, MD, for research on pathogen
variability.
Asian Longhorn Beetle
Newark, DE.--1998, Research is being conducted under both field and
quarantine laboratory conditions on basic beetle biology, detection
sampling, and control methodologies, including cultural and biological
control. A Specific Cooperative Agreement was developed with the
Department of Entomology at Cornell University to assist in this
research effort.
Beltsville, MD.--1998, The ARS Insect Chemical Ecology Laboratory
is conducting research on pheromone isolation and characterization to
enhance field detection and sampling. The Systematics Entomology
Laboratory is working cooperatively with the Department of Entomology
at Cornell University to conduct research on beetle systematics, basic
biology and pest identification methods.
Question. Of the $6 million increase proposed for fiscal year 1999,
$3.7 million is proposed to be used to enhance the development of
diagnostic tests, vaccines, and other immune strategies that prevent
outbreaks and spread of exotic and zoonotic diseases, and pathogens.
Please indicate for each of fiscal years 1997 and 1998 the research
being funded in each of these areas and describe the progress we have
made to date and why additional funds are required.
Answer. ARS has funded exotic and domestic animal disease research
at a level of $40,590,800 for fiscal year 1997 and $39,943,900 for
fiscal year 1998, respectfully. New funding is urgently needed because
a number of new disease issues have emerged that are negatively
impacting livestock production in the U.S. or have the potential to be
introduced into the U.S. as exotic animal diseases. Recent outbreaks in
1995 and 1997 of the vector-borne disease vesicular stomatitis has cost
approximately $100 million. Tick-borne parasitic diseases and arbo-
viral vector-borne diseases restrict U.S. export markets. Porcine
reproductive respiratory syndrome (PRRS) emerged in the U.S. during the
1990's and is now considered the most important disease constraint for
swine production. New variants of the PRRS virus caused major disease
losses in 1997 in the Midwest. The emergence of several zoonotic
diseases in wildlife such as tuberculosis and brucellosis pose new
barriers to disease eradication in several states. The 1997 emergence
of diseases such as foot and mouth disease (FMD) in Taiwan, hog cholera
in Europe, and avian influenza in poultry in Hong Kong have each cost
billions of dollars to animal agriculture in the respective countries
where these diseases emerged. Bovine spongiform encephalopathy (BSE) in
Great Britain and Europe continues to be a trade barrier issue. In
summary, because of the emergence of new diseases within the borders of
the U.S. and new disease outbreaks abroad, there is an urgent need for
the U.S. to invest in animal disease research in order to protect our
animal industries. Improved methods of disease prevention will enable
U.S. livestock industries to provide the safest and most disease free
livestock and livestock products in the world. This will lower
production costs and allow the U.S. to continue to gain competitive
advantages in international trade markets.
Highlights of progress made to date in animal infectious disease
research are listed below:
Scrapie is now an endemic disease in sheep in the U.S. ARS
scientists developed a non-invasive preclinical diagnostic test that
will help the United States Sheep Industry significantly reduce the
risk of infection from scrapie in their herds. A voluntary ``scrapie
free'' flock certification has been established.
ARS scientists developed and evaluated a new vaccine strain of
Brucella (RB51) that protects cattle from brucellosis and does not
produce false-positive results in brucellosis screening tests, and
preliminary efficacy studies show the vaccine to be effective in bison
calves. However, the vaccine proved to be unsafe in pregnant bison,
causing abortions after it was administered. Adaptation of the cattle
vaccine for use in pregnant bison would significantly enhance efforts
to control and eradicate brucellosis in bison.
ARS researchers used polymerase chain reaction (PCR) technology to
identify the mycobacterium that causes TB in tissues submitted for
pathologic examination. The PCR technique will benefit not only the TB
eradication program but also will provide a significant contribution to
agencies that must assess potential public health risks posed by the
presence of mycobacterial infections in animals.
ARS scientists at the Plum Island Animal Disease Center, Greenport,
Long Island, New York, have cloned the genes responsible for FMD viral
proteins and expressed them in a non-infectious vector thus providing a
safe source of reagents for a new diagnostic test. The availability of
this type of test will reduce the risk of international trade of
animals from countries free from FMD that still practice vaccination,
as well as in the effective use of FMD vaccines for control strategies
in the event of an outbreak in the U.S.
ARS scientists have tested two vaccine technologies using genetic
material from the hemagglutinin gene of the H5 influenza virus. Both
vaccines provided protection against illness and death from deadly
strains of H5 avian influenza virus. The vaccines will provide a tool
for use by the poultry industry and APHIS to be used in an overall
eradication strategy emphasizing quarantine, biosecurity and
controlled-slaughter.
ARS scientists developed a polymerase chain reaction (PCR) test
that detects one form of Avian Leukosis virus-subgroup J in blood and
other tissues of affected chickens. Using the PCR test, broiler breeder
companies will be able to determine the incidence of this new virus
infection in their breeder flocks. Additional PCR tests are needed to
detect other strains of the virus.
ARS scientists have shown that Culicoides variipennis, a small
biting midge, transmitted vesicular stomatitis virus to a vertebrate
host. The understanding of the role of insects in disease transmission
is essential to the U.S. ability to protect animals, humans, and U.S.
agriculture against emerging pathogens.
ARS found a protein in bluetongue virus that binds to a protein in
the insect vector species. This virus protein provided a first
demonstration that the insect and animal host interact with this virus
by different mechanisms. Blocking the attachment of the protein with
this vector provides a new strategy that may prove useful in
interrupting transmission.
ARS developed an electrostatic space charge supplier that removes
about 95 percent of dust and airborne bacteria, such as Salmonella.
Hatching cabinets are known to be one of the primary sources for
Salmonella contamination of poultry. This system greatly reduces the
need for chemical disinfectants, could greatly reduce cleanup and
disinfection time, and is effective for dust control in other types of
poultry environments.
ARS scientists developed a customized live vaccine to protect birds
from losses due to coccidiosis and have shown that bird performance is
comparable to birds which are drug treated. So far, over 60 million
birds have been treated with this ARS technology. This breakthrough is
a major contribution in eliminating the need for chemicals in
production of poultry. In addition, coccidiosis in chickens develop
resistance to chemicals used for control.
Preempt, a new product created by ARS scientists, significantly
reduces the potential of Salmonella contamination in broiler chickens.
This new product preempts the growth of Salmonella in chicken
intestines by introducing a blend of 29 live, non-harmful bacteria
naturally present in healthy adult chickens. The newly developed
mixture can be sprayed in a mist over newly hatched chicks to give them
the protection necessary to significantly reduce potentially dangerous
Salmonella in the chicken Americans eat. Preempt is the successful
result of the public-private partnership where USDA patented the
mixture and granted a private company a licensing agreement to market
the product.
food genome initiative
Question. A $3.5 million increase in the ARS budget is proposed for
fiscal year 1999 as part of the Food Genome Initiative. Please
summarize why this funding is important and what you hope to
accomplish. Is ARS doing any work in this area now or is this a
completely new undertaking?
Answer. Among the major challenges facing humankind in the next
century is the need for substantial increases in the production of high
quality food. The Food Genome Initiative is an essential part of the
USDA's and ARS' research strategy to meet that demand. The Initiative
includes the mapping, identification, and understanding of the function
and control of genes responsible for economically important traits in
crops and livestock. ARS now devotes more than $3 million annually to
support plant genome databases and additional funds for genetically
mapping of plant and animal species. This has contributed to the
development of databases for nine crop species. However, there is a
need to fill in gaps and expand databases on other crops and animal
species. With the information gained from the genome initiative,
scientists will be able to develop plants and animals with increased
production traits such as growth efficiency, disease resistance,
tolerance to adverse soil and climate conditions and improved
nutritional quality.
food safety
Question. A $14 million increase in the ARS budget is proposed for
fiscal year 1999 for the President's Food Safety initiative. Please
describe the Total amount of ARS funding now being committed to food
safety research, where this research is being conducted, what is being
accomplished, and why additional funds are required.
Answer. The Total amount of funding for ARS food safety research in
fiscal year 1998 is $54,949,400.
This research is being conducted in the following locations:
Fayetteville, AR; Albany, CA; Athens, GA; Dawson, GA; Tifton, GA; Ames,
IA; Peoria, IL; New Orleans, LA; Beltsville, MD; Mississippi State, MS;
Fargo, ND, Clay Center, NE; Ithaca, NY; Wyndmoor, PA; College Station,
TX; and Logan, UT and Headquarters.
Accomplishments of the ARS food safety research program are listed
as follows by subject area:
Pathogen reduction research program.--To improve detection methods,
ARS has developed:
(1) Methods for Campylobacter culture and identification for the
Food Safety Inspection Service (FSIS).
(2) A rapid test for detecting E. coli 0157:H7 for use by producers
and industry.
(3) Serologic tests to detect animals which have been infected but
may not be actively shedding E. coli or Salmonella. (4) A single
procedure Multiplex PCR assay for detection of E. coli 0157:H7 and
Salmonella.
(4) PCR and immunohistochemical methods to detect Cryptosporidia.
Pathogen reduction research program.--To develop prevention
techniques for pathogen avoidance, reduction, and elimination, ARS has
demonstrated or developed:
(1) how infection of E. coli 0157:H7 can occur in neonatal and
weaned calves, and that it requires 2 factors, intimin and Shiga toxin.
(2) that viable Cryptosporidia can be transmitted into oysters,
clams and other aquaculture animals.
(3) bacterial cultures (preempt) to competitively inhibit
Salmonella in broiler chicks, and natural substances to enhance the
immune response in chicks and neonatal swine.
(4) irradiation procedures to kill Cyclospora on certain fruits and
vegetables.
(5) steam pasteurization for poultry to kill pathogens on poultry
skin.
(6) information identifying specific equipment materials in poultry
processing facilities that are conducive to the formation of biofilms
(bacterial films difficult to remove from surfaces).
(7) spray scalding procedures to reduce cross contamination in
poultry processing plants.
(8) new methods to prevent spillage of fecal matter during initial
processing and evisceration of poultry.
(9) a hot water and quick chill (thermoflux) procedure that
significantly reduces Salmonella incidence in specific, highly
contaminated pork cuts.
(10) that Salmonella and Campylobacter are increased during
transportation of broilers to slaughter and that consumption of litter
during fasting is a contributing factor.
(11) that fecal shedding of E. coli 0157:H7 increases in cattle
that are alternatively fasted and fed.
(12) that swine carry Salmonella into the slaughter plant, because
the Salmonella serotypes in trailers used for hauling swine are similar
to those found in preslaughter holding pens.
Pathogen reduction research program.--In the area of risk
assessment, ARS has:
(1) Helped simplify the use of predictive microbiology in microbial
risk assessment by updating the USDA Pathogen Modeling Program to the
Fifth Edition. The models are now available to the public via Internet.
(2) Targeted the interactions of organic acids and temperature in
relation to E. coli 0157:H7 for modeling studies, particularly to
determine the rapidity at which this pathogen can adapt to change.
(3) Developed a technique, together with an international
committee, for estimating dose-response curves based on microbiological
survey and epidemiological data for foodborne pathogens for which
direct human data is unlikely to be available.
Drug residues and chemical contaminants research program.--ARS
research confirmed that levels of regulatory concern of dioxins in
chickens resulted from ball clay that was added to soybean meal as an
anticaking agent. Identification of these dioxin sources provides
producers with the knowledge needed to produce dioxin-free food
products. Studies of the disposition of the animal drug clenbuterol
identified metabolites of clenbuterol and determined that they can be
converted back to the parent drug in the GI tract; this will help to
evaluate the risk of toxicity to humans. A monoclonal antibody capable
of binding animal drug hygromycin B was formulated into a rapid ELISA
assay, a patent issued, and the antibodies licensed to a private test
kit manufacturing company.
Research program to prevent mycotoxins.--Specific genetic markers
were identified in corn which contribute to resistance to both
Aspergillus colonization and aflatoxin formation. Reporter strains of
aflatoxin-producing fungi were developed and tested which allowed
quantification of the amount of fungal invasion in kernels, a critical
measurement in the assessment of resistance during corn varietal
development by plant breeders. The reporter strains are also being used
to detect compounds in corn kernels that modulate aflatoxin production.
In cotton, genetic engineering has been able to transform embryos with
antifungal genes to induce resistance to aflatoxin producing fungi.
With walnut and peanut, ARS has significantly contributed to the
germline transformation with antifungal genes that will enhance
resistance to A. flavus in these crops. Biological control with
competitive non-aflatoxin producing strains of the fungus now shows
great promise with cotton, corn and peanut. In cotton, continued large-
scale testing under the EPA Experimental Use Permit in Arizona resulted
in reduced infection of cottonseed by toxigenic strains and, thus, in
reduced aflatoxin levels. Experiments in GA with corn showed for the
first time that biological control with a toxigenic strains of A.
flavus and A. parasiticus could reduce aflatoxin contamination.
Additionally, field-grown peanuts from the 1997 drought-stressed crop
treated with the biocompetitive strains had aflatoxin levels reduced by
90 percent compared with untreated peanuts. To control the effects of
Fusarium graminearum and its toxin, deoxynivalenol (DON), in wheat and
barley, ARS has introduced partial resistance into wheat from lines
that are more resistant under optimal conditions to the pathogen. The
toxin, DON, was demonstrated to be a virulence factor for the
pathogenesis of F. graminearum on wheat, a finding which suggests that
wheat or barley germplasm with increased resistance to trichothecenes
might have improved resistance to Fusarium diseases as well. Fungal
genes that confer resistance to or detoxify DON have been identified
and will be incorporated into wheat and barley to determine if they
improve resistance to Fusarium caused head scab diseases.
Research to control the effects of toxic plants.--A study was
conducted to quantify swainsonine in tissues of locoweed-poisoned sheep
and determine the rate of swainsonine clearance from animal tissues.
Poisoned animals have significant tissue swainsonine concentrations and
animals exposed to locoweed should be withheld from slaughter for at
least 28 days to assure that the locoweed toxin has been cleared from
all animal tissues. Lupine alkaloids have been detected in the blood
plasma of cattle, sheep and goats after consumption of the lupines.
Serum elimination times were found to vary for different individual
alkaloids and measurements will be continued in order to determine
definitive clearance times. Larkspur is the most important poisonous
plant problem in cattle in the mountainous regions of the western
United States.
Additional funds are being requested to support research
initiatives to both establish a better biological understanding of
pathogens and to make possible the technological advances to assure
food safety and meet the expectations of the American consumer. Food
safety research must meet the challenge of solving the problems
resulting from emerging pathogens, changing production practices,
increased pathogen resistance, increased numbers of food products, and
poor food storage and preparation practices.
Question. Of the $14 million increase requested, $8 million is for
pre-harvest food safety research to design effective control programs
to prevent the spread of bacteria and parasites from animals to humans
and to improve post-harvest handling practices for fruits and
vegetables. Where will this research be carried out?
Answer. The requested increases for preharvest food safety research
to design effective control programs to prevent the spread of bacteria
and parasites between animals and humans will be carried out at the
following locations: Albany, CA; Riverside, CA; Athens, GA; Ames, IA;
Peoria, IL; West Lafayette, IN; New Orleans, LA; Beltsville, MD; Clay
Center, NE; and College Station, TX.
Question. Are we doing any research in these areas currently? If
so, what research is being conducted, where is it being carried out,
and what is its cost?
Answer. ARS currently carries out food safety research in areas for
which increases have been requested. Preharvest food safety research is
currently being conducted at Fayetteville, AR ($297,400); Albany, CA
($2,153,200); Athens, GA ($4,937,400); Dawson, GA ($754,800); Tifton,
GA ($571,400); Ames, IA ($3,367,100); Peoria, IL ($3,384,100); New
Orleans, LA ($2,972,000); Beltsville, MD ($1,971,700); Mississippi
State, MS ($677,300); Fargo, ND ($2,024,400); Clay Center, NE
($1,588,200); Ithaca, NY ($320,100); College Station, TX ($3,010,600);
Logan, UT ($1,973,700); and Headquarters ($1,445,000).
Question. Of the $14 million increase requested, $6 million is for
post-harvest research in support of the Hazard Analysis and Critical
Control Point (HACCP) model implemented by the Food Safety and
Inspection Service. Please describe this research proposal more fully.
Answer. This proposal provides for research to determine how
microorganisms associated with foodborne disease become tolerant to
antibiotics and to traditional food safety safeguards, to develop
accurate user-friendly detection methods for pathogenic parasites and
viruses in foods, to develop microbial sampling technologies to support
HACCP, to develop computerized expert systems to evaluate both food
processing systems and controls, to develop sensors to alert processors
and consumers of food products not stored safely, and to develop new
handling systems and pathogen decontamination technologies to control
pathogens while preserving the freshness qualities of fruits and
vegetables.
Question. Are any research monies being committed to this area
currently? If so, where is that research being conducted and what is
its cost?
Answer. ARS currently carries out food safety research in areas for
which increases have been requested. Post-harvest research is currently
being conducted at Albany, CA ($3,876,400); Athens, GA ($3,211,600);
Peoria, IL ($1,275,700); New Orleans, LA ($104,400); Beltsville, MD
($1,886,500); Clay Center, NE ($1,738,500); Wyndmoor, PA ($10,391,100);
College Station, TX ($806,800); and Headquarters ($210,000).
Question. Funds were provided to the ARS for fiscal year 1998 for a
study by the National Academy of Sciences on the scientific and
organizational needs for an effective food safety system. Please give
us a status report on this effort. When did the National Academy of
Sciences receive the funds for the study? Please describe what
involvement USDA is having in the study, if any.
Answer. A research agreement between the ARS and the National
Academy of Sciences was completed on January 13, 1998, which provided
for the agreement period of performance from January 1, 1998 through
September 30, 1998. This grant from ARS will provide $420,000 to be
transferred to the Academy.
USDA has primarily a consultative and facilitative role in the
study. USDA participated in the first open meeting of the committee
(March 23-25, 1998) and will assist in contacting other Federal
agencies with responsibilities in food safety, and provide information
as requested by the committee.
integrated pest management
Question. How will the $5.5 million increase requested in the
budget be utilized by the ARS to reach the Administration's goal of
encouraging the adoption of IPM practices on 75 percent of the Nation's
crop land by the year 2000?
Answer. The funding increase will be utilized by the ARS to support
the Agency's efforts to develop biologically-based components needed in
IPM and areawide systems that can be readily adopted by the nation's
farming community. The agency is committed to reducing the use of
higher risk pesticides and to promoting IPM, including biological and
cultural control and other sustainable agricultural practices. The
funding increase will be specifically targeted at developing
biologically-active natural compounds ($0.6 million) to attract natural
enemies for control of crop pests and to control blue-green algae in
catfish ponds; accelerating development of alternatives to methyl
bromide by a Competitive Grants Program ($2.0 million); developing
augmentative biological control and other IPM programs for boll weevil,
gypsy moth, and weed control ($1.4 million); and to support the new
USDA Office of Pest Management Policy ($1.5 million) by providing a
coordinated approach to minor use pesticides and a more rapid response
to the Food Quality Protection Act data analysis needs.
The ARS areawide pest management IPM programs are coordinated
across the USDA agencies, Directors of research and extension in the
Land Grant system, EPA, and State and private IPM practitioners through
a Departmental IPM National Coordinating Committee, Regional
Coordinator Committees and Project Component Coordinating Committees
with memberships from the Federal and State levels. Additionally, a
number of research and extension task forces function as coordination
and communication bodies, not only for the areawide IPM programs, but
also for other major pest management programs administered by ARS.
These task forces include representatives from Federal, State and
private sectors.
human nutrition research
Question. What amount of funding is currently being utilized for
Human Nutrition Research?
Answer. The current funding for human nutrition research will be
provided for the record.
[The information follows:]
Human Nutrition
Location Fiscal year 1998
Arkansas Children's Hospital Research Institute, Little
Rock, AR............................................ $2,769,500
Western Human Nutrition Research Center, San Francisco,
CA.................................................. 5,537,500
Jean Mayer USDA Human Nutrition Research Center on
Aging, Boston, MA................................... 14,909,000
Beltsville Human Nutrition Research Center, Beltsville,
MD.................................................. 18,645,200
Grand Forks Human Nutrition Research Center, Grand
Forks,
ND.................................................. 8,204,400
Children's Nutrition Research Center, Houston, TX....... 11,191,700
National Agricultural Library........................... 675,000
Lower Mississippi Delta Intervention Research Initiative
(LA, AR, MS)........................................ 3,147,700
Other Locations......................................... 1,265,000
Headquarters (Survey of Children's Food Intake)......... 5,000,000
--------------------------------------------------------
____________________________________________________
Totals............................................ 71,345,000
Question. Please describe the human nutrition research being
carried out by each of the ARS Human Nutrition Research Centers and the
overall objectives of this research.
Answer. The research carried out by each of the ARS Human Nutrition
Research Centers and the overall objectives of this research will be
provided for the record.
[The information 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. What is an additional $10.5 million required for Human
Nutrition Research for fiscal year 1999 following the $7.5 million
increase provided for this research program for fiscal year 1998?
Answer. The Human Nutrition Initiative is a comprehensive multi-
year plan for nutrition research, fiscal year 1998-fiscal year 2003 for
which we request $10.5 million this year. The research of the Human
Nutrition Initiative will serve all Americans throughout the entire
lifecycle, from maternal nutrition prior to conception through
nutrition and the elderly, and includes diverse research strategies
including molecular, biochemical, metabolic, behavioral, and
agricultural research techniques. The Nutrition Research Initiative can
help us reap benefits in terms of reduced health care costs, less
morbidity and early mortality associated with chronic diseases, and
improved quality of life. The Initiative harnesses the strengths of
modern nutrition science and combines them with the fundamental mission
of the ARS to conduct research that will define relationships between
diet, genetics, and lifestyle and the risk for chronic disease in order
to reduce health care costs and enhance health and life quality for
Americans, improve the scientific basis for more effective Federal
assistance programs, and generate a more nutritious food supply by
conducting research that defines the basis for modifying the health
promoting properties of plant and animal foods.
Question. How will the $10.5 million requested be allocated, by
Center, and what research will this additional funding support at each
of the Centers? Please list the research projects for which increased
funding is requested in order of priority.
Answer. The $10.5 million would be allocated to the respective
Centers to undertake research within the following human nutrition
initiatives:
I. Nutrient--Gene Interactions ($2,400,000)
Boston, MA, $300,000.--Determine the regulation of the synthesis of
fatty acids in response to oxidative stress and how the regulation is
responsive to diet.
Little Rock, AR, $900,000.--Determine the precise relationship
between nutrients in the diet and the development of cognition in
children at the molecular level.
Grand Forks, ND, $650,000.--Identify the regulatory genes that are
responsive to trace minerals in the diet with the aim of determining
the regulatory genes of importance.
Houston, TX, $550,000.--Determine which genes and nutrients
interact and how they interact to mediate growth and weight gain in
children.
II. Diet and Human Performance ($2,400,000)
Beltsville, MD, $500,000.--Adapt or develop methods for measuring
the emerging class of putative phytonutrients which considers regional,
seasonal, and maturity at harvest and can be used in field-evaluation
of dietary patterns of health.
San Francisco, CA, $750,000.--Define material on child dietary
components that affect cognitive development in children.
Little Rock, AR, $400,000.--Define material on child dietary
components that affect cognitive development in children.
Houston, TX, $250,000.--Study ethnic differences in the effect of
diet on body composition in children.
Grand Forks, ND, $500,000.--Establish influence of mineral-
containing or mineral-influenced phytonutrients on markers for human
performance.
III. Role of Nutrition throughout the Life Cycle ($1,550,000)
Houston, TX, $1,000,000.--Define the relationship of nutritional
status at various stages of childhood to the long term needs for
nutrients and the risk of nutritionally related diseases.
Boston, MA, $550,000.--Develop an understanding of the relationship
between diet and the development of vascular dementia in the elderly.
IV. Update the National Nutrient Databank ($650,000)
Beltsville, MD, $650,000.--Utilize key foods approach to update the
National Nutrient Databank by analyzing the nutrient content of those
foods that supply the bulk of the important nutrients in the American
diet.
V. Diet and Immune Function ($1,400,000)
San Francisco, CA, $500,000.--Define the relationship between
nutrition and the induction of the synthesis of immunoglobins.
Boston, MA, $250,000.--Determine changes in the immune response
that occur throughout the aging process and determine if dietary
antioxidants can delay or prevent such changes.
Beltsville, MD, $250,000.--Define the role of phytonutrients to
increase the immune response by looking at the induction of T-cell
lymphocytes in response to foods of plant origin.
Little Rock, AR, $400,000.--Determine foods in the diets of young
children that have a positive effect on growth and development.
VI. Increasing the Scope of Food Nutrition Survey Efforts ($850,000)
Beltsville, MD, $550,000.--Expand the scope of the Continuing
Survey of Food Intakes by Individuals to include the NHANES measures of
biological/functional indicators of nutritional status within
individuals.
San Francisco, CA, $300,000.--Assess the biological impact of the
food assistance program to improve the cost-effectiveness of proper
dieting.
VII. Development of Food Composition Methods ($1,250,000)
Beltsville, MD, $500,000; Boston, MA, $250,000; Little Rock, AR,
$500,000.--Develop analytical methods that will be used to determine
the concentration of phyto-compounds in food. Efforts will concentrate
on those components suspected of having health promoting properties,
particularly in carotenoids, flavonoids, glucosinylates and phenolic
compounds.
Question. What additional funding will be required in each future
fiscal year, by Center, to meet the objectives of the Administration's
Initiative on Human Nutrition?
Answer. The plan for the Administration's Human Nutrition
Initiative published in the President's fiscal year 1998 Budget, called
for increases in the research programs at the six human nutrition
laboratories over the 1998-2002 period. This plan, updated to reflect
actual 1998 appropriations, is provided for the record. However, as you
know, budgets are developed on a year-by-year basis and funding
estimates change based on current budget targets. The fiscal year 1999
President's Budget, submitted to Congress in February, included an
additional $10.5 million (for a Total of $18 million) in fiscal year
1999.
[The information follows:]
AGRICULTURAL RESEARCH SERVICE HUMAN NUTRITION INITIATIVE AS PROPOSED IN THE 1998 PRESIDENT'S BUDGET--5-YEAR
FUNDING
----------------------------------------------------------------------------------------------------------------
Fiscal year--
----------------------------------------------------------
1998 1999 2000 2001 2002
(actual) (estimate) (estimate) (estimate) (estimate)
----------------------------------------------------------------------------------------------------------------
Beltsville Human Nutrition Research Center (BHNRC)... $250 $4,200 $7,300 $10,500 $14,000
Jean Mayer USDA Human Nutrition Research Center on 250 2,300 3,700 5,100 6,000
Aging (HNRCA).......................................
Children's Nutrition Research Center (CNRC).......... 500 3,000 5,100 7,100 9,000
Grand Forks Human Nutrition Research Center (GFHNRC). 250 2,100 3,200 4,300 4,900
Western Human Research Center (WHNRC)................ 250 2,500 4,000 5,400 6,500
Arkansas Children's Hospital Research Institute...... 1,000 3,900 6,700 9,600 12,600
Headquarters (Survey of Children's Food Intake)...... 5,000 .......... .......... .......... ..........
----------------------------------------------------------
Total.......................................... 7,500 18,000 30,000 42,000 53,000
----------------------------------------------------------------------------------------------------------------
Question. Will the Administration's Initiative on Human Nutrition
continue to be funded at the expense of ARS' existing research
programs?
Answer. The Human Nutrition Initiative is important. Its
implementation will be consistent with priorities set by the
Administration. The Initiative on Human Nutrition complements ARS'
existing research program. Knowledge about health-promoting foods and
components of foods can be 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. The National Nutrient
Databank and the Continuing Survey of Food Intake in Individuals will
both be strengthened by the Initiative. Both provide information which
is foundational to agriculture production and food industries.
Question. For fiscal year 1998, one-time funding of $5 million was
provided for ARS to conduct a survey on food consumption by infants and
children. Where is this reduction in funding for the one-year cost of
this study reflected in the fiscal year 1999 budget?
Answer. The $5 million allocated to ARS to conduct a survey on food
consumption by infants and children in fiscal year 1998 was held at
Headquarters for a one-time allocation to the survey. In fiscal year
1999, the $5 million will be combined with a proposed increase of $10.5
million for a Total of $15.5 million to be allocated to the Human
Nutrition Centers at Boston, MA ($2.05 million), Little Rock, AR ($2.9
million), Grand Forks, ND ($1.85 million), Houston, TX ($2.5 million),
San Francisco, CA ($2.25 million), and Beltsville, MD ($3.95 million).
Question. Please provide the Committee with an update on the
Dietary Intakes Survey.
Answer. The final year of data collection was released for the
1994-96 Continuous Survey of Food Intakes by Individuals (CSFII) and a
CD-ROM of data for the entire survey was just released. The CSFII has
been widely praised for its timely release of data, high response rate,
ease of use of the data, and the quality of the survey. Current efforts
are underway with a feasibility study directed at developing a new,
computer assisted telephone interview technology to reduce the costs of
conducting future surveys by providing an effective alternative to the
costly on-site interview process. At the same time, data collection has
begun on the year-long Supplemental Childrens Survey that will be
combined with the just completed CSFII to provide the sample size
needed by EPA to comply with the Food Quality Protection Act of 1996.
ARS plans are to combine the Supplemental Children's Survey with the
National Health and Nutrition Examination Survey (NHANES) conducted by
the Department of Health and Human Services whereby food intake data
can be linked to health status. This combined survey will be consistent
with the National Nutrition Monitoring and Related Research Act of
1990.
Question. Why does the fiscal year 1999 request propose an increase
of $1.5 million to expand the sample size on the ongoing dietary
surveys?
Answer. ARS proposes to reallocate $1.5 million to enhance the
surveys. The proposed Continuing Survey of Food Intakes by Individuals
(CSFII) will increase sample size by 2,000 to assess dietary intakes by
low income populations and populations at risk for disease such as the
elderly and children. The data will be used by governmental policy
makers to monitor effectiveness of food assistance programs.
Question. Why wasn't this expansion of the survey proposed last
year?
Answer. Continued support for the survey is an integral part of the
Human Nutrition Initiative to maintain baseline data on the food
consumption patterns and to understand their likely impact on health
and well-being. The proposal to reallocate $1.5 million from the $5
million 1998 increase for surveys to a specific survey in fiscal year
1999 is to meet research needs not met by the survey in fiscal year
1998. Specifically, the survey size will be increased for low income
populations and populations at risk of disease.
environmental research
Question. An increase of $7 million is requested to support the
President's Climate Change Technology Initiative. Please explain what
research ARS will carry out and how this research will complement that
undertaken by the Forest Service.
Answer. The $7 million in the request would be utilized in two
areas: (1) $3 million of the proposed increase would be used to
accelerate ``Agricultural Practices and Mitigation of Climate Change
Impacts'' research which focuses on agriculture's opportunities for
removing carbon dioxide from the atmosphere and storing it in soils as
organic carbon (carbon sequestration). The Kyoto protocol provides
credit for sequestering carbon in sinks as a portion of reductions in
greenhouse gas emissions. Previous research by ARS has demonstrated
that conservation practices such as the shift from conventional to
minimum- or no-till systems are very effective in enhancing the uptake
of soil carbon by the soil and storage in the soil. However, much
remains to be done to document the various agricultural sinks, and to
determine the sequestration potential of alternative management
practices. (2) The remaining $4 million will be used to initiate new
research under the title ``Biomass for Energy.'' The program's
objectives are twofold: (1) the development of more productive plant
materials as sources of fuel (biomass); thus, reducing the use of
fossil fuels and the associated carbon-producing combustion; and (2)
the development of more efficient processes for converting plant
materials like switchgrass to ethanol and high-value chemicals which
can substitute for petrochemicals in the manufacture of a variety of
products like coatings, fuel additives, and livestock feed additives.
This would provide farmers and rural communities with a more
diversified commodity portfolio by adding energy-producing crops to
traditional food and fiber production. The research complements that of
the Forest Service by focusing on the production and utilization of
highly productive grasses, as opposed to trees, and by developing
methods for using stalks and other crop residues as a biomass source.
ARS and the Forest Service cooperated in drafting the initiative, and
ARS program leaders have begun meetings with their Forest Service
counterparts to explore coordinated implementation of the research
program. The research will also be coordinated with the Department of
Energy.
Question. Increased funding of $2 million is requested for ARS
research on the Pfiesteria outbreak in the Chesapeake Bay. Please
explain ARS' role in this research.
Answer. The increased funding will be used to develop detection
methods for Pfiesteria, to determine the effect of Pfiesteria toxins on
aquaculture and fish production, and to develop specific management
practices and treatment technologies at the farm and watershed scale to
protect water quality in order to prevent outbreaks of Pfiesteria and
other harmful algal blooms. ARS research locations identified for the
program increase are Beltsville, Maryland; Florence, South Carolina;
Auburn, Alabama; and New Orleans, Louisiana. The ARS research program
was developed in coordination with other Federal agencies as part of a
national research strategy on Pfiesteria and harmful algal blooms. This
multi-agency strategy was developed in the fall of 1997 through the
Committee on Environment and Natural Resources of the National Science
and Technology Council.
Question. Why is an additional $500,000 requested for Melaleuca
research for fiscal year 1999?
Answer. Melaleuca, the Australian paperbark tree, was introduced
into Florida from Australia at the turn of the century. Well adapted to
wetland areas, it escaped cultivation and now occupies about 1.5
million acres, and expands at a rate of about 50 acres per day. In the
wild, Melaleuca displaces native wetland vegetation in the Everglades
and other areas/waterways of south Florida, where damage from this tree
is estimated at $168 million per year. Herbicidal and mechanical
control of Melaleuca have proven ineffective in many situations,
particularly for long-term control. ARS believes that biological
control may provide the best option for sustainable management of
Melaleuca. Although ARS has identified several potential biological
control agents of this pest, safety testing, release and evaluation of
these agents requires significant additional scientific research. The
first biological control agent for Melaleuca, the weevil, Oxyops
vitosa, was released in April 1997 following detailed quarantine tests
that documented both the safety and effectiveness of this agent.
Although the weevil is established and is beginning to cause damage to
Melaleuca, ARS believes that a complex of several natural enemies will
be required to effectively control this weed. In support of this
program, ARS has identified many other natural enemies that are in
various stages of assessment for biological control of Melaleuca. The
proposed $500,000 increase will be used to hire two new scientists at
the ARS Ft. Lauderdale Laboratory to accelerate biological and safety
assessments for these agents and to field release those where
regulatory permits have been granted.
Question. What amount of funding is currently available for
Melaleuca research, and how has ARS utilized the $500,000 increase
provided for this purpose for fiscal year 1998?
Answer. In fiscal year 1998, ARS allocated $663,400 to research on
Melaleuca control. These resources have been used in conjunction with
temporary resources ($225,000) provided by cooperators such as the Army
Corps of Engineers, the South Florida Water Management District, the
Florida Department of Natural Resources, the Florida Department of
Environmental Regulations, and Dade County to initiate an international
biological control program for management of this invasive tree. To
accomplish this, ARS has stationed scientists in Australia and Florida
to accelerate the biological control program for Melaleuca. Of the
$500,000 allocated to ARS in fiscal year 1998, $250,000 was allocated
to the ARS International Research Programs to hire a new scientist to
locate, identify, collect and test new Melaleuca biological control
agents in the weeds home range of Australia. The remaining $250,000 is
allocated to the ARS Laboratory at Ft. Lauderdale, Florida to hire a
new scientist to safety test and release biological control agents onto
Melaleuca in south Florida.
alternative solutions to methyl bromide
Question. What is the status of your research work to find
alternative solutions to methyl bromide?
Answer. ARS is conducting research at 20 locations to find
alternatives to current soil fumigation and postharvest methods
requiring methyl bromide. ARS is seeking alternatives through several
approaches: (1) new cultural practices; (2) improved host-plant
resistance to pests and diseases; (3) biological control systems using
beneficial microorganisms; (4) safer fumigants; and (5) combinations of
the above. For postharvest treatment, research is directed at (1)
creation of pest-free agricultural zones; (2) finding new physical
methods such as heat or cold treatment or storage in modified
atmospheres; (3) alternative fumigants; (4) methyl bromide trapping and
recycling technologies; (5) biological control; and (6) combinations of
the above.
ARS is supporting, through cooperative agreements, methyl bromide
alternatives research by university scientists in Florida and
California for crops that will be especially impacted by the methyl
bromide ban in 2001. ARS has regular and frequent meetings with
affected industry representatives to make sure that ARS research
efforts as well as ARS-supported university research are properly
focused on the most pressing industry problems. ARS is also working
with the USDA Animal and Health Plant Inspection Service (APHIS) to
develop quarantine treatment technology to interdict and eradicate
exotic pests arriving at U.S. ports of entry on imported commodities,
packing and crating materials, returning military equipment, etc.
Methyl bromide was only recently identified as an ozone depleting
material. However, because ARS has for many years been developing non-
chemical procedures to replace chemical soil and postharvest
fumigations, ARS has several accomplishments in this area.
In relation to postharvest treatments ARS developed or assisted in
developing include cold treatment for citrus and carambola from Florida
to Japan, pest-free certification for walnuts to New Zealand, heat
treatments for papaya and cold treatment for carambola from Hawaii to
Japan and mainland U.S., phosphine fumigation of hay to Japan, gamma
irradiation treatment of litchi, rambutan, papaya and carambola
exported to the mainland U.S. and blueberry production in Florida, and
forced hot air protocol for control of medfly in citrus. In addition,
ARS scientists have worked with USDA Animal and Plant Health Inspection
Service (APHIS) personnel to devise a risk-based quarantine standard
which will be more amenable to non-methyl bromide treatments for some
low-risk quarantine situations.
Accomplishments pertinent to replacing methyl bromide as a soil
treatment include improved strawberry and vegetable varieties with
increased resistance to some soilborne diseases and pests;
microbiological agents for the biological control of some soilborne
diseases of vegetables and ornamental crops; improved cultural
practices, such as improved soil preparation, crop rotation systems,
and altered planting dates, to mitigate the effects of some soilborne
pests of strawberries, vegetable, and ornamental crops; and improved
pesticide formulation and application technology for available
chemicals other than methyl bromide to control plant parasitic
nematodes.
Non-pathogenic variants of a tomato-infecting fungus were shown to
be effective in controlling pathogenic strains. Grapevine, peach and
prune rootstocks with improved nematode resistance have been developed.
Methods were devised for mass-producing and stabilizing mycoherbicidal
fungi for control of several weed species. Solarization of soil was
shown to be effective for controlling weeds in vegetable production.
Root-knot nematode resistance has been incorporated into commercial
bell peppers. Impermeable films were shown to dramatically reduce the
emissions of methyl bromide to the atmosphere. Fumigation with
alternative chemicals was shown to be effective under some conditions
for strawberries and tomatoes.
Question. What is the current level of funding for this research
and how are those funds being allocated?
Answer. The current level of funding and where these funds are
allocated will be provided for the record.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Location -----------------------------------------------
1997 funds 1998 funds 1999 funds
----------------------------------------------------------------------------------------------------------------
Davis, CA....................................................... $230,100 $228,800 $228,800
Fresno, CA...................................................... 3,531,600 3,542,400 3,542,400
Riverside, CA................................................... 128,900 128,200 128,200
Salinas, CA..................................................... 545,600 542,500 542,500
Washington, DC.................................................. 245,500 244,100 244,100
Gainesville, FL................................................. 196,500 215,600 215,600
Miami, FL....................................................... 1,241,300 1,234,300 1,234,300
Orlando, FL..................................................... 1,626,000 1,616,800 1,616,800
Byron, GA....................................................... 85,400 84,900 84,900
Tifton, GA...................................................... 470,500 467,800 467,800
Hilo, HI........................................................ 1,686,100 1,705,500 1,705,500
Manhattan, KS................................................... .............. 71,700 71,700
Beltsville, MD.................................................. 1,140,800 1,061,100 1,061,100
Stoneville, MS.................................................. 185,500 184,500 184,500
Corvallis, OR................................................... 501,000 493,900 493,900
Charleston, SC.................................................. 336,600 334,600 334,600
Weslaco, TX..................................................... 1,509,700 1,501,100 1,501,100
Wenatchee, WA................................................... 213,000 211,800 211,000
Yakima, WA...................................................... 262,700 261,200 261,200
Kearneysville, WV............................................... 442,900 440,400 440,400
Headquarters.................................................... .............. .............. \1\ 2,000,000
-----------------------------------------------
Totals.................................................... 14,579,700 14,571,200 16,571,200
----------------------------------------------------------------------------------------------------------------
\1\ Proposed fiscal year 1999 program increase of $2 million (Environmental Quality/Bio-Active Compounds).
The fiscal year 1999 budget requests an increase of $2 million for
research on alternatives to methyl bromide. Dr. Horn, you indicate in
your prepared statement that grower groups will work with ARS to
develop the priorities for a competitively awarded program focusing on
crops or uses most threatened by the loss of methyl bromide.
Question. Would you please explain how this will work and why ARS
rather than CSREES will be responsible for a competitive grants
program?
Answer. ARS has primary responsibility in USDA for methyl bromide
alternatives research. As such, ARS has developed a broad network of
State, university, and industry personnel who are interested in finding
methyl bromide replacements for a wide range of uses. ARS will use
these contacts to assure that only high priority issues are addressed
by any research projects funded by competitive grants funds ARS may
receive. The ARS National Program Staff will ensure that funded
projects will be coordinated and complementary to existing methyl
bromide alternatives research. We think this program serves as an
excellent model to ensuring coordination of in-house and extramural
research directed toward a given problem.
evaluation studies
Question. The fiscal year 1999 request proposes the restoration of
$913,000 for Evaluation Studies. Please provide a list of studies for
the record which will be conducted with the funding proposed, including
the purpose and cost of each study.
Answer. The funds appropriated for the Evaluation Studies Program
are essential to provide valuable analyses and assessments from outside
experts on high priority research and related issues relating to the
broad Research, Education, and Economics (REE) program. These resources
support studies examining the current status, results and promising
future directions of research on specific issues within the scope of
the REE mission. They have also allowed us to gain important
assessments of the effectiveness of programs and potential ways to
enhance that effectiveness to promote the highest return on investments
in REE agencies. As such, these studies have provided invaluable input
for planning and implementing the REE programs, resulting in stronger
programs with promising outcomes.
A partial listing of projects for funding if monies are again made
available are listed below. Additional study proposals are anticipated
on other high-priority concerns such as food safety, transmissible
spongiform encephalopathies, water quality, and other emerging issues.
1. The National Academy of Sciences Committee on Animal
Nutrition--compiles nutrient requirement tables used for
preparing balanced feed rations for all animals........... $100,000
2. Calcium and Related Nutrients: American Needs--reviews
current information on nutrient intake to determine data
gaps and to recommend adjustment of food consumption...... 100,000
3. Assessing the Overall Impacts of the USDA IPM Initiative--
examination of IPM programs having the most significant
impact on farm productivity............................... 60,000
4. Evaluation of the National Research Initiative--review of
the impact of competitive grants on agricultural
technology................................................ 100,000
5. The Benefits of USDA's Investment in the 1890's--evaluation
of USDA program contribution to the viability of 1890
universities.............................................. 75,000
6. The Industrialization of Agriculture and Publicly-Funded
Agricultural Research--evaluation of the impact of modern
industrial farming enterprise on the structure of
agriculture............................................... 100,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 535,000
germplasm
Question. Please identify the current ARS and State resources
committed to maintaining plant germplasm repositories. Provide a
listing of the repositories, showing federal and state resources
committed to each.
Answer. The estimated funding for maintaining the ARS plant
germplasm system repositories for fiscal year 1998 is $21,405,000.
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Location -----------------------------------------------
1997 funds 1998 funds 1999 funds
----------------------------------------------------------------------------------------------------------------
Davis, CA....................................................... $572,300 $619,000 $619,000
Fresno, CA...................................................... 217,000 325,800 325,800
Riverside, CA................................................... 383,900 431,700 431,700
Ft. Collins, CO................................................. 2,960,200 3,193,400 3,193,400
Washington, DC.................................................. 368,100 366,000 366,000
Miami, FL....................................................... 670,300 666,500 666,500
Griffin, GA..................................................... 1,502,800 1,494,300 1,494,300
Hilo, HI........................................................ 447,400 494,900 494,900
Ames, IA........................................................ 1,445,600 1,437,400 1,437,400
Aberdeen, ID.................................................... 843,900 839,100 839,100
Urban, IL....................................................... 636,800 543,100 543,100
Beltsville, MD.................................................. 3,688,600 3,539,300 3,539,300
Stoneville, MS.................................................. 314,200 312,400 312,400
Fargo, ND....................................................... 220,600 219,400 219,400
Geneva, NY...................................................... 1,145,000 .............. ..............
Ithaca, NY...................................................... .............. 1,249,000 1,249,000
Corvallis, OR................................................... 767,600 813,200 813,200
Mayaguez, PR.................................................... 943,900 1,159,900 1,159,900
College Station, TX............................................. 522,500 109,100 109,100
Logan, UT....................................................... 145,000 144,200 144,200
Pullman, WA..................................................... 1,120,600 2,312,100 1,662,100
Madison, WI..................................................... 294,200 292,500 292,500
Headquarters.................................................... 847,400 842,700 842,700
-----------------------------------------------
Total..................................................... 20,057,900 21,405,000 20,755,000
----------------------------------------------------------------------------------------------------------------
State resources committed to certain repositories include both
direct commitments and in-kind support to Regional Plant Introduction
Stations (RPIS) and the Interregional Potato Station. In Total, these
commitments are $2,591,000. The direct commitments of the States can be
identified and reported more accurately as off-the-top formula funding
through the Regional Directors' Associations and local funds as direct
contributions from the host State Agricultural Experiment Stations.
These resources are identified for fiscal year 1998:
------------------------------------------------------------------------
Location/site Formula funds Local funds
------------------------------------------------------------------------
Griffin, GA, Southern RPIS.............. $250,000 $350,000
Ames, IA, North Central RPIS............ 497,000 324,000
Geneva, NY, Northeastern RPIS........... 144,000 155,000
Pullman, WA, Western RPIS............... 346,000 250,000
Sturgeon Bay, WI, IR Potato Station..... 151,000 124,000
-------------------------------
Totals............................ 1,388,000 1,203,000
------------------------------------------------------------------------
Question. What are our unmet germplasm requirements? Please
identify by repository.
Answer. The U.S. General Accounting Office's study of the U.S.
National Plant Germplasm System (report GAO/RCED-98-20, October, 1997)
identified some unmet germplasm requirements that fall into three
principal areas. These include: the need to increase the genetic
diversity in the national collections, the inadequate information on
the germplasm in the collections, and the failure of the system's
preservation activities to keep pace with the collections' needs. The
needs encompass all activities of the germplasm system, but specific
needs vary by location and crops. We have identified a number of
specific activities that are of the highest priority to prevent the
loss of genetic materials and to replenish long term storage and
distribution centers with fresh stocks. Other activities are identified
that make the collections more useful to researchers in publicly
supported institutions and private industry who continue to place
increased importance on having access to a broad range of genetic
diversity that is critical to the improvement of plants for human and
animal food, industrial, and ornamental use. All collections
established must be rationalized, duplicates eliminated and core
collections established which contain maximum diversity in the smallest
number of samples.
location and priority needs for location
Palmer, AK (Pullman, WA worksite)
Acquire high latitude germplasm for the Arctic germplasm collection
(barley, wheat, potato, forages, small fruits).
Develop an adequate infrastructure to preserve an Arctic germplasm
collection.
Maintain virus-free potato germplasm.
(Activities of primary interest to 6 Crop Germplasm Committees (CGC's))
Davis, CA
Develop cultural practices to optimize use of the available space and
long term maintenance of stone fruit, grape, and walnut germplasm
collections.
Document (passport, inventory, evaluation, and distribution data)
collections in Germplasm Resources Information Network (GRIN)
database.
Conduct therapy on and maintain virus-free stone fruit collections.
Characterize useful traits of stone fruit, grape and walnut
collections.
Conduct research to develop backup preservation technologies.
Institute major regeneration effort for stone fruit, grape and walnut
collections.
(Activities of primary interest to 3 CGC's)
Fresno, CA
Conduct field regeneration of annual, biennial, and perennial seed-
propagated crops requiring a long season, arid environment.
Characterize germplasm during regeneration and document in GRIN
database.
(Activities of primary interest to 24 CGC's)
Riverside, CA
Acquire additional genetic diversity to fill gaps in the citrus
collection.
Conduct therapy on and maintain virus free citrus plants.
Acquire adequate screenhouse space to accommodate the virus-free citrus
collection.
Conduct research to develop backup preservation technologies.
Institute major regeneration effort for citrus collection.
(Activities of primary interest to 2 CGC's)
Ft. Collins, CO
Develop reliable techniques for cryopreservation of a wide range of
clonally-propagated species. Perform seed germination tests on
accessions maintained in base and active collections.
Provide backup to active collections by preserving seed, vegetative
buds, in vitro plants and pollen.
Develop methodologies for the long-term preservation of non-orthodox
seeds.
(Activities of primary interest to all CGC's)
Washington, DC
Acquire and maintain field plantings of woody and herbaceous ornamental
germplasm.
Characterize horticultural value of assembled woody and herbaceous
ornamental collections.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database. Cooperate with botanic gardens and
arboreta to document woody plant collections in the U.S. Conduct
research to develop backup preservation technologies.
(Activities of primary interest to 5 CGC's)
Miami, FL
Conduct therapy on and maintain virus free sugarcane and fruit
collections.
Maintain collections of tropical and sub tropical fruit germplasm of
important and potentially important species.
(Activities of primary interest to 3 CGC's)
Griffin, GA
Regenerate, backup to base collection, and make available for
distribution, 1481 diverse species.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Maintain in vitro the sweet potato germplasm collection in alternate
location (Ft. Collins). Rationalize major collections (sorghum,
cowpea, peanut) for redundancy.
Complete the elimination of seedbourne viruses from all peanut and
cowpea accessions.
Conduct research to develop backup preservation technologies.
(Activities of primary interest to 7 CGC's)
Hilo, HI
Conduct therapy on and maintain virus-free fruit and nut collections.
Conduct research to develop backup preservation technologies.
(Activities of primary interest to 1 CGC)
Ames, IA
Regenerate, backup to base collection, and make available for
distribution, 1770 diverse species.
Expand regeneration and characterization of the maize collection;
expand germplasm enhancement of maize (GEM) project.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Conduct research to develop backup preservation technologies.
Institute major regeneration effort for maize, sunflower, melon, and
cucumber collections.
(Activities of primary interest to 9 CGC's)
Aberdeen, ID
Regenerate wheat, barley, oat, and rice accessions on a regular basis
to insure availability.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Regenerate and maintain the integrity of the barley genetic stock
collection.
Acquire additional accessions of wheat wild relatives to increase the
collections genetic diversity.
Acquire adequate quarantine greenhouse space for increasing weedy
relatives of small grains.
Upgrade seed storage facility.
Institute major regeneration effort for small grain wild relatives.
(Activities of primary interest to 4 CGC's)
Urbana, IL
Acquire additional genetic diversity to fill gaps in the soybean
collection.
Upgrade seed storage facility.
Regenerate maize genetic stocks and fill requests for seed.
Acquire necessary greenhouse space for maintaining soybean wild
relatives and maize genetic stocks.
Institute major regeneration effort for maize genetic stocks.
(Activities of primary interest to 2 CGC's)
Beltsville, MD
Maintain and improve the GRIN database support for all sites.
Develop acquisition priorities across all crop species.
Provide taxonomic support for GRIN and all active collection sites.
Maintain prohibited species in quarantine and conduct required tests to
determine pathogen status.
Conduct research to develop improved quarantine testing methods.
(Activities of primary interest to all CGC's)
Stoneville, MS
Institute major regeneration effort for soybean accessions adapted to
Southern latitudes.
(Activities of primary interest to 1 CGC)
Ithaca, NY
Backup apple germplasm collection as cryopreserved, vegetative buds.
Conduct research to develop backup preservation technologies for grape
and sour cherry germplasm.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database. Institute major regeneration effort
for apple, onion, brassica, and winter squash collections.
(Activities of primary interest to 5 CGC's)
Fargo, ND
Maintain flax collection.
Document (passport, inventory, evaluation, and distribution data)
collection in GRIN database.
Corvallis, OR
Maintain field greenhouse and screenhouse plantings of small fruit
germplasm.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Develop cultural practices to optimize use of the available space and
long term maintenance of pear and temperate nut germplasm
collections.
Conduct therapy and maintain virus-free small fruit collections.
Institute major regeneration effort for small fruit pear, temperate
nut, mint, and hops collections.
(Activities of primary interest to 2 CGC's)
Mayaguez, PR
Conduct quarantine growout of sorghum and maize accessions introduced
into the U.S.
Maintain accessions of tropical fruit and nut species.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Maintain sorghum genetic stocks.
Institute major regeneration effort for sorghum (see Griffin, GA).
(Activities of primary interest to 2 CGC's)
College Station, TX
Upgrade seed storage facility.
Regenerate cotton collection on a timely basis. Document (passport,
inventory, evaluation, and distribution data) cotton and pecan
collections in GRIN database.
Maintain and distribute cotton genetic stocks.
Acquire additional genetic diversity to fill gaps in the pecan
collection.
Conduct research to develop backup preservation technologies.
Institute major regeneration effort for cotton and pecan collections.
(Activities of primary interest to 2 CGC's)
Logan, UT
Maintain in-field rangeland grass collection. Document (passport,
inventory, evaluation, and distribution data) collection in GRIN
database.
(Activities of primary interest to 1 CGC)
Pullman, WA
Regenerate backup to base collection, and make available for
distribution 2427 diverse species.
Regenerate difficult to grow alfalfa, clover, and sugarbeet accessions
to make them available.
Complete the elimination of seedbourne viruses from all bean and pea
accessions.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Institute major regeneration effort for alfalfa, sugarbeet, chickpea,
lentil, clover, pea, and bean collections.
(Activities of primary interest to 10 CGC's)
Madison, WI
Acquire additional potato wild relatives to fill gaps in the genetic
diversity of the collection.
Study the effect of the genebank's procedures on the genetic diversity
of the potato collection.
Complete taxonomic identification of potato wild relatives in the
collection.
Document (passport, inventory, evaluation, and distribution data)
collections in GRIN database.
Institute major regeneration effort for potato collection.
(Activities of primary interest to 1 CGC)
funds and research management
Question. How much money budgeted for positions was due to lapse at
the end of each of fiscal years 1996 and 1997?
Answer. Money budgeted for positions in fiscal years 1996 and 1997
was due to lapse in the amount of $12.4 million and $12.9 million,
respectively.
Question. What was done with this savings in each of these years?
Please be specific as to the purposes for which these funds were used
and the extent to which funds were obligated at the location at which
they were saved.
Answer. A portion of these projected lapsed funds accrued to
Headquarters and were reallocated as follows:
------------------------------------------------------------------------
Fiscal year--
Use of funds -------------------------------
1996 funds 1997 funds
------------------------------------------------------------------------
Area-Wide Priorities (Research Equipment $2,343,900 $5,325,500
and Other High Cost Needs).............
Location Closures, Conversions, and 2,299,500 602,700
Transfers..............................
Food Nutrition Study (Beltsville, MD)... .............. 500,000
Remedial Investigation and Feasibility .............. 1,400,200
Study (Beltsville, MD).................
Removal Actions (Hazardous Waste 436,900 ..............
Material)..............................
RCRA Closure Sites (Orient Point, NY)... 360,000 ..............
Senior Executive Service and Other 309,500 194,000
Relocations............................
Oil Spill (Orient Point, NY)............ 164,500 ..............
M. Shahan Repairs(Orient Point, NY)..... .............. 113,000
Docks and Harbors Repairs (Orient Point, .............. 1,027,300
NY)....................................
Environmental Site Assessment Phase II 70,000 ..............
Sampling (El Reno, OK).................
Agency-Wide Hazardous Waste Cleanup..... 68,400 ..............
-------------------------------
Subtotal.......................... 7,452,900 7,762,500
------------------------------------------------------------------------
The balance of accrued lapsed salaries was retained at ARS field
locations for locally-based spending decision. Approximately, 40
percent of the savings were obligated at the locations where they were
lapsed. The primary uses of these funds were for research equipment,
employee relocations, facilities repair and maintenance, safety and
health improvements, and unanticipated operating needs. The remaining
60 percent, as reflected in the funding table above, was used for
Agency priorities not necessarily at the location where the funds were
lapsed. An example of this would be the funding provided for location
closures; no lapse occurred at these locations, however, funds were
obligated at these sites for closure costs.
Question. How many active research projects does ARS currently
engage? How many of these are to support production agriculture?
Answer. There are currently 1,078 active research projects. Seventy
percent of these projects support production agriculture.
Question. How does the ARS assess the needs of producers in
determining its research priorities?
Answer. As an Agency committed to finding solutions to
``agricultural problems of high national priority,'' ARS actively
maintains close interaction with its customers. The enactment of GPRA
has encouraged ARS to make these lines of communication more formal and
more explicit. At the headquarters level, ARS senior managers,
including the members of the National Program Staff, are in regular
contact with a wide range of organizations representing all aspects of
agricultural production, processing, distribution, and consumption.
Area Directors are continually interacting with producers within their
jurisdiction. At the Laboratory level, our scientists are in almost
daily contact with farmers, ranchers, and other users that have an
interest in their research. We sometimes enter into agreements with
local producers to test new practices or technologies under actual
conditions. ARS conducts a large number of workshops annually to review
its research programs and results. Customers of the research are
usually included in order to get their input into the research. The
accumulated effect of all these interactions is a research program that
is relevant and able to meet the most critical needs of American
agriculture. In addition, ARS is currently reorganizing its research
activities into 25 National Programs. On February 23, 1998, we placed
25 descriptive statements on the ARS Home Page at the Internet address
http://www.ars.usda.gov, and invited our customers, stakeholders,
partners, and the general public to review and comment on them. The
input we receive from our customers will play a major role in shaping
our new national programs. We will continue to receive comments until
the end of April 1998.
Question. How many scientists are currently on board? How many were
on board at the beginning of each of fiscal years 1996 and 1997?
Answer. Currently the Agricultural Research Service employs 1,804
full time, permanent research scientists. At the beginning of fiscal
year 1996, there were 1,849. There were 1,824 research scientists at
the start of fiscal year 1997.
extramural funding
Question. Please list the funding ARS commits to land grant
universities. Please identify the amounts by recipient.
Answer. A list of funding committed to land grant universities will
be provided for the record.
[The information follows:]
School Fiscal year 1997
Alabama Agri and Mech College................................. $10,000
Alcorn State (MS)............................................. 450,200
Auburn University............................................. 81,600
Central Oregon Experiment Station............................. 18,500
Clemson University............................................ 43,900
Colorado State University..................................... 810,000
Cornell University............................................ 1,157,900
Florida Agri and Mech University.............................. 25,200
Georgia Coastal Plain Expt. Station........................... 54,600
Illinois Ag. Expt. Station.................................... 42,000
Iowa State University......................................... 529,700
Kansas State University....................................... 483,600
Langston University........................................... 3,500
Louisiana State University.................................... 145,900
Michigan State University..................................... 248,700
Mississippi Ag. and Forestry Expt. Sta........................ 1,501,300
Mississippi State University.................................. 918,600
Montana State University...................................... 262,400
New Mexico State University................................... 831,100
New York Ag. Expt. Station.................................... 25,000
North Carolina State University............................... 676,200
North Central Ag. Expt. Station............................... 134,300
North Dakota State University................................. 453,500
Ohio State University......................................... 64,000
Oklahoma State University..................................... 322,500
Oregon State University....................................... 526,000
Pennsylvania State University................................. 220,700
Prairie View A&M College...................................... 10,000
Purdue University............................................. 1,157,500
Rutgers University............................................ 54,500
South Dakota State University................................. 80,500
Southern University........................................... 289,700
Texas A&M University.......................................... 682,600
Texas Ag. Expt. Station....................................... 8,000
Tuskegee Institute............................................ 61,900
University of Arizona......................................... 203,100
University of Arkansas........................................ 489,800
University of California...................................... 2,853,200
University of Connecticut..................................... 50,000
University of Delaware........................................ 12,500
University of Florida......................................... 1,143,300
University of Georgia......................................... 253,200
University of Hawaii.......................................... 1,573,600
University of Idaho........................................... 276,600
University of Illinois........................................ 325,500
University of Kentucky........................................ 15,000
University of Maine........................................... 32,800
University of Maryland........................................ 755,000
University of Massachusetts................................... 14,800
University of Minnesota....................................... 209,900
University of Missouri........................................ 765,400
University of Nebraska........................................ 695,500
University of Puerto Rico..................................... 25,000
University of Tennessee....................................... 40,000
University of Vermont......................................... 45,000
University of Wisconsin....................................... 861,700
University of Wyoming......................................... 155,000
Utah State University......................................... 193,900
Virginia Polytechnic Institute and State University........... 70,800
Washington State University................................... 727,400
--------------------------------------------------------------
____________________________________________________
Total...................................................24,173,600
Question. Please identify other extramural recipients of ARS
research contracts.
Answer. In fiscal year 1997 ARS committed $11.64 million to Tufts
University and $.646 million to The Consortium for International Earth
Science Information Network (CIESIN) for research contracts. In
addition, Westat Inc. received $3.4 million from ARS of which $.5
million was provided by Food, Nutrition, and Consumer Services.
Question. In fiscal year 1998, the Committee directed that general
reductions be taken across each program, project and activity. What was
the magnitude of the fiscal year 1998 general reduction and explain how
this was implemented?
Answer. As directed by the Congress, the agency applied general
reductions Totaling $3.8 million in fiscal year 1998. This was
implemented through an across-the-board reduction of all research
projects.
Question. Provide for the record fiscal year 1997 obligations
incurred and your current fiscal year 1998 funding estimates for the
following areas of research: canola, hops, kenaf, guayale, lesquerella,
and sunflowers. Similarly, provide the Committee with information on
the following pests: bollworm, boll weevil, whitefly, karnal bunt, fire
ant, and gypsy moth.
Answer. Obligations incurred for fiscal year 1997 and fiscal year
1998 estimated funding for crops and pest research are provided as
follows:
------------------------------------------------------------------------
Fiscal year
-------------------------------
CROPS AND PESTS RESEARCH 1997
obligations 1998 funding
------------------------------------------------------------------------
Crops:
Canola.............................. $349,110 $350,000
Hops................................ 382,751 491,000
Kenaf............................... 1,318,353 737,100
Guayule............................. 598,601 564,500
Lesquerella......................... 482,591 329,200
Sunflower........................... 2,514,329 2,252,300
Pests:
Boll Worm/Corn Earworm.............. 4,206,110 4,182,500
Boll Weevil......................... 1,768,202 2,586,100
Whitefly............................ 5,527,905 5,883,400
Karnal Bunt......................... 423,542 714,200
Fire Ant............................ 1,028,646 1,152,800
Gypsy Moth.......................... 1,675,631 1,832,100
------------------------------------------------------------------------
centers of excellence
Question. For fiscal year 1999, please identify the proposed
funding for ARS Centers of Excellence, where they are located, how they
were selected, and their proposed funding and staffing levels as
compared with fiscal year 1997 and fiscal year 1998.
Answer. The ARS Centers of Excellence are selected by matching the
critical and/or priority needs of ARS and the collaborating 1890
Universities which possess the expertise and excellence required to
address the program mission and goals. These matches are often based on
expansion of existing cooperative research programs and the
institution's strength.
The location, funding and staffing levels of the ARS Centers of
Excellence for fiscal years 1997, 1998 and 1999 are as follows:
----------------------------------------------------------------------------------------------------------------
Fiscal year--
--------------------------------------------------------------------------
Location 1997 1998 1999
--------------------------------------------------------------------------
Funds Scientists Funds Scientists Funds Scientists
----------------------------------------------------------------------------------------------------------------
University of Arkansas Pine Bluff, AR $373,300 1.0 $537,900 2.0 $537,900 2.0
Delaware State University Dover, DE.. 250,000 1.0 248,500 1.0 248,500 1.0
University of Maryland Princess Anne, 245,600 1.0 244,400 1.0 244,400 1.0
MD.................................
Alcorn State University Lorman, MS... 165,700 1.0 164,700 1.0 164,700 1.0
Langston University Langston, OK..... ........... .......... 199,000 .......... 199,000 ..........
Tennessee State University 491,200 2.0 488,400 2.0 488,400 2.0
McMinnville, TN.....................
--------------------------------------------------------------------------
Total.......................... 1,525,800 6.0 1,882,900 7.0 1,882,900 7.0
----------------------------------------------------------------------------------------------------------------
Question. Describe the programs at each of the Centers.
Answer. The research programs at each of the Centers will be
provided for the record.
[The information follows:]
Swine Production at Alcorn State University.--The objective of the
program is to develop an efficient system for the production of meat
type hogs in the Southern United States. The research includes the
evaluation of breeds of swine suitable for production in Southern
climates, the use of local feeds, and development of feeding systems to
obtain efficient production of pork.
Aquaculture Products at Delaware State University.--This program
will develop rapid detection and monitoring methods for pathogens and
spoilage microorganisms in aquaculture processes and products and
improving the efficiency of purging contaminants in order to prevent
human illnesses.
Grazing Lands at Langston University, Oklahoma.--The objective of
this program is to 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.
Horticulture at Tennessee State University, McMinnville.--The
objective of the program is to develop new and improved ornamental
trees and shrubs for the U.S. nursery industry. The research includes
development of basic genetic and physiological information related to
nursery crop species; reduce pesticide use and fertilizer runoff during
nursery crop production; develop improved nursery crop propagation
methods; and evaluate existing germplasm or ornamental trees and shrubs
for pest resistance, tolerance of environmental stress, and superior
ornamental value.
Aquaculture at University of Arkansas at Pine Bluff.--The ARS
Aquaculture Systems Research Unit develops and evaluates new or
alternative aquaculture production systems, particularly small scale
systems, and develops new components of these systems to improve the
efficiency of fresh water fish farming. Research also addresses
improvement of cultivation and processing methods to enhance the
quality of farm-raised fish and their products.
Critical Control Points in Model Systems at University of Maryland
Eastern Shore (UMES).--The program seeks to determine the natural
prevalence of bacterial pathogens in poultry grow-out houses,
processing plants, and in distribution channels; to conduct challenge
studies on critical control points in model systems to provide data for
predictive model development; and to develop risk assessment models for
use in hazard management systems. In particular, the laboratory is
developing risk assessment and predictive models to provide the
scientific basis for Hazard Analysis Critical Control Point (HACCP)
systems in poultry production, processing, and distribution. ARS
research is conducted in close collaboration with the USDA Food Safety
& Inspection Service (FSIS), providing critical research to support
their regulatory mission.
Question. What working relationship and accomplishments have
resulted from these collaborations?
Answer. The working relationship and accomplishments that have
resulted from these collaborations will be provided for the record.
[The information follows:]
Alcorn State University.--Through meetings and visits of Alcorn
personnel to ARS laboratories, ARS scientists have developed a good
working relationship with the Center. As a result, new breeds of swine
have been purchased for evaluation and an artificial insemination
program utilizing semen from superior boars, has been initiated.
Delaware State University at Dover.--The ARS aquaculture program is
housed in the Delaware State University (DSU), Department of
Agriculture and Natural Resources. Close working relationships have
been established with DSU's two aquaculture faculty members who have
also participated in the recruitment for an ARS aquaculture research
scientist to be based at DSU. The ARS research program will complement
DSU's aquaculture research program. The ARS National Program Leader for
Aquaculture is a cooperator in a Capacity Building Grant application
for aquaculture research submitted to the USDA Cooperative State
Research, Education, and Extension Service.
Langston University, Oklahoma.--ARS will assist Langston University
in establishing a Grazing Lands Center of Excellence in fiscal year
1998. It is a worksite of the ARS grazing land research laboratory at
El Reno, Oklahoma. The details of the program have not yet been
developed, but it is expected to focus on pasture management by small
farmers. ARS will soon station a plant physiologist at the Grazing Land
Center of Excellence.
Tennessee State University at McMinnville.--A Director of the new
research facility has been appointed by Tennessee State University
(TSU). An excellent collaboration has been established between TSU, 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.
Evaluation of several new shrubs and trees has been initiated in the
genetics program of plant improvement for the Tennessee industry.
University of Arkansas at Pine Bluff.--The ARS Aquaculture Systems
Research Unit (ASRU) and University of Arkansas at Pine Bluff (UAPB)
have entered into a cooperative partnership to promote and facilitate
the expansion of aquaculture in Arkansas and the surrounding areas of
the Mississippi Delta. The location of the ASRU at UAPB has enabled ARS
to hire UAPB students as aquaculture technicians and has enhanced ARS'
ability to recruit from a broadened pool of highly-trained and
competent minority candidates from the UAPB Aquaculture Center of
Excellence program. As part of an effort to enhance production related
research capabilities at UAPB, ARS funded a grant to UAPB for the
construction of a research pond complex of 21 ponds (0.25 acre each)
and a support building at the UAPB Aquaculture Research Station.
University of Maryland Eastern Shore (UMES).--The working
relationships of ARS with the UMES are very close. ARS established a
work site at the UMES, Princess Anne, MD, in fiscal year 1994 as a
satellite laboratory of its Eastern Regional Research Center (ERRC).
The ARS laboratory uses UMES laboratory space and UMES scientists and
students to provide support for the research program. UMES students are
employed by the ARS staff to conduct modeling studies. A UMES faculty
member is employed during the summer months. The ARS laboratory at UMES
has developed The Salmonella Risk Assessment Modeling Program for
Poultry, version 1.0 as a guide for processors and regulatory personnel
to evaluate the public health consequences of changes in the poultry
grow-out to consumption continuum. It is now being evaluated by two of
the largest U.S. poultry processors.
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
$477,800 are allocated to PM-10 and PM-2.5 research which refers,
respectively, to atmospheric particulates equal to less than the 10 and
2.5 micrometers in size that are said to reach and endanger human
lungs. The research is directed to a) understanding how particulates
are emitted from agricultural fields during field operations and wind
storms, b) determining the origination of particulates, c) developing
methods for reducing particulate emissions, and d) developing a PM-10
prediction technology for use in assessing alternative methods of
controlling particle emissions.
At Manhattan, Kansas, 1.0 SY and $166,800 are allocated to research
on PM-10 and PM-2.5 particulates and on developing a PM-10 and PM-2.5
module for inclusion in a wind erosion model (Wind Erosion Prediction
System--WEPS). The erosion prediction model will be used to select,
from among alternative land treatments, the most appropriate treatments
for controlling wind erosion and particulate emissions.
At Lubbock, Texas, 1.5 SY and $317,600 are allocated to field
measurement and documentation of particulate fractions during wind
erosion events.
Question. What funding is included in the fiscal year 1999 budget
for PM-10 research. Please give program, funding, and staffing by
location.
Answer. The fiscal year 1999 budget and staffing is the same as
that for fiscal year 1998; as described above.
Question. What major accomplishments have come from your research
in this area?
Answer. (a) Considerable progress has been made in identifying how
PM-10 emissions occur during weathering, tillage, traffic, and abrasion
by wind-blown soil clods. (b) Progress has 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 developed, but still needs validation. (d) The prediction
model being developed for Washington is an interim model pending
completion of the wind erosion model. (e) A scientist in Pullman, WA,
has developed a biologically-based method for determining the sources
of particulates (e.g. agricultural fields, roads, parking lots).
Question. How is the ARS research effort connected at all to the
San Joaquin Valley PM-10 study funded in part through CSREES?
Answer. The ARS program and the CSREES-administered PM-10 program
in the San Joaquin Valley of California are funded separately. However,
there is coordination, communication, and cooperation between the
programs. California personnel participate in the review and planning
meetings of the Washington study (which is a jointly funded 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.
precision agriculture
Question. Dr. Horn, I understand that ARS scientists at Stoneville
and Mississippi State have been working with scientists at the National
Aeronautics and Space Administration (NASA) and Mississippi State
University on precision agriculture. Please bring the Committee up to
date on your current activities and future plans, including possible
matching funds from NASA.
Answer. The ARS Application and Production Technology Research Unit
(APTRU) at Stoneville has been informally collaborating with NASA's
Space Remote Sensing Center (SRS) at the John C. Stennis Space Center.
Negotiations are proceeding regarding a more formal collaborative
arrangement. The Crop Simulation Research Unit (CSRU) at Mississippi
State is currently a participant, with Mississippi State University
(MSU), in the 5-year National Site Verification Index Program that is
funded by NASA. Under the terms of this participation, CSRU has access
to $25,000 of the $50,000 annual Total provided to MSU under the grant.
CSRU is also a member of the Mississippi Coalition for Applications in
Remote Sensing (MCARS), of which MSU and SRS are also members. MCARS is
currently developing a proposal for funding under the Mississippi
Challenge program, which is a matching funds program between NASA and
the State of Mississippi. At both Stoneville and Mississippi State, the
purpose of the research is to improve the tools and technologies of
precision agriculture (i.e., remote sensing, geographical information
systems, yield monitors) to assist producers in treating crop fields on
a site-specific basis. The role of the APTRU is to conduct research on
the application of various crop inputs (e.g., fertilizers, pesticides)
to counteract crop stresses. The role of CSRU is, through simulation of
crop growth, to provide decision support and even control of settings
on equipment that apply various crop inputs. A major goal of each
location is to produce precision agriculture tools that are economical,
effective, and easy to use and understand.
integrated watershed research
Question. The Joint Explanatory Statement of the Conferees
accompanying the conference report on the fiscal year 1998
appropriations Act directed that the USDA-ARS National Sedimentation
Laboratory initiate an integrated watershed research program in the
Yalobusha River Basin, stream estuaries, and Grenada Lake. What is ARS
doing to carry out this directive?
Answer. The National Sedimentation Laboratory (NSL) has initiated
several research activities in the Yalobusha River Basin (YRB) to meet
the Congressional mandate. These research activities were primarily
designed to establish a reference database against which the effect of
evolutionary and proposed channel adjustment measures by the Army Corps
of Engineers (COE) for flood control, as well as their environmental
impact on Grenada Lake, can be assessed and to provide the COE with
needed information for selecting locations for channel stabilization
measures.
A geomorphic study was conducted which summarizes the historical
background of channel changes, hydrologic conditions, stages of channel
evolution, dominant watershed processes, bed material, and streambank
stability conditions for the preconstruction phase. As part of this
partially COE-funded study, geographic information (GIS) based maps
were prepared showing stages of channel evolution, location of
migrating scour holes, bed material type, and sampling locations. This
information has been provided to the COE to assist them in selecting
the most suitable locations for the placement of grade control
structures and other channel improvement and stabilization measures,
while at the same time providing the NSL with essential background
information for river evolution studies.
Intensive studies were conducted to characterize water depth,
velocity, habitat, fish and wildlife communities in the lower Yalobusha
River above and below an existing debris jam. Contour maps of the
channel bottom in limited reaches upstream and downstream of the
Yalobusha debris/sediment jam have been developed to obtain background
information on quantity and quality of in channel aquatic habitats and
to assess the impact of changes in channel geometry on flow regime and
habitat following channel adjustments for flood control. Exploratory
studies in cooperation with the U.S. Corps of Engineers Waterways
Experiment Station are underway to obtain continuous records of water
stage above and below the debris jam.
Water quality measurements have been made at several sites in the
Yalobusha River main stream, tributaries, and at inflow and outflow
points of Grenada Lake for determining concentrations of sediment,
agricultural chemicals, and naturally occurring contaminants. The data
will assist in selecting erosion control/conservation practice research
on upland areas and will serve as documentation for determining the
impact and effectiveness of channel stabilization and watershed
restoration measures on water quality. A preliminary monitoring
program, incorporating the biological and habitat components of the
channel system prior to adjustments, has been initiated at 33 sites in
the Yalobusha River and its tributaries. This program will facilitate
the assessment of environmental and ecological changes during
construction phases and the selection of low-cost remedial measures.
Discussions are underway to explore the use of funding from the
Environmental Quality Improvement Program (EQIP) managed by the Natural
Resources Conservation Service (NRCS), for stabilizing small
tributaries and erosion control of adjacent land with edge-of-field
bufferstrips and other soil erosion control measures, in order to
reduce sediment and non-point source pollutants entering into streams
and to rehabilitate in-stream habitat conditions.
aquaculture
Question. Since we continue to hear that aquaculture is the
fastest-growing sector of U.S. agriculture and you have provided to the
Committee your research requirements to support this new industry,
would you please tell us why the President's budget proposes to
eliminate funding increases provided for fiscal year 1998 for ARS
research in this area?
Answer. The President's fiscal year 1999 budget proposal calls for
$51.2 million in program spending for new and expanded research, plus
$14.5 million in pay increases and $.9 million for evaluation studies,
for a Total of $66.6 million, however, proposed increased funding is
only $32 million. To cover the difference, the budget proposal calls
for $34.6 million in program reallocations. Specifically, fiscal year
1998 program increases added by the Congress are proposed for
termination and redirected to support the Administration's priority
programs in fiscal year 1999.
Question. Please list those locations involved in aquaculture
research, their specific programs and mission, and current funding and
staffing levels. Please list future funding and staffing requirements,
by location.
Answer. The current and future funding and staffing levels for
locations involved in aquaculture research will be provided for the
record. The projections are based on the staffing and funding levels
that will be required for fully functional programs at each location.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998-- Total
Location/program and mission ---------------------------- Total funds scientists
Funds Scientists required required
----------------------------------------------------------------------------------------------------------------
Auburn, AL: Diagnosis and control of diseases and $1,087,000 4.0 $1,800,000 6.0
parasites of cultured fish.............................
Pine Bluff, AR: Aquaculture production and processing 537,900 2.0 537,900 2.0
technology.............................................
Stuttgart, AR: Research on therapeutics evaluation, 1,728,600 5.0 3,590,00 11.0
health mgmt. and culture systems for farm-raised fish..
Albany, CA (Hilo, HI) Oceanic Institute: Tropical 1,603,300 .......... .............. ..........
aquaculture feeds and culture technology development...
New Orleans, LA: Improve flavor quality of farm-raised 755,100 2.4 1,005,10 3.4
catfish................................................
Beltsville, MD (NAL): Aquaculture Information Program 34,000 .......... 34,000 ..........
provides the public with information on all aspects of
aquaculture............................................
Stoneville, MS: Improve production efficiency, including 3,639,200 5.0 5,298,60 8.0
breeding, genetics, nutrition, health, harvesting, and
product quality of catfish.............................
Wyndmoor, PA (Dover, DE, Worksite): Food safety of farm- 248,500 1.0 248,500 1.0
raised fish............................................
College Station, TX: Food safety of catfish............. 363,200 .......... 363,200 ..........
Kearneysville, WV: Water Quality control and intensive 1,439,600 .......... 1,439,600 ..........
culture of fish........................................
Leetown, WV: Cool and cold water aquaculture research... 250,000 .......... 4,000,000 12.0
-------------------------------------------------------
Total............................................. 11,686,40 19.4 18,316,900 43.4
----------------------------------------------------------------------------------------------------------------
Question. In its report to this Committee on Aquaculture, USDA
indicated that it was planning a thorough review of the Stuttgart
National Aquaculture Research Center to determine the specific
directions of future research programs. Is that review, which was to be
undertaken during fiscal year 1997, now complete? Please submit the
results of this review for the record.
Answer. The review is now complete. The review consisted of three
components: (1) a strategic planning session for all ARS aquaculture
research locations held in New Orleans, Louisiana, on June 5-6, 1997;
(2) an ARS Warmwater Aquaculture Research Meeting held in Memphis,
Tennessee, on July 7, 1997; and (3) a review and Program Planning
Session for the Stuttgart National Aquaculture Research Center (SNARC)
conducted on February 2-3, 1998. As a result of the review, ARS
aquaculture scientists and administrators and external stakeholders
identified the mission, major program components, future species and
research priorities, and funding and personnel needs for the SNARC.
These results were shared with review participants and stakeholders in
a report dated February 3, 1998, and will be the basis for future
implementation of the SNARC research program and staffing.
Key points from the review are: (1) The primary focus of SNARC will
be on warmwater species other than catfish. (2) Major research programs
at SNARC will be Therapeutic Evaluations and Chemical Registration in
support of cold, cool and warm species including catfish; and
Aquaculture Production Systems. (3) Priority species identified are:
baitfish, striped bass and its hybrids, and polyculture (simultaneous
culture of multiple species). (4) Additional research areas identified
for emphasis include bird depredation of aquaculture species.
delta nutrition intervention research initiative
Question. Please provide the Committee with an update on the Lower
Mississippi Delta Nutrition Intervention Project.
Answer. The Lower Mississippi Delta Nutrition Intervention Research
Initiative (NIRI) is conducted by 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 ARS. Each partner participates in attaining
the project objectives. The consortium is governed by a steering
committee which has representatives from each partner. The research
committee develops objectives and protocols and has representation from
each partner.
Question. What progress has been made to date?
Answer. The partners reviewed the current state of knowledge of the
socioeconomic, nutritional and health status of the Lower Mississippi
Delta and published a monograph in 1997 entitled: ``Nutritional and
Health Status in the Lower Mississippi Delta of Arkansas, Louisiana and
Mississippi: A Review of Existing Data,'' Edited by Gail Harrison.
The partners completed a data collection for validation and pilot
study of assessment methodologies to be used for repeated cross
sectional surveys. The partners also completed a Key Informant survey
to determine the understanding that community leaders have of
nutritional status in three Delta counties.
Question. What work on this project is scheduled for each of fiscal
years 1998, 1999, and each future fiscal year?
Answer. In fiscal year 1998, the partners will prepare a draft
research proposal for an expanded community assessment research
program. The partners are analyzing the data of the Key Informant
survey and determining community characteristics that will impact
possible nutrition intervention strategies. The partners are each
developing strategic plans to determine their contribution to obtaining
and analyzing data necessary to develop nutrition interventions.
In fiscal year 1999, the partners propose extensive field surveys
based on the results of preliminary assessments in 1998. The
partnership will focus on data collection and analysis. Extensive
collaborative field work will be required. Post fiscal year 1999,
research will depend on prior outcomes but will include initial
planning, implementation, and validation of targeted nutritional
interventions.
Question. Please list objectives and funding by participant.
Answer. The objectives are shared by all members acting as a
consortium and the funding of $3,147,700 is shared equally. The members
of the consortium 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 ARS. The project
objectives are listed:
1. To review the existing data describing the socioeconomic,
nutritional, and health status of lower Mississippi delta residents.
2. To review the existing nutrition and community assessment
research methodologies in order to identify potential assessment
methods for the Lower Delta Research Initiative.
3. (a) To conduct an assessment to determine the nutritional status
of a population of lower Delta residents (including dietary intake,
food consumption behaviors, biochemical and physiologic, and
anthropometric measurements) and to conduct similar assessments so that
the nutritional status of the population can be measured over time. (b)
To assess community factors impacting nutritional status.
4. To identify nutritionally responsive health problems and their
determinants or causes in the Lower Mississippi Delta populations so
that interventions may be designed for testing.
5. To review intervention research methodologies in order to
identify potential interventions aimed at solving the nutritional
problems identified in the Lower Delta.
6. To evaluate, in a research setting, potential solutions for the
targeted nutritional problems so that successful interventions can be
implemented on a larger scale.
Question. What level of funding is included in the fiscal year 1999
budget request for this project?
Answer. A Total of $3,147,700 is budgeted for fiscal year 1999 for
the Lower Mississippi Delta Nutrition Intervention Project.
I understand that increased funding for this project is required in
fiscal year 1999 to fund a study to determine dietary intake,
prevalence of food insecurity, and diet and health knowledge and
attitudes as well as to fund a pilot study for nutrition assessment
(biological measures and behavioral measures of nutrition status). This
information, I am told can not be obtained from other nutritional
studies funded by USDA.
Question. Do you agree that these studies are needed? If not, why?
If so, when are these studies planned?
Answer. The partners in the Lower Mississippi Delta Nutrition
Intervention Research Initiative are currently evaluating two trial
studies, a phone survey and a key informant survey, that should dictate
methodologies of future surveys. Recommendation for increased funding
will be based on the results of these pilot studies. A thorough
analysis was not available to make a recommendation for the fiscal year
1999 budget.
Question. Is funding included in the fiscal year 1999 budget
request for these studies? If so, how much is included? If not, what
funding is needed for fiscal year 1999?
Answer. The funding requests for fiscal year 1999 for the Lower
Mississippi Delta Initiative is $3,147,700. This will be satisfactory
to analyze the pilot studies and to design large scale studies if
warranted.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. The ARS Annual Performance Plan parallels the structure of
the new ARS Strategic Plan, which was developed to meet the
requirements of the Government Performance and Results Act of 1993. In
the Annual Performance Plan, the Goals, Objectives, Strategies, and
Performance Goals are linked to specific anticipated outcomes that the
Agency expects to achieve in fiscal year 1999 with the funds requested.
All the activities identified in the Strategic and Performance Plans
link directly to the Mission Statement which, in turn, directly
reflects the statutory authorities that underpin the Agency's work. A
crosswalk is shown at each of the five Goals and at Initiative 2
linking program activities to the budget request.
Question. Could you describe the process used to link your
performance goals to your budget activities?
Answer. ARS carries out its research through 1100 CRIS research
projects which are aligned with the 6 Budget Program Activities, 25
National Programs and the 5 Goals of the GPRA driven Strategic and
Performance Plan structure. The CRIS research projects are the primary
level of funding and accountability and provide the linkage essential
to crosswalk this information.
Question. What difficulties, if any, did you encounter, and what
lessons did you learn?
Answer. There are many challenges in making a transition such as
this. GPRA requires us to anticipate the longer-term outcomes and
impacts of our work, which is more difficult in a research environment
than it is in many other areas. Since the spring of 1994 ARS has
employed a series of workgroups and teams to help clarify and resolve
some of these issues. In addition, ARS helped found the Research
Roundtable, an ad hoc group of Federal research agencies, that meets
regularly to share information on how best to comply with GPRA. We have
tried to adopt and adapt all this information to make GPRA work for
ARS. In the Performance Plan submitted last year we relied heavily on
numerical measures of outputs. We have since revised our approach and
moved to using more tangible intermediate outcomes as the indicators of
progress towards our long-term goals.
Question. Does the agency's Performance Plan link performance
measures to its budget?
Answer. Yes, the funding resources are identified at the level of
the 5 Agency Goals and Initiative 2, which relates to the work of the
National Agricultural Library.
Question. Does each account have performance measures?
Answer. The Performance Goals relate to the new Strategic Plan
structure and are linked to the traditional budget accounts by a
crosswalk.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. There are substantial differences between the ARS Strategic
and Performance planning structure, our National Programs and the
Program Activity structure contained in the Budget. The budget activity
structure is presented on the following areas: Soil, Water, and Air
Sciences; Plant Sciences; Animal Sciences; Commodity Conversion and
Delivery; Human Nutrition; the Integration of Agricultural Systems, and
Agricultural Information and Library Services. The Strategic Plan is
outcome oriented and includes the following 5 broad societal Outcomes:
An agricultural production system that is highly competitive in the
global economy; A safe and secure food and fiber system; A healthy,
well nourished population; An agricultural system which protects
Natural Resources and the environment; Enhanced economic opportunity
and quality of life for Americans. In addition, three management
initiatives, which includes the National Agricultural Library, are
identified in the annual Performance Plan.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. No, the Agency will continue to effectively present its
budget through the approved Program Activity Structure which is linked
to the core, CRIS research project system. This system is utilized in
the allocation of resources as budgeted by the President and as
directed by Congress. Our accounting system tracks each project to
ensure compliance with the Appropriations Act and Congressional
reports. These projects also provide the basis for systematic review by
the National Program Staff and Area Directors. As stated earlier, the
CRIS project system provides the essential linkage to the major
Planning and Financial systems utilized by the Agency.
Question. How were performance measures chosen?
Answer. The new ARS Strategic Plan was drafted by an Agency-wide
team that was always mindful of the need to measure progress towards
achieving the plan's Strategies, Objectives, and Goals. The ARS Annual
Performance Plan, that accompanies the fiscal year 1999 budget, was
developed by the National Program Staff. Input was obtained from each
of the National Program Leaders who, in consultation with the key
Research Leaders and Lead Scientists, identified the performance
indicators that were incorporated into the Annual Performance Plan.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. ARS has various mechanisms in place to retrieve financial
and programmatic data on all aspects of its research program. At the
present time, a committee of ARS employees is looking at what data we
are currently collecting and what data we should be collecting to
support the new Strategic and Performance Plans and the new National
Program structure. We do not anticipate that the cost of data
collection needed to validate future performance will be much greater
than current costs.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. Across the five programmatic goals we have identified
scores of performance indicators, that can be tracked and reported on
by the National Program Staff. Accomplishing these performance measures
will clearly demonstrate progress towards achieving the Goals and
Objectives identified in the ARS Strategic Plan. We are still
developing some of the baseline data, tracking and reporting
requirements for several of the performance measures under Initiative
3, Creative Leadership, but we expect to have these mechanisms in place
to meet the timetables identified in the Performance Plan.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. Measuring performance in research provides some unique
challenges that may not exist in operating programs. The approach used
in the fiscal year 1999 ARS Annual Performance Plan is to identify
intermediate outcomes that are tangible and measurable. If ARS achieves
all or most of these intermediate outcomes it will be a clear
indication of progress towards meeting the longer-term Strategies,
Objectives, and Goals in the new Strategic Plan. We would recommend
that the subcommittee track the performance goals under the 5
programmatic Goals: Goal I: Through Research and Education, Empower the
Agricultural System with Knowledge that Will Improve Competitiveness in
Domestic Production, Processing, and Marketing. Goal II: To Ensure an
Adequate Food Supply and Improved Detection, Surveillance, Prevention,
and Educational Programs for the American Public's Health, Safety and
Well-Being. Goal III: A Healthy and Well-Nourished Population Who Have
Knowledge, Desire, and Means to Make Health Promoting Choices. Goal IV:
To Enhance the Quality of the Environment through Better Understanding
of and Building on Agriculture's and Forestry's Complex Links with
Soil, Water, Air, and Biotic Resources. Goal V: Empower People and
Communities, Through Research-based Information and Education, to
Address the Economic and Social Challenges of Our Youth, Families, and
Communities.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. Because of the diversity of the ARS research program we
have identified 84 performance indicators in fiscal year 1998 and 86 in
fiscal year 1999 in the Annual Performance Plan. As we gain experience
in implementing the GPRA performance and reporting processes, we
believe we will become better able to identify performance goals and
indicators that are meaningful in a research environment.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Yes, the Agency's senior managers are fully aware of the
difference in output and outcome.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. ARS has a long history of positive interaction with its
customers and stakeholders but a formal process of more systematically
measuring customer satisfaction is still evolving. Some components,
such as the National Agricultural Library and the National Arboretum,
periodically survey their users and visitors to measure and improve the
quality of their services and general satisfaction. Many of the
Administrative and Financial Management units regularly measure
customer satisfaction from the internal agencies and components they
support. A National Programs Staff committee is currently working to
develop practical ways to measure customer satisfaction in our research
programs. In developing our Strategic Plan ARS identified the following
Customers, Beneficiaries, Stakeholders, and Partners:
Customers.--Individuals or organizations that directly use ARS
products or services.
Producers (farmers, growers, and ranchers) and processors
National and international organizations
Advocacy groups
Commodity and futures markets
International trade organizations
International science and research organizations
Legislative Branch
Executive Branch
U.S. Department of Agriculture
Secretary of Agriculture
Other mission areas
Action and regulatory agencies
Office of Budget and Program Analysis
Inspector General
Chief Financial Officer
Chief Information Officer
Other Federal agencies
Scientific community
Medical community
Health and dietary community
Environmental community
State and local governments
News media
Beneficiaries.--Individuals whose well-being is enhanced by the
agency's activities.
Domestic consumers
Foreign consumers of U.S. agricultural exports and technologies
Stakeholders.--Organizations or individuals that have an interest
in the work of ARS but do not directly use the agency's products.
Legislative branch
Executive branch
ARS employees
National and international organizations
Producer and processor organizations
Food and commodity organizations
Foreign countries/governments
Trade organizations
Environmental organizations
Retail organizations
Consumer organizations
Partners.--Organizations that ARS works with collaboratively.
Institutions of higher education
Federal research agencies
Private industry
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The fiscal year 1999 Annual Performance Plan and the fiscal
year 1999 budget were developed on parallel tracks with crosswalks
showing the linkages.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Yes. The version of the Annual Performance Plan currently
before the subcommittee reflects the President's budget proposal for
fiscal year 1999. Once the appropriations process is completed, ARS
will revise the Annual Performance Plan to show the level of program
performance that can be expected with the actual resources that are
appropriated.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. Within reason, yes. ARS is currently revising the type and
amount of data which it requests from each research unit. This enhanced
data collection will help the National Program Staff and the Area
Offices to better monitor and manage the research program. To avoid an
undue burden on the research leaders, we plan to collect most of the
data on an annual basis.
The Government Performance and Results Act requires that your
agency's Annual Performance Plan establish performance goals to define
the level of performance to be achieved by each program activity set
forth in your budget.
Many agencies have indicated that their present budget account
structure makes it difficult to link dollars to results in a clear and
meaningful way.
Question. Have you faced such difficulty?
Answer. This Agency will not have any difficulty linking dollars to
results. As stated, ARS CRIS research projects underpin budget and
program activities and the goals/outcomes as established under GPRA.
The 1100 research projects are the foundation for allocating,
accounting and review of the Agency's research. This is ``the'' level
of accountability in this Agency and this information can be cross-
walked or translated into the major systems operated by ARS.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. No. The existing budget account structure consisting of 6
Program Activities does not need to be modified.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. The Agency's CRIS projects are the accountability unit and
aggregate and crosswalk to the major program, budget, management and
review systems.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. There is no need to modify the existing accountability
systems for program performance or budget activities.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. The Annual Performance Plan does not refer to external
factors but the unabridged version of the ARS Strategic Plan 1997-2002,
which will be printed later this spring, contains the following
discussion of the external factors that impact on ARS:
Consumer, Socio-Economic, and Policy Trends.--The abundance and
affordability of the American food supply is greatly due to U.S.
agricultural research. The Nation's ability to sustain this plentiful
and inexpensive food supply continues to be paramount. But in recent
years, consumer and producer attention has expanded somewhat to other
areas of concern such as food safety and quality, the relationship of
agriculture and the environment, the profitability of the agricultural
enterprise, and the impact of government regulations, land use
restrictions, and economic options that diminish the supply of farm and
grazing land. The long-term sustainability of the Nation's food and
fiber production systems will be determined not only by the continued
profitability of farming and ranching, but also by how these production
systems affect the environment. The capacity of U.S. agriculture to
adapt to environmental changes is also a concern as are the
availability and quality of natural resources. Another key
environmental issue is how human activities affect weather patterns,
atmospheric composition, and soil and water quality and productivity.
Global population increases, demographic changes, and economic growth
will substantially increase the demand for agricultural products and
lead to the development of new markets. At the same time, increased
agricultural efficiency in other countries will force U.S. agriculture
to be more competitive.
Funding.--The ability of ARS to respond to the many and diverse
needs of producers and consumers is determined by annual
appropriations.
1996 Farm Bill and the Pending Revision of the Research Title.--The
1996 Farm Bill, the Federal Agriculture Improvement and Reform Act, set
a new direction for American agriculture by beginning the process of
phasing out farm subsidy payments based on production levels and
introducing free market disciplines. The effect of this legislation
will be to heighten the importance of agricultural research as one form
of a safety net beneath producers. Research to maintain and improve
productivity; to detect, control, and eradicate diseases and pests
(insects, weeds, etc.); and to promptly address nontariff trade
barriers, especially sanitary and phytosanitary conditions will take on
even greater importance in a market environment. The 1996 Farm Bill
also updated and expanded the ``Purposes of Agricultural Research''
which were first enacted in 1990. As described elsewhere, ARS
incorporated the Purposes into this strategic plan adopting them as the
agency's objectives. Congressional reauthorization of the Research
Title will have an impact on ARS, but we are still too early in the
legislative process to anticipate what that impact will be.
Competition.--The Department of Labor projects an increase of 19
percent in the size of the general workforce in the next decade, which
is slightly lower than the rate of growth for the preceding decade. The
labor market during this period is also expected to be highly
competitive for many occupations that require an advanced education,
including scientists, engineers, economists, and computer specialists.
The high earning potential of professions, such as law and medicine,
will continue to make a career in science less attractive to many young
men and women who have the creative intelligence needed for
professional success in agricultural research. Consequently, a major
emphasis on recruitment, student employment, upward mobility, and
training programs will be needed to attract and retain a quality
workforce. The trend toward increasing workforce diversity is also
expected to continue, and opportunities for encouraging women and
minorities into careers in science, engineering, and economics will
need to be given a high priority.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. As indicated above, the issue of external factors was not
addressed in the fiscal year 1999 ARS Annual Performance Plan. Having
said that, we would like to stress that an in-depth examination of the
major external factors affecting American agriculture was part of the
strategic planning process and the process for developing the new
National Programs. The five Vision Conferences are a specific example
of how ARS identified and considered external factors in its strategic
and programmatic planning processes. The visioning process consisted of
a pilot conference in January 1995, followed by five regional
conferences held in June and July of 1995. The conferences brought
together over 400 participants, representing a broad cross section of
the Agency's customers, stakeholders, and partners, who worked in more
than 30 breakout groups to provide input regarding: (1) the key forces
that will influence American agriculture during the next 20 to 25
years, (2) how these changes will affect agricultural research, and (3)
more specifically, how ARS should respond to these changes. Using the
input and information gathered from this process, ARS identified the
following 10 major issue areas that will affect agriculture and
agricultural research over the next 25 years: international/global
issues, population/demographics issues, environmental issues,
sustainability of production systems issues, economic issues,
government and political issues, consumer/societal issues, food and
health issues, technological advancement issues, and education and
information issues. Likewise, ARS has been and is continuing to be
actively engaged with a wide-range of customers, stakeholders, and
partners in developing its new National Program structure.
Question. What impact might external factors have on your resource
estimates?
Answer. The most important and direct external factor identified in
the ARS Strategic Plan is the level of Administration and Congressional
support, both in terms of the reauthorization of the Farm Bill--
especially the Research Title, and the level of funds appropriated to
support the Agency's research activities. Other external factors such
as the heightened concern about the relationship of agriculture and the
environment, concerns about food safety, and the impact of government
regulations gradually change the focus of ARS research. Global
population growth and economic changes also affects American
agriculture and the research priorities needed to sustain it. Changes
in the American workforce may also impact on ARS' ability to attract
and retain the wide range of skills needed to meet the agricultural
research needs of the next century.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication?
Answer. No. In managing the ARS research program, the National
Program Staff seeks to avoid unnecessary duplication while ensuring
complementarity and coordination between research units and locations.
Agricultural research must be conducted at different locations to
account for climatic, regional, and geographic variations as well as
different combinations of pests, diseases, and agricultural products,
each with unique problems calling for unique research approaches and
solutions.
Question. If so, does the Performance Plan identify the overlap or
duplication?
Answer. In developing the Annual Performance Plan we did not find
any areas of program duplication.
Future funding decisions will take into consideration actual
performance compared to expected or target performance. Given that:
Question. To what extent are your performance measures sufficiently
mature to allow for these kinds of uses?
Answer. In our unabridged Strategic Plan which will be printed
later this spring, we discuss the difficulty of predicting the ultimate
outcome of research and the near impossibility of applying numerical
measures to research, especially basic research. Having said that, we
are confident that the use of a large number of tangible intermediate
outcomes will enable the subcommittee to determine whether ARS is
making reasonable progress towards reaching the goals and objectives
identified in the Strategic and Performance Plans. Two examples of ARS
Performance Goals and the tangible intermediate outcomes we have
identified to indicate progress are as follows: Under Performance Goal
2.1.4.1--``During fiscal year 1999, ARS will conduct research leading
to registration of a second therapeutic compound useful in treating
diseases of farm raised fish.'' At the end of fiscal year 1999, the
subcommittee will be able to determine if ARS completed the research
and assembled the data on this compound and provided it to the Food and
Drug Administration to support their decision making process on the use
of this new drug. In Performance Goal 1.1.3.2--``During fiscal year
1999, ARS will release technology for calibrating HVI strength
measurements on cotton fiber which is expected to be adopted worldwide
as the official calibration procedure. This adoption will ensure that
cottons are all subjected to the same standards worldwide, allowing
those cotton growers who produce a superior high-quality product to
receive compensation for it.'' At the end of fiscal year 1999, the
subcommittee will be able to determine if ARS produced a reference
measuring technology that is adopted internationally enabling cotton
marketers and buyers to compare cotton quality regardless of where it
is produced. We have learned many lessons as we developed our new
Strategic Plan and the first Annual Performance Plan and we will know a
great deal more after we have moved through the entire GPRA planning
and reporting cycle.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Certainly there are. Anticipating the longer range outcomes
or results of research, especially basic research, runs counter to our
long experience with predicting scientific research. The great
unpredictability of research, particularly its unanticipated benefits,
makes it extremely difficult for scientists to formally offer
predictions for fear they will engender unrealistic expectations.
Predicting what problems will need to be address, what type of metrics
should be used to reasonably measure on-going research, how best to
express ``future'' research accomplishments, and how to align the
resources available to out year research results are all areas were we
lack experience. As we work our way through one or two planning and
reporting cycles, we will gain the experience we need to more
meaningfully adapt GPRA to the ARS research environment.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. Not at this time. ARS devoted 2\1/2\ years to developing
its new GPRA driven Strategic Plan and the first Annual Performance
Plan. We used workgroups, a agency-wide Strategic Planning Team, as
well as the input we received from outside sources such as the Research
Roundtable, an ad hoc group of Federal research agencies formed to
address how best to apply GPRA in a research environment. We held
visioning conferences, published our draft strategic plan in the
Federal Register, and placed several drafts on the ARS Home Page to
expedite customer, stakeholder, and partner review and comments. As we
move through the early stages of implementing GPRA we are discovering
things that might have been done differently. Rather than devoting
resources to the revision of the Strategic Plan, we believe that it
would be more productive to move forward aggressively with full
implementation of GPRA. At the end of the ``shake-down'' period (a
testing under operating conditions of something new for possible faults
and defects and for familiarizing the operators with it) we will be in
a much better position to meaningfully revise the ARS Strategic Plan.
______
Question Submitted by Senator Gorton
For two years in a row now, USDA and the Administration have
eliminated funding for the operation of the Prosser Research Station in
Washington state. I understand that the Agriculture Research Service
did not recommend the closure of Prosser in this year's budget. I am
told that this was a decision made by the Office of Management and
Budget.
Question. Why did USDA and the research arm of USDA (REE) not
express to OMB the importance of the Prosser Research Station, and for
that matter, the other facilities which are to be eliminated in ARS'
budget? Are these research sites not considered to be priorities for
production agriculture research?
Answer. The President's budget requires the reallocation of
existing resources to finance new, high priority research needs. A
number of projects carried out in ARS research stations at Prosser,
Washington; Mandan, North Dakota; Orono, Maine and Brawley, California,
were identified as less critical. As a result, a cost-effective
decision was made to terminate and redirect resources to new research
initiatives and recommend closure of these research stations.
______
Questions Submitted by Senator Bumpers
human nutrition initiative
Question. Please provide an update on the Human Nutrition
Initiative and, in particular, the role of Arkansas Children's
Hospital.
Answer. The Human Nutrition Initiative is a multi-year plan to
enhance the scientific basis for understanding the role of nutrition in
well-being. The research areas of the Human Nutrition Initiative are:
(1) nutrient-gene interactions, (2) diet and immune function, (3) role
of nutrition throughout the life cycle, and (4) diet and human
performance. The Initiative began in fiscal year 1998 with a
Congressional appropriation of $7.5 million. Research in the Human
Nutrition Initiative is carried out at six human nutrition centers:
Arkansas Children's Hospital Research Institute, in Little Rock, AR;
Western Human Nutrition Research Center, San Francisco, CA; Jean Mayer
USDA Human Nutrition Research Center on Aging, Boston, MA; Beltsville
Human Nutrition Research Center, Beltsville, MD; Grand Forks Human
Nutrition Research Center, Grand Forks, ND; and Children's Nutrition
Research Center, Houston, TX.
The Arkansas Children's Nutrition Center (ACNC) is the newest of
the ARS Human Nutrition Research Centers. It provides a research
program that focuses on unique issues. Its major efforts focus on the
effects of early nutrition on growth, cognitive development in
children, and the effect of early nutrition on the subsequent risk of
diseases in adulthood. It currently has funding for two major projects.
One, is to determine the role of nutrition in brain function,
especially cognitive and behavioral function of infants and children.
Data from these long-term studies will provide the understanding of how
children can improve their learning abilities in the early years and
later in the classroom. In addition, it is now thought that these
results will have a far reaching impact on child behavior.
The second project involves dietary factors other than the
traditionally studied nutrients. There are many factors in diets that
affect development and normal metabolic, physiologic and endocrine
systems. These factors may have beneficial or adverse effects. ACNC is
studying factors in children's diet, such as the soybean products found
in infant formula, that are thought to prevent breast cancer later in
life based on their animal research model. There are factors that have
been isolated in several foods that are likely to have similar effects
on such diseases as prostate cancer, colon cancer, osteoporosis,
obesity, etc. Thus, the role of the ACNC is to develop new and as yet
unexplored areas of child nutrition.
Question. How is this Initiative more than just a simple
restatement of the fact that we should all eat more fruits and
vegetables?
Answer. The translation of sound nutritional science findings into
consumer advice such as `eat more fruits and vegetables' is certainly
one important outcome of the research. Four important trends which
affect nutrient intake and nutritional health: (1) Framework condition.
This refers to the increasing importance of processed foods, and the
declining presence of farming and gardening in most people's daily
lives; (2) Acceleration of scientific knowledge about the positive
biological effects of compounds within foods, particularly in
preventing degenerative processes formerly thought to be obligate
consequences of aging; (3) Biotechnology which can drastically alter
the composition of many foods now under production; (4) Accelerations
in information exchange which result in more rapid communication about
nutrition. The Human Nutrition Initiative will strengthen production
agriculture by defining the nutritional basis for enhancing the health
promoting properties of foods, the scientific basis of dietary
recommendations, the effectiveness of food assistance programs, and
ultimately human health.
Question. If this Initiative results in a more healthy diet, are
there projections on health care savings that might result from this
research?
Answer. There are many areas where health care costs will be
reduced. Diet is thought to be a major factor in 60-75 percent of all
cancers. The delay or prevention of the type of breast cancer being
studied at ACNC is thought to involve as much as 60 percent of the
Total breast cancers in the United States. Any progress on prevention
would result in multi-millions of dollars saved each year. Even if this
disease onset could just be delayed for 5 years, there would be
enormous savings in medical care costs. This is also true of other
potentially diet-related cancers such as prostate cancers and colon
cancers that if prevented or delayed would significantly reduce health
care cost. In the central nervous system projects, improvement in
cognitive function will improve the ability of children to learn and
help reduce problems with behavior. Improved learning will enable
individuals to more closely attain their full potential to contribute
to society through private and public pursuits. It is postulated that
diet plays a significant role in behavioral problems now treated with
drugs and therapy. Prevention of these problems would also result in
substantial cost savings. The success of nutrition research in the last
30 years in reducing the incidence and severity of cardiovascular and
digestive disease, is a clear indication that alterations in diet and
life-style have beneficial effects both through reduced morbidity and
mortality and a concomitant reduction in the cost of health care.
food genome research initiative
Question. The proposed budget includes an increase for food genome
research. What role might the ARS Rice Germplasm Laboratory play in
this initiative?
Answer. The food genome research will vastly expand our knowledge
of the genome for species of importance to the food and agricultural
sectors. ARS will focus on a government-wide effort to map the genomes
of agriculturally important crops and livestock to determine the DNA
sequence of the functioning genes in those genomes, and to define and
understand the function and control of economically important genes.
ARS will build on current genomic research, such as the Human Genome
Project and the Arabidopsis Genome Research Project, to understand gene
structure and function. This is expected to have considerable payoff in
crop species such as rice. The National Rice Germplasm Evaluation and
Enhancement Center at Stuttgart, Arkansas, is a national center for
genetic improvement of rice. The program to be developed at this new
facility will include the genetic improvement of a broad range of
traits critical to optimizing rice production and utilization. Thus,
scientists at this location will be close collaborators with the food
genome research, particularly in the functional genomics component.
Question. What role might the Poultry Center of Excellence in
Fayetteville, Arkansas play?
Answer. There is potential for the poultry industry to benefit
greatly from the use of molecular markers to select for superior
animals. The ARS Avian Disease and Oncology Laboratory, East Lansing,
Michigan, has developed a genomic map and a national database system
for chickens. The Poultry Center of Excellence in Fayetteville,
Arkansas, could work with the East Lansing laboratory to use genetic
information, as other universities and ARS locations are doing, to
identify genes or groups of genes that may be responsible for desired
economic traits such as growth rate, feed efficiency, and resistance to
disease. At present, we do not have scientists trained in the
appropriate field of science at the Fayetteville, Arkansas laboratory,
a necessity in order to initiate a genomics program.
Question. What role might the ARS National Aquaculture Research
Center in Stuttgart, Arkansas play?
Answer. The recent review and planning session for future
aquaculture research at the SNARC did not identify genome research as
an area of emphasis for the Center, and there are no immediate plans to
hire geneticists at the SNARC. However, there will be opportunities for
genetic improvement of emerging warmwater aquaculture species,
including hybrid striped bass, a species which will receive research
emphasis at the SNARC.
Question. The proposed budget includes an increase for food genome
research. How does the USDA food Genome research Initiative fit with
ongoing genome research in other areas of government?
Answer. The USDA Food Genome Initiative expands the scope of a
National Plant Genome Initiative to include animals and microbes. USDA
will lead the Food Genome Initiative and ensure that there is
coordination with other relevant Government agencies and the
international research community.
ars pest biology--fire ants
The budget proposes $3.5 million for pest biology.
Question. Please provide an update on ARS research related to the
control and eradication of the Imported Fire Ant.
Answer. Imported fire ants, Solenopsis richteri, and S. invicta,
currently infest over 300,000,000 acres in the South. Continued
expansion is expected northward along both continental coasts.
As a result of ARS research, four bait toxicants have been
commercialized and two are coming to the marketplace through
cooperative programs with industry. In addition, ARS scientists are
working closely with Animal and Plant Health Inspection Service-Plant
Protection and Quarantine (APHIS-PPQ) and other national and
international customers, including seven universities to develop
biologically-based IPM strategies for fire ant control.
The ongoing research on the imported fire ant at the ARS Unit in
Gainesville, Florida, includes: development and introduction of three
biocontrol agents into the United States for non-insecticidal
management of fire ant in large-scale areas; pheromone enhancement of
bait attractions; basic biology and ecology of fire ant populations;
non-toxic, behavioral modification interventions using repellents and
semiochemicals; and support of the APHIS program.
Recently, ARS has initiated an effort to introduce some natural
enemies of fire ants in South America into the U.S. If successful,
imported fire ant populations in the U.S. could be reduced to levels
similar to those found in South America.
For example, parasitic flies in the genus Pseudacteon have been
shown to stop fire ant foraging and shift the competitive balance to
other local ant species. The microsporidian parasite, Thelohania
solenopsae, causes reductions in mound density. The parasitic ant
Solenopsis (Labauchena) daguerrei has been reported to kill host
colonies over a period of several years.
The phorid fly, was released in Gainesville at 3 locations from
July through early October. Fly populations successfully cycled to
successive generations and were observed continuing to attack fire ants
in January. Brood from laboratory colonies of fire ants infected with
Thelohania solenopsae has been used to infect previously healthy field
colonies in Florida. Preliminary data suggests that limited secondary
spread has occurred.
A software and field-deployable hardware system currently is under
development by the Gainesville unit that may aid in database
management, the evaluation of candidate biocontrol agents, and in
developing and implementing pesticide-reduced strategies incorporating
existing technologies.
The long-term goals of ARS fire ant research are:
(1) Collect and determine relevant remotely sensed data for
selected sites in cooperation with NASA. Merge ground-based biological
data with remote sensed data to predict likelihood of success for
various biocontrol agents.
(2) Develop computer-based decision support systems to aid fire ant
control practitioners in day-to-day operations requiring integration of
management technologies.
(3) Develop mass propagation of candidate biocontrol agents found
successful in limited field research/demonstration tests.
(4) Develop large area-wide integrated management strategies.
(5) Develop quarantine management that will allow the use of less
pesticides.
(6) Develop new technologies with emphasis on biologically-based
strategies. These may include classical biocontrol agents,
biopesticides, social disruption using semiochemicals (pheromones),
genetic manipulation, resource manipulation, manipulation of pathogen
virulence.
Question. Is ARS coordinating in any way with the fire ant research
underway at the University of Arkansas at Monticello?
Answer. ARS has been cooperating with University of Arkansas at
Monticello under a specific cooperative agreement for the development
of an integrated fire ant management strategy. The principal objectives
of the cooperative research include:
(1) Production of a hazard-rating model of fire ant range expansion
into Northern Arkansas.
(2) Studies of fire ant natural enemies in South America to provide
the science based knowledge that is needed to manage successfully
imported biocontrol agents.
(3) Development of strategies for using existing contact pesticides
for prolonged fire ant control.
______
Questions Submitted by Senator Kohl
integrated farming system program
I remain very interested in the Integrate Farming System program of
the Agricultural Research Service. It is very important for USDA to be
investing in long-term research on sustainable agriculture systems for
the 21st century and ARS is well positioned to undertake this mission.
The need for new diversified, integrated crop and animal production
systems in particularly urgent for your family farmers and for the
health of our environment.
Question. Does the budget request include funding for the Wisconsin
Integrated Cropping System Trials?
Answer. The fiscal year 1999 budget request includes $497,100 for
the Wisconsin Integrated Cropping Systems Trials, the same as for
fiscal year 1998. In fiscal year 1997, funding was appropriated for
$500,000. This funding is split between the U.S. Dairy Forage Research
Center, the University of Wisconsin and the Michael Fields Agricultural
Institute in East Troy, Wisconsin. The Agricultural Research Service
(ARS), through the U.S. Dairy Forage Research Center, has established a
long-term cooperative agreement with the University of Wisconsin in
cooperation with the Michael Fields Agricultural Institute to carry out
the Wisconsin Integrated Cropping Systems Trials at Arlington and at
the Lakeland Agricultural Complex at Elkhorn, Wisconsin. A sum of
$810,000 is to be provided to the University for this cooperative
project which spans a 5-year period from fiscal year 1997 through 2001.
Funding of $270,000 was provided in fiscal year 1997 and $180,000 has
been provided so far in fiscal year 1998. Additional in-house research
on Integrated Farming Systems by an ARS scientist will be an integral
part of the overall cooperative effort.
Question. Last year, this Committee instructed the agency to
implement interdisciplinary partnerships, including farmers and
nongovernmental organizations, in carrying out all its IFS projects.
Can you give me a progress report on this?
Answer. Currently, 13 ARS locations doing IFS work have farmer and/
or nongovernmental partners. During the past year, ARS organized its
1100 projects into 25 national programs. One of the national programs
is titled `Integrated Farming Systems' (IFS). An executive summary for
this national program may be found on the Internet at http://
www.ars.usda.gov/nps/programs/207s2.htm. An important aspect of program
and project development will be obtaining inputs from farmers,
nongovernmental organizations, and others as to the priority issues
that need to be addressed and the manner in which partnerships may be
developed.
Question. How many IFS projects are there currently?
Answer. The IFS national program is in the process of being formed.
Forty-seven locations have tentatively been identified as participants.
IFS covers traditional farming, sustainable agriculture, and precision
agriculture.
Question. How many are implemented as partnerships?
Answer. Twelve multi-disciplinary research projects, which include
partners representing the private sector and other governmental
agencies, have been implemented.
Question. How many farmers participate in IFS projects?
Answer. Twelve of the above projects, including the Wisconsin
Integrated Cropping Systems project, have direct participation of
farmers. Ten of them are carried out as on-farm research projects in
which farmers participate.
Question. What is your plan to transition more IFS projects to
partnership arrangements?
Answer. ARS is encouraging all locations to identify and involve
customer and stakeholder groups. The goals are to have these groups and
interested individuals provide input during the periodic review and
evaluations that all ARS units undergo, and to maintain continuous
relationships that will lead to increased on-farm research, CRADAs, and
other partnerships. For example, some ARS program managers and
researchers recently met with farmers and ranchers associated with the
Campaign for Sustainable Agriculture, which includes the Michael Fields
Institute. As a result of that meeting, farmers will be matched with
appropriate ARS scientists throughout the country to initiate
partnerships.
______
Questions Submitted by Senator Byrd
Question. Please provide me with a status report on the
construction of the National Center for Cool and Cold Water Aquaculture
(NCCCWA), detailing pertinent dates and milestones.
Answer. ARS received $1,921,000 in fiscal year 1995 for land
purchase and laboratory planning and design. Total construction costs
are estimated at $12 million. ARS received $6 million in fiscal year
1997 and an additional $6 million in fiscal year 1998 for construction
of the NCCCWA.
The architect-engineer has developed the site plan for the NCCCWA.
Conceptual designs have also been prepared for the laboratory/office
building and the tank/aquaria building. Final drafts of the Program of
Requirements and the Investigative Report have been completed. However,
there has been a delay in design progress as a result of the extreme
drought conditions experienced in 1997 that resulted in an
unprecedented reduction in spring water supplies and stream flow in the
vicinity of the U.S. Department of Interior's Leetown Science Center
(LSC), including very low flows in two nearby springs (Bell and Link).
The NCCCWA will be co-located with the LSC. Original plans were to pipe
the water from these springs to the NCCCWA and provide a return supply
of water from the facility to prevent drawing down the natural water
resource. The drought condition called into question whether natural
water resources would always be sufficient to provide for the future
needs of both the FHL and the NCCCWA without impacting local residents.
After extensive investigation, the current plan is for the NCCCWA
design to include the capability for water recirculation, with
appropriate treatment, for up to 50 percent of the water supplied to
the tank/aquaria building. This capability will also provide for
greater control over water quality for research purposes and will
obviate the need to develop Bell and Link Springs, as originally
planned. Preliminary projections are that the capital costs of the
recirculation capability will be essentially equivalent to the cost
savings resulting from not developing the Bell and Link Springs.
The design is expected to be completed by January 1999; and a
construction contract is scheduled for a May 1999 award. Construction
is expected to take 18 months and be completed by November 2000.
Question. Is the current construction schedule the same as the
Agricultural Research Service's (ARS) original projection?
Answer. The current schedule has fallen behind the original ARS
projection by four months.
Question. If not, why?
Answer. The drought experienced in 1997 required extensive
investigation of the adequacy of water resources which delayed the
schedule beyond that originally envisioned.
In fiscal year 1998, $250,000 was provided to ARS to initiate the
program of the National Center for Cool and Cold Water Aquaculture.
Question. What progress has been made on the Center's program?
Answer. The program increase for the Center is being used to hire a
highly qualified scientist to serve as Research Leader for the Center,
to begin carrying out a cooperative research program with the U.S.
Geological Survey's Leetown Science Center (LSC), and to oversee final
design and construction of the facility. The ARS National Program Staff
is working closely with the LSC to identify areas of mutual research
interest where collaboration in research could occur.
Question. What is the status of collaborative efforts between ARS
and West Virginia University on cool and cold water aquaculture
activities in Appalachia?
Answer. The ARS, National Program Staff (NPS) has been discussing
with scientists and administrators at West Virginia University (WVU)
opportunities for collaboration in research between the National Center
for Cool and Cold Water Aquaculture and WVU. There is particular
interest in a collaborative research program on genetics of rainbow
trout. ARS has indicated that, if WVU is successful in developing and
obtaining funding for a proposal on the genetics of rainbow trout, ARS
could provide additional support for graduate students and/or a post-
doctoral researcher to work with WVU on the research program.
Question. What is the status of collaborative efforts between ARS
and the West Virginia Department of Agriculture on cool and cold water
aquaculture activities in Appalachia?
Answer. At the invitation of the Commissioner of the West Virginia
Department of Agriculture, the ARS National Program Leader for
Aquaculture is participating in the West Virginia Aquaculture Task
Force, a partnership formed to support the development of aquaculture
in West Virginia. The primary mission of the Task Force is to establish
a State Aquaculture Plan that will set realistic goals and a system to
achieve them and promote effective cooperation and government
coordination for aquaculture in the State. The first meeting of the
Task Force took place on February 25, 1998.
In fiscal year 1998, $250,000 was provided for an agroforestry
systems program at the Appalachian Soil and Water Conservation Research
Laboratory.
Question. What progress has been made on this new research
initiative?
Answer. A plant physiologist with root/soil interactions expertise
was added to the agroforestry program. This addition filled a critical
gap in the program. A research plan was developed to address conversion
of farm woodlots to agroforestry production systems.
Question. What is the projected timetable to carry out the
objectives of the research?
Answer. The envisioned system involves clearing selected areas in a
woodlot, followed by establishment of a multi-species planting that
includes high-value hardwood timber species and shade-tolerant
horticultural (crop producing) tree, shrub, and herbaceous species. The
resulting system would begin providing income to a landowner within 3-5
years.
Implementation of the research plan, experimental site selection
and preparation has been initiated. This site represents a first-
generation system for which no temperate-climate prototype exists.
Within two years the research site will be fully developed, and will
include establishment of short-term, immediate-return plant species;
extensive data on the microclimate and rhizosphere characteristics of
the research site will also be collected. Within 3-5 years, based on
knowledge gained from the microclimate and rhizosphere
characterizations, there should be: (1) complete establishment of long-
lived woody species; (2) a procedure available to farmers on the
methods needed to establish mid-and long-lived crop species; (3)
results from the short-term production systems experiments; and 4)
information on ecological/inter-species interactions in agroforestry
woodlot systems.
Within 5-10 years the full production data from short and mid-term
species will be available for reliable economic analyses of land use
alternatives and the design of second-generation agroforestry woodlot
production systems.
Question. What is the estimated cost of conducting this research?
Answer. The fiscal year 1999 funding for agroforestry research of
$438,400 will support the new scientist's research for the next 2
years. However, resources to purchase and install equipment for the
research project are severely constrained. An additional $300,000-
$500,000 (plus the reinstatement of the $250,000 add on to the fiscal
year 1998 budget, proposed for termination in fiscal year 1999), would
allow full development of collaborations with university cooperators
(e.g., West Virginia University), and would also support the addition
of a new scientist, a soil mycologist, and the technical support to
manage the research site and collect data. The collaboration of and
support for University experts are needed to fully analyze and
interpret the data.
Question. With the completion of the five-year mission plan for the
Appalachian Soil and Water Conservation Research Laboratory, please
provide me with a list of research programs that will be undertaken in
the future.
Answer. Four major research programs areas have been identified:
(1) Management of hilly grasslands in Appalachia for sustainable
production; (2) Renovation and improvement of underutilized, abandoned
or disturbed hill lands with browsing livestock; (3) Agroforestry
systems for the Appalachian regions; and (4) Improving soil quality and
forage legumes for Appalachia. Each program will have multiple
objectives directed towards solving problems of the Appalachian small
farmer.
Question. Please provide the funding level required for each
program.
Answer. The current funding level at the Appalachian Soil and Water
Conservation Research Laboratory is $4,423,400. Because the programs
are under development, final decisions have not been made on
redistribution to the four programs, but approximately an equal split
is anticipated. A $1.2 to 1.5 million increase (4 to 5 scientists) is
required for the location, distributed equally to the four programs.
Question. List any projects that have been terminated or are
planned for termination at the Appalachian Soil and Water Conservation
Research Laboratory in fiscal year 1998 or in fiscal year 1999.
Answer. The current projects to be redirected to the new programs
are: Livestock grazing systems and water quality in Appalachia;
management and ecology of pastures in the Appalachian region; forage
legume breeding for the Appalachian region; alleviation of acid soil
constraints to plant growth; and selection and improvement of plants
for infertile acid soils. Agroforestry systems for the Appalachian
region, will be continued. These projects will be implemented even
though the fiscal year 1999 budget proposal does not include the fiscal
year 1998 congressional add on. Many current project activities,
especially related to the development of useful products for customers,
will be incorporated into the new programs.
Question. What are the research results related to those programs?
Answer. The research results related to those programs are:
(1) Potentials for Agroforestry.--The research found that 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.
(2) 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.
(3) 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.
(4) 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.
(5) Management and Ecology of Pastures in the Appalachian Region.--
Different types of plants are being evaluated for use in Appalachia
which will lead to increased commodity diversification. 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.
(6) 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.
Question. Please provide the number of people on staff and full-
time employees at the Appalachian Soil and Water Conservation Research
Laboratory for fiscal year 1997 and budgeted for fiscal year 1998.
Answer. In fiscal year 1997 there are 58 full-time employees of
which 15.0 are classified as research scientists. These numbers will
remain the same for fiscal year 1998.
Question. With the completion of the five-year mission plan for the
Appalachian Fruit Research Station, please provide me with a list of
research programs that will be undertaken in the future.
Answer. The programs that will be undertaken in the future include
the development of (1) knowledge of the critical molecular processes in
fruit development and ripening; (2) genetic materials with improved
pest resistance, cold hardiness and fruit quality; (3) integrated
cultural and pest management systems that reduce pesticide/herbicide
use, increase production cost efficiency and minimize environmental
impact; (4) harvesting, handling and postharvest quality control
technologies that increase shelf life and market value.
Question. Please provide the funding level required for each
program.
Answer. To fully develop these programs and operate the laboratory
at full capacity would require an additional four to five scientists
for an estimated total of $1.2 to $1.5 million.
Question. List any projects that have been terminated or are
planned for termination at the Appalachian Fruit Research Station in
fiscal year 1998 or in fiscal year 1999.
Answer. No projects are planned for termination in fiscal year 1998
or in fiscal year 1999.
Question. What are the research results related to those programs?
Answer. Some of the research results from the current programs are
provided below.
The peach gene for the chlorophyll a/b binding protein and the
region controlling gene expression have been fully sequenced. This
protein is essential for the light reaction of photosynthesis in peach
and other plants.
A transgenic line of plum carrying a gene for resistance to plum
pox virus was developed and shown to have good resistance in greenhouse
and European field trials. This virus has caused severe economic loss
in Europe and was recently detected in South America. The transgenic
plums may provide the only basis for protecting U.S. orchards.
Transgenic Bartlett and Buerre Bosc pears carrying genes that
affect growth habit and confer resistance to fire blight were developed
and are being evaluated.
A unique, non-chemical approach to pest control in fruit crops
using hydrophobic particles to coat tree leaves was developed, patents
filed and successfully demonstrated in field trails in Chile and the
U.S. Through a cooperative research and development agreement with a
U.S. company, the technology has received EPA clearance with a zero
reentry time. This is a major step forward in meeting the regulatory
limitations of the Food Security Act.
A mechanical harvester for citrus was developed and successfully
tested in Florida. A cooperative research and development agreement has
been signed with the Florida Department of citrus. A similar design for
a blueberry and raspberry mechanical harvester that meets fresh fruit
quality requirements was licensed. This could be important to small
farm operations.
A 15-year study of herbicides used in orchard systems demonstrated
no accumulation of herbicide residues in the soil or changes in soil
microbial populations while effectively control-ling perennial weeds.
Question. Please provide the number of people on staff and full-
time employees at the Appalachian Fruit Research Station for fiscal
year 1997 and budgeted for fiscal year 1998.
Answer. In fiscal year 1997, there were 17 scientists and 55 other
full-time-equivalents. For fiscal year 1998, there are 17 scientists
and 50 other full-time-equivalents budgeted.
______
Questions Submitted by Senator Craig
Producers in my state, and their suppliers, have grown dependant
upon the work being done by ARS scientists to develop new crop
varieties and pest resistance. This work is conducted around the
country, including four ARS stations in Idaho. I was pleased to learn
that the President's budget request includes a $32 million increase for
ARS--pleased until I saw where the money was to be spent.
The President's budget request cuts important funding for ARS
research in a wide range of crops, including: soybeans, potatoes, rice,
cotton, small fruits, and sugar, among others. In place of these
important research activities, ARS dollars are being syphoned off to
fund environmental projects such as the Presidential Environmental
Initiative for Global Change, the Presidential Initiative on South
Florida Ecosystem Restoration, and programs in watershed health and
environmental quality.
Question. How does this effect the ability of ARS to fulfill its
underlying mission of providing reliable research to American
producers?
Answer. Environmental issues such as global change, watershed
health, and environmental quality are directly relevant to crop
production and are recognized by commodity groups as important
concerns. Because ARS does not have enough funds to address all the
necessary required research, the Administration has proposed for fiscal
year 1999 that funds be redirected from projects which are less urgent.
The projects proposed for closure are not limited to production
agriculture, but also include certain environmental research projects
that are less critical. ARS' strategic plan, gives a high priority to
production agriculture. Part of the funds obtained through project
closures would be redirected to environmental research that is directly
relevant to crop production. Although many EPA programs do concern
agriculture and involve ARS research to varying degrees, much of the
high priority environmental research ARS needs to undertake is not now
being pursued by other government research agencies, such as the EPA.
The President's request for ARS also includes $13.97 million in
support of the Presidential Initiative for Food Safety.
Question. Will the money be spent on new ARS facilities dedicated
to food safety?
Answer. The $13.97 million for ARS in support of the Presidential
Initiative for Food Safety will not be spent on new ARS facilities
dedicated to food safety.
Question. How does USDA propose to incorporate this new work with
the ongoing efforts being conducted at research universities across the
nation?
Answer. ARS food safety research is coordinated with and
complements that of ongoing efforts being conducted at research
universities across the Nation.
ARS works closely with CSREES to explore how the two agencies can
effectively coordinate their research to plan food safety research,
identify opportunities for collaborative Federal and State research to
break down the barriers to communication between Federal agency
scientists and university scientists, and to identify the unique
research facilities and expertise of each party. The longer term nature
of Federal funding complements that of the university research
programs. The multi-year sustained programs of the Federal laboratories
support research initiatives that establish the basis for the continued
biological understanding of pathogens and the technological advances
necessary to develop the means to assure food safety and meet the
expectations of the American consumer. The combined efforts of both
Federal Government and academia are necessary because food safety
research must solve the problems resulting not only from the complexity
of the food production and distribution system, e.g., the plethora of
technological practices, an array of animal and plant species and
varieties, a range of climatic and regional differences, and a vast
array of food products and consumer practices, but also recent changes
in the system, e.g., changes in animal husbandry practices and
processing technologies and the emergence of new pathogens.
Question. Has USDA considered the option of matching these ARS
funds with CSREES monies to establish a series of national food safety
research centers?
Answer. Because ARS already has facilities for conducting the
necessary food safety research, and the critical mass of scientific
expertise and structure to lead the necessary food safety research
programs, ARS has not considered the option of matching these ARS funds
with CSREES monies to establish a series of national food safety
research centers.
Question. What impact would the proposed cuts at the ARS research
station in Aberdeen, Idaho, have on the work being done in small
grains? How does ARS plan to compensate for these cuts?
Answer. While the research conducted at Aberdeen is unique in its
capacity for the molecular enhancement of oat and barley germplasm for
feed and food efficiency and utility, ARS maintains a large, fully
coordinated multi-disciplinary program for solving small grain
production and postharvest issues. Although the work conducted at
Aberdeen is important, ARS is required to make difficult decisions to
support and finance other new research priorities. Some components of
Aberdeen's molecular enhancement of oat and barley research would not
be expanded and some components would be conducted elsewhere within the
framework of the overall small grains program. The proposed cuts at
Aberdeen would reduce the small grains research program by $359,800 and
impact 1 scientist.
______
Cooperative State Research, Education, and Extension Service
Questions Submitted by Senator Cochran
food safety
Question. The fiscal year 1999 budget proposes an increase of $3
million for the second year of funding for the Food Safety Special
Research Grants Program, from $2 million for fiscal year 1998 to $5
million for fiscal year 1999. What is the current status of this new
program? For what types of research will funds be awarded?
Answer. We have developed the Request for Proposals for the fiscal
year 1998 program after substantive internal discussion by our CSREES
Food Safety Team and consultation with other Federal agencies,
including FSIS, FDA, ARS, and EPA. It is currently awaiting final
approval by USDA legal staff. The Request for Proposals will focus on
issues in the fresh fruit and vegetable industry. Specifically, we are
seeking proposals that will provide new information about contamination
of these products with food-borne pathogens during the harvesting and
transport segments, development of sampling and testing procedures to
enable more accurate monitoring of the microbial status of fresh
produce and, finally, development of new techniques or methods for
preserving the quality and safety of these fresh products from
harvesting to the consumer. While the explanatory notes implied a
broader approach to food safety research, the CSREES Food Safety team
strongly recommended, and the other agencies listed above agreed, that
it was important to give more focus to the program in this first year.
Given the high priority on improving the safety of fruits and
vegetables by the President which occurred after the Explanatory Notes
were written, and the increasingly obvious gaps in our knowledge for
preventing contamination of these food products, this seemed to be the
most effective use of these funds in fiscal year 1998.
Question. Why is such a significant increase in funding for this
new program being requested when the results of the first fiscal year
of the program are not yet known?
Answer. In preparing the Request for Proposals for this current
fiscal year, it was clear that there were more high priority issues
than could be addressed with funds made available in fiscal year 1998.
In addition, as we are developing the educational materials to assist
growers in complying with the new proposed guidance document for
producers of fresh fruits and vegetables which is being issued soon by
the Food and Drug Administration, it is already evident that there are
several critical gaps in our knowledge base which will severely hamper
our ability to provide the growers with the information they need to
meet these new guidelines and improve the safety of our domestic
produce. Similarly, the newly implemented regulations for Hazard
Analysis Critical Control Points programs in slaughter plants has
already begun to create a further impact on food animal producers to
implement a series of good production practices in order to meet the
criteria being set by the packing industry. In several instances, our
knowledge of the ecology of food borne pathogens in the animal
production setting is too limited to be of greatest help to the
producers. Thus, we will need to accelerate some of our research
efforts on these topics if we are to be of greatest help to the
production agriculture community. The production segment of our food
product chain has received lesser attention within the food safety
research agenda and is now in need of significant resources if we are
to meet the needs of the producers as they attempt to meet the guidance
and regulatory demands that they now face. It is out intention to
broaden the Request for Proposals for fiscal year 1999 and include work
related to safety of meat and poultry products in a more balanced
portfolio of research. The exact split of funding between fruits and
vegetables vs meat and poultry will be determined each year based on
input from a number of sources including other federal agencies (ARS,
FSIS, FDA, CDC, EPA), commodity groups, consumer groups, and industry.
Question. The fiscal year budget proposes a $5 million increase in
funding for Food Safety Education under the Smith-Lever 3(d) program
(from $2,365,000 to $7,365,000). What is the justification for this
increase?
Answer. In recent years, USDA has announced adoption of a new
Hazard Analysis and Critical Control Points or HACCP-based method for
inspecting meat and poultry products. But some industry representatives
fear that HACCP places the onus for food safety on producers and
processors. They believe that consumers also must share in the
responsibility for food safety. The responsibility for ensuring the
safety and wholesomeness of our nation's food supply is a shared one,
and both industry and consumers have a critical role to play in food
safety. But in order for consumers to understand and adopt recommended
safe food handling practices, a massive public education and outreach
effort is required. A funding increase for the Food Safety and Quality
Smith-Lever 3(d) Program will be used to develop a broad, comprehensive
public education program focusing on the entire spectrum of the food
chain from farm to table, including the role of the consumer, as we
work to ensure and improve the safety of the nation's food supply. We
are having regular discussions with other agencies, including FSIS,
FDA-CFSAN, and FDA-CVM, and are coordinating our programs with their
efforts. The educational programs for growers of fruits and vegetables,
which are designed to assist in reaching compliance with the new
Guidance Document being promulgated by FDA-CFSAN, are being developed
by a joint working group which includes USDA, FDA, and industry
representatives.
As part of the President's Food Safety Initiative, both domestic
and imported fruits and vegetables have been identified as an area of
growing concern. In order to ensure that fruits and vegetables meet the
highest health and safety standards, it is critical that an education
and outreach effort be targeted toward producers of domestic and
imported produce. A funding increase for the Food Safety and Quality
Smith-Lever 3(d) Program will be used to significantly expand an
education and outreach program focusing on preventing microbial
contamination during growing, harvesting, processing, and
transportation of produce. Expanded education efforts targeting
consumers will also be required to prevent contamination of fruits and
vegetables during food preparation, storage and service in homes,
restaurants, schools, congregate meal sites, food banks, and other
settings where food is prepared and served.
Question. How are the current program funds being allocated and
what have been the achievements of this program to date to increase
consumer awareness, understanding, and information regarding food
safety?
Answer. Current funds are awarded either by formula or
competitively to faculty at Land-grant colleges and universities
throughout the U.S. and its territories. The formula funds are
allocated as $25,000 per institution with a total of $1.4 million
assigned to this part of the program. Each institution is required to
submit a plan of work for these funds describing how they will be used.
The remaining funds in the amount of $775,800 are available for
competitive awards. The focus of the program for the competitive funds
is determined each year in consultation with stakeholders. The
submitted proposals are reviewed by a committee of peer reviewers and
the ranked proposals are then considered for funding. In fiscal year
1998, $195,000 of the $775,800 total has been allocated for support of
the Food Animal Residue Avoidance Data Base (FARAD) program.
Funds have been used to support the development of educational
programs and resources that improve peoples' ability to make informed,
responsible decisions about food safety and quality issues. Educational
programs developed with these food safety education funds have targeted
farmers, producers, processors, distributors, educators, researchers,
and consumers. Programs are developed primarily to help food handlers
all across the food chain translate research-based food safety
information into sound, practical behaviors that reduce the risk of
food-borne illness.
Federal food safety education funds, and state matching funds have
enabled Land-grant partners and stakeholders to develop programs and
resources in food safety that can be sustained beyond the funding year.
Since the inception of the program in 1991, 49 states and 5 territories
have established on-going food safety education programs. More than
half of those states have developed programs targeting youth; more than
half have developed programs targeting industry; and about one quarter
of those states have developed programs targeting under-served
populations or those at increased risk for food-borne illness such as
pregnant or nursing mothers, young children, the chronically ill, the
immuno-compromised, and older Americans. Last year 42 percent of
education program participants reported adoption of recommended food
handling practices, while 70 percent of program participants reported
increased adoption of practices that protect the food supply.
pest management
Question. Increased funding is requested for Minor Crop Pest
Management to allow for expansion of the registration process for minor
use pesticides and the initial registration of safer and more
environmentally compatible pesticides. Please give us a report on the
status of these efforts to date and what will be achieved with the
additional $1,721,000 proposed. Will this speed up the process so that
farmers can have these pesticides available?
Answer. In response to the minor crop re-registrations needs
created by FIFRA 88, the IR-4 Project conducted an average of 215
studies per year between 1988-97 and obtained an average of 94
clearances per year over the same time period. The increase of
$1,721,000 will allow an additional 20 percent more pesticide
clearance--about 20--than in 1997. More recently, in response to the
Food Quality Protection Act, IR-4 adopted a strategy to replace all
``at risk'' pesticide registrations on minor crops with ``safer'' pest
control products, which include reduced risk pesticides, bio-
pesticides, and IPM-compatible products.
This initiative began in 1997 with the addition of 45 reduced risk
pesticide studies and 8 bio-pesticide studies to the on-going minor
crop research program. In 1998, 165 registration studies involving
safer pest control products are being conducted by IR-4 and its
cooperators. This research will lead to the submission to EPA of 218
registrations, involving 96 minor crops over a two-year time period.
With an increased level of funding, goals for the IR-4 reduced risk
strategy are: 195 registration petitions on minor crops in fiscal year
1999, 215 in fiscal year 2000, 235 in fiscal year 2001, and 250 in
fiscal year 2002. This research will result in over 1,100 new
registrations for safer pest control products over the next six years.
These uses will serve as replacements for pesticide uses that may be
canceled as a result of FQPA.
IR-4 also has adopted a policy of close cooperation with commodity
interests and registrants. The purpose of this policy is to initiate
early discovery research on pest control products for minor crops where
expedited registration of these products will benefit producers of
minor food and ornamental commodities. This policy will provide a much
earlier start to the registration process than before and will assure
that minor crop producers have rapid access to products that represent
lower risk to the user, the consumer, and the environment.
Question. The budget indicates that the additional funding for the
Pest Management Alternatives and Expert IPM Decision Support System
program will permit the continued identification of a list of crop/
pest/control combinations where only one or a limited number of control
options are available. How many combinations have been identified under
these programs to date and why are additional funds required to carry
out this effort?
Answer. The Pest Management Alternatives Program provides funding
to the Land-Grant System to develop alternative pest management tactics
to replace those lost through EPA regulatory action or voluntary
withdrawal as a result of FQPA implementation. The funding for this
program supports two different activities. The first provides annual
funding for a competitive grants program which solicits proposals from
agricultural scientists to identify new environmentally sustainable
pest management alternatives for pesticides which have been lost, or
are in danger of being lost, due to FQPA regulatory action. The second
supports the development of an on-line Pest Management Information and
Decision Support System which accesses numerous specific databases and
allows decision-makers to identify specific crop/pest pairs for which
alternative pest management tactics are not available. The Decision
Support System links informational databases together and provides
decision-makers with ready access to pest management information needed
to identify and prioritize the critical needs of American agriculture.
Together, these two program activities provide a comprehensive response
in addressing the needs resulting from FQPA implementation by
identifying pest management systems that are vulnerable to FQPA
implementation, and conducting programs to develop solutions to pest
management problems and assist growers in implementing them.
In the fiscal year 1998 Request for Proposals (RFP) for the Pest
Management Alternatives Program the Information Decision Support System
identified 58 crops which have no alternative pest management options
available for one or more pest of the major pests with the
implementation of FQPA. These crop/pest sites have been listed in the
fiscal year 1998 RFP and research to identify pest management
alternatives on these critical sites will be funded by this program in
fiscal year 1998. Funding is needed to expand and refine the
development of the expert decision support system by incorporating
other existing or new databases into the Pest Management Information
Decision Support System, and to make the decision support system
accessible via the world wide web. Web access and data entry at the
state and local level will identify additional critical pest management
needs and additional options/alternatives for management. These
critical needs will be incorporated into future RFP's allowing research
to address key priority pest management needs of farmers and
furthermore ensure that we have adequate pest management tools for
production of both major and minor crops important to US agriculture.
pesticide applicator training
Question. The fiscal year 1999 budget requests $1.5 million for
Pesticide Applicator Training through the Extension Service. What is
the demand from growers, commercial applicators, and homeowners for
this training?
Answer. The Pesticide Applicator Training Program offers growers
and commercial applicators a forum, through meetings held at the county
level and with state agricultural associations and commodity groups,
for dialogue on important pesticide issues. Each year, extension
pesticide coordinators and county agents train over 500,000 growers and
commercial applicators in the proper use of pesticides and keep them up
to date on issues such as the Food Quality Protection Act, ground water
concerns, food safety and basic instruction in Integrated Pest
Management. Total numbers of growers and commercial applicators
continue to increase each year in these training sessions.
Homeowner training in the proper selection and use of pesticides is
critically needed. Recent mis-use practices, such as occurred in
Mississippi with a highly toxic agricultural pesticide used in homes,
point up the need for an intensive, coordinated training and
educational effort. Homeowners will benefit, by being able to make
intelligent decisions on proper and safe pest control. These
educational programs will also serve to safeguard agricultural
pesticides, which if mis-used, may be canceled or further restricted in
their use.
Question. Last year, the budget indicated that the Pesticide
Applicator Training Program was being redesigned. Has this been done?
Answer. USDA's fiscal year 1998 budget included $1.5 million to
redesign the Pesticide Applicator Training Program to provide ``seed
money'' for states to develop partnerships with other USDA supported
programs such as EFNEP, 4-H, Master Gardener and with selected private
organizations. The objective of the partnerships was to leverage
funding to develop educational programs for the general public,
especially homeowners and small or part-time farmers, that will reduce
user and environmental exposure to toxic pesticides. The mis-use of
pesticides in the home environment threatens human health, especially
infants and children, and the continued availability of products
essential to agriculture production, structural pest management, and
public health.
In the last two years states and federal agencies spent nearly $90
million investigating and remediating homes deliberately contaminated
with agricultural pesticides. Unfortunately, the $1.5 million requested
for the Pesticide Applicator Training Program was not included in the
fiscal year 1998 appropriation, thus precluding its redesign.
pest management
Question. How are extension activities supported with Integrated
Pest Management (IPM) funds accelerating the transfer of proven pest
management technologies from the researchers to farmers, ranchers, and
other users? How fast are new research findings being transferred to
the users?
Answer. Farmers have identified the lack of effective alternative
pest management tactics as a primary reason for not implementing IPM on
their farms. Where effective alternative tactics have been developed,
they are widely and rapidly implemented through extension programs and
adopted by farmers. These extension efforts are a key element of USDA's
goal of helping to implement IPM practices on 75 percent of U.S. crop
acreage, and will help the Nation's farmers adjust to changes in
pesticide availability resulting from implementation of the Food
Quality Protection Act of 1996.
Additional funds requested in fiscal year 1999 will support
regional and national projects that bring together the expertise of
multiple organizations and disciplines. Funded projects will address
research and extension education priorities identified by IPM planning
teams consisting of farmers, crop consultants, agribusiness, land-grant
university research and extension faculty, state and Federal agency
personnel, public policy interest groups and other stakeholders.
Examples of such projects are ``Cotton IPM in Transition: Opportunities
for Biologically-Intensive IPM'' scheduled for Mississippi, North
Carolina, Oklahoma, and Texas, ``Area-wide Mating Disruption of Codling
Moth on Tree Fruits'' in the Pacific Northwest, and ``Using an Adult
Attracticide Against Corn Rootworm in the Midwestern United States''.
With extension faculty being part of the planning teams and
participating as full members of funded projects, transfer of
technology and information will occur as soon as it is available.
program terminations
Question. The fiscal year 1999 budget proposes to terminate
Supplemental and Alternative Crops, Farm Safety, Agricultural
Telecommunications, and Rural Health and Safety. Please provide a
description of each of the programs proposed for termination, who will
be impacted by the proposed reductions, and why you believe the cost of
these programs can be borne by local governments when you are proposing
to cut funding for the base Hatch Act and Smith-Lever formula programs.
Answer. The Supplemental and Alternative Crops program promotes the
research and development of new crops and conventional crops grown for
new uses. Traditional and new agricultural materials provide renewable
raw materials for processing and manufacturing of a broad range of
chemical, energy, construction, environmental, and fiber products, as
well as food products. The authority under which this program is
administered incorporates all phases of research and development
including agronomics, harvesting and pilot processing operations for
converting the raw materials into final product. This comprehensive
approach results in new and expanded markets, reduced dependency on
imports, and diversification of agriculture in areas affected by
declining demand for crops grown locally. The proposed termination of
Supplemental and Alternative Crops funding would affect the two
research programs that are currently conducted under this authority.
The first is the National Canola Research Program. Funding is provided
to six land-grant universities, each representing a region with
numerous institutions engaged in canola research and extension
activities to provide a domestic source of the oil and to meet
increasing market demands. The second program is conducted at the
University of Arizona for research and development of hesperaloe, a
plant with the potential to provide a domestic source of hard fibers
that must currently be imported for use in specialty paper-making.
Hesperaloe, as a new crop for the semi-arid Southwest, offers a
potentially viable alternative to conventional crops grown in the
region that have high water and chemical requirements.
The Farm Safety program provides seed money to all 50 states and
Puerto Rico to support a National farm safety extension program
developed by the State Extension Service Specialists to meet the
State's most critical needs. These funds support development and
implementation of extension education programs and methods targeted at
reducing the injury, illness and mortality rates of farmers/ranchers,
seasonal and migrant agricultural workers, timber harvesters, and their
families. Competitive grants are also awarded under this program to
support the AgrAbility Program that provides education and assistance
on accommodating the agricultural workplace for the estimated 500,000
farmers, ranchers, and agricultural workers who have disabilities. The
proposed reduction in the Farm Safety and AgrAbility programs will
impact the land-grant universities that provide leadership and
expertise in collaboration with State and non-governmental entities,
such as Farm Safety Just 4 Kids, that have an interest in farm safety
education and the development and implementation of programs that
encourage citizens to adopt practices that will reduce agricultural
injuries, illnesses and fatalities. This program can potentially be
supported with Smith-Lever formula funds and other State and private
funding sources.
The Agricultural Telecommunications Program was established to
improve the competitive position of U.S. agriculture in international
markets; to train students for careers in agriculture and food
industries; to facilitate interaction among leading agricultural
scientists; to enhance the ability of U.S. agriculture to respond to
environmental and food safety concerns and to identify new uses for
farm commodities and increase domestic and foreign demand for U.S.
agricultural products. The legislation provided funding for program
production, program delivery and technical assistance to eligible
institutions. The program enables land-grant and other universities to
develop their capacity to design and deliver education at a distance
using telecommunications. It also creates access to the information and
education resources of the universities for citizens nationwide. Those
impacted by the proposed reduction would include land-grant
universities, such as 1994 Tribal Colleges, who are new to using
distance learning and telecommunications to reach learners. Customers
in rural areas who depend on telecommunications and distance learning
to help them overcome distance and time barriers to education would
ultimately be affected. The costs of these programs would be borne by
universities who would shift existing resources to continue to fund
these types of programs.
In support of the REE/CSREES Strategic Goal 3: Healthy, Well-
Nourished Population, through the Mississippi Rural Health Corps
project, the Rural Health and Safety Program is conducted by the
Cooperative Extension Service and 15 community and junior colleges
represented by the Mississippi Community College Foundation and the
Mississippi State Board for Community and Junior Colleges. The purpose
of this endeavor is to improve rural health service through education
of Mississippians and to train health care professionals in rural
practice. The Mississippi Rural Health Corps is attacking the rural
health problem by building capacity to annually train and employ a
minimum of 400 additional RNs, LPNs, and other allied health care
professionals who contract to practice in a rural setting following
their training. A pilot rural medical scholar program for high school
students and an updated state health service industry needs assessment
are also planned. Also supported under the Rural Health and Safety
Program, the rural health and safety project in Louisiana, a joint
effort of the Southern University Cooperative Extension and School of
Nursing, has established a mobile clinic-based nurse education
curriculum that gives students a client-based, culturally-sensitive
understanding of health care needs and obstacles to accessing health
care services for inner-city and rural medically underserved
populations, while providing needed screening and referral services for
these populations. Rural residents in Mississippi, and both rural and
inner-city low income residents in selected Louisiana Parishes, would
be impacted by these proposed reductions.
The State of Mississippi has been providing matching funds for the
Mississippi Rural Health Corps program. We expect that the program will
be maintained at a reduced funding level with the discontinuation of
funding under the Rural Health and Safety Program. We also expect that
State level funding in Louisiana can be provided to maintain the nurse-
managed mobile health care clinic. States have the flexibility to
support these programs with formula funds, State or local funding, or
private funding.
Question. Please provide an update on achievements of the projects
being carried out through the Rural Health and Safety Program.
Answer. After five years of operation, the Mississippi Rural Health
Corps has led to major intermediate outcomes via educational and
community-based changes in the rural health systems in the state. The
project has stimulated the development of a network of collaborative
rural health interests including economic, volunteer, community, health
consumer, and health service organizations. The broad scope of this
network positively impacts the Mississippi rural health system through:
247 Rural Health Association members; 165 Coalition members; 762
nursing graduates; 325 allied health graduates; 76,245 Cooperative
Extension health education program participants; and 286 trained lay
health advisors. To make the resources of the University of Mississippi
Medical Center and other centralized health facilities available to the
nursing and allied health departments of the community and junior
colleges, to registered nurses, RNs, needing graduate level courses,
and for statewide informal health education, the interactive video
Community College Network has been established, with some 2,000
undergraduate rural health program participants and 37 RNs receiving
graduate level courses. In addition, Mississippi Rural Health Corps lay
health advisors in self-care, blood pressure, and breast cancer early
detection reached 2,500 consumers with screening, skills training, and
awareness education. Although difficult to measure specifically, it is
clear that the many accomplishments will result in final outcomes that
include improved delivery of rural health care services, enhanced
health status for tens of thousands of rural residents, and enhanced
education and employment opportunities for thousands of rural
Mississippi youth.
The Louisiana nurse-managed mobile health care clinic, called the
``Jag Mobile,'' has reached needy low-income rural and inner-city
populations through sixteen community based ``health partners,''
including senior citizen community centers, public housing authorities,
church-operated day care and pre-school centers, community feeding
centers, drop-in environmental shelters, and a battered women's
program. Project outputs have included over 600 persons fully screened
for health conditions and over 300 more receiving blood pressure and
blood sugar screening only. For those persons fully screened, self-
reported health conditions have included diabetes, high blood pressure,
heart problems, asthma, kidney disease, cancer, hepatitis, and
substance abuse. All persons found to have medical problems are
referred to local physicians for further treatment. Two major
intermediate outcomes have been realized from this project: first,
several dozen nursing students have been prepared to provide culturally
sensitive health care services to needy populations; and secondly, the
Jag Mobile has become a welcome addition in communities and has made
many individuals aware of their health needs and what they can do to
prevent escalation of minor health conditions into more costly major
medical problems.
Question. Who is receiving the agricultural telecommunications
funds in fiscal year 1998 and for what purpose?
Answer. The request for proposals for the 1998 Agricultural
Telecommunications Program will be released in June, 1998. As stated in
the legislation, the competition will be open to accredited
institutions of higher education. Grants will be awarded for projects
which use telecommunications and distance education to create access to
the information and education resources of the universities, and for
projects that seek to improve the capacity of Land-Grant and other
universities to design and deliver education at a distance using
telecommunications.
expanded food and nutrition education program (efnep)
Question. Please provide a description of the projects being funded
through the Expanded Food and Nutrition Education Program (EFNEP) for
fiscal year 1998.
Answer. EFNEP does not fund ``projects'' per se, but rather the
funds are distributed to states based on a formula that takes into
consideration the proportion of their population that is at or below
125 percent of poverty. EFNEP operates in all 50 states and the
territories of American Samoa, Guam, Micronesia, Northern Marianas,
Puerto Rico and the Virgin Islands. It is designed to assist limited
resource audiences in acquiring the knowledge, skills, attitudes and
changed behavior necessary for nutritionally sound diets and to
contribute to their personal development and the improvement of the
total family diet and nutritional well-being.
Within the constraints of the funds available, states select the
communities with the greatest need, and conduct nutrition education
programs for low-income youth and families with young children. Today
EFNEP operates in less than 25 percent of all counties, and reaches
only a fraction of the eligible population. The number of poor children
under six years old grew from 3.4 million in 1972 when EFNEP was just
beginning, to 6.0 million in 1992. This represents 26 percent of all
U.S. children less than six years old. However, while the population
that EFNEP focuses on nearly doubled, the funding only increased by 25
percent over this time period.
The delivery of EFNEP youth programs takes on various forms. EFNEP
provides education at schools as an enrichment of the curriculum, in
after school care programs, through 4-H EFNEP clubs, day camps,
residential camps, community centers, neighborhood groups, and home and
community gardening workshops. Youth are taught lessons on nutrition,
food preparation and food safety, and physical fitness.
Through an experiential learning process, adult program
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
delivered as a series of 10-12 or more lessons, often over several
months, by para-professionals and volunteers, many of whom are
indigenous to the target population. The hands-on, learn-by-doing
approach allows the participants to gain the practical skills necessary
to make positive behavior changes. Through EFNEP, participants learn
self-worth--that they have something to offer their families and
society.
EFNEP is a program that works; in 1996, 84 percent of adult
participants showed improvement in one or more food resource management
practices, 91 percent showed improvement in one or more nutrition
practices and 66 percent showed improvement in one or more food safety
practices. Additionally, intakes levels for 6 key nutrients increased,
and 2\1/2\ times as many participants consumed a minimally acceptable
diet after completing EFNEP than at entry into the program.
Question. Why is a reduction in funding being proposed for fiscal
year 1999? Who will be impacted by this proposed reduction?
Answer. Funding levels for many of the CSREES formula-funded line
items, including EFNEP, were reduced to provide the funding necessary
to support Departmental and Presidential initiatives, such as food
safety, children, youth and families at risk and other initiatives. The
4 percent reduction in funding will result in approximately 8,600 fewer
families and 16,000 fewer youth reached by this educational program.
sustainable agriculture research and education (sare)
Question. Please provide a list of the SARE research projects
funded for each of fiscal years 1997 and 1998, including a description
of the project, who conducted the research, and the amount of the
award.
Answer. Proposals submitted for SARE funding in fiscal year 1998
are currently undergoing review and final decisions on projects to be
funded will be made later this year. Projects funded in fiscal year
1997 are as follows, excluding producer grants, which are discussed in
response to the next question.
----------------------------------------------------------------------------------------------------------------
Projects funded in fiscal year 1997-- Conducted by--
----------------------------------------------------------------------------------------------------------------
Description Contact Organization/State Amount
----------------------------------------------------------------------------------------------------------------
No-till Forage Establishment to Panciera............... University of Alaska, AK............. $100,000
Improve Soil and Water Conservation
and Reduce Associated Production
Risks.
Blueprinting Traditional Sustainable Frank.................. American Samoa Community College, AS. 91,850
Food Production Systems of Samoa in
Development of a Research/Extension
Model.
Sustainable Culture of the Edible Glenn.................. Environmental Research Laboratory, AZ 95,201
Red Seaweed Gracilaria parivspora
Abbott in Traditional Hawaiian
Fishponds.
Development and Implementation of Daane.................. University of California, CA......... 79,858
Trap Cropping Strategies for
Control of Hemipteran Pests in
Pistachio Orchards.
Decomposition and nutrient release Mitchell............... University of California, CA......... 41,604
dynamics of cover crop materials.
Reducing Insecticide Use on Celery Trumble................ University of California, CA......... 100,000
Through Low Input Pest Management
Strategies.
Nitrogen Management for Pumpkins and Ashley................. University of Connecticut, CT........ 40,000
Squash.
Biological and Cultural Methods of Stoner................. Connecticut Agricultural Experiment 20,000
Insect Management in Vegetables: Station, CT.
Survey and Case Studies of Organic
Farms and Evaluation of the
Scientific Literature.
An Integrated Vegetable Production, Payton................. The Pine Center--Bainbridge College, 134,800
Postharvest and Marketing System GA.
for Limited Resource Farmers in
South Georgia.
Producers assessment of sustainable Steiner................ USDA-ARS, GA......................... 228,864
land management practices to
project water quality.
Management of Soilborne Plant McHugh................. Waikele Farms, HI.................... 21,900
Parasitic Nematodes for Sustainable
Production of Field Grown Tomatoes
and Cucumbers by Cover Cropping.
Combining Landscape and Augmentative Lewis.................. Iowa State University, IA............ 92,740
Biological Control to Suppress
European Corn Borer Populations in
Sustainable Low-Input Systems.
Management, Impact and Economics of Momont................. University of Idaho, ID.............. 105,400
Beef Cattle Grazing in Mountain
Riparian Ecosystems.
Development of Market Infrastructure Bonney................. Sustainable Earth, Inc., IN.......... 86,200
to Support Local and Regional Food
Systems.
Cluster Use of Whole-Farm Planning Janke.................. Kansas State University, KS.......... 106,400
with Decision Cases and Evaluation.
Yesterday's Research for Tomorrow's Kok.................... Kansas State University, KS.......... 63,500
Needs.
Integration of Freshwater Prawn Tidwell................ University of Kentucky, KY........... 155,197
Nursery and Growout Systems Into
Diversified Systems.
Impacts on Agricultural System Hamilton............... Center for Sustainable Systems, KY.. 174,858
Sustainability from Structural
Change in Peanut, Poultry, Swine,
and Tobacco Production Systems.
Chinese Medicinal Herbs as Crops for Craker................. Univ. Massachusetts, MA.............. 60,718
the Northeast.
Integrating High-Density Orchards Cooley................. Univ. Massachusetts, MA.............. 121,535
and Biointensive Integrated Pest
Management Methods in Northeastern
Apple Production.
Design and Implementation of a Millner................ USDA-ARS, MD......................... 20,000
Searchable Database on Compost
Production and Use for Internet
Users.
Enhancing Adoption of Sustainable Mutch.................. Michigan State University, MI........ 100,405
Agriculture Practices via Farmer-
Driven Research.
Farm Beginnings: An Educational Schwartau.............. Minnesota Extension Service, MN...... 90,000
Training and Support Program to
Establish Young Dairy Farmers in
Southeast Minnesota.
A Sustainable Approach to Spivak................. University of Minnesota, MN.......... 78,750
Controlling Mite Pests of Honey
Bees.
Use of a Vegetative Filter as an Crawford, Jr........... University of Missouri, MO........... 55,755
Alternative Waste Management System
for a Sustainable, Seasonal
Management-Intensive Grazing Dairy..
Comparison of Pest Management Lenssen................ Montana State University, MT......... 150,964
Interactions in Spring Wheat-Cover
Crop and Spring Wheat-Fallow
Cropping Systems.
Equal Access to Agriculture Programs Harris................. Land Loss Project, NC................ 151,290
and Opportunities: Advocacy to End
USDA Racial Discrimination and
Reestablish Viable and Sustainable
Minority Farm Agriculture.
Maximizing Forage and Minimizing Anderson............... North Dakota State University, ND... 78,360
Grain Intake in Bison Fed for Meat.
Improving Sustainability of Cow-Calf Adams.................. Univ. Nebraska West Central Res & Ext 81,000
Operations with Natural Forage Ctr, NE.
Systems.
Farmer-Designed Research on the use Baltensperger.......... University of Nebraska, NE........... 91,000
of Legumes in Sustainable Dryland
Cropping Systems.
Potential of Earthworms as MacHardy............... University of New Hampshire, NH...... 99,069
Biocontrol Agents of Scab and
Leafminers in New England Apple
Orchards.
Sustainable Phosphorous Fertilizer Heckman................ Rutgers University, NJ............... 92,780
Recommendations for Corn Production
in the Northeast USA.
Flowering Plants to Enhance Shrewsbury............. Rutgers University, NJ............... 80,344
Biological Control in Landscapes.
Integration of Behavioral, Polavarapu............. Rutgers University, NJ............... 133,179
Biological, and Reduced-Risk
Chemical Approaches into a
Sustainable Insect Management
Program for Cranberries.
CORE VALUES Northeast: A Northeast Gordon................. Mothers & Others, NY................. 20,000
IPM--Apple Consumer Education and
Market Development Project.
Farmer-Centered, Value-Added Frisch................. Regional Farm/Food Project of 53,000
Processing and Marketing Citizens, NY.
Opportunities for Northeast Dairy
Farmers: A Participatory Research.
Demonstration of Narrow Row Corn Cox.................... Cornell University, NY............... 70,346
Production in New York.
Ethnic Markets and Sustainable Lawrence............... Just Food, NY........................ 99,961
Agriculture.
Eastern Gamagrass Determining its Salon.................. USDA-NRCS, NY........................ 108,252
Feasibility as a Forage Crop for
the Northeast.
A Strawberry IPM Systems Comparison Kovach................. Cornell University, NY............... 116,586
Demonstration.
Use of Cover Crop Practices to Dickinson.............. Stratford Ecological Center, OH...... 87,823
Control Weeds in Integrated Lower-
Chemical Input Systems of Vegetable
Production.
Advancing Sustainable Potato Murphy................. The NW Coalition for Altern. to 35,000
Production in the Northwest. Pesticides, OR.
Sustainable Crop/Livestock Systems Allen.................. Texas Tech University, TX............ 222,125
in the Texas High Plains.
The Hometown Creamery Revival....... Dunaway................ Dairy Farm Cooperators, VA........... 145,474
Regionally Centered Sustainable Flaccavent............. CPSDI, VA............................ 173,240
Agriculture System.
Managed Riparian Buffer Zones and Jokela................. University of Vermont, VT............ 142,448
Cover Crops to Minimize Phosphorus
and Nitrogen Runoff Losses from
Corn Fields.
Efficacy Evaluation of Homeopathic McCrory................ Northeast Organic Farming 161,026
Nosodes for Mastitis and Calf Association, VT.
Scours, and Documentation of
Homeopathic Practices in Organic
and Conventional Dairy Production.
Documentation of Organic and Wonnacott.............. NOFA-Vermont, VT..................... 43,986
Transitional Dairy Production
Practices.
Building Community Support for Butler................. Washington State University, WA...... 113,000
Agriculture on the Urban Edge.
Enhancing No-Till and Conservation Fiez................... Washington State University, WA...... 125,842
Farming Success Through The Use of
Case Studies. Conferences, and
Workshops to Facilitate Farmer to
Farmer Learning in The Pacific
Northwest.
Sustainable Crop Production Kuo.................... Washington State University, WA...... 118,000
Practices with Mixed Leguminous and
Nonleguminous Cover Crops.
Development of Sustainable Practices Andrews................ University of Wisconsin-Madison, WI.. 92,892
for Integrated Management of Apple
Diseases.
Training and Transitioning New Klemme................. University of Wisconsin-Madison, WI.. 29,000
Farmers: A Practical Experiment in
Farmer Self-Development and
Institutional Reinvention.
Using Small Grain Cover Crop Posner................. University of Wisconsin, WI.......... 92,300
Alternatives to Diversify Crop
Rotations.
Evaluating Pasture-Based Poultry Stevenson.............. University of Wisconsin-Madison, WI.. 89,348
Systems: Potential Contribution to
Farm Diversification, Human
Nutrition, and Marketing
Alternatives.
Integrating Nematode-Resistant Crops Koch................... Univ. of Wyoming, WY................. 113,184
into Sugarbeet Rotations.
----------------------------------------------------------------------------------------------------------------
Question. What portion of SARE funds have been awarded to producers
in each of the past two fiscal years, please include a description of
the project and the amount of the award.
Answer. In fiscal year 1997, 113 producer grants were awarded for a
total of $513,423. These projects represent 68 percent of the total
number of projects funded, and six percent of fiscal year 1997 funds.
In fiscal year 1996, 114 producer grants were awarded for a total of
$512,618, representing 67 percent of the total number of projects
funded, and six percent of fiscal year 1996 funds.
Fiscal year 1997 Producer Grants
Description/producer/State Amount
Growing American and Korean Ginseng in Alaska, Smith, AK...... $5,000
Crop Production Systems for Nonchemical Control of Reniform
Nematodes, Edgar, AL...................................... 8,892
Sustainable Pumpkin Production in the Southeast, James, AL.... 4,655
Evaluation of a Low-Cost Innovative Ensiling System for Small-
to Medium-Sized Dairy Operations, Wright, AL.............. 10,000
Continuation of a Sustainable Agroforestry System, Paleso'o,
AS........................................................ 2,315
Feasibility of Soil Solarization for Strawberry Production on
the Central Coast of California, Galper, CA............... 5,000
Vermicomposting Demonstration Project, Renner, CA............. 5,000
Pheromone Foggers for Pesticide Replacement, Thompson, CA..... 5,000
Individual Confinement Rearing vs. Pasture-Based Group Rearing
of Dairy Calves, Wackerman, CA............................ 3,248
Pasture Fryer Chickens, Mattics, CO........................... 2,500
Converting Pasture Land to Specialty Crop Production as an
Alternative Farm Enterprise, Taylor, CO................... 2,500
Perennial Grass Establishment in Existing Alfalfa, Wiley, CO.. 1,825
Biological Insect Control of Herbaceous Perennials, Berecz, CT 600
Composting Tobacco Stalks Using PAW (Passive Aerated Windrow)
System, Collins, CT....................................... 2,042
Effect of Limited Environmental Controls on Shiitake Mushroom
Production in the Southern Coastal Plain, McRae, FL....... 9,990
Evaluation of an Alternative Low-Input Production System for
Fresh Market Tomato, Murray, GA........................... 5,109
Algae-Based Winter Feed for Small-Scale Goat Farm Operations,
Szostak, GA............................................... 7,907
Use of Sunnhemp in Cucumber Production, Quan, GU.............. 4,300
Sustainable Alternatives To Herbicide for Weed Control: Using
Cover Crops To Combat Panicum repens and Panicum maximum
In Lowland, Eastern Hawaii, Acciavatti, HI................ 3,500
Growing Ring-Spot Virus-Free Papayas Using Anti-transpirants
and Other Sustainable Techniques, Biloon, HI.............. 4,000
Trees for Food, Carter, IA.................................... 5,000
Converting Unproductive Woodlands Into a Profitable Shade-
Plant Nursery, DeWitt, IA................................. 2,925
Feasibility of Corn Stalk Ash as a Fertilizer Source, Reinig,
IA........................................................ 4,974
Systems Thinking in a Range Environment, Black, ID............ 5,000
Non-irrigated Alfalfa Performance Trial, Benewah County,
Idaho, Crawford, ID....................................... 3,500
Paradise Time Controlled Grazing, Pratt, ID................... 5,000
Long-Term Benefits of Cover Crops and Crop Rotations, Upton
Jr., IL................................................... 4,818
Ornamental Bittersweet Production for Small Woodland Farms,
Klueh, IN................................................. 2,915
Great Circle Farm CSA/Permaculture Demonstration Site, Neff,
IN........................................................ 5,000
Biological Control of Small Soapweed (Yucca glauca Nutt.),
Baldwin,
KS........................................................ 4,515
Comparing Controlled Microbial Systems (CMS) Composting to
Conventional Composting to Piled Feedlot Manure, Boller,
KS........................................................ 5,000
Creating the Link: Cooperative Marketing of Organic (All-
Natural) beef, Endicott, KS............................... 9,854
Machinery Link Co., Govert, KS................................ 5,000
Tree Filter & Wetland Livestock Waste Management Plan, Sextro,
KS........................................................ 4,808
Sustainability Starts at Home-Building Regional Self Reliance
through Agritourism, Armstrong-Cummings, KY............... 9,580
Overwintering Survival of Kentucky Honeybees, Lee, KY......... 5,283
Managed Grazing System to Increase Sustainability, McCord, KY. 2,630
Maximizing Corn Production through Tillage Methods, Cultivar
and Fertilization in the Mountains of Southeast Kentucky,
Teague, KY................................................ 4,956
Echinacea Field Trials, Baker, MA............................. 1,730
High Tunnel Strawberries for New England, Coldwell, MA........ 2,720
Regulation of lateral branching in Genovese Basil (Ocimum
basilicum) via application of bacterial spray, Kellett, MA 1,152
Using Dogs to Control Bird Depredation of Blueberries,
Valonen, MA............................................... 2,900
Mixed Field Forage, Walker, MD................................ 2,230
Establishing and Enlarging on Maine Ginseng Production, Drane,
ME........................................................ 6,000
Successful Marketing Through Product Identification/Packaging,
Holmes, ME................................................ 3,500
Biological Management of Colorado Potato Beetle, Johanson, ME. 1,701
Conservation of Wild Blueberry and Cranberry Pollinators,
Kelley, Jr., ME........................................... 3,950
Field Trials of Ag Covers to Reduce Cranberry Fruitworm
Damage, Macfarlane, ME.................................... 1,770
Improving Production Methods for Shiitake Mushrooms, Woodward,
ME........................................................ 2,225
Swine Finishing in a Hoop Structure with Deep Bedding, Blonde,
MI........................................................ 5,000
Transition from Traditional Grain/livestock agriculture to on-
farm roadside marketing of produce, Bosserd, MI........... 5,000
Innovative Farmers Seeking Lowest Nitrogen Rates for Corn on
Sandy Soils to protect Ground Water, Hiscock, MI.......... 4,021
The Economics of Seed Saving on three Biological Farms in
Western Michigan, Keiser, MI.............................. 4,676
Developing partnerships between Southern Michigan cash crop
farmers and Northern Michigan livestock farmers, Miller,
MI........................................................ 5,000
The Custom Grazing of Replacement Dairy Heifers on Fuego
Fescue and Barenbrug Ryegrass Pasture Under a Management-
Intensive Grazing System, Paulik, MI...................... 3,518
Processing and Marketing Milk Produced on Our Small Family
Dairy, Shetler, MI........................................ 5,000
Marketing On-Farm Composted Manure, Slater, MI................ 9,700
Innovative Farmers Seeking Sustainable Solutions Through On-
Farm Demonstrations, VandyBogurt, MI...................... 4,750
Farmer Networking to Direct Precision Ag Technologies Toward
Sustainability, Waller, MI................................ 4,950
Integrated Row Tillage Project, Williams, MI.................. 3,523
Diversifying a Small Crop Farm with Hogs and Poultry on
Pasture, Apple Trees, and Plums, Aspelund, MN............. 1,536
Increased Pasture Profitability Through South African Dorper
Sheep, Burke, MN.......................................... 1,790
Feeding the Saints Pilot Project, King, MN.................... 9,650
Development of Cultivation Equipment for Diversified Vegetable
Production, Lancaster, MN................................. 3,194
Cattle, Grass, and Streams: Can They Exist Together as a
Sustainable Ecosystem, Lentz, MN.......................... 4,690
Native Minnesota Medicinal Production Feasibility Study,
Soberg, MN................................................ 5,000
Community-Based Direct Marketing with the World Wide Web, Van
Der Pol, MN............................................... 9,992
Conversion of a Marginal Row-Crop and CRP Farm to a Seasonal
Grass-Based Dairy, Bright, MO............................. 5,000
Evaluation of Mycorrhizal Inoculation on Growth and Quality of
Three Eastern North Carolina Christmas Tree Species,
Dorsey, NC................................................ 650
Effect of Different Application Rates of Swine Lagoon Effluent
on Corn and Wheat, Hart, NC............................... 2,317
Forest Site Preparation with Swine, Livingston, NC............ 5,088
Grazing Yearlings on Annual Forage Pastures, Klamm, ND........ 4,986
Promotion of Crop Diversification and Research of Specialty
Crop Markets for Western North Dakota, Trulson, ND........ 9,680
Kentucky Blue Grass Management and Variety Evaluation for
Sustainable Seed Production in Western Nebraska and
Surrounding Area, Laursen, NE............................. 4,250
No-Till vs Conventional Tillage for Butternut Squash
Production and Phytophthora blight control, Grasso, Jr.,
NJ........................................................ 1,680
Limiting Gopher Deprivation By Time-Control Livestock Grazing,
Schneberger, NM........................................... 3,500
Value Added Wheat Production, Siebel, NM...................... 3,500
Mechanical Cultivation and Fertility Workshops, de Graff, NY.. 3,450
Recycling composted poultry manure to grow various crops,
Kreher,
NY........................................................ 5,782
Cover Crop Interseeding into Soybeans at Time of Last
Cultivation: Adapting Experimental Results into Practical,
Farm-scale Methods, Potenza, NY........................... 5,550
Nutrient Retention and Humus Formation in Various Bedding
Materials, Walker, NY..................................... 5,080
Linking Sustainable Agriculture Production with Low-Income and
Minority Consumers, Stewart, OH........................... 9,195
Economics of Seasonal Extension of Cut Flower Production,
Stamback, OK.............................................. 8,100
Sustainable Wheat Management Systems, Torrance, OK............ 9,344
Using Truffles to Enhance Douglas Fir Production On A Small
Family Farm, Grant, OR.................................... 2,800
Biological Control of Pear Pests, Ing, OR..................... 5,000
``Foxtail'' Reduction in Permanent Pastures, Panner, OR....... 3,500
Constructed Wetland for Waste Water Treatment, Shull, OR...... 3,200
The Use of Goats to Control Juniper, Sage & Rabbit Brush,
Snyder,
OR........................................................ 3,500
Comparison of Weed control and Soil Erosion Control in 15''
row Corn vs 30'' row Corn, Groff, PA...................... 1,495
Rotational Grazing in South Dakota/Dairy Cattle, Maas, SD..... 3,448
Effects of Conservation Tillage on Water Quality in Southern
Texas, Eubanks, TX........................................ 8,000
Cool Season and Warm Season Grasses to Stabilize Erodible
Soils and Increase Profitability, Kearney, TX............. 10,000
Alternative Cropping For the Navajo Reservation, Maryboy, UT.. 4,300
Increased Forage Production during Alfalfa Crop Rotation Years
in Johnson Canyon, Utah. Biological Control of Scotch and
Bull Thistle on Disturbed Alfalfa Pastures, Noel, UT...... 2,900
Greenhouse Subsurface Pipe System to Convert Solar Energy to
Soil Heat, Johnson, VT.................................... 4,475
Technical Assistance for New Sheep Dairy Farms, Major, VT..... 7,431
Northeast Livestock Export Program (Phase II), Ratcliff, VT... 4,600
Development of NOFA Certified Pastured Poultry contractual
Company to Diversify and Revitalize Vermont Agricultural
Industry, Rich, VT........................................ 5,450
Education of Public in the Use of Native Woodland Plants and
Wildflowers in the Home Garden, Schlegel, VT.............. 1,145
Organic Meat/Poultry Processing, Marketing, and Distribution
Effort, Sheehan, VT....................................... 3,345
Diversifying an Organic Grain System: Spring Wheat & Edible
Bean Variety Trials, Van Hazinga, VT...................... 6,000
Sorghum Syrup Production in Vermont, Williamson, VT........... 6,000
Dryland Corn Production in Columbia and Walla Walla Counties
(WA), Carlton, WA......................................... 3,000
Release of the Predator Mite, Amblyseius fallacis to Control
Spider Mites in Red Raspberries and Reduce Reliance on
Pesticides, Cieslar, WA................................... 1,850
Small Farm Harvest Labor Reduction Project, Critchley, WA..... 2,500
Bamboo Alternative Crop for Southwest Washington, Northcraft,
WA........................................................ 2,000
Vegetation Management on Small Acreages Using Short Duration,
Intensive, Rotational Grazing, Swagerty, WA............... 2,043
Replacing Chemical Weed Control With Mulch in Commercial
Blueberries, Cuddy, WI.................................... 4,980
Composting For Disease Suppression, DeWilde, WI............... 4,610
Cooperative Marketing of Sheep Milk, Foster, WI............... 10,000
Christmas Lights and Deer Scents, Bonhage-Hale, WV............ 937
Evaluating Forage Quality and Yield in Pastures in the
Shenandoah Valley, Grantham, WV........................... 2,753
Fiscal year 1996 Producer Grants
Description/producer/State Amount
Establish More Efficient and Biological Practice for Bringing
Forest Land into Agricultural Use through Sustainable
Development Using Indigenous Species for Alaska, Talbot,
AK........................................................ $3,000
Pig Manure Control and Utilization Project, Tuli, AS.......... 5,000
Moving Succession Forward in a Lahmann Lovegrass Monoculture,
Getzwiller, AZ............................................ 3,000
Goal-Driven Intensive Management of a Riparian/Sandy Bottom
Site, Holtschlag, AZ...................................... 4,310
Managing Biological Processes for Maximum Diversity and
Productivity, Mercer, AZ.................................. 2,500
Farming, Agriculture, and Resource Management for
Sustainability (F.A.R.M.S.), McNamara, CA................. 5,000
Habitat Management as a Transitional Tool to an Insecticide:
Free Pest Management Program in Apples, White, CO......... 1,500
Pedal-Powered Tillage for a Small Community-Supported Farm
(CSA), Haney, CT.......................................... 2,400
Certified Organic Associated Growers (COAG), Norris, CT....... 2,670
Growing Potatoes Organically 3 Different Ways, van Acterberg,
CT........................................................ 1,670
Kenaf/Vegetable Rotation in an Organic Farming System, Kemble,
DE........................................................ 1,200
Economical Analysis of Kenaf Grown with Different Nutrient
Sources, Palmer, DE....................................... 3,140
Dry-Extrusion of Wet Garbage for Swine Feeding, Pangelinan, GU 4,350
Vegetable Soybean Cultivar Trials, Quan, GU................... 3,020
Sustainable Greenhouse Tomato Production: Evaluating
Alternatives to Pesticide Use for Controlling Tomato
Pinworm Larvae in Hawaii, Tresky, HI...................... 3,520
Non-Chemical Suppression of Perennial Weeds, Frantzen, IA..... 9,875
Iowa Network for Community Agriculture: Forming a Network to
Support Producer Initiatives for Local Food Systems (CSA
and Similar Efforts) in Iowa., Hall, IA................... 9,850
Organic Farming Mentor Project, Thicke, IA.................... 10,000
Rural Action Ag Center, Varley, IA............................ 9,580
Comprehensive Integrated Agroforestry Project, Wahl, IA....... 4,838
Comparison of Finishing Pig Performance in Hoophouse Building
vs. a Conventional Slatted, Curtain-Sided Building, Weis,
IA........................................................ 1,775
Economic Viability of Greenhouse Solarization, Higgins, ID.... 2,450
A Matted Mulch as an Alternative to Herbicide use in
Strawberries, Melons and Tomatoes, Fouts, IN.............. 4,393
Community Farm Project, Schabacker, IN........................ 5,000
Livestock Re-Establishment Research Project at White Violet
Farm, Sullivan, IN........................................ 5,000
Cover Crop Inter-Row Seeder For Row Crops, Ediger, KS......... 3,200
Erosion-Sensitive Farm is Converted to a Clean Water Farm that
Includes a Management-Intensive Rotational Grazing System
and Well-planned Calving Facility, Howell, KS............. 4,947
Prairie Hills Marketing Network: Marketing for Producers in
Northwest Kansas, Rowh, KS................................ 9,962
Group Strategic Alliances for Carroll County Feeder Calves,
Hendrick, KY.............................................. 10,000
Technical Assistance for Meat Goat Marketing, Hoffman, KY..... 8,900
Vegetative Filter Strips & Artificial Wetlands to Filter
Silage & Manure Effluent, Burt, MA........................ 3,000
High Density Planting for Weed, Disease and Pest Management in
Commercial Strawberry Production, Hatch, MA............... 8,381
The Use of Ethylene as a Chemical Pinching Agent on
Floricultural Crops, Konjoian, MA......................... 5,000
Commercializing State-of-the-Art Thermal Aquatic Technology
for Orchard Weed, Fungi, and Insect Control, Smith, MA.... 5,670
Improving Aquaculture Productivity & Safety with Dockside
Elevator Systems, Pels, MD................................ 3,869
Establishing An Integrated Rotational Grazing & Watering
System, Vorac, MD......................................... 2,500
Maximizing the Benefit of Rotational Pasture by Using a
Combination of Early Calving and Creep Feeding Heavy
Calves Barley on Pasture, Boisvert, ME.................... 1,000
Improving Potato Seed Performance, Crane, ME.................. 2,400
Using Composted Paper Mill Wood Fiber Residual as a Mulch/Soil
Amendment in Potato Production, Fitzpatrick, ME........... 2,974
The Development of Rhubarb Agriculture in Maine, Jacoby, ME... 3,200
The Efficacy of Red Oak Sawdust as a Mulch to Control Grass
and Weeds in Organic Wild Blueberries, Johnson, ME........ 2,827
Dairy Farm Diversification/Waldo County, Maine, Keene, ME..... 3,000
Sustainable Pollination of Wild Blueberry and Cranberry,
Kelley, Jr.,
ME........................................................ 4,880
Broad Based Organic Control of Cranberry Fruit Worm,
Macfarlane,
ME........................................................ 2,950
Extending the Vegetable Production Season in Northern Michigan
with Polyhouses, Chadwick, MI............................. 2,696
Permaculture Greenhouse System: Integrating Greenhouse and
Poultry Production, Meisterheim, MI....................... 5,000
Using Forages and Grazing Systems as an Alternative to Crop
Production on Michigan Muck Soils, Oswalt, MI............. 5,000
Sheep Offal Composting Project, Essame, MN.................... 9,580
Pipestone Lamb Marketing Project, Fruechte, MN................ 10,000
Hog Production in an Existing Facility using Swedish
Techniques, Haroldson, MN................................. 5,000
Prairie Farmers Coop Producer-Owned Livestock Processing and
Marketing, Timmerman, MN.................................. 10,000
Establishment of Rotational Grazing System Utilizing Warm and
Cool Season Grasses, Bohmont, MO.......................... 5,000
Growing Day-Neutral Strawberries using the Sunbelt/
Polyacrylamide Gel System, Compton, MO.................... 3,126
Extending the Grazing Season in a Rotational Grazing System
for Dairy, Hedges, MO..................................... 4,160
Management-Intensive Grazing, Stump, MO....................... 5,000
The Production of Bromus Willdenowii Kunth Prairie Grass
(Grasslands Matua) and Bromus Stamineus Desv. Grazing
Brome (Grassland Gala) in the Tennessee Valley as an
Alternative to Fescue and Ryegrass, McKee, Jr., MS........ 9,900
Legume Grazing in Rotation with Small Grains, Alger, MT....... 4,000
Green Manure/Covercrop Combination Experiment, Daniel, MT..... 1,923
Evaluation of Grass Species for Improved Pasture Management,
Lee,
MT........................................................ 4,800
Vegetative Changes through Alternative Water Sources, Veseth,
MT........................................................ 2,500
Aquaculture Conversion Model Emphasizing Poultry and Hog
Facilities Re-Use and Recycled On-farm Resources, Bunting,
NC........................................................ 6,000
Identification of Cover Crops to Enhance the Habitat of
Specific Beneficial Insects in Sustainable Production
Systems, Haines, NC....................................... 9,462
Multiple On-Farm Use of Aquatic Plants and Animals, Harman, NC 9,575
Alternatives to Chemicals in the Peanut Cotton Rotation,
Morris, NC................................................ 9,366
Networking and Education of Sustainable Bison Producers in the
Northern Plains, Lautt, ND................................ 9,966
Corn Starch Amendment for Marginal Soils, Johnson,, NE........ 1,297
Plant Population Effect on Yields of Sweet Corn, Hardy, NH.... 632
Comparison of Drainage Methods for Phytophthora Root Rot
Control, Lee, NJ.......................................... 3,500
Increasing the Value of Irrigated Pastures, Baker, NM......... 4,200
Test Plot Demonstration for Organically Produced Small Grains,
Phase II, Roybal, NM...................................... 5,000
Feasibility of No-till Frost Seeding, Bishop, NY.............. 1,285
Permanent Bed Vegetable Production Systems, Blomgren, NY...... 3,190
Use of a Biological Filter in a Recirculating Aquaculture
System, Brockway, NY...................................... 1,758
Answering Questions About Ditch Bank Stabilization, Cocot, NY. 2,100
Rotational Grazing of Sheep to Control Weeds in Christmas
Trees, Drexler, NY........................................ 1,325
An Evaluation of Chinese Medicinal Herbs as Field Crops in the
Northeast, MacLean, NY.................................... 3,498
Development & Adoption of Computerized Crop Record Keeping
Program, McChesney, NY.................................... 4,000
Full Capitalization of Water Resources, Rounsaville, NY....... 6,000
Multiple-Site Evaluation of Cover Crops Established in Wheat
Stubble, Bennett, OH...................................... 9,613
The Study of Alternative Management Strategies for European
Red Mite in North Central Ohio Apple Orchards, Eshelman,
OH........................................................ 9,722
Organic Mulch for Weed Control in Rhubarb, Boden, OR.......... 2,500
Use of Aerated Compost Teas for Control of Foliar Diseases of
Spinach, Lettuce and Broccoli and to Promote Plant Vigor
and Quality, Booth, OR.................................... 2,620
Low Tillage Weed Control, Fullmer, OR......................... 1,895
The Effect of Aerated Compost Teas on Disease Control in
Blueberries and Tomatoes, Gray, OR........................ 2,610
Grazing Sheep in New Forest Plantings, Lehman, OR............. 1,575
Use of Aerated Compost Teas as a Preventative Foliar Fungicide
on Grape Vines Vitus vinifera, Michul, OR................. 2,930
School Cafeteria Compost System for Soil Amendment Production,
Strong, OR................................................ 3,000
Minimizing Equipment Costs on a Grazing Farm, Bowlan, PA...... 2,683
4-H Sustainable Approach to Raising Beef, Curtis, PA.......... 2,260
Economic Comparison & Weed Control Observation of 15'' Row
Corn vs. 30'' Row Corn, Groff, PA......................... 1,040
Crownvetch Living Mulch Grazing, Hubbard, PA.................. 470
Alternative Rotation System for Vegetables, Matthews, PA...... 2,960
Finishing Beef Calves on Legume Pasture, Berry, SD............ 2,504
Low Input Sustainable Agriculture Short Course, McGregor, TN.. 9,650
Sustainable Cultivation of Medicinal Herbs as an Alternative
to Tobacco as a Cash Crop, Miller, TN..................... 5,004
Grazing Alternatives to Tall Fescue for Stocker Cattle, Pitts,
TN........................................................ 9,982
Can Organically Managed Native Warm Season Grasses Provide a
Sustainable and More Cost Effective Hay Source for a
Family Operated Goat Dairy than Input Intensive Annual
Sorghum/Sudan Grass Crosses?, Dexter, TX.................. 9,638
Agri-Tourism: Educating the Public and Generating On-Farm
Income, Hayden, VT........................................ 1,450
Sustainable Yield Sugaring & Marketing, Hinsdale, VT.......... 4,920
Northeast Livestock Export Program, Ratcliff, VT.............. 4,400
Best Method for Establishing Globe Artichoke Seedlings,
Rozendaal,
VT........................................................ 1,060
Sorghum Syrup Production in Vermont, Williamson, VT........... 5,875
Carrot Rust Fly Control, DeWreede, WA......................... 1,150
Weed Control in Organic Apple Orchard, Holwegner, WA.......... 2,550
Alternative Crop Production in a ``Direct Seed Annual Crop
Intense Rotation Program'', Kupers, WA.................... 4,400
Achieving Sustainability in San Juan County Hay Fields,
Matthews,
WA........................................................ 2,750
Organic vs. Synthetic Fertilizer-Container Nursery Trials,
Sundquist, WA............................................. 4,575
Improved Nitrogen Utilization and Herbicide Reduction Through
Relay Intercropping, Tinkelberg, WA....................... 4,230
Life after CRP: The Conservation and Economic Benefits of
Improved Grassland Cover Using Managed-Intensive Grazing,
Cates, WI................................................. 4,100
Exploring Low-input Alternative for Watering Ewes in Winter,
Fyksen, WI................................................ 3,195
Northwood Farm Sustainable Raised Beef, Goodman, WI........... 5,000
Sustainable Mushroom Cultivation in the North for Disabled
Growers, Huebner, WI...................................... 4,055
An Analysis of Producing and Niche Direct Marketing Pasture-
Finished Beef, Wrehota, WI................................ 5,912
Tall Stature Grasses for Winter Grazing and Spring Calving,
Weber,
WY........................................................ 2,800
Question. Please summarize the achievements of the SARE program to
date.
Answer. In its ten-year history, SARE has funded 1,122 projects.
Five hundred of those projects are Research and Education projects--
including projects in the USDA/EPA co-funded Agriculture in Concert
with the Environment program--which are usually multi-disciplinary and
often multi-institutional; 497 are producer grants to individual
farmers or ranchers or small groups of producers to do on-farm
research, demonstration, or education; and 125 are projects in the
Professional Development Program funded with Smith-Lever 3(d) funds.
These 1,122 projects span a wide range of topics, farming systems,
and geography, all related to improving the scientific base and
practical knowledge about food and farming systems that are profitable,
protect the environment, and contribute to quality of life for people
and communities. Many if not most projects address multiple topics,
however a breakdown of project numbers by primary topic is as follows:
Approximately one-fourth of the projects address production of field or
horticultural crops, for example soil-enhancing cover crops, crop
rotation, ridge tillage, or crop diversification. Nearly one-fifth
address animal production systems on topics such as management-
intensive grazing, forage improvement, manure management, or less
capital-intensive poultry and hog production for small farmers. Nearly
one-fifth concern biologically-based IPM or other pest management
topics. Ten percent of the projects are primarily educational, in
addition to the requirement that each SARE research project include an
education/outreach component; another 11 percent provide educational
opportunities to field professionals--the 125 PDP projects. Eight
percent address marketing, economics or community development, such as
economic comparisons of different production systems, direct marketing,
or on-farm processing and other value-added opportunities that provide
jobs in local communities as well as improved profits for producers.
Five percent of SARE projects are primarily concerned with protection
of wildlife, riparian areas, and other natural resources. Another five
percent explore the integration of crops and livestock in farms or
ranches.
Many concrete impacts have resulted from these diverse projects.
For example, a survey of participants in a Nebraska project that worked
with more than 130 people on about 80,000 acres of farm and ranch land
found that sixty percent of participants increased the diversity of
commodities grown, thirty percent reported improved profitability,
forty percent reported decreased soil erosion, and fifty percent
reported improved wildlife habitat. A project re-introducing
agriculture and value-added marketing to small producers in northern
New Mexico is projected to bring them $100,000 per year in agricultural
income. A Michigan producer participating in a SARE project looking at
the ability of grass and legume filter strips to provide habitat for
beneficial insects while controlling nutrient runoff, saved $6-10 per
acre by reducing insecticide sprays. A New York grape producer saved
$31-36 per acre in reduced fungicide applications after learning to
monitor conditions with a weather station and computer model. These are
but a few of the ways that SARE project findings are contributing to
producer profits, resource stewardship, and vital communities.
Question. The fiscal year 1999 budget proposes that with the
additional funding proposed for SARE, emphasis will be given to helping
farmers and ranchers save money through grazing system improvements
that also protect natural resources. Why?
Answer. Grazing systems are one of several opportunities for SARE
in the coming years. Management-intensive grazing has been shown,
through dozens of research and demonstration projects funded by SARE
and others, to be an excellent strategy for producers to improve
profits, protect natural resources, and improve quality of life for
ranching families and communities. Traditional grazing systems turn
livestock loose on large pastures, where the animals often remain for
weeks at a time. In management-intensive grazing systems, graziers
place livestock in smaller paddocks and move the animals frequently
with the help of affordable, portable fencing. These grazing systems
reduce feed costs because farmers and ranchers do not have to grow or
purchase forage or grain year-round. Pastures require few or no inputs
of pesticides and allow natural recycling of manure. They also provide
a continuous soil cover while protecting wildlife habitat and important
ecosystems. Graziers can work fewer hours and spend more time with
their animals instead of worrying about field equipment and hauling
manure. Thus grazing systems offer a fine example of a win-win approach
where producers profit along with the environment and communities.
Other areas of great opportunity for SARE include soil health,
livestock waste management, crop and enterprise diversification, and
other marketing alternatives for family farms both small and large. In
each case, SARE funds will be used to study and extend these types of
win-win solutions.
binational agricultural research and development program (bard)
Question. The fiscal year 1999 budget proposes to increase funding
for the Binational Agricultural Research and Development Program (BARD)
from the fiscal year 1998 funding level of $500,000 to $1,500,000.
Given the fact that the budget proposes reductions in base programs
such as the Hatch Act, McIntire-Stennis Cooperative Forestry, the
Smith-Lever Act, EFNEP and Aquaculture Centers, the termination of
existing programs, and the elimination of special research and federal
administration grants in support of domestic needs, why is increased
funding for BARD a priority?
Answer. The $2 million requested for BARD would restore funding to
the fiscal year 1997 level. Restoration of the $2 million funding level
is requested because the Administration supports increasing the
proportion of agricultural research funding that is awarded by merit
review with peer evaluation, as 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. What agricultural research is currently being supported
with funding through BARD? Please give a description of the research
being funded, the amount of funds provided for each project, and who is
conducting the research.
Answer. The information follows.
Fiscal year 1997 projects
Regulation of Arabidopsis Glutamate Decarboxylase in Response to
Heat Stress: Modulation of Enzyme Activity and Gene Expression. Auburn
University. Locy, R.D., Cherry, J.H., Singh, N.K. $130,400
Farmer's Time Allocation Decisions in Different Institutional
Environments: A Household Perspective. University of California at
Davis. Chalfant, J.A., Sumner, D.A. $76,182
Control of Fertilization-Independent Development by the fie2 Gene.
University of California at Berkeley. Fischer, R.L. $120,900
Etiology of the Rugose Wood Disease of Grapevine and Molecular
Study of the Associated Trichoviruses. University of California at
Riverside. Rao, A.L.N. $124,900
Interactions of Cloud Proteins, Pectins and Pectinesterases in
Flocculation of Citrus Cloud. University of Georgia. Wicker, L., Kerr,
W.L. $124,900
Streptococcus iniae Infections in Trout and Tilapia: Host-Pathogen
Interactions, the Immune Response Towards the Pathogen and Vaccine
Formulation. University of Georgia. Evans, D.L. $133,200
Lek Behavior of Mediterranean Fruit Flies: an Experimental
Analysis. University of Hawaii. Shelly, T.E. $122,400
Molecular-Based Analysis of Cellulose Binding Proteins Involved
with Adherence to Cellulose by Ruminococcus albus. University of
Nebraska. Morrison, M.$142,660
Improving Methionine Content in Transgenic Forage Legumes. New
Mexico State University. Sengupta-Gopalan, C. $142,600
On-line Fault Detection and Diagnosis for Greenhouse Environment
Control. Cornell University. Albright, Louis D. $112,400
Use of Anti-Fungal Gene Synergisms for Improved Foliar and Fruit
Disease Tolerance in Transgenic Grapes. Cornell University. Reisch,
B.I., Kikkert, J.R. $133,820
Controlling Ethylene Responses in Horticultural Crops at the
Receptor Level. North Carolina State University. Sisler, E.C. $124,320
Prediction of Nitrogen Stress Using Reflectance Techniques. Texas
A&M University. Searcy, S.W. $127,400
Control of Bovine Anaplasmosis: Cytokine Enhancement of Vaccine
Efficacy. Washington State University. Palmer, G.H., Brown, W.C.
$143,230
Regulation of Avocado Resistance to Postharvest Pathogens by
Modulation of the Biosynthesis of Antifungal Compounds. Washington
State University. Browse, J. $109,900
Fiscal year 1996 projects
Functional Biogenesis of V-ATPase in the Vacuolar System of Plants
and Fungi. University of California at Berkeley. Schekman, R.W. $81,000
Enhancement of Baculoviruses' Insecticidal Potency by Expression of
Synergistic Anti-Insect Scorpion Toxins. University of California at
Davis. Hammock, B.D. $125,000
Genetic Diversity of Resistance Gene Clusters in Wild Populations
of Lactuca. University of California at Davis. Michelmore, R.W.
$125,000
Resistance to Tomato Yellow Leaf Curl Virus by Combining Expression
of a Natural Tolerance Gene and a Dysfunctional Movement Protein in a
Single Cultivar. University of California at Davis. Gilbertson, R.L.,
Lucas, W.J. $121,250
Mapping and Tagging by DNA Markers of Wild Emmer Alleles that
Improoove Quantitative Traits in Common Wheat. University of California
at Davis. Qualset, C.O., McGuire, P.E. $137,000
Biosensors for On-line Measurement of Reproductive Hormones and
Milk Proteins to Improve Dairy Herd Management. University of
California at Davis. Delwiche, M.J., BonDurant, R. $145,870
Creating and Characterizing Genetic Variation in Tilapia Through
the Creation of an Artificial Center of Origin. University of
California at Davis. Gall, G.A.F., May, B. $145,500
Molecular Genetic Analysis of Citric Acid Accumulation in Citrus
Fruit. University of California at Riverside. Roose, M. $125,000
Rhizosphere Ecology of Plant-Beneficial Microorganisms. University
of California at Riverside. Crowley, D.E. $130,430
Osmotin and Osmotin-Like Proteins as a Novel Source for
Phytopathogenic Fungal Resistance in Transgenic Carnation and Tomato
Plants. Purdue University. Hasegawa,, P.M., Bressan, R.A. $125,000
Study of the Basis for Toxicity and Specificity of Bacillus
thuringiensis Delta-endotoxins. Purdue University. Aronson, A. $113,630
Elicitor-Induced Response in Lycopersicon esculentum. Purdue
University. Martin, G.B. $125,000
Regulated Expression of Yeast FLP Recombinase in Plant Cells.
Purdue University. Lyznik, L.A., Hodges, T.K. $135,610
Ozone Altered Stomatal/Guard Cell Function: Whole Plant and Single
Cell Analysis. Pennsylvania State University. Pell, E.J., Assmann, S.
$135,400
Developing Nutritional-Management Protocols which Prevent Tibial
Dyschondroplasia. Pennsylvania State University. Leach, Jr. R.M., Gay,
C.A. $125,000
Identification of Staphylococcus aureaus Virulence Factors
Associated with Bovine Mastitis. Pennsylvania State University.
Sordillo, L.M., Wojchowski, D.M., Perdew, G.H. $142,000
Virus Synergy in Transgenic Plants. Cornell University. Palukaitis,
P., Zaitlin, M. $124,480
Role of Placental Lactogen in Sheep. Texas A&M University. Bazer,
F.W. $116,130
Creating and Characterizing Genetic Variation in Tilapia Through
the Creation of an Artificial Center of Origin. Virginia Polytechnic
and State University. Hallerman, E.M. $65,700
Question. What research will be supported with the $1.5 million in
fiscal year 1999 funding proposed for this program? Where will the
research be carried out?
Answer. There are eleven discipline areas within which awards will
be made using fiscal year 1999 funding. The discipline categories are:
(1) Agricultural Engineering; (2) Animal Production; (3) Animal
Protection; (4) Aquaculture; (5) Fruit Tree Crops; (6) Field & Garden
Crops; (7) Post Harvest; (8) Soil & Water; (9) Agricultural Economics;
(10) Cellular & Molecular Biology; and (11) Plant Protection. Research
supported by funding administered through CSREES for BARD is carried
out at land-grant institutions.
Question. How are BARD funds awarded?
Answer. 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 BARD 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, and 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 recommended
for funding. A binational Technical Advisory Committee (TAC) reviews
the recommendations of the peer review panels and policy
recommendations which the Executive Director, BARD Executive Staff,
presents to the binational BARD Board of Directors. All final decisions
regarding support of proposals are made by the Board of Directors.
Question. The prepared testimony indicates that low interest rates
and an increase in the cost of research have impeded the ability of
BARD to adequately meet the needs of each country's producers and
consumers. Please explain what increases in the cost of research have
been incurred and what needs are not being met.
Answer. Increases in the cost of research are due to various
factors, including the cost of complying with regulations, the use of
more sophisticated equipment, and the complexity of problems being
addressed. 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 Israeli agriculture. The generation of
new knowledge is an ongoing process, and 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). Fundamental research supported by BARD
provides the knowledge base needed to develop solutions to pressing
agricultural problems in the U.S. and in Israel.
Question. What level of interest was available off the BARD
endowment to support joint research efforts in each of the past three
fiscal years? Has this interest off the BARD endowment been used to
support research projects? If not, why? If yes, which research projects
were funded with the interest off the existing BARD endowment in each
of these years?
Answer. The level of interest has been approximately 7 percent on
the initial BARD endowment of $80 million and 6.9 percent on the
subsequent $30 million increase to the endowment to support joint
research efforts in the past three fiscal years. The cumulative funding
provided by BARD for projects awarded in fiscal years 1995 through 1997
is approximately $32.9 million. This amount is derived from
approximately $6.1 million from CSREES and $6.1 million in matching
funding from the Israeli government for a total of $12.2 million, and
approximately $20.7 million from the interest earned on the endowment.
Copies of the BARD Annual Scientific Reports for 1995, 1996, and 1997
are being provided to the Committee. The Reports include scientific
abstracts and other information about the BARD projects supported with
combined CSREES, Israeli, and endowment interest funds in those three
fiscal years.
national research initiative (nri) competitive grants program
Question. The prepared testimony indicates that NRI has expanded
the science base for the Hazard and Critical Control Point (HACCP)
approach to meat and poultry inspection. What HACCP requirements are
based on NRI-funded research?
Answer. Incidence of disease-causing microorganisms in eggs,
poultry, swine, cattle and shellfish, as well as the economic impact on
food exports, lead to NRI-funded research on development of strategies
to control, eliminate or prevent foodborne pathogens from entering the
food supply. Research is ongoing to develop improved means for pathogen
control and elimination, as well as determination through risk
assessment, what critical control points from ``farm to fork'' are
vulnerable. NRI has supported research to develop reduction strategies
for Salmonella on commercial poultry and swine farms, as well as
production systems; to understand the specific critical control points
from harvest to consumption, in Vibrio vulnificus from shellfish;
strategies are being developed to identify, then prevent or eliminate
E. coli contamination on the farm. Additionally, the NRI supported
research on HACCP-based quality assurance programs on table eggs and
the incidence of salmonellosis, and the potential impacts upon overall
food quality and international trade.
Question. The fiscal year 1999 budget proposes to fund NRI at $130
million, an increase of $32.8 million from the fiscal year 1998 funding
level. Please prioritize the specific increases requested for each
component of NRI-funded research.
Answer. Priority will be given in each of the specific components
to research topics that reflect national needs identified by
stakeholders and reflected in the Administration's proposed
initiatives. Further, a general priority of the NRI that applies to all
of the components is that of making research grants that are both
larger in awarded dollars and longer in duration while maintaining a
reasonable funding success rate. By so doing, the use of Federal
dollars is made more effective and the competitive process, for both
the NRI and the recipient institutions, is made more efficient. The NRI
also acknowledges an increase in sophistication of technological tools
and instrumentation available to scientists conducting research
relevant to agriculture. Such advances may allow for a broader scope to
some types of proposals, while also requiring substantially higher
levels of funding. In fiscal year 1999, NRI will be an important
component of the National Food Genome Initiative and the President's
Food Safety Initiative.
The requested increase in the Natural Resources and Environment
component would ensure that the research programs contained therein
were offered on a regular, annual basis, and that each program would be
able to attain a better success rate, which has ranged from as low as 6
to 15 percent for some programs. The research areas currently supported
are critical for sustainability of agriculture and forestry. They will
contribute both fundamental and mission-linked information for
improving understanding of: (1) plants as they respond to their
environment, both normal and stressed by nature and man-made
pollutants; (2) soils, the basic medium upon which all terrestrial
organisms depend and where physical structure, chemistry, biology, and
hydrology interact in ways that ultimately determine whether natural
and managed soil and environmental quality are maintained and improved;
(3) ecosystems, where an understanding of the flow of energy and the
cycling of nutrients is requisite to the development of management
strategies to ensure the sustainability and health of both natural and
managed ecosystems; and (4) water quality and availability, as all
agricultural and forestry practices ultimately influence the nation's
water resource. A final priority is that of developing a new research
area to enhance understanding weather and climate interactions with
agricultural systems. Such a program would be complementary to the
above areas, address current agricultural problems such as particulate
pollution, and lead to improved management.
The increase requested for the Plant Division would be used for
high priority research areas in Food Genomics; Energy Conversion by
Plants; Synthesis of Plant Products; Plant/Microbe Interactions; Insect
Community/Plant Habitat Interactions and; Assessment of Risks of
Biological Control Agents. The increase will provide additional
resources for plant genome research that will focus on mapping,
identifying, and understanding the function and control of genes in
agriculturally important plants, with emphasis on functional genomics,
identification of expressed sequence tags and quantitative trait loci,
development of comparative and physical genomic maps, technology, and
bioinformatics. This knowledge is the key that will permit the United
States to develop new genetic technologies for improvements in yield,
pest resistance, composition, and quality of the domestic agricultural
output. Increased funding will support research metabolic pathways in
plants that will enable the genetic engineering for designing and
altering agriculturally important plants for enhanced and new
functions. Increased funding will answer questions about (1) how the
composition and ecology of microbial communities surrounding a plant
and the microbial flora inside a plant affect plant processes, such as
disease resistance; beneficial plant/microbe interactions; response to
environmental factors; water and nutrient uptake by the plant and; (2)
the genetic and metabolic pathways and controls in both plants and
microbes that govern these processes Increased funding will focus on
understanding ecological interactions between insect and plant
communities to enhance development of new pest control strategies for
US agriculture. For example, insects developing in non-crop plants
(e.g., weeds, ornamentals, and native vegetation) can significantly
impact their importance in many agroecosystems. In addition, funding
will be used to assess the possible effects of classical biological
control on non-target species.
In the area of Nutrition, Food Safety and Health, priority will be
given to research to develop strategies to prevent or eliminate
disease-causing micro-organisms, naturally occurring toxicants, or drug
residues from entering our food supply; to develop or improve current
sampling procedures for detection of disease-causing microorganisms,
naturally occurring toxicants or drug residues, expected to lead to
rapid, reliable and practical quantification methods for microbial
agents, naturally occurring toxicants or drug residues; to develop
approaches to and models for risk assessment in support of food safety;
examine the role of livestock/poultry manures and their applications in
the transmission of foodborne diseases; examine the mechanisms
responsible for antibiotic resistance in livestock and poultry that
could lead to foodborne illness; identify obstacles to adopting
appropriate food safety habits, and develop recommendations for
interventions to improve safe food consumption among consumers. All
these research areas are complementary to the President's Food Safety
Initiative.
In the Animals component, the proposed increase will provide
additional resources for high priority animal genome research such as
functional genomics, comparative and physical mapping, identification
of expressed sequence tags and economic trait loci and bioinformatics.
The research would also include whole genome sequencing of animal
pathogens, previously unsupported in the NRI due to insufficient funds.
These research areas would be complementary to that of the National
Food Genome strategy. Additional high priority animal health research
will also be supported that responds to disease challenges posed by new
and re-emerging diseases that threaten US animal agriculture.
In the Markets, Trade and Rural Development component, the Markets
and Trade program provides priority consideration for agricultural
competitiveness, and technology and sustainability. To these, a fourth
priority would be added dealing with natural resource economics. The
program has purposely limited the priority areas initiatives because of
the relatively small size of the program. Expanding the program in this
way would invite proposals that examine many of the critical
environmental issues that are resulting from changes in the structure
of various agricultural sectors, one example being increased
concentration in the food animal production sector. The Rural
Development Program currently places priority on research goals that
deal with understanding the forces affecting rural areas and on the
design and evaluation of new approaches to rural development. Because
of resource constraints, a lower priority has been placed on
understanding the quality of life aspects that are important to and
result from living and working in rural areas. Increased funding would
permit an expansion to capture research goals that address in a more
direct manner, quality of life characteristics of rural areas, and how
those characteristics might be improved.
The proposed increase for the Processing for Adding Value or
Developing New Product components would allow additional resources to
be directed toward: metabolic engineering of plants and microorganisms
to produce value-added products from agriculture; new crop development,
focusing on genetic and agronomic issues in addition to the current
emphasis of value-added product development; greater emphasis on
research of foods and food systems with health promoting properties;
and additional resources directed toward development of novel food
manufacturing processes, including greater process automation and
control, to strengthen competitiveness of the US food industry.
An increase in the NRI will also allow additional high priority
Agricultural Systems research to be supported. With the current level
of funding, the NRI's Agricultural Systems Program can only support ten
percent of the proposal submissions.
Question. What are the returns on NRI-funded research? What is the
documentation for these findings?
Answer. The cost-effectiveness of the NRI or individual research
projects has not been specifically estimated. However, the benefits of
public investment in agricultural research, through programs such as
the NRI, have consistently been shown to outweigh the costs.
For example, work by the Economic Research Service (ERS) indicates
a return on investment for agricultural research of 20-60 percent. The
ERS further concludes that agricultural basic research tends to have
twice the benefits to society, with returns on investment of 60-90
percent as compared to more applied agricultural research. Publicly
funded research was found to have twice the return as compared to
privately funded research. A report by the Council of Economic Advisors
further supports the link between research and positive economic and
social returns, citing consistent positive returns from research.
Agriculture productivity has increased at an average annual rate of
1.94 percent for the period of 1948-1994, one of the highest rates of
productivity growth of all U.S. industries. For the period of 1990-
1994, this rate of productivity increase was 2.77 percent. Publicly
funded research has been a major contributor to this increase in
productivity, not only by providing higher yielding crop varieties,
better livestock breeding practices, more effective fertilizers and
pesticides, and better farm management practices, but also through
research that keeps productivity from falling, such as by overcoming
pesticide resistence. Agriculture research not only benefits the farmer
through decreased costs and higher profits, but also the nation, and
low-income people in particular, through lower food prices. In
addition, publicly funded agricultural research has been broadened to
impact environmental protection and food safety.
The sources for these findings are Economic Research Service,
``Agricultural Productivity in the United States,'' Agriculture
Information Bulletin Number 9510, January 1998, USDA, Economic Research
Service, ``The Value and Role of Public Investment in Agricultural
Research,'' Staff Paper Number 9510, May 1995, and the Council of
Economic Advisors ``Supporting Research and Development to Promote
Economic Growth: The Federal Government's Role,'' October 1995.
extension indian reservation program
Question. An increase in funding is requested for fiscal year 1999
to expand the presence of extension agents on Indian Reservations. How
many extension agents are currently funded and which reservations are
being served? How many additional extension agents will be funded with
the increased funding requested and where will they be located?
Answer. Currently we have 25 agents in 16 states. They serve the
following reservations:
Alaska: Tanana Chiefs Council
Arizona: Colorado River; Hopi; San Carlos Apache
Arizona/New Mexico/Utah: Navajo (Window Rock); Navajo (Ship Rock)
Florida: Seminole
Idaho: Fort Hall
Mississippi: Choctaw
Montana: Flathead; No. Cheyenne; Blackfeet; Ft. Belknap
North Carolina: Cherokee
North Dakota: Ft. Berthold
New Mexico: Jicarilla Apache; Zuni
Nevada: Pyramid Lake & Walker River (one agent)
Oklahoma: Muscogee
Oregon: Warm Springs
South Dakota: Rosebud; Pine Ridge
Washington: Chehalis; Colville
Wyoming: Wind River
The requested increase will be used to provide 31 additional agents
for some of the unmet needs, as follows:
Agents
State Needed
Alaska............................................................ 3
Arizona........................................................... 14
California........................................................ 2
Colorado.......................................................... 2
Idaho............................................................. 2
Maine............................................................. 1
Minnesota......................................................... 2
Montana........................................................... 4
Nevada............................................................ 3
New Mexico........................................................ 9
Oklahoma.......................................................... 2
South Dakota...................................................... 8
Utah.............................................................. 4
Washington........................................................ 4
Wisconsin......................................................... 2
Wyoming........................................................... 1
We have a backlog of about 20 unfunded projects from Arizona,
Colorado, Idaho, Minnesota, Montana, Oklahoma, South Dakota, Wisconsin,
and Wyoming as a result of previous competitive applications. These
will be accorded some priority in any subsequent competition. We will
issue a request for (competitive) proposals when an increase in funding
is received. The requested increase for EIRP in fiscal year 1999
supports the CRAT team recommendations to expand agricultural
opportunities to small-scale and disadvantaged farmers.
1890 facilities program
Question. Additional funds are requested for fiscal year 1999 for
the 1890 Facilities Program to allow facilities at these institutions
to be more comparable to the facilities found on campuses of the 1862
land-grant universities. Have you done an inventory of the facilities'
improvements required at each of the 1890 Institutions to achieve this
goal? If so, please provide the committee with a list of facilities'
needs by institution and the funding required to meet these needs.
Answer. The agency has not yet conducted an inventory of the
facilities' needs required for the use of the proposed fiscal year 1999
funds. The agency has instructed the 1890 Universities to update its
inventory of needs for the use of the proposed funds. The agency will
issue, in April 1998, a request for a Five-Year Plan for the
development of facilities. The Five-Year Plan details the proposed use
of the funds over a five year period. Each construction or renovation
project must have a statement of need which describes the factors or
circumstances which led to the institution's need for the planning,
construction, renovation or acquisition project proposed. Also, the
plan must show the procedures to be used to accomplish the goals of the
individual project. Tentative timetables are developed for--
accomplishing each goal. A proposed construction budget is submitted,
indicating the sources of funding--federal and/or non-federal--for the
completion of the project. A review panel must approve each Five-Year
Plan, before a grant is awarded to the institution. The increase is
consistent with the CRAT team recommendations.
Question. Please provide how the 1890 facilities funds were
allocated, by institution, in each of fiscal years 1997 and 1998, and
how much each institution would receive if the program is funded at the
fiscal year 1999 request level.
Answer. The 1890 facilities funds were allocated in fiscal year
1997 and fiscal year 1998 as shown on the following table. The
allocation for fiscal year 1999 has not yet been determined. This will
be determined when the fiscal year 1999 budget is approved.
COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE 1890
EXTENSION AND RESEARCH FACILITIES PROGRAM
------------------------------------------------------------------------
Allocated fiscal year--
Institutions -------------------------------
1997 1998
------------------------------------------------------------------------
Alabama:
Alabama A&M University.............. $403,755 $403,755
Tuskegee University................. 403,755 403,755
Arkansas: University of Arkansas at Pine 387,818 387,818
Bluff..................................
Delaware: Delaware State University..... 310,482 310,482
Florida: Florida A&M University......... 408,640 408,640
Georgia: Fort Valley State University... 448,874 448,874
Kentucky: Kentucky State University..... 497,465 497,465
Louisiana: Southern University.......... 379,624 379,624
Maryland: University of Maryland Eastern 356,775 356,775
Shore..................................
Mississippi: Alcorn State University.... 392,395 392,395
Missouri: Lincoln University............ 495,381 495,381
North Carolina: North Carolina A&T State 511,065 511,065
University.............................
Oklahoma: Langston University........... 399,604 399,604
South Carolina: South Carolina State 394,830 394,830
University.............................
Tennessee: Tennessee State University... 455,003 455,003
Texas: Prairie View A&M University...... 588,339 588,339
Virginia: Virginia State University..... 430,885 430,885
-------------------------------
Subtotal.......................... 7,247,040 7,247,040
Federal Administration.................. 301,960 301,960
-------------------------------
Total............................. 7,549,000 7,549,000
------------------------------------------------------------------------
Question. Please provide a list of the facility improvements funded
through the 1890 Facilities Program for each of the past two fiscal
years and for fiscal year 1998 to date, indicating the amount of funds
provided by institution and the facilities funded.
Answer. The U.S. Department of Agriculture 1890 Facilities Program
is authorized to provide Federal support in the design and construction
of research and education facilities that assist in the discovery of
new knowledge and the delivery of relevant and timely information to
solve production problems and other problems of importance to diverse
audiences served by the eligible universities. In addition to
traditional programs, these institutions provide an emphasis on small
farmers and other limited resource families, an important focus for the
Department in the implementation of the Civil Rights Implementation
Team recommendations.
Research and education programs are focused on the five outcomes
adopted by the Research, Education, and Economics (REE) Mission Area
and goals of the Cooperative State Research, Education, and Extension
Service (CSREES) Agency strategic plans (An agricultural system that is
highly competitive in the global economy; A safe and secure food and
fiber system; A healthy well-nourished population; An agricultural
system which protects natural resources and the environment; and
Enhanced economic opportunity and quality of life for Americans). This
ensures that the 1890 facilities programs focus on issues of national
importance.
Completed and planned facilities will focus research and education
efforts on issues, such as: water quality; food safety; nutrition;
community development, particularly the rural/urban interface; plant
and animal biotechnology, including forestry; small ruminant
management; the use of distance and mobile education technologies;
youth programming; plant and animal genome research; aquatic
entomology; etc. Finally, the facilities will also provide training
opportunities for minority undergraduate and graduate students who will
become future scientists and agricultural leaders, with the potential
to take advantage of employment opportunities with the U.S. Department
of Agriculture. The broad scope of these activities is documented in
the Five year plans of work developed by each university for approval
by CSREES before facility funds are allocated. Program/project
monitoring is possible through review of annual facility plans and the
program plans and reports submitted for agency review as part of the
Government Performance and Results Act accountability process initiated
by the agency and land-grant partners.
Facilities Improvements as follows.
1890 FACILITIES PROGRAM
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal years--
----------------------------------------------------------------------------------------------------------------
Total cost of
Institutions approved 5-yr. 1998 proposed Status of approved 5-yr. plan \3\
plan \1\ (1993- 1996 appropriated funds 1997 appropriated funds projects \2\
97)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama:
Alabama A&M University....... $2,093,113 $416,242 $403,755 .............. --Major purchases have been made for water
1. Animal Science Research and 1. Animal Science Research and quality equipment, computer hardware/fiber
Demonstration Facility. Demonstration Facility. optics lines and wiring for networking
2. Food Science & Nutrition 2. Food Science & Nutrition improvements.
Demonstration Laboratories. Demonstration Laboratories. --The Alternative Crops facility was
3. Downlinking & networking 3. Downlinking & networking completed.
development. development. --Renovations in the Family and Consumer
4. Construct Agricultural Mechanical 4. Construct Agricultural Mechanical Sciences Management Laboratory, Animal
Research Laboratory. Research Laboratory. Physiology Laboratory, and Research and
5. Plant, food & animal laboratory 5. Plant, food & animal laboratory demonstration facilities.
equipment. equipment.
Tuskegee University.......... $2,093,113 $416,242 $403,755 .............. --Caprine research facility completed.
1. Construction/renovation Woodruff 1. Asbestos Removal Replacement of --Replacement of the Campbell Hall Research
Lab. Campbell Hall roof. building's roof completed.
--Renovation of the food processing
laboratories & the construction of the
Extension Activities Center in progress.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Arkansas: University of Arkansas $2,010,493 $399,812 $387,818 .............. --Laboratory equipment purchased for
Pine Bluff. 1. Construct facility for 1. Construct slaughter house for swine aquaculture and small ruminant research
horticulture, aquaculture, human demonstration program. programs.
nutrition, child development, and 2. Support construction of an --Aquaculture facilities renovated.
small ruminant (sheep) research and aquaculture demonstration processing --Extension complex completed.
improve infrastructure. and marketing facility. --Furnishings and equipment for new Extension
2. Construct mixing pad for 3. Repair station infrastructure complex purchased.
agricultural chemicals. including roads and ponds.
3. Contract engineering design for 4. Purchase and install growth chamber
fish processing/marketing building. for agronomy and horticulture
research.
5. Purchase irrigation accessories for
agronomy area and farm.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Delaware: Delaware State $1,607,900 $319,672 $310,482 .............. --Accumulating funds.
University. Expansion of Herbarium Expansion of Herbarium and Small --Installed equipment in new extension
Animal Laboratory building.
--Installed feed storage handling system.
--Mobile teaching unit operational.
--Pond construction complete.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Florida: Florida A&M University.. $2,118,441 $421,279 $408,640 .............. --Accumulating funds.
1. Research & Extension Complex. 1. Research and Extension Complex. --Completed research and extension complex.
2. Plant and soils research equipment. 2. Teleconference Center. --Renovated entomology laboratory.
3. Pavilion. --Installed irrigation system.
4. Environmental Center installation. --Renovated ponds.
5. Animal science research equipment.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Georgia: Fort Valley State $2,327,016 $462,757 $448,874 .............. --Accumulating funds.
University. 1. Small Ruminant Research and 1. Small Ruminant Research and --Under construction--Small Ruminant Research
Extension Center. Extension Center. & Extension Center.
2. Research/Extension Education 2. Research/Extension Education --Completed the Communication Production
Support Center. Support Center. Center.
3. Research/Extension Human 3. Research/Extension Human
Development and Family Life Center. Development and Family Life Center.
4. Communication Production Center.
5. Technology Development Transfer
Center.
6. Multipurpose Agricultural
Demonstration Pavilion.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Kentucky: Kentucky State $2,578,915 $512,850 $497,465 .............. --Horticulture and Entomology Laboratories in
University. 1. Equipment for the Atwood Research 1. Pond Site (new construction). the Atwood Research Facility completed.
Facility. 2. Research farm (multi-purpose --Telecommunications equipment was purchased
2. Renovate Water Quality lab. building). and installed in four rooms in the
3. Equipment for Extension building. Cooperative Extension Building.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Louisiana: Southern University... $1,968,017 $391,365 $379,624 .............. --Accumulating funds.
1. Renovation of livestock pavilion. 1. Renovation of livestock pavilion. --Contract awarded for renovation of
2. Multi-purpose Research & 2. Multipurpose Research & livestock pavilion.
Demonstration Center Demonstration Center
3. Extension Telecommunication Center. 3. Extension Telecommunication Center.
4. Equipment purchases.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Maryland: University of Maryland $1,849,563 $367,809 $356,775 .............. --Accumulating funds.
Eastern Shore. 1. Food Science Technology, Research & 1. Food Science Technology, Research & --Major equipment purchased.
Extension Center. Extension Center.
2. The Lifespan Human Development 2. The Lifespan Human Development
Center. Center.
3. Major equipment installation.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mississippi: Alcorn State $2,034,222 $404,531 $392,395 .............. --Accumulating funds.
University. 1. Planning the construction of 1. Construction of Research & --Construction underway on Research &
Research and Extension building. Extension building. Extension building.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Missouri: Lincoln University..... $2,568,115 $510,702 $495,381 .............. --Construction of Phase II of Allen and
1. Construction of Phase II of Allen 1. Construction of Phase II of Allen Foster Halls was completed.
and Foster Halls. and Foster Halls.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Carolina: North Carolina $2,649,257 $526,830 $511,065 .............. --Accumulating funds.
A&T State University. 1. Renovation of Coltrane Hall. 1. Renovation of Coltrane Hall. --Constructed off-campus farm storage
2. Construction of Extension/Research 2. Construction of Extension/Research building.
office building at the University office building at the University --Constructed second floor to Coltrane Hall
Farm Complex. Farm Complex. for Extension office complex.
3. Renovation of Ward Hall. 3. Renovation of Ward Hall. --Established an Extension/Research
4. Renovation of Analytical and Food & 4. Renovation of Layer and Broiler Telecommunications studio.
Nutrition Labs. Facilities.
5. Scientific equipment purchases. 5. Biotechnology purchase (growth
6. Construct building for research chamber and accessories for plant
into adaption of small machinery to stress studies).
small scale farming. 6. Telecommunications studio.
7. Telecommunications studio.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Oklahoma: Langston University.... $2,071,598 $411,963 $399,604 .............. --Accumulating funds.
Construction of Research and Extension 1. Construction of Research &
building. Extension building.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
South Carolina: South Carolina $2,046,844 $407,041 $394,830 .............. --Construction underway on extension
State University. Renovate extension facility Renovate extension facility. facility.
--Purchase and installation of distance
education equipment underway.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Tennessee: Tennessee State $2,358,790 $469,075 $455,003 .............. --Accumulating funds.
University. 1. Construct Research & Extension 1. Construct Research & Extension
Facility. Facility.
2. Purchase land for research farm. 2. Purchase land for research farm.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Texas: Prairie View A&M $2,958,522 $588,339 $570,689 .............. --Constructed office and training complex.
University. 1. Install irrigation system in 1. Purchase research laboratory --Purchased equipment for training complex.
research plots. equipment.
2. Install security fencing around 2. Purchase equipment for Abattoir.
research plots. 3. Purchase communications equipment.
3. Install animal waste disposal 4. Run satellite (teleconferencing)
system. cabling.
4. Install environmental plant growth 5. Renovate and upgrade bio-safety/
chambers. surgery and environmental chamber
5. Construction of multi-purpose labs at International Dairy Goat
pavilion. Research Center (IDGRC) and other
6. Renovate facility and equipment in general repairs and replacements in
the Abattoir. the IDGRC.
7. Renovate facility and equipment in
creamery.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Virginia: Virginia State $2,233,761 $444,211 $430,885 .............. --Accumulate funds.
University. 1. Construct Extension building 1. Renovate buildings on university --Major equipment purchased and installed.
(office complex). farm. --Satellite downlinking equipment installed
2. Renovate buildings on university 2. Purchase major equipment for and in use.
farms. distance education. --Renovated research meat goat building.
3. Water quality and aquaculture 3. Purchase major research equipment. --Construction of Extension Office Complex
equipment. 4. Renovate research storage building. has been completed. Building occupied.
4. Further develop the multi-purpose --Aquaculture equipment installed.
pavilion at the university farm. --Multi-purpose pavilion completed.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ CSREES funding of the approved five-year plan is contingent upon the appropriation of funds for the 1890 Facilities Program.
\2\ Fiscal year 1998 funds have not been allocated to the Universities to date. Waiting review of rules and guidelines by Office of General Counsel.
\3\ In many cases, 1890 Institutions are required by State law to have all funding in-hand before construction may begin; for that reason, construction accomplishments do not correspond to
funds provided through fiscal year 1998; i.e., Institutions must ``accumulate'' funds before starting projects.
Question. How are 1890 Facilities Program funds allocated?
Answer. The distribution is as follows for the 1890 Facilities
Program: 4 percent for Federal administration; of the remainder 60
percent will be distributed equally and 40 percent will be distributed
based on the Section 1444 formula of the 1977 Farm Bill, as amended.
Sec. 1447 states the following:
A sum equal to 4 percent of the total amount appropriated each
fiscal year under this section shall be allotted to the Cooperative
State Research, Education, and Extension Service of the Department of
Agriculture for administrative, technical, and other services, and for
coordinating the extension work of the Department of Agriculture and
the several States.
Of the remainder, 20 percent shall be allotted among the eligible
institutions in equal proportions; 40 per centum shall be allotted
among the eligible institutions in the proportion that the rural
population of the State in which each eligible institution is located
bears to the total rural population of all the States in which eligible
institutions are located, as determined by the last preceding decennial
census; and the balance shall be allotted among the eligible
institutions in the proportion that the farm population of the State in
which each eligible institution is located bears to the total farm
population of all the States in which the eligible institutions are
located, as determined by the last preceding decennial census.
higher education programs
Question. Please provide the Committee with a report on each of the
CSREES higher education programs, indicating the institution receiving
grants under each program and an assessment of how each program is
meeting its objectives.
Answer. The information follows.
Higher Education Challenge Grants Program
Institutions funded in fiscal year 1997:
University of Arizona
University of California--Davis (2) \1\
---------------------------------------------------------------------------
\1\ Number indicates grants awarded.
---------------------------------------------------------------------------
University of Connecticut
University of Georgia
University of Hawaii at Manoa (2)
University of Idaho (2)
Purdue University, Indiana (2)
Iowa State University (2)
Kansas State University (3)
University of Kentucky
Louisiana State University
University of Missouri--Columbia (3)
University of Nebraska
Rutgers--The State University of New Jersey
New Mexico State University
Cornell University, New York (2)
North Carolina State University
Ohio State University (2)
Cameron University, Oklahoma
Oklahoma State University
Oregon State University
Pennsylvania State University
Southwest Texas State University
Texas Tech University
University of Vermont
Virginia Polytechnic Institute & State University (3)
Washington State University (3)
University of Wisconsin--River Falls (2)
The Challenge Grants Program's objective 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 the entire
four-year academic community, making it the centerpiece of all USDA
teaching grants programs. However, in spite of exciting projects that
demonstrate its worth, only approximately 45 projects can be funded
each year at the current level of funding. During the eight years of
the program only 23.8 percent of proposals could be funded, in spite of
many more worthy and needed projects.
Hispanic-Serving Institutions Education Grants Program
Institutions funded in fiscal year 1997:
Central Arizona College
California State University, Los Angeles
California State University, Bakersfield
Porterville College, California
Rancho Santiago College, California
Trinidad State Junior College, Colorado
Miami-Dade Community College, Florida
Albuquerque Technical Vocational Institute, New Mexico
University of New Mexico
Eugenio Maria De Hostos Community College, New York
Interamerican University of Puerto Rico
Southwest Texas Junior College
Texas A&M University--Kingsville
The Hispanic-Serving Institutions Education Grants Program was
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.
1890 Institution Capacity Building Grants Program
Institutions funded for teaching projects in fiscal year 1997:
Alabama A&M University (2)
University of Arkansas-Pine Bluff (3)
Florida A&M University (4)
Southern University, Louisiana
University of Maryland-Eastern Shore (2)
Alcorn State University, Mississippi (2)
Lincoln University, Missouri
North Carolina A&T State University (2)
South Carolina State University (2)
Prairie View A&M University, Texas
Virginia State University (3)
Institutions funded for research projects in fiscal year 1997:
Alabama A&M University (2)
Tuskegee University, Alabama (2)
Delaware State University
Fort Valley State University, Georgia (3)
Kentucky State University
Lincoln University, Missouri
North Carolina A&T State University
Langston University, Oklahoma (3)
Prairie View A&M University, Texas (2)
4The 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 the proposal
and carrying out the project.
Multicultural Scholars Program
Grants are awarded every two years. Thus, institutions funded in
fiscal year 1997, with both 1996 and 1997 funds, are:
Alabama A&M University
University of Arkansas, Fayetteville
California Polytechnic State University--San Luis Obispo
California State University, Fresno
University of Florida
University of Hawaii at Manoa
University of Idaho
University of Illinois, Urbana
Purdue University, Indiana
Michigan State University
Rutgers University, New Jersey
New Mexico State University
Cornell University, New York
University of North Dakota
North Dakota State University
Oklahoma State University
Pennsylvania State University
Seton Hill College, Pennsylvania
South Dakota State University
Tennessee State University
University of Vermont
Virginia Polytechnic Institute & State University
University of Wisconsin-River Falls
University of Wisconsin-Stout
The Multicultural Scholars Program ultimately aims to increase the
utilization 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 under-represented in the food and agricultural sciences for
careers in agriscience and agribusiness. The program accomplishes these
goals by providing grants to universities for undergraduate
scholarships for outstanding students from such underrepresented
groups. The program is open to all colleges and universities. Since the
program began in 1994, participating colleges and universities have
provided 206 scholarships.
USDA National Needs Graduate Fellowships Program
Grants are awarded every two years. Thus, institutions funded in
fiscal year 1998, with both 1997 and 1998 funds, are:
University of Arkansas, Fayetteville
University of Arizona
University of California, Davis
University of Florida
University of Georgia
Indiana University
Iowa State University (4)
University of Illinois, Urbana (3)
Purdue University (5)
Kansas State University
University of Kentucky
Worcester Polytechnic Institute, Massachusetts
Michigan State University (3)
University of Minnesota, St. Paul (6)
University of Missouri--Columbia (3)
North Carolina State University (3)
North Dakota State University
University of Nebraska--Lincoln (2)
Cornell University, New York (5)
Ohio State University
Pennsylvania State University (2)
Texas A&M University
Virginia Polytechnic Institute & State University (3)
University of Wisconsin, Madison (3)
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.
Approximately 1,028 Fellows have been trained within these areas of
expertise under the Fellowships Program.
The program also provides competitive, special international study
or thesis/dissertation research travel allowances for a limited number
of current USDA Graduate Fellows. In 1997, seven Fellows from the
following institutions were awarded funds for such international study:
Indiana University; Iowa State University; Michigan State University;
Purdue University; Cornell University; Oregon State University; and,
Pennsylvania State University.
Tribal Colleges Endowment Fund and Tribal Colleges Education Equity
Grants Program
All 29 tribally controlled Land-Grant Institutions were funded in
the Tribal Colleges Endowment Fund and the Tribal Colleges Education
Equity Grants Program in fiscal year 1997. They are:
Bay Mills Community College, Michigan
Blackfeet Community College, Montana
Cankdeska Cikana Community College, North Dakota
Cheyenne River Community College, South Dakota
College of the Menominee Nation, Wisconsin
Crownpoint Institute of Technology, New Mexico
D-Q University, California
Dine Community College, Arizona
Dull Knife Memorial College, Montana
Fond du Lac Tribal and Community College, Minnesota
Fort Belknap College, Montana
Fort Berthold Community College, North Dakota
Fort Peck Community College, Montana
Haskell Indian Nations University, Kansas
Institute of American Indian Arts, New Mexico
Lac Courte Oreilles Ojibwa Community College, Wisconsin
Leech Lake Tribal College, Minnesota
Little Big Horn College, Montana
Nebraska Indian Community College, Nebraska
Northwest Indian College, Washington
Oglala Lakota College, South Dakota
Salish Kootenai College, Montana
Sinte Gleska University, South Dakota
Sisseton Wahpeton Community College, South Dakota
Southwest Indian Polytechnic Institute, New Mexico
Standing Rock College, North Dakota
Stone Child Community College, Montana
Turtle Mountain Community College, North Dakota
United Tribes Technical College, North Dakota
The Tribal College Endowment Fund distributes interest earned by an
endowment established for the 1994 Land-Grant Institutions (29 Tribally
controlled colleges) as authorized in the Equity in Education Land-
Grant Status Act of 1994. The Endowment Fund enhances education in
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. Interest earned in fiscal year 1997 was
$451,397. After a 4 percent set-aside for administration, the remaining
funds are distributed by formula: 40 percent in equal shares and 60
percent based on student count.
The Tribal Colleges Education Equity Grants Program is designed to
strengthen higher education instruction in the food and agricultural
sciences at 1994 Land-Grant Institutions. Projects focus on
undergraduate and/or graduate studies in the food and agricultural
sciences in the same areas as the Endowment Fund. Each institution
receives $50,000.
small farm initiative
Question. Describe in more detail the Small Farms Initiative
proposed to be funded at a level of $4 million for fiscal year 1999.
Answer. The Initiative will support multi-functional, mutually
reinforcing research and extension activities that address high
priority needs of small farmers as identified by the National Small
Farm Commission, USDA's National Plan for Small Farms, and participants
in the 1996 National Small Farm Conference. These high priority needs
include:
--Research that focuses on solutions to production, environmental
protection, and processing problems that demand low capital
inputs, but build on small farmers' management, labor, and
entrepreneurial skills;
--Research and extension programs that help small farmers build
alternative markets for their products and develop value added
products;
--Education and extension programs that small farmers can use to
enhance their entrepreneurial skills and business acumen;
--Extension programs that focus on developing farmer networks to
enhance the flow of information and knowledge both to and from
USDA and the Land Grant system and among farmers; and
--Educational and extension programs directed at the specific needs
of new or beginning farmers.
CSREES will apply the lessons learned in previous research,
education and extension programs to build a grass-roots-driven,
participatory program that involves farmers, non-governmental
organizations, USDA, other federal and state agencies, and all of the
Land Grant partners in program development and delivery. These programs
will:
--Involve farmers in every aspect of program development, delivery
and evaluation, including serving on review teams, conducting
on-farm research, and taking leadership of farmer networks;
--Include non-governmental organizations that represent or work
closely with small farmers in program development to build a
sustainable public-private sector partnership;
--Bring women farmers, minority farmers, farm youth, socially
disadvantaged farmers, and physically challenged farmers into
the mainstream of program activities; and
--Build on the research, education and extension strengths of the
1994, 1890 and 1962 Land Grant partners to ensure the program
meets local needs.
The structure of the CSREES program will be frugal with taxpayers'
money while ensuring representation from a broad sector of the
government and non-government community and targeting local needs.
CSREES will develop a structure for program delivery that:
--Keeps operating costs down by using existing structures where
possible and relying to the maximum degree possible on new
cost-saving technologies to administer the program;
--Encourages regional flexibility in organization and program content
to meet local needs;
--Uses one or more virtual centers or consortia, including both Land
Grant and non-governmental organizations, to administer program
activities; and
--Relies heavily on competitive grants with 100 percent nonfederal
match encouraged for commodity-or location-specific activities.
Question. Why is this new initiative needed?
Answer. Small farms are an important part of the total agricultural
sector. About 1.4 million of the nation's 1.9 million farms are small
farms. Small farmers hold about one-third of the nation's farm land.
Small farms complement and contribute to the productivity of mid-
and large-sized farms and agribusinesses. For example, a medium-sized
feedlot averages 10,000 head of cattle. The feedlot operator depends on
thousands of cow/calf operations, each with an average of 49 head of
cattle, to provide the feeder calves for his feedlot.
Small farms often lead the way in new product development. For
example, the fastest growing sectors of the agricultural market in the
United States today are the organic and natural food markets. Small
farms led the way in both areas and contribute most of the production.
Small farms enhance the quality of life for millions more Americans
and protect natural resources for the entire nation. Small farms play a
dynamic and important role in maintaining and stabilizing rural
communities. Small farmers are often major clients of the entire
business community in rural areas. Their tax dollars are critical to
the entire community.
Small farms also enhance the quality of life for urban communities.
Small farms are often the only productive land use that can serve as a
buffer between high density population centers and rural areas. They
contribute significantly to the quality of the urban diet by providing
fresh, high-quality, diverse produce through direct markets to urban
residents.
Small farms protect resources that serve all Americans. They
provide open space for wildlife habitat, water recharge and the human
need for contact with nature.
Small farms have special and varied needs and new research,
education and extension programs are required to address these needs.
Small farms are not failed large farms. Small farmers are resourceful
entrepreneurs who produce valuable agricultural products using more
limited fiscal, human and land resources than their larger scale
neighbors. Because they have fewer resources available to them, they
have special research, education and extension needs.
Small farms differ widely from state to state and even within the
same state. Small farmers include many different cultural and social
groups. For example, language can be a barrier for some and these
groups need information available to them in their own languages. Some
small farmers have limited educational backgrounds. They also have
special information needs. Education and extension programs must
address these multiple groups of clients.
Small farms produce an enormous range of products and many of them
are products for which the existing research base is not well
developed. Organic production provides one example. Relatively little
research-based information is available for organic producers.
This Initiative will help address the issues raised by the National
Small Farm Commission and the USDA Civil Rights Action Team. All of the
priority needs that this Initiative will address are prominent in the
Report of the National Small Farm Commission. Many of the programs and
activities that this Initiative will fund will address the USDA Civil
Rights Action Team's ``Recommendations for Strengthening USDA's
Research and Educational Assistance to the Socially Disadvantaged.''
This Initiative contributes significantly to achieving USDA's
overall goals and objectives. It specifically addresses four of the
CSREES goals outlined under the REE mission area.
Goal 1, to achieve an agricultural production system that is highly
competitive in the global economy;
Goal 2, to provide a safe, secure food and fiber system;
Goal 4, to achieve greater harmony between agriculture and the
environment; and
Goal 5, to enhance economic opportunities and quality of life for
families and communities
Question. What legislative authority is required for this new
initiative?
Answer. The Administration has proposed that a new authority for an
Integrated Research, Extension, and Education Competitive Grants
Program be included in the re-authorization of the research title of
the 1996 Farm Bill.
forestry research
Question. Why is a reduction in the McIntire-Stennis research
program being proposed for fiscal year 1999? What will be the impacts
of this proposed funding reduction?
Answer. This change will reduce the amount of funding available for
formula distribution. McIntire-Stennis funding provides the base for
development of faculty and graduate students to respond to current
issues through State, private, and other sources of funding at eligible
State institutions. States have maximum flexibility to fund specific
programs through formula funds, thus the proposed decrease would have
the least impact in those areas States identify as high priority.
Question. What specific research is being carried out under the
McIntire-Stennis research program?
Answer. Research under McIntire-Stennis includes investigations
relating to:(1) Reforestation and management of land for the production
of crops, timber, and other related commodities; (2) management of
forested watershed lands to improve conditions of water flow and to
protect resources against floods and erosion; (3) management of forest
and rangeland for production of forage for domestic livestock and game
and improvement of food and habitat for wildlife; (4) management of
forest lands for outdoor recreation; (5) protection of forest land
against fire, insects, diseases, or other destructive agents; (6)
utilization of wood and other forest products; (7) development of sound
policies for the management of lands and the harvesting and marketing
of forest products; and (8) such other studies as may be necessary to
obtain the fullest and most effective use of forest resources.
Question. Other than through the McIntire-Stennis program, what
forestry research is being supported by the ARS and CSREES? Please
provide a description of each project funded, the level of funding for
each project and who is conducting the research.
Answer. ARS scientists conduct considerable research related to
forestry problems and interests. Some ARS laboratories and Forest
Service Research Laboratories are co-located to facilitate cooperative
research. Additional cooperation is with scientists at Lant Grant
Universities and other research institutions. Brief descriptions of ARS
research projects most applicable to forestry issues, including the
level of funding for forestry related research in the fiscal year 1998
budget, and the ARS Facility doing the research, are as follows:
--Systematics of Flies of Importance in Biological Control,
Agricultural Crops, and Forests--Systematics Entomology
Laboratory, Beltsville, MD. This project is directed toward
developing identification tools and a classification system for
flies of agricultural importance. About $72,000 of the total
project funding of $602,600 directly supports forestry related
research.
--Discovery of Pest Behavior-Modifying Chemicals with Enhanced
Biological Potency--Insect Chemical Biology Laboratory,
Beltsville, MD. The objectives of this project are to discover
and develop new and efficacious behavior-modifying compounds
that will assist in the control of a wide range of insect
pests. About $34,000 of the total project funding of $339,400
directly supports research on forest insect pests.
--Development of Sustainable Urban Agro-Systems and Biocontrol
Strategies for Gypsy Moth--Insect Biocontrol Laboratory,
Beltsville, MD. The principal objective of this project is to
develop integrated insect pest management programs for urban-
forest areas, such as home sites and parks. While not directly
focused on forest ecosystems, much of the total project funding
of $548,000 supports research that could prove beneficial to
insect control in forests.
--Development of Biological Control Technology for Exotic Insect
Pests with Emphasis on the Asian Longhorn Beetle--Beneficial
Insects Introduction Research, Newark, DE. This project is
directed toward promoting cooperation with other state and
federal scientists in identifying, importing, releasing, and
evaluating biological control agents for major exotic insect
pests, such as the Asian Longhorn beetle. About $240,000 of the
total funding of $400,000 for this project, which was initiated
in fiscal year 1998, supports forestry related research.
--Biological Control of Gypsy Moth & Quarantine Services for
Introduced Beneficial Insects--Beneficial Insects Introduction
Research, Newark, DE. This project is directed toward: the
exploration for natural enemies of gypsy moth in Asia; the
importation, quarantine handling, and rearing of promising
species; assessment of the danger these introduced insects pose
to non-target organisms; and evaluation of the effectiveness of
released species on the target pest. About $280,000 of the
total project funding of $403,700 supports research on forest
insect control.
--Agroforestry Systems for the Small Farmer--Dale Bumpers Small Farms
Research Center, Booneville, AR. The major goals of this
project are to provide a scientific basis for managing small
farm ecosystems and to develop technologies that enhance their
sustainability and productivity. Agroforestry systems, that
combine livestock, tree, forage, and crop production, provide
opportunities for small farms to enhance their economic
competitiveness and visibility. About $375,000 of the total
project funding of $1,259,500 directly supports forestry
related research.
--Agroforestry Systems for the Appalachian Region--Appalachian Soil
and Water Conservation Laboratory, Beckley, WV. The major
objective of this project is to evaluate the simultaneous
production of trees and understory species to optimize the
economic and environmental integrity of Appalachian farms.
Specifically, the research will target the development of tree/
forage/specialty crop systems that can fill high value niche
markets and provide raw materials for associated value added
enterprises. The competitive and synergistic mechanisms by
which agroforestry systems partition sunlight, water and
nutrients will be determined for use in developing improved
land management strategies. About $70,000 of the total funding
for the project of $688,400 directly supports forestry related
research.
--The Development of Pest-Resistant Landscape Trees to Enhance the
Environment and Reduce the Use of Pesticides--Arboretum,
Washington, D.C. The objectives of this project are: to breed
and select pest resistant individuals and progenies of
important landscape trees with an emphasis on fungal, bacterial
and insect pests, and tolerance to environmental stresses; to
assess the range of variability in resistance among host
plants; and to propagate, evaluate, and release improved
cultivars. None of the total funding for the project of
$743,300 supports research that is focused on forest
ecosystems, but should benefit forest management.
--Genetics and Germplasm Evaluation of Landscape Woody Plants--
Arboretum, Washington, DC. The objectives of this project are
to select, evaluate and develop new cultivars of important
nursery crops with pest and disease resistance, improved
flowering and fruiting characteristics, better climatic
adaptability, and greater tolerance to environmental stresses.
None of the total funding for the project of $745,300 directly
supports research on forest ecosystems, but should benefit
forest management.
Other forestry research funded by CSREES includes an array of
forestry research in the same general areas as McIntire-Stennis--the
range of physical sciences, biology, and the social sciences, in forest
ecosystems, forest management and forest products. These areas of
research are being conducted under the Special Grants, the National
Research Initiative, Hatch, Small Business Innovation Research, and
Evans-Allen programs, and multi-disciplinary projects through the Fund
for Rural America.
The information on CSREES forestry research follows.
COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE FORESTRY RESEARCH (EXCLUDING McINTIRE-STENNIS)--
FISCAL YEAR 1996
----------------------------------------------------------------------------------------------------------------
Station Hatch Grants Other
----------------------------------------------------------------------------------------------------------------
Alabama......................................................... $167,543 $26,156 ..............
Alaska.......................................................... 9,378 .............. ..............
Arkansas........................................................ 36,095 126,459 ..............
Arizona......................................................... 15,987 18,468 ..............
California...................................................... 157,187 240,034 ..............
Colorado........................................................ 102,729 28,000 ..............
Connecticut..................................................... 73,190 87,174 ..............
Delaware........................................................ .............. .............. $7,593
Florida......................................................... 44,004 .............. ..............
Georgia......................................................... 9,042 28,414 ..............
Hawaii.......................................................... 31,475 3,011 ..............
Illinois........................................................ 245,115 19,195 ..............
Indiana......................................................... 79,168 .............. ..............
Iowa............................................................ 19,376 .............. ..............
Kansas.......................................................... 16,978 .............. ..............
Kentucky........................................................ 7,157 .............. 81,469
Louisiana....................................................... 4,000 .............. 154,228
Massachusetts................................................... 22,127 355,996 ..............
Maryland........................................................ .............. 76,363 ..............
Maine........................................................... 54,402 448,556 ..............
Michigan........................................................ 103,620 613,353 ..............
Minnesota....................................................... 200,513 .............. 3,263
Mississippi..................................................... 72,308 713,392 ..............
Missouri........................................................ 85,089 34,903 3,570
Montana......................................................... .............. .............. ..............
North Carolina.................................................. 11,864 .............. ..............
Nebraska........................................................ 46,451 .............. ..............
Nevada.......................................................... 77,548 9,218 ..............
New Hampshire................................................... 25,041 .............. ..............
New Jersey...................................................... 27,025 13,907 ..............
New Mexico...................................................... 19,469 .............. ..............
New York........................................................ 22,619 330,257 ..............
Ohio............................................................ 19,054 .............. ..............
Oregon.......................................................... 84,609 1,335,001 ..............
Pennsylvania.................................................... 49,639 20,019 ..............
South Carolina.................................................. 5,394 .............. 106,922
Tennessee....................................................... 12,612 .............. ..............
Texas........................................................... 47,372 25,976 ..............
Utah............................................................ 14,343 447 ..............
Virginia........................................................ 53,856 90,646 ..............
Wisconsin....................................................... 95,839 89,373 ..............
Washington...................................................... 62,568 796,337 ..............
West Virginia................................................... 229,202 .............. ..............
Wyoming......................................................... .............. 30,987 ..............
-----------------------------------------------
Total..................................................... 2,460,988 5,561,640 357,045
----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------
State Hatch Grants Other
------------------------------------------------------------------------
Alabama:
Machinery systems for $60,140 ........... ...........
improved forest management..
Simulation and automation to 17,582 ........... ...........
improve quality,
productivity and performance
in agriculture..............
Effects of ecosystems on soil 6,629 ........... ...........
acidity and aluminum
toxicity....................
Microbial interactions in 1,124 ........... ...........
agricultural and forestry
ecosystems..................
Transgenic manipulation of 595 ........... ...........
higher fungi
(homobasidiomycetes)........
Pit membrane structure and 2,750 ........... ...........
development in hardwoods....
Effect of environmental ........... $26,156 ...........
conditions on load duration
behavior of structural
composite lumber............
The National Atmospheric ........... ........... ...........
Deposition Program..........
Urban tree evaluation and 75,714 ........... ...........
environmental factors
affecting urban landscape
plant use...................
Growth regulation of 2,849 ........... ...........
herbaceous and woody
ornamental plants...........
Nutrition, growth and antler 159 ........... ...........
development of Alabama white-
tailed deer.................
Biological reconnaissance of ........... ........... ...........
the Grady Pond depression
wetlands of the Central Gulf
Coastal Plain...............
Evaluation of benthic ........... ........... ...........
invertebrates, water quality
and watershed conditions in
Southeastern streams........
--------------------------------------
Total.................... 167,543 26,156 ...........
======================================
Alaska: Classification and 9,378 ........... ...........
interpretation of permafrost
soils in Alaska.................
======================================
Arkansas:
Regional advantages in 2368 ........... ...........
producing and marketing
woody ornamentals...........
National Atmospheric 12,601 ........... ...........
Deposition Program..........
Integrated forest management ........... 126,459 ...........
strategies..................
Ecology and impact of gypsy 21,126 ........... ...........
moth invasion...............
Arkansas Forest Resources ........... ........... ...........
Center: A continuing
research program............
Arkansas Forest Resources ........... ........... ...........
Center......................
--------------------------------------
Total...................... 36,095 126,459 ...........
======================================
Arizona:
Criteria for defining site 1,103 ........... ...........
conservation thresholds for
Arizona rangelands..........
Forage utilization patterns 593 ........... ...........
and plant response under
short duration grazing......
Nutritional content of forage 451 ........... ...........
used by Sonoran pronghorn in
Arizona.....................
Evaluating forest policies to 778 ........... ...........
determine their adequacy for
ecosystem management........
Advanced resource technology 9,945 ........... ...........
for natural resource
management and environmental
assessment..................
Social, economic and 415 ........... ...........
institutional influences on
rangeland management........
Hydrology of Southwestern 1,488 ........... ...........
wetlands and riparian areas.
Can cattle use artificial and 416 ........... ...........
social visual cues to track
forage locations............
Alien grass invasion and 798 ........... ...........
ecosystem feedback in
southern Arizona............
Seed and seedling fate of ........... 1,853 ...........
warm-season grasses in
relation to seedbed water
availability................
Shifts in lower treeline: ........... 16,615 ...........
Identifying causal factors..
Water source controls tree ........... ........... ...........
ecophysiological processes
in riparian ecosystems......
--------------------------------------
Total.................... 15,987 18,468 ...........
======================================
California:
Pesticides and other toxic 5,901 ........... ...........
organics in soil and their
potential for ground and
surface water contamination.
Reactions of chemical species 5,765 ........... ...........
in soils....................
Organic compounds in forest 21,858 ........... ...........
soil, and effects on
microbial processes and
nutrient availability.......
Environmental transformation, 1,507 ........... ...........
exposure, and effects of
pesticide resi- dues.......
Climate and land use controls 14,951 ........... ...........
on the soil carbon cycle of
California..................
The role of biological 15,852 ........... ...........
control in urban pest
management systems..........
Nest-box barriers for 16,367 ........... ...........
population and roosting
protection..................
Interactions among bark 424 ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Interactions among bark 13,225 ........... ...........
beetles, pathogens and
conifers in North American
forests.....................
Ecological investigations of 18,399 ........... ...........
mycorrhizal fungi in
California forest ecosystems
Fungal evolution: Pathogen 116 ........... ...........
population genetics and
identification..............
Interactions among bark 2,828 ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Poverty in rural forest ........... 2,604 ...........
communities: An historical
and biographical assessment.
Engineering factors in forest- 11,581 ........... ...........
resource production,
utilization and management..
Analysis of energy usage and 3,640 ........... ...........
development of energy
conservation technology.....
Improve food safety through 898 ........... ...........
discovery and control of
natural and induced
toxicants and antitoxicants.
Requirements for natural 4,186 ........... ...........
regeneration of red fir in
disturbed and undisturbed
sites.......................
Herbivore-host interactions ........... ........... ...........
and interactions between
herbivores mediated through
their hosts.................
Prediction of coast redwood 1,560 ........... ...........
and giant sequoia growth
rates as a function of
climate.....................
Interactions among bark 4,682 ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Interactions among bark ........... ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Chemical ecology and IPM 809 ........... ...........
programs for pest insects...
Interactions among bark 8,548 ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Fire and dynamics of conifer 4,089 ........... ...........
forest ecosystems in
southern California and
northern Baja California....
The edaphic role of weathered ........... 43,271 ...........
rock in a seasonally-dry
coniferous forest ecosystem.
Climate change and genetic ........... 179,161 ...........
diversity in Mexico's
threatened spruce ecosystems
Influence of substrate ........... 14,998 ...........
heterogeneity on ecosystem
productivity and resource
use.........................
--------------------------------------
Total.................... 157,187 240,034 ...........
======================================
Colorado:
Cattle preference as a tool ........... ........... ...........
to modify riparian
vegetation..................
Benefits and costs transfer 28,806 ........... ...........
in natural resource planning
Grazing management for 153 ........... ...........
efficient water use and
conservation in mountainous
riparian ecosystems.........
Management of rangeland 73,618 ........... ...........
vegetation and animals for
system sustainability.......
Economic analysis of 152 ........... ...........
rangeland use...............
Identifying the mechanism for ........... 28,000 ...........
reduced photosynthetic
performance in old trees....
--------------------------------------
Total.................... 102,729 28,000 ...........
======================================
Connecticut:
Using supplemental food to ........... 51,874 ...........
increase effectiveness of
ants as gypsy moth predators
Transgenic strains of the ........... 35,300 ...........
chestnut blight fungus for
biocontrol in the forest....
Ecology and impact of gypsy 2,304 ........... ...........
moth invasion...............
Government policies for 765 ........... ...........
regulating the use of water
and land resources..........
Acquiring an ethic of 39,812 ........... ...........
stewardship among
Connecticut woodland owners.
The role of cytokinin 936 ........... ...........
metabolism and absorption in
controlling in vitro plant
development.................
Forest landscape ecosystem 13,484 ........... ...........
assessment through satellite
remote sensing and neural
processing..................
Determination of UVB solar 312 ........... ...........
radiation above forest
canopies from meteorological
measurement.................
Drift of pesticides from 15,577 ........... ...........
orchard spray operations:
Model development and
validation..................
--------------------------------------
Total.................... 73,190 87,174 ...........
======================================
Delaware: Some effects of ........... ........... $7,593
agricultural drainage on natural
systems.........................
======================================
Florida:
The National Atmospheric 8,358 ........... ...........
Deposition Program..........
Biology and pest management 3,282 ........... ...........
of arthropod pests of
ornamental alents of
southern Florida............
Comparison of two management ........... ........... ...........
programs on the growth &
incidence of decline
(blight) of citrus trees....
Comparison of two management 32,364 ........... ...........
programs on the growth and
incidence of decline
(blight) of citrus..........
--------------------------------------
Total.................... 44,004 ........... ...........
======================================
Georgia:
Benefits and costs in natural 2,420 ........... ...........
resource planning...........
Semiochemical management of 1,562 ........... ...........
southern pine bark beetles..
Pathology and management of 279 ........... ...........
diseases of forest and shade
trees and woody ornamentals.
Examination of the components 4,782 ........... ...........
of cold hardiness in woody
landscape plants............
Relationship of plant root ........... 28,414 ...........
traits to resource
competition and stress
tolerance...................
--------------------------------------
Total.................... 9,042 28,414 ...........
======================================
Hawaii:
Evaluating alternative crops 216 ........... ...........
in Hawaii using crop growth
models......................
The influence of sediment ........... 3,011 ...........
removal and deposition on
soil and water quality in
Hawaii......................
Antiquality factors affecting ........... ........... ...........
the utilization of leucaena
as a livestock feed........
Molecular analysis of 13,903 ........... ...........
rhizobium-tree legume
symbiosis...................
Biological control of exotic 15,557 ........... ...........
weeds of Hawaiian range and
forest lands................
Diseases of Niu, Olona, Noni, ........... ........... ...........
Milo and Kou................
Propagation of native 43 ........... ...........
Hawaiian plants for the
ornamentals industry........
Weed control in vegetable and 1,545 ........... ...........
ornamental crops growing in
the tropics.................
Altitudinal variations in 210 ........... ...........
arthropods associated with
decomposing remains in
Hawaii......................
--------------------------------------
Total.................... 31,475 3,011 ...........
======================================
Illinois:
Utilization of soybean meal/ 104 ........... ...........
soy molasses in polymers:
Plywood adhesives and
polyurethane foams..........
Biomass and nitrogen cycling 12,532 ........... ...........
in sewage sludge amended
fields......................
Inventory and analysis of the 14,4863 ........... ...........
mesophytic forest and its
western extensions..........
Genetic manipulation of 4,190 ........... ...........
perennial plants............
Forest community dynamics of 36,753 ........... ...........
east-central Illinois
forests.....................
Rate of biodegradation of 23,693 ........... ...........
treated hardwood............
Agriculture and urbanization: 3,582 ........... ...........
Toward satisfying competing
demands.....................
Adaptations of black oak to 17,265 ........... ...........
fire........................
Biological control of 2,134 ........... ...........
verticillum wilt in woody
nursery crops...............
Organic perspectives of C N S ........... 19,195 ...........
and P biogeochemistry in a
low elevation spruce-fir
ecosystem...................
--------------------------------------
Total.................... 245,115 19,195 ...........
======================================
Indiana:
Separations of bioproducts... 1,842 ........... ...........
Quality control in wood 22,770 ........... ...........
product manufacturing.......
Soil spatial information 3,366 ........... ...........
systems for global modeling
and ecosystem management....
Influence of surface and 1,172 ........... ...........
canopy morphology on radiant
energy transport............
Managing insect and mite 1,638 ........... ...........
pests of ornamental plants..
Productivity relationships in 19,432 ........... ...........
benthic communities.........
Genetics of reintroduced 7,532 ........... ...........
wildlife species in North
America.....................
Climate and structural ........... ........... ...........
control of canopy processes
in mixed-hardwood forests...
Population processes of 21,060 ........... ...........
forest mammals in fragmented
landscapes..................
Utilization of biomass....... 356 ........... ...........
--------------------------------------
Total...................... 79,168 ........... ...........
======================================
Iowa:
Production of wood adhesives 2 ........... ...........
from soy and corn proteins..
Interactions among bark 10,391 ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Induction and optimization of 8,790 ........... ...........
biological nitrogen fixation
in temperate woody legumes..
Development of coconut coir 193 ........... ...........
products as horticultural
substrates..................
--------------------------------------
Total...................... 19,376 ........... ...........
======================================
Kansas:
Improved systems of 6,209 ........... ...........
management for pecan insect
and mite pests..............
Range improvement 3,616 ........... ...........
investigations..............
Climate and agricultural 1,073 ........... ...........
landscape productivity
analysis and assessment in
the North Central region....
Pecan experiment field....... 5,040 ........... ...........
Rootstock and interstem 1,040 ........... ...........
effects on pome and stone
fruits......................
--------------------------------------
Total...................... 16,978 ........... ...........
======================================
Kentucky:
Biological improvement of 7,157 ........... ...........
chestnut and management of
the chestnut blight fungus..
Development of clonal mass ........... ........... 81,469
propagation procedures for
forest tree species.........
--------------------------------------
Total.................... 7,157 ........... 81,469
======================================
Louisiana:
Impact, population dynamics, 4,000 ........... ...........
and control of insect
defoliators in Louisiana
forests.....................
Effect of soil compaction and ........... ........... 154,228
flooding on survival, growth
and physiological responses.
--------------------------------------
Total.................... 4,000 ........... 154,228
======================================
Massachusetts:
Navigation and habitat use by 7,298 ........... ...........
raccoons and opossums in
suburban forests--
implications for management.
The National Atmospheric 8,952 ........... ...........
Deposition Program..........
Allocation of scarce 5,877 ........... ...........
recreation resources:
Enhancing support and
understanding for management
decision....................
The role of forest floor ........... 39,996 ...........
nitrogen leaching in
ecosystem itrogen retention.
Influence of above- and below- ........... 316,000 ...........
ground litter on forest soil
organic matter dynamics.....
--------------------------------------
Total.................... 22,127 355,996 ...........
======================================
Maryland: Production of nitrogen ........... 76,363 ...........
gases in riparian forests
receiving cropland discharges...
======================================
Maine:
Northern New England Product ........... 30,392 ...........
Development and Marketing
Center......................
New England wood research.... ........... 211,470 ...........
New England wood research.... ........... 200,511 ...........
Modeling and analysis of 10,148 ........... ...........
value-added production
systems.....................
Benefits and costs of 21,110 ........... ...........
resource policies affecting
public and private land....
Evolutionary biology of ........... ........... ...........
amelanchier (shadbush),
picea (spruce), and isotria
(small whorled poronia).....
Policy analyses of maine's ........... ........... ...........
forestry sectorMaine........
Effects of climate and ........... ........... ...........
substrate quality on soil
microbial populations.......
The National Atmospheric 23,144 ........... ...........
Deposition Program (NADP)...
Wood properties and yield of ........... 6,183 ...........
northern conifers grown
under short rota- tions....
--------------------------------------
Total.................... 54,402 448,556 ...........
======================================
Michigan:
Plant germplasm and 4,029 ........... ...........
information management and
utilization.................
Physiology of carbon balance ........... ........... ...........
in fruit crops: Abiotic and
biotic thresholds...........
Biological improvement of 7,222 ........... ...........
chestnut and management of
the chestnut blight fungus..
Fates and effects of trace ........... ........... ...........
contaminants in aquatic
systems.....................
Microbial ecology of 2,453 ........... ...........
denitrification and
biodegradation..............
Biological control and 1,815 ........... ...........
integrated management of
insects in nurseries, turf
and the urban forest........
Physiological adaptation and ........... ........... ...........
cultural manipulation of
plant systems...............
Lignin degradation by ........... ........... ...........
basidiomycete fungi and
applications................
Plant chem. defenses: Insect ........... ........... ...........
detox. & ecol. factors
affecting gene flow and host
sel./hybrid zone............
Wildlife responses to habitat ........... ........... ...........
management..................
Avirulent fungal and 4,540 ........... ...........
bacterial plant pathogens:
Their role and fate in plant
disease epidemics...........
Predicting recreation and ........... ........... ...........
tourism choices.............
Impacts of recreation and ........... ........... ...........
tourism.....................
Biol. active nat. prod. & 2,806 ........... ...........
value added prod. from
plants & microbes for agri.
& pharmaceutical use........
Application of present value 2,618 ........... ...........
techniques for financing
design and selection of
durables....................
Degradation of lignocellulose ........... ........... ...........
by termites and their
microbial symbionts.........
The National Atmospheric 33,302 ........... ...........
Deposition Program (NADP)...
Temporal and spatial dynamics 19,917 ........... ...........
of insects in diverse
landscapes: A risk
assessment perspective......
Development of arthropod ........... ........... ...........
resistance management
systems.....................
Ecological impacts and ........... ........... ...........
management of forest insects
in Michigan.................
Environmental and genetic ........... ........... ...........
components of reproduction
in bird populations.........
Mechanisms of baculovirus ........... ........... ...........
pathogenesis in insects.....
Diet choice and foraging in 14,171 ........... ...........
ants........................
Improving public involvement ........... ........... ...........
in agricultural and natural
resource issues.............
The Center for the Study of 10,577 ........... ...........
Insect Diversity............
Relationship between habitat ........... ........... ...........
characteristics and fish
population dynamics.........
Influences of natural ........... ........... ...........
resource recreation on land
management in Michigan......
Social science and ........... ........... ...........
communications in outdoor
recreation resource
management..................
Physiological basis for 170 ........... ...........
integrated approach towards
sustainable mgt. of plant-
parasitic nematodes.........
Advanced technology ........... 103,416 ...........
applications to Eastern
hardwood utilization........
Advanced technology ........... 34,2271 ...........
application to Eastern
hardwood utilization........
Advanced technology ........... 44,977 ...........
applications to Eastern
hardwood utilization........
Infectious mitochondrial ........... 105,041 ...........
hypovirulence in
cryphonectria parasitica....
Isolation of symbiosis ........... 17,648 ...........
related genes essential to
ectomycorrhizae formation...
--------------------------------------
Total.................... 103,620 613,353 ...........
======================================
Minnesota:
The impact of land and water 8,648 ........... ...........
management decisions on
Minnesota's people and their
environment.................
Biology, ecology and control 76,685 ........... ...........
of tree diseases............
Atmospheric deposition: Long- ........... ........... ...........
range transported and local
source emitted air
pollutants..................
Diagnosis, epidemiology and 669 ........... ...........
control of plant diseases
caused by badna viruses.....
Quantification of nutrient 12,362 ........... ...........
cycles of Minnesota forests.
Growth and succession in 9,741 ........... ...........
forested ecosystem
simulations.................
Wild ungulates: Relationships 6,575 ........... ...........
with timber, vegetation,
sodium, urban problems, and
restoration.................
Forestry and forest products ........... ........... 3,263
research in the United
States: A review and
assessment..................
Remote sensing inputs to 37,246 ........... ...........
inventory and analysis of
natural resources...........
Methods and procedures for ........... ........... ...........
benefits-based management of
recreation and nonrecreation
resources...................
Assessment and use of genetic ........... ........... ...........
diversity of Northern tree
species.....................
Physiology of tree growth-- ........... ........... ...........
mineral nutrition and
vegetation manage- ment....
Wood-based composites: 20,462 ........... ...........
Investigations leading to
new and improved products
and raw materials...........
Assessment of raw material 3,826 ........... ...........
trends and life cycle
environmental impacts of
alternative raw materials...
Dimensional instability of ........... ........... ...........
paper: Thermodynamic
approach....................
Lignin biosynthesis, 24,299 ........... ...........
biodegradation and
derivative plastics.........
Biochemistry of fungi: The ........... ........... ...........
heat shock response.........
--------------------------------------
Total...................... 200,513 ........... 3,263
======================================
Mississippi:
Interaction among bark 72,308 ........... ...........
beetles pathogens and
conifers in North American
forests.....................
Development and maintenance ........... ........... ...........
of microcomputer software
for agricul- ture..........
Tree mortality as a result of ........... ........... ...........
insect-fungal-host
interactions: Elucidation of
mechanisms..................
Wood Utilization Research ........... 222,921 ...........
Program.....................
Improvement in furniture ........... 10,140 ...........
design and manufacturing
technology..................
Development of specialty wood ........... 8,270 ...........
composites..................
Compaction of soils on ........... 51,840 ...........
forested lands and assessing
its effect on the growth of
loblolly pine...............
Wood-derived chemicals....... ........... 5,132 ...........
Business and production ........... 1,736 ...........
systems.....................
Wood Utilization Research ........... 122,636 ...........
Program.....................
Load-deformation relation of ........... 7,383 ...........
staple joints and factors
affecting its behavior......
Development of new wood ........... ........... ...........
preservatives based on
synergistic combinations....
Wood Utilization Research ........... 122,280 ...........
Program.....................
Wood Utilization Research ........... 161,054 ...........
Program.....................
--------------------------------------
Total...................... 72,308 713,392 ...........
======================================
Missouri:
Drought tolerance mechanisms ........... 32,592 ...........
in black walnut (juglans
nigra l.)...................
The importance of root ........... 2,311 ...........
signaling in drought
adaptation mechanisms.......
Macropore-scale water and 2,427 ........... ...........
solute transport processes..
Dynamics of Missouri fish 3,225 ........... ...........
populations.................
Nutrient cycling in 3,562 ........... ...........
agroecosystems..............
Seasonal patterns in the 8,879 ........... ...........
trophic State of Missouri
reservoirs..................
Ecology and conservation of 10,510 ........... ...........
urban greenspace............
The ecology and behavior of 2,592 ........... ...........
Missouri fishes, with
emphases on reproduction and
non-game species............
Ecology and conservation of 5,181 ........... ...........
birds in grassland and
wetland ecosystems in
Missouri....................
Deer ecology in rural and 12,804 ........... ...........
urban landscapes............
Temporal and spatial 5,214 ........... ...........
variability in soil
landscapes..................
The relationship of soil 2,161 ........... ...........
properties with landscape
position in Missouri........
Ecology, conservation, and 3,244 ........... ...........
restoration of mammals......
Ecology and impact of gypsy 10,755 ........... ...........
moth invasion...............
Horticultural utilization of 1,112 ........... ...........
organic residues............
Ecology and epidemiology of 9,341 ........... ...........
plant diseases in
agricultural and native
ecosystems..................
Leadership for advanced ........... ........... 3,570
materials from renewable
resources...................
Economic and environmental 4,077 ........... ...........
implications of expiring
conservation reserve
contracts...................
Compliance benefits of the 7 ........... ...........
Conservation Reserve Program
--------------------------------------
Total...................... 85,089 34,903 3,570
======================================
Montana:
Agricultural policy.......... ........... ........... ...........
Validation & use of ........... ........... ...........
multispectral radiometry to
measure forage biomass in
wildlife livestock..........
Dwarf mistletoe and biomass ........... ........... ...........
allocation, gas-exchange,
and water relations of
Douglas fir.................
--------------------------------------
Total.................... ........... ........... ...........
======================================
North Carolina:
Development and integration 4,111 ........... ...........
of entomopathogens into pest
management systems..........
Ecology of forest tree 2,539 ........... ...........
diseases....................
Balancing soil arthropod 472 ........... ...........
management and soil health
in agriculture..............
The rosette bud mite and the 3,109 ........... ...........
balsam woolly adelgid on
Fraser fir Christmas trees..
Relationships between soil 1,633 ........... ...........
fertility and plant
communities in the Southern
Appalachians................
Wood machining and tooling ........... ........... ...........
research....................
--------------------------------------
Total...................... 11,864 ........... ...........
======================================
Nebraska:
Changes in soil properties 15,000 ........... ...........
associated with changes in
land use over the past
century.....................
Flow of water and particles 7,500 ........... ...........
in soils and porous media...
Regulation of photosynthetic 4,815 ........... ...........
processes...................
Regulation of photosynthetic 3,180 ........... ...........
processes...................
The design of an enzyme 3,080 ........... ...........
reactor for the conversion
of hemicellulose to
menosaccharides.............
A national agricultural ........... ........... ...........
program to clear pest
management agents for minor
use.........................
Cultural practices to 280 ........... ...........
minimize environmental
stress on vegetable crop
production and physiology...
Introduce and develop high 75 ........... ...........
value crops from hardy woody
plant germplasm for the
north central region........
Wildlife damage management 205 ........... ...........
for sustainable systems.....
Water quality and water 260 ........... ...........
quantity criteria for
Nebraska fishes.............
Avian species in diverted 1,689 ........... ...........
farmland....................
Primary water quality 30 ........... ...........
determinents of attached
algal communities in
Nebraska....................
Evaluation of environmental 393 ........... ...........
factors and fish species for
aquaculture development in
Nebraska....................
Exchange of carbon dioxide 530 ........... ...........
and other atmospheric trace
gases in vegetated
ecosystems..................
Remotely sensed estimates of 875 ........... ...........
productivity, energy
exchange processes and water
stress in vegetation........
Drought: Response and policy 3,258 ........... ...........
implications................
Relationships between 705 ........... ...........
remotely-sensed spectral
properties of vegetated
surf. & biophysical property
Feedlot management and 1,750 ........... ...........
production considerations
for the cattle feeder.......
Selection and development of 2,828 ........... ...........
native herbaceous landscape
plants......................
--------------------------------------
Total...................... 46,451 ........... ...........
======================================
Nevada:
Improved characterization and 3,250 ........... ...........
quantification of flow and
transport processes in soils
Natural products chemistry as 56,873 ........... ...........
a resource for biorational
methods of insect control...
Natural product chemistry as 464 ........... ...........
a resource for biorational
methods of insect control...
Natural products chemistry as 16,716 ........... ...........
a resource for biorational
methods of insect control...
Natural product chemistry as 245 ........... ...........
a resource for biorational
methods of insect control...
Conceptual and predictive ........... 9,218 ...........
models of paleovegegation
dynamics in the Great Basin.
--------------------------------------
Total.................... 77,548 9,218 ...........
======================================
New Hampshire:
The National Atmospheric 15,620 ........... ...........
Deposition Program..........
Molecular probes for nitrogen- ........... ........... ...........
fixing symbionts of pioneer
plants......................
Fitness indicators for forest 4,937 ........... ...........
tree populations in a
changing climate............
Riparian denitrification as a 1,966 ........... ...........
control on nitrate export
before forest harvesting....
Developmental potential of 2,518 ........... ...........
New Hampshire lakes and
shorelines: Supply and
demand issues...............
--------------------------------------
Total.................... 25,041 ........... ...........
======================================
New Jersey:
Small mitochondrial dsrna ........... 13,907 ...........
that causes hypovirulance of
cryphonactria darasitica....
Ecosystem causes and ........... ........... ...........
consequences of exotic plant
invasions in hardwood
forests.....................
Cellulase, the biologic key 3,221 ........... ...........
to renewable energy.........
Technical and economical 102 ........... ...........
efficiencies of producing
marketing and managing
landscape plants............
Controlled environment and 7,197 ........... ...........
facilities engineering for
greenhouses.................
Biological improvement of 15,550 ........... ...........
chestnut and management of
the chestnut blight.........
Molecular characterization of 955 ........... ...........
intracellular membrane plant
K+ chan- nels..............
The effects of ........... ........... ...........
ectomycorrhizae on
decomposition in coniferous
forest soil................
--------------------------------------
Total.................... 27,025 13,907 ...........
======================================
New Mexico:
Plant genetic resource 3,395 ........... ...........
conservation and utilization
Benefits and costs in natural 970 ........... ...........
resource planning...........
Systematic and floristic 5,894 ........... ...........
studies of Southwestern
plants......................
Cellular and molecular 9,210 ........... ...........
genetics approaches for crop
improvement in semiarid
lands agriculture...........
--------------------------------------
Total.................... 19,469 ........... ...........
======================================
New York:
The National Atmospheric 1,297 ........... ...........
Deposition Program..........
Integrated pest management ........... 5,268 ...........
for diversified fresh market
vegetable producers.........
Intraspecific variation in 14,199 ........... ...........
host plant water relations
in response to infection by
ash yellows.................
A new soil medium for urban 4,703 ........... ...........
tree survival...............
Response of pin cherry- ........... ........... ...........
Northern hardwood stands to
changes in resource
availability................
Transmission of hypovirulence ........... 12,025 ...........
in populations of
cryphonectria parasitica....
Diseases of ornamental trees ........... ........... ...........
and shrubs in New York State
The taxonomy and uses of the 2,420 ........... ...........
cultivated oaks (quercus) of
the United States...........
1995 Cary Conference: ........... 6,840 ...........
Enhancing the ecological
basis for conservation......
Effects of predation and ........... 117,732 ...........
abiotic factors on detritus
food webb in for- ests.....
Organic matter chemistry in ........... 55,304 ...........
clear-cut and unmanaged
forest ecosys- tems........
Pathogen incidence & rate of ........... 38,472 ...........
spread: Impact of habitat &
landscape attributes........
Aggregation pheromone in Ips ........... ........... ...........
Pini........................
Biomass conversion to ........... ........... ...........
industrial polysaccharides..
Acid-catalyzed hydrolysis of ........... 38,358 ...........
lignin aryl-ether linkages
in wood.....................
Genetics of pheromone based ........... 56,258 ...........
assortative mating in the
bark beetle Ips Pini........
--------------------------------------
Total.................... 22,619 330,257 ...........
======================================
Ohio:
A national agricultural ........... ........... ...........
program to clear pest
control agents for minor
uses........................
Developing useful control 14,598 ........... ...........
tactics for arthropod pests
of landscape plants........
The economics of solid waste 2,504 ........... ...........
management and recycling....
Economics of sustainable 1,952 ........... ...........
food, forest and mining
systems.....................
The National Atmospheric ........... ........... ...........
Deposition Program..........
Rural economic development: ........... ........... ...........
Alternatives in the new
competitive environment.....
--------------------------------------
Total.................... 19,054 ........... ...........
======================================
Oregon:
Biological control of weeds.. 3,358 ........... ...........
Ecology and management of 2,289 ........... ...........
foothill rangelands.........
Interactions among bark 33,598 ........... ...........
beetles, pathogens and
conifers in North American
forests.....................
Ecology and management of 6,331 ........... ...........
forest insects..............
Environmental transformation, 3,454 ........... ...........
exposure, and effects of
pesticide resi- dues.......
Behavior and persistence of 1,798 ........... ...........
pesticides in crops and the
environment.................
Ecology and management of 7,446 ........... ...........
Western juniper (juniperus
occidentalis) in Oregon.....
Biotechnology in Oregon...... ........... 528 ...........
Characterization of stream/ 1,312 ........... ...........
river fish assemblages in
Oregon......................
Ecosystem dynamics, 14,816 ........... ...........
anthropogenic impacts and
restoration of wildlife and
fish habitats...............
Measuring N(2) fixation & N ........... 1,318 ...........
cycling in pure & mixed red
alder strands using 15(N)...
Size and diversity of frankia ........... 47,188 ...........
populations that nodulate
ceanothus SPP...............
Ecological interactions in 10,209 ........... ...........
high elevation lakes:
Impacts of human and natural
disturbance.................
Center of Wood Utilization ........... 140,219 ...........
Research....................
Center for Wood Utilization ........... 174,870 ...........
Research....................
Center for Wood Utilization.. ........... 286,469 ...........
Center for Wood Utilization ........... 226,456 ...........
Research....................
Center for Wood Utilization ........... 48,074 ...........
Research....................
Elucidation and optimization ........... 30,391 ...........
of bioprotectant mechanisms
against wood staining fungi.
Dynamic characteristics of ........... 31,197 ...........
metal-plate-connected wood
joints......................
Vapor copper--a potential new ........... 37,886 ...........
wood preservative...........
Mapping of genes related to ........... 68,048 ...........
adaptation in Douglas-fir
hybrids.....................
Root decay in 3 coniferous ........... 50,593 ...........
forests: Substrate,
temperature and moisture
effects.....................
Identifying the mechanisms ........... 25,974 ...........
for reduced photosynthetic
performance in old trees....
Controls on forest soil ........... 73,206 ...........
carbon dynamics: Does
nitrogen management matter..
Predicting decomposition ........... 92,584 ...........
dynamics of woody detritus
of forest ecosys- tems.....
--------------------------------------
Total.................... 84,609 1,335,001 ...........
======================================
Pennsylvania:
Ecological indicators & 204 ........... ...........
restoration strategies for
wetland/riparian/stream
components of watersheds....
National Atmospheric ........... ........... ...........
Deposition Program--
monitoring of atmospheric
chemical deposition effects.
Non-traditional land-based 10,499 ........... ...........
solutions for municipal
waste disposal..............
Economic impact of travel and ........... ........... ...........
tourism in Pennsylvania.....
Biochemistry of biorational 26,675 ........... ...........
pesticides--bacillus
thuringiensis and
baculoviruses...............
Improving the efficacy of ........... ........... ...........
biorational pesticides used
in aerial applica- tion....
Enhancing international value- ........... 13,184 ...........
added opportunity for U.S.
hardwoods (in Japan)........
Effect of forest irrigation ........... ........... ...........
on avian and mammalian
communities.................
Determining the efficacy and 8,334 ........... ...........
crop tolerance of herbicides
used in ornamentals and
right-of-ways...............
Creep behavior of wood-foam ........... 6,835 ...........
composite structural
insulated panels............
Artificial intelligence-based 3,310 ........... ...........
modeling of natural and
managed systems.............
Ecological indicators & 616 ........... ...........
restoration strategies for
wetland/riparian/stream
components of landscapes....
--------------------------------------
Total.................... 49,639 20,019 ...........
======================================
South Carolina:
Impact of bark boiler ash 5,394 ........... ...........
recycling on heavy metal
loads in wildlife in coastal
plain forests...............
The potential of forestry- ........... ........... 106,922
based rural economic
development in South
Carolina....................
--------------------------------------
Total.................... 5,394 ........... 106,922
======================================
Tennessee:
Endophyte infected & 8,236 ........... ...........
endophyte free tall fescues
& other forages in
management systems for
herbivore...................
Reducing environmental 4,376 ........... ...........
impacts of production
agriculture.................
--------------------------------------
Total...................... 12,612 ........... ...........
======================================
Texas:
Benefits and costs transfer 242 ........... ...........
in natural resource planning
Biological improvement of 12,822 ........... ...........
chestnut and management of
the chestnut blight fungus..
Environmental soil chemistry, 4,863 ........... ...........
fertility, management, and
plant nutrition for forage
and other crops.............
Development of PCR based ........... ........... ...........
probes for detection of
fungal plant patho- gens...
Information engineering and 166 ........... ...........
development of integrated
resource management systems.
Sustainable farming systems 537 ........... ...........
and resource conservation...
Production and improvement of 24,593 ........... ...........
plants for urban
environments................
Development of propagation 4,150 ........... ...........
technologies and assessment
of drought tolerant
ornamental species..........
Amelioration of degraded rain ........... 23,366 ...........
forest soils by trees.......
Conifer transformation with ........... 2,610 ...........
shoot apices and
agrobacterium...............
--------------------------------------
Total...................... 47,372 25,976 ...........
======================================
Utah:
Interactions among bark 14,343 ........... ...........
beetles, pathogens, and
conifers in North American
forests.....................
Shrub selection and breeding ........... 447 ...........
for rangeland rehabilitation
--------------------------------------
Total...................... 14,343 447 ...........
======================================
Virginia:
Antioxidant metabolism in 30,606 ........... ...........
soybean and Eastern white
pine: Enzyme purification
and characterization........
Investigating the role of ........... ........... ...........
pales weevil in procerum
root disease epidemiology...
Biological improvement of 23,250 ........... ...........
chestnut and management of
the chestnut blight fungus..
The effect of continuous ........... ........... ...........
process technology on
softwood lumber quality.....
Measurement of drying ........... ........... ...........
stresses in red oak.........
Solid-state NMR, dielectric ........... ........... ...........
and viscometric study of PF
resin cure..................
Mechanisms by which R. ........... 90,646 ...........
maximum influences forest
canopy structure............
--------------------------------------
Total...................... 53,856 90,646 ...........
======================================
Wisconsin:
Development of statistical 3,197 ........... ...........
methodologies for biology...
Biochemical ecology of 23,584 ........... ...........
interactions between aspen
and forest insect pests....
Sphaeropsis blight of pines: 23,296 ........... ...........
Pathogen types and host
resistance..................
Interrelation of 30,339 ........... ...........
photosynthesis, respiration
and biomass distribution as
determinants of tree growth.
Advanced modeling of the ........... 16,581 ...........
North American pulp and
paper sector................
Ecology and impact of gypsy ........... ........... ...........
moth invasion...............
Ecological, sociological and 13,157 ........... ...........
economic aspects of white-
tailed deer damage to
agricultural crops..........
Beyond tiger: The links 2,266 ........... ...........
between the human layer and
natural resource layers in a
GIS environment.............
Analysis and forecasting of ........... 63,840 ...........
the impacts of GATT and
NAFTA on the U.S. forest
products industry...........
Mechanisms of persistence of ........... 8,952 ...........
aspen seedlings following
the 1988 Yellowstone fires..
--------------------------------------
Total.................... 95,839 89,373 ...........
======================================
Washington:
Physical chemical state and 58,411 ........... ...........
plant availability of
uranium in contaminated mine
soil........................
Biological and systematic 4,157 ........... ...........
studies of xylaria and
allied genera...............
Effect of enhanced UV-B ........... 79,308 ...........
radiation on carbon dynamics
in selected tree species....
Enhancing the competitiveness ........... 13,500 ...........
of ag and forest products...
Benefits of post resistance ........... 31,196 ...........
to sustainability of hybrid
poplar production systems...
Defense reactions in ........... 71,521 ...........
conifers: Oleoresinosis.....
Forest ecosystem study, Fort ........... 123,160 ...........
Lewis, WA...................
A comparison of sporocarp and ........... 85,274 ...........
mycorrhiza dominance by
ectomycorrhizal fungi.......
Carbon isotope discrimination ........... 36,858 ...........
and water use efficiency of
poplars.....................
Competitiveness in ........... 257,991 ...........
international forest
products....................
The use of fiber wettability ........... 18,237 ...........
to assess sizing efficiency.
Effects of plant competition ........... 3,825 ...........
in secondary succession: An
experimental approach.......
Molecular genetics of ........... 37,766 ...........
populus: Collaborative
network.....................
Mapping quantitative trait ........... 10,040 ...........
loci in populus.............
Single fiber kappa analyzer.. ........... 27,661 ...........
--------------------------------------
Total...................... 62,568 796,337 ...........
======================================
West Virginia:
Inventory of Appalachian 63,000 ........... ...........
hardwood stands.............
Biological improvement of 110,856 ........... ...........
chestnut and management of
the chestnut blight fungus..
Bionomics of forest 34,328 ........... ...........
defoliating insects and
insects secondarily
attacking defoliation
stressed trees..............
Benefits and costs transfer 14,707 ........... ...........
in natural resource planning
Investigation of the 6,311 ........... ...........
environmental impacts of
kiln drying Appalachian
hardwoods...................
--------------------------------------
Total.................... 229,202 ........... ...........
======================================
Wyoming: Spatial disturbance ........... 30,987 ...........
history in the Medicine Bow
National Forest, Wyoming........
======================================
Total...................... 2,460,988 5,561,640 357,045
------------------------------------------------------------------------
Question. Please distinguish the role of the Forest Service and
that of ARS/CSREES in forestry research.
Answer. ARS conducts limited research related to forestry. Even
though this research has relevance, and potential benefits for forest
management, it is not directed toward the management of forest
ecosystems. One of the principal targets for this ARS research is the
urban environment. ARS research on agroforestry is primarily directed
toward optimizing the economic and environmental benefits to both crop
and livestock operations from interactions created when trees or shrubs
are deliberately combined with farm crops and animals. Other ARS
activities related to forestry research include research projects on
the use of trees as windbreaks, in arboretums, and for horticultural
applications. CSREES has a very different mission than the in-house
research at USDA. The McIntire-Stennis funds are part of the land grant
system, which has a tripartite mission of research, extension, and
education. The Forest Service has no dedicated programs for the
extension of their research results, nor for education.
The McIntire Stennis Act, states ``it is further recognized that
forestry schools are especially vital in the training of research
workers in forestry.'' Thus, the capacity building aspect of this
program was laid out in the original legislation. The forestry schools
are also unique, in comparison to the Forest Service in that they have
more forest scientists available, from a wider range of disciplines,
and have a graduate student workforce available and therefore provide
an organization capable of responding quickly to new trends and issues.
Given their mandate, the Forest Service spends a higher proportion of
its effort on research relating to public land management.
Finally, research direction and priorities are set nationally and
regionally in Forest Service research, and state by state in CSREES
cooperative research. The Dean or Department Head is usually in direct
contact with stakeholders at the state level, so that in general,
statewide and short-term research is the niche of the universities, and
regional/national and long-term research is the niche of the Forest
Service. The Forestry Research Advisory Council (FRAC) provides advice
and reports on regional and national planning and coordination of
forestry research within the Federal and State agencies concerned with
developing and utilizing the Nation's forest resources, forestry
schools, and the forest industries, as well as advising on the
apportionment of funds for the McIntire-Stennis Program. Finally, some
Forest Service research stations do not have all the relevant
disciplines represented, and so for some areas in some disciplines,
only universities are available to conduct research. This is
particularly the case in social science research. The Forest Service,
CSREES and the universities participate in ongoing coordination of
research efforts.
special and administrative grants
Question. For each of the special research and administrative
(research and extension) grants funded for fiscal year 1998, please
indicate the following: a detailed description of the project funded;
who is carrying out the research; federal and nonfederal 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
The main focus of work on this problem has been identification of
corn germplasm resistant to aflatoxin. Of continuing importance are the
identification of Aspergillus flavus-inhibiting compounds and fungus-
inhibiting enzymes, including developing effective transformation
methods and plant regeneration techniques. There has been increased
national concern over aflatoxins as carcinogens, possessing other toxic
properties, as well as the potential for health risks wherever toxin-
contaminated corn is found. Aflatoxin contamination continues to occur
with some regularity in the southeastern United States, and more
recently in the southwestern United States. Outbreaks also have
occasionally occurred in the upper midwest region. The original goal of
this research was the reduction of aflatoxin production in corn. During
the past year, corn plants have been produced with the antifungal genes
chitinase and B-glucanase. These antifungal genes have the potential of
conferring resistance to many ear rots including that caused by
Aspergillus flavus. Additional useful data have been collected on
inheritance of resistance from the inbred line Tex6.
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, 1997, and 1998, $113,000 per year. A total of $1,064,000
has been appropriated. The non-federal funds and sources for this grant
are $22,349, derived from project investigator salaries and fringe
benefits.
This research is being conducted at the University of Illinois. The
anticipated completion date for the original objectives was 1995, but
last year, the scientists updated the estimate to 2000-2002, because
there is concern that they do not have one mechanism of resistance that
will completely solve the problem. It now appears necessary to pyramid
genes for resistance, including naturally-occurring genes and possibly
those that can be placed into the plant using biotechnology. The
scientists continue to anticipate solving these related problems by the
above estimated dates. The last agency evaluation was December, 1996.
That evaluation stated that the research techniques are consistent with
a high likelihood that specific objectives will be satisfied. There is
good balance between fundamental and applied research.
agricultural diversification and specialty crops, hawaii
With the resurgence of interest in Hawaiian culture and
corresponding increased prevalence of Hawaiian dances, there is
increased pressure on plant materials found in State and Federal
forests in Hawaii. To this end, the University of Hawaii College of
Tropical Agriculture and Human Resources have been working on the ``lei
project'', involving about 20 members from the College and different
organizations in the state working together to develop a handbook for
the production and business of materials for Hawaiian lei (body
adornment made of plant materials). The group identified 85 candidate
plants and assembled a source book of 90 nurseries in Hawaii that have
these plants for sale as starter material. Efforts continue to find
entrepreneurs to grow and process taro on a large scale for
hypoallergenic products. The new taro production manual will help
prospective entrepreneurs understand the requirements of this
opportunity.
Work is continuing with Maui onion growers who are potentially
interested in obtaining a Federal Marketing Order for their unique
onions. Most of the effort in this area has been on researching
information about market potential and giving informational talks. Work
is continuing on kava, a root crop that might be used as a non-
addictive natural relaxant, in the area of collecting production stock
and researching and assembling production information. Some work on
market potential has also been done. Work is continuing on Stevia, to
explore its use as a natural food sweetener and an ornamental plant.
Although this special research grant is awarded noncompetitively,
the proposal is reviewed for merit by the university before submission
to CSREES and reviewed by CSREES for technical merit and allowable
costs and procedures. The principal investigator believes this research
to be of local and Pacific regional need, and, in some cases, national
need. The small projects that are being undertaken under the umbrella
of the Diversified Agriculture project are one attempt to provide to
some current and would-be entrepreneurs the tools they need to make
business decisions about agricultural opportunities.
Grants have been awarded from funds appropriated as follows: fiscal
year 1988-1989, $156,000 per year; fiscal years 1990-1993, $154,000 per
year; fiscal year 1994, $145,000; and fiscal years 1995-1998, $131,000
per year. A total of $1,597,000 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 1994-1998. In addition, nearly
$50,000 of in-kind support has come from private sector and state
partners, $8,000 from the Office of Hawaiian Affairs, and $30,000 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 on the island of Oahu, and
on the islands of Maui and Hawaii. The lei materials and Maui onion
work will conclude by September 30, 1998. All taro related work is
complete. Work on the marketing book is complete. Work continues on
kava, high pressure processing, and other projects consistent with the
original goal.
The CSREES's agency representative to this project has met with the
University of Hawaii investigators to review progress and plan
subsequent activities. This close interaction has led the project
though a progression of steps from research discovery to near-term
commercialization of various products, and, in the case of high
pressure processing, back to testing and development of a new
technology for possible commercial use.
agricultural diversity/red river, mn and nd
This multi-year, multi-phase project will have six specific
components. They are: (1) vegetable growing research--especially field
and glasshouse related research, (2) vegetable collection and storage
research and/or related storage or distribution business development,
(3) development of processing industries for the fresh market or
research related to the fresh products for market, (4) development of
marketing and/or supply associations among vegetable producers, (5)
development of processing industries for the ready-to-eat salad market
or research related to ready-to-eat products, and (6) development of
processing industries for the frozen vegetable products market or
research related to frozen products. This first phase of this multi-
phase project will concentrate its industry development and research
activities in three areas: vegetable growing research--especially field
and glasshouse related research, development of marketing and/or supply
associations among vegetable producers, and development of processing
industries for the ready-to-eat salad market or research related to
ready-to-eat products.
Initially the growing of vegetables in the region was driven by an
opportunity to meet increasing consumer demand for fresh vegetables and
concerns over both the cost of water and the environmental impacts of
the use of chemicals in the traditional vegetable producing regions of
the southern United States. This industry currently raises three crops
of vegetables a year. This requires extensive irrigation in the hot
summer months. Population growth and increased domestic and industrial
demands for water have created significant pressures to shift water
usage away from agriculture and toward other domestic and industrial
needs. The shift in cropping patterns can have a positive effect on
farm income and lessen the need for outside or federal financial
assistance. The project objectives include: (1) Conduct three
replicated field trials on growing of carrots; (2) Continue study of
vegetable growing techniques in Europe an continue negotiations with
vegetable growing research facilities/laboratories in Europe to
transfer growing knowledge to the region; (3) Review current and future
market opportunities for further development of the industry and
identify strategies and partners for pursuing these opportunities and
take appropriate organizing steps; (4) Develop and maintain a WWW
Webpage for this vegetable industry project; (5) Conduct market
research for establishment of a ready-to-eat delicatessen salad
processing facility in the region; (6) Conduct market research for
establishment of a ready-to-eat fresh-bagged salad processing facility
in the region; (7) Continue business development planning for
establishment of a ready-to-eat delicatessen salad processing facility
in the region; and, (8) Continue business development planning for
establishment of a ready-to-eat fresh-bagged salad processing facility
in the region.
This work supported by this grant begins in fiscal year 1998 and
the appropriation for fiscal year 1998 is $250,000. Non-federal support
will come from private growers, state agri-development project funds,
the Ford Foundation and other local foundations. The work is being
carried out in Minnesota, North Dakota and South Dakota. Since this is
a new project and has not started yet, original objectives have not
been met. It is expected that this will be a multi-year, multi-phase
project.
ag-based industrial lubricants research program, iowa
This project is a continuation of seven years of activity conducted
to target specific applications, establish baseline performance data,
develop formulations of additives and chemical modifications,
administer laboratory and field tests, characterize, and build
relationships for commercialization of industrial lubricants derived
from U.S. grown vegetable base oils. Baseline performance data will be
compiled to establish fatty acid compositions, guide genetic
modifications, additive development, establish standards relative to
toxicity and biodegradability, and characterize compatibility with
specific metallic and non-metallic components. The grant has been peer
reviewed internally at the University of Northern Iowa.
Primary local and regional need is related to expanding value-added
applications of agricultural commodities in order to stimulate
increased demand and raise crop prices paid to farmers. On a national
level, the need is to provide renewable, safer, more environmentally
sound alternatives to petroleum based industrial lubricants. The
principal investigator believes this research to be of local, regional
and national importance.
The original goal of the program was sponsored by non-federal
funding to develop a soybean based hydraulic oil which was introduced
to market in July of 1997, marketed by AGRI Industries of West Des
Moines, Iowa as BioSOY hydraulic fluid. The original goal of the
project sponsored by federal appropriation which has not yet officially
started, is to replicate the success of the BioSOY introduction among
several other currently targeted lubricant applications. Federal
funding for this project began with an appropriation of $200,000 in
fiscal year 1998. No prior federal funding has been appropriated to
this research.
Since 1992 this research program has received cash grants from the
Iowa Soybean Promotion Board, Carver Scientific Research Initiatives,
in addition to several in-kind donations from industry to develop and
coordinate commercializa-tion of what has since become BioSOY hydraulic
oil. Beginning in 1995, the state of Iowa began to support the program
through its Wallace Technology Transfer Foundation. Beginning in 1996,
state funding was provided by legislative appropriation through the
Iowa Department of Economic Development. Additional funding has been
provided by the Iowa Department of Agriculture and Land Stewardship.
Laboratory and literature studies are being carried out primarily
at the Ag-based Industrial Lubricants Research Program facility in
Waverly, Iowa, with minor portions of activity being conducted on the
campus of the University of Northern Iowa in Cedar Falls, Iowa and the
laboratories of various industrial affiliates located throughout the
state and country. Field tests are being conducted a Sandia National
Laboratories, U.S. Department of Army test sites, some municipalities,
and in industrial equipment located throughout the nation.
The original objectives of the project sponsored by federal
appropriation have not yet begun, however these objectives are
anticipated to be complete within the first year of the project.
Additional lubricant applications are anticipated to be targeted during
the first year for development in subsequent periods. Agency evaluation
of this project has not been completed to date.
alliance for food protection, ne, ga
The fiscal year 1998 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 1997 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
and environmental factors on controlling Bacillus cereus, and
developing a device to rapidly detect foodborne pathogens using immuno-
magnetic separation technology. CSREES has requested, but has not yet
received, proposals from the University of Georgia and the University
of Nebraska in support of the fiscal year 1998 appropriation.
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, toxic fungal
metabolites in corn products, 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.
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 detection of almond and hazelnut residues in
processed foods, produced high-quality antibodies for these assays,
identified a soybean allergen, discovered that certain types of
Fusarium fungi do not produce mutagenic substances, and developed a
simple liquid chromatographic procedure for determination of
moniliformin 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, 1997, and 1998, for a
total appropriation of $900,000. The non-federal funds and sources
provided for this grant were $117,000 state funds and $250,000 industry
and miscellaneous in fiscal year 1996 and were estimated to be a
minimum of $75,000 state funds and $35,000 industry in fiscal year
1997.
Research is being 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 and the original objectives have not yet been met.
The researchers anticipate that work will be completed on the original
objectives in 1999.
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 in support of
the fiscal year 1997 appropriation was conducted on December 20, 1996,
and good progress was demonstrated on the objectives undertaken in
1996. 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, north dakota
The alternative crops project has two main thrusts, development and
utilization of alternative or novel crops and utilization of
traditional crops. The goals of the project are to diversify income at
the farm gate, reduce reliance on monoculture to help alleviate pest
problems, while providing new agricultural and industrial products to
society. Some of the new areas under investigation include, production
and use of dry field peas for the northern plains, production of levan
from sugar beets, and development of a fresh-pack carrot industry in
the northern plains. Previous work continues with oilseed crops such as
crambe, rapeseed and safflower as a renewable supply of industrial oil,
products from food crops for novel new uses in paints, coatings, food
ingredients, and the development of new biochemical and enzymatic
processes to refine oils for industrial uses. The projects funded in
this appropriation are evaluated by a peer-panel chosen by the Director
of the North Dakota Agricultural Experiment Station.
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 and 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.
Regionally, the temperate areas of the Midwest have the potential to
grow a 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 spawned
several crops and products into profitable private sector businesses.
The original goal of this research was and still is to introduce,
evaluate and test new crops which will broaden the economic diversity
of crops grown in North Dakota. The primary emphasis is to find new
crops with non-food uses and create value added products. 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
lupin flower, 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 biochemical 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.
Appropriations by fiscal year are as follows: 1990, $494,000; 1991,
$497,000; 1992 and 1993, $700,000 per year; 1994, $658,000; 1995,
$592,000; and in 1996, 1997 and 1998, $550,000 per year. A total of
$5,291,000 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, totaling $173,837. 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, totaling $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. The
principal researcher believes that the development of new crops and
products should be an on-going effort in North Dakota and other states.
Fiscal year 1998 is the ninth 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, and
continue to expand. As U.S. agriculture enters a new policy era with
less emphasis on commodity subsidies, great opportunity may exist to
better establish more biodiversity in agriculture. Such a change,
however will remain dependent upon research and development programs
specifically targeted at such a goal. This project has been evaluated
based on the annual progress report. The cognizant staff scientist has
reviewed the project and determined that the research is conducted in
accordance with the mission of this agency. An evaluation of this
project will be conducted in 1998.
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
project undergoes merit review by the university and by the CSREES
Program Leader on an annual basis.
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. Research generated from this
grant should lead to alternative production systems that can have
national, regional and local impact.
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 has led to improved feed
formulation and feeding strategies for hybrid striped bass. Researchers
have also developed management strategies to improve production
efficiency and cost effectiveness in non-forage based crawfish
production systems.
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 1995-1998 each year. A
total of $2,315,000 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, $79,935 in fiscal year 1996, and $124,893 in fiscal year
1997. 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 2000. 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 1997 review indicated that the research addresses an important
opportunity in the aquaculture industry, research objectives were met,
that progress on previous research was well documented, and that the
proposed research builds on the previous work funded through this
program. The research on hybrid striped bass funding through this
program complements research conducted through other USDA programs.
alternative salmon products, ak
This is a new grant in fiscal year 1998. Research will be aimed at
developing a commercial pin-bone removal machine to reduce production
costs of salmon fillets and thus open markets for salmon fillet shatter
packs. CSREES has requested, but has not yet received a proposal in
support of the fiscal year 1998 appropriation.
The Alaska salmon industry has lost considerable market share
worldwide to farmed salmon production. In 1994, the farmed salmon
market share surpassed Alaska's market share of the world's salmon
supply and has continued to climb every year since. In 1997, Norwegian
farmed salmon production exceeded Alaska wild stock harvests. Also in
1997, Chilean coho salmon exports to Japan exceeded North American
sockeye salmon exports to Japan. Japan has traditionally been Alaska's
strongest and most lucrative export market. The current situation is an
example of foreign competition undermining a traditional American
industry.
The Alaska salmon industry is a multi-state industry. Though the
product is harvested in Alaska, the benefits are shared with fishermen
residents in Washington state, Oregon, California and throughout the
nation. The appropriation will be used to support development of
market-desired salmon products using wild-caught salmon. Because this
is a new grant, no progress has been reported. The work supported by
this grant will begin in fiscal year 1998, with an appropriation of
$400,000. Industry will contribute approximately $200,000, based on an
estimated cost of $50,000 per plant, times four plants, for commercial
testing of the beta prototypes during the summer 1998 salmon season in
Alaska.
The work with be conducted at the University of Alaska Fairbanks:
Fishery Industrial Technology Center in Kodiak Alaska and at the
Geophysical Institute of the University in Fairbanks, Alaska. The
anticipated completion of the full objectives of this research area,
including original and related objectives, will require about five
years. It is anticipated that the proposal received in support of the
fiscal year 1998 appropriation will be reviewed for merit by a CSREES
specialist shortly after it is received by the agency.
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 and Critical Control
Point programs by USDA; 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. CSREES has requested and received proposals from the
consortium members in support of the fiscal year 1998 appropriation.
Projects included for funding in the proposal submitted to CSREES have
been reviewed for scientific merit by scientists at a non-recipient
institution.
The principal researchers believe a safer national meat product
food supply could reduce large economic losses--$5 to $6 billion a
year--as a result of lost productivity and wages and medical treatment
of victims, in addition to reducing the human suffering and loss of
life that occur every year as a result of foodborne illnesses. The
consortium's efforts for technology transfer with groups such as
hospitality associations, health departments, and trade associations
are helping educate the consumer and food service worker on safe
handling procedures across the nation. Scientific based testing for
safe food products will also find greater acceptance in international
markets, which will continue to contribute to increased exports and
sustainable rural economies at home. 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
included findings that for about 30 percent of households with children
experiencing salmonellosis symptoms, Salmonella cells were recovered
from multiple sources other than food. Researchers also found that some
commercial ``natural'' antimicrobial compounds with claims of being
able to control pathogens on poultry were either ineffective or not
cost effective. A model poultry carcass spray unit using different
chemical mixtures produced significant reductions in counts of total
bacteria and of Salmonella. For raw deboned poultry items, an X-ray
imaging system was coupled with laser system to aid in detection of
small residual bone fragments in such products. Researchers have
developed a rapid, non-destructive measurement model using near-
infrared reflectance and transmittance spectroscopy to correlate
heating patterns with destruction of pathogenic Salmonella and Listeria
bacterial cells as poultry is thermally processed. The target pathogen
Listeria monocytogenes was found to change its surface makeup with
different selective growth media and thereby elude detection by
monoclonal antibodies that can detect these pathogens when cells are
grown in non-selective media. A 24-hour tissue culture procedure was
developed that was able to detect the harmful cytotoxins of the
pathogen E. coli O157:H7 in raw and cooked foods. Two new natural
biopeptide bacteriocins active against Listeria were isolated and
characterized and shown to be unlike previously reported bacteriocins.
A novel simple adsorption method using rice hull ash was developed to
harvest and concentrate bacteriocins from the production broth. A
nested PCR assay was developed that is able to detect small numbers of
Campylobacter in 14 different raw foods including selected raw fruits
and vegetables. A DNA fingerprinting method recently reported to be
very useful for separating strains and pinpointing sources of E.coli
O157:H7 was shown to not be as helpful for separating ten different
serotypes of Salmonella linked to human illnesses in Arkansas and
Michigan, apparently because serotypes of this latter pathogen have a
more highly similar DNA makeup.
At Iowa State University research was expanded in production animal
food safety on farms. A triplex PCR technique for detection of
Escherichia coli 0157:H7 in ground meat was found to be more rapid and
more sensitive than culture techniques. In another study, a test
developed for rapid enumeration of coliforms and generic E. coli in
water was adapted to monitoring these organisms on pork carcasses. E.
coli and Salmonella spp. were found most frequently in ground pork
samples collected from packers and purveyors and least frequently at
supermarkets. Listeria monocytogenes was found in up to a third of
samples taken at food services and supermarkets but was not identified
in samples collected at packing plants. Hot water rinses of hog
carcasses contaminated with hog feces were effective in reducing the
bacterial load on the carcasses; an additional organic acid rinse
achieved further reductions. Some acceleration of lipid oxidation and
production of more volatiles were found in irradiated ground pork, but
levels were low and oxygen availability either before or after cooking
caused more changes than did irradiation.
Research at Kansas State University showed that low dose
irradiation resulted in minimal or no changes in beef and pork color,
flavor and texture. Studies demonstrated that standard commercial
processes for Lebanon-style bologna achieved a 5-log reduction in E.
coli O157:H7. The ongoing work with steam pasteurization of carcasses
has proved that this process can consistently meet the pathogen
reduction requirements for E. coli control which is to be used as an
index for process control. Results with Salmonella control demonstrated
that steam pasteurization can achieve the pathogen control standards
also required by USDA. Researchers have carried these findings to the
industry, consumer groups, and classrooms. For example, the research
demonstrating that ground beef can ``brown'' prematurely and before it
reaches the temperature to control E. coli O157:H7 has helped USDA and
others to recommend measuring the temperature to assure safety.
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; fiscal
year 1997, $1,690,000; and fiscal year 1998, $1,521,000. A total of
$17,329,000 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 $1,776,167
State appropriations and $824,378 industry, for a total of $2,600,545
in 1997. Thus, from 1991 through 1997 a total of $14,753,169 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. Continuing and evolving issues related to the safety of beef,
pork and poultry products will necessitate that research be ongoing to
ensure the safety of these products.
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 proposals was conducted during January 1998. In
addition, the CSREES scientist conducting the merit reviews of the
proposals participated in the Consortium's annual meeting in October
1997 where results of Consortium research projects were presented. Good
progress continues to be demonstrated by Consortium researchers in
meeting research objectives. Consortium researchers have helped develop
and validate procedures that have been adopted by USDA' s Food Safety
and Inspection Service to detect and reduce or destroy foodborne
pathogens on beef carcasses.
apple fire blight, michigan and new york
This project studies fire blight in apple trees, which is a
bacterial disease that can kill spurs, branches, and whole trees. The
management of this disease is difficult because only one antibiotic
treatment is available. The objectives of this research are to develop
fire blight resistance varieties, evaluate biological and chemical
control methodologies for disease management, and develop an education
and extension component for disease management. Fire blight is a
destructive disease of apple trees that can kill the trees. This
disease is caused by bacteria and effects apple trees in all apple
growing areas of the nation. In the northeast, the disease is more
prevalent because of humid weather conditions.
The goals of this research are to develop transgenic apple trees
through various molecular technologies, to develop new approaches to
antibiotic treatments of 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. The last objective involves
using disease prediction models.
Fiscal year 1977 was the first year funds were appropriated for
this grant at $325,000. For fiscal year 1998, $500,000 was
appropriated. A total of $825,000 has been appropriated. The non-
federal funds for 1997 were $40,127 for Michigan and $104,166 for New
York State. The funds for 1998 are state appropriated $25,071 and
$15,000 in funds from the Michigan Apple Research Committee for a total
of $40,071 from Michigan whereas New York is estimating state
appropriated funds at $104,166 for 1998.
Research is being conducted at Michigan State University and
Cornell University, New York Experiment Station and the anticipated
date of completion for the original objectives was 1998. The objectives
have not been met. It is estimated by the researchers that three to
five years are needed to complete this project.
The last merit review of this project was in January, 1997. In
summary, the evaluation indicated that progress was demonstrated in all
the objectives. In New York, rootstock transformation was successful in
two commercially important apple varieties and another transgenic line
performed well in field trials. New biological and chemical control
agents were evaluated for their use in integrated pest management of
fire blight. Commercial orchards were mapped for tree loss due to fire
blight rootstock infection and were used in an economic analysis to
determine a potential economic loss. In Michigan, a fire blight control
activity of a mixture of phage was conducted on apple trees under field
conditions. There was significantly less fire blight in inoculated
blossom clusters that had been treated. The use of antibiotics on the
bacteria were also effective under field conditions. A new technique
for detection of fire blight was developed that allows for the rapid
detection of low levels of bacteria from large samples.
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 project undergoes merit review by the
university and by the CSREES Program Leader on an annual basis. The
principal researcher believes the development of alternative
aquaculture production systems, such as closed recirculating systems,
would 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.
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
have also been evaluated. The research has led to improved production
efficiency and cost effectiveness in closed recirculating systems.
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,
and in fiscal year 1998, $158,000. A total of $1,253,000 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; in fiscal year 1996, $171,970; and in fiscal year 1997
$209,781. The primary source of funding is from the state with grants
and industry funding 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 and 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 2000.
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 1997 review of the project indicated that the project has
met stated objectives to develop best management practices, evaluate
solid waste management techniques, and improve production efficiency
and cost effectiveness in closed recirculating systems. The researchers
have indicated that the proposal is consistent with the NSTC's
Strategic Plans for Aquaculture Research and Development.
aquaculture, louisiana
Research has focused on catfish, crawfish, redfish, 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. Grants are awarded to
scientists within the university on a competitive peer review basis.
The entire proposal is also reviewed by the CSREES Program Manager on
an annual basis. The principal researcher indicates that there is a
need to improve production efficiency for a number of important
aquaculture species 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. The research funded through this program focuses on the
production of a number of important aquaculture species such as
catfish, crawfish, hybrid striped bass, and redfish.
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
continues to be directed at important opportunities to enhance
production efficiency and the commercial viability of sustainable
aquaculture systems in the region.
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 1995-1998 each year, for a total of $2,467,000. 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; in fiscal year 1996, $150,104; and in fiscal year 1997
$158,808. 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 and the
original specific objectives were to be completed in 1990. These
specific research objectives have been met, however, the broader
objectives of the research program are still being addressed. The
specific research outlined in the current proposal will be completed in
fiscal year 2000.
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 conducted site visits
in 1996 and 1997 to meet with the scientists involved in the project
and review the progress of the research. The 1997 review of the project
indicated that the research is addressing the aquaculture industry,
that the facilities are excellent, the principal investigators are well
qualified, the experimental design is sound, 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. The researchers are asked to develop a
research proposal consistent with the NSTC's Strategic Plans for
Aquaculture Research and Development.
aquaculture food and marketing development, west virginia
CSREES has requested the university to submit a grant proposal that
has not yet been received. The proposal will be put through the
university's peer review process and is reviewed by the CSREES Program
Manager. Since this is the first year of this project, CSREES will send
the proposal out for external peer review. The researchers indicate
that there is a regional and national need to evaluate marketing and
product development for small scale aquaculture systems in rural
communities. In addition there is a need to improve the efficiency and
sustainability of these systems. The researchers also indicate that the
proposed research is consistent with the NSTC's Strategic Plan for
Aquaculture Research and Development. This research could also
potentially be funded through the Fund for Rural America.
The goal of this research program is to develop sustainable
aquaculture production systems for small scale aquaculture producers in
rural communities. Research is likely to focus on refining culture
technologies, economics, marketing, value added processing and product
quality. Researchers will utilize an integrated systems approach in
addressing opportunities for these systems that may include biological
and system design components.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $600,000. The university
estimates that significant non-federal funding will be provided in
fiscal year 1998 primarily from state sources to cover the salaries of
the principal investigators. As the program develops, additional non-
federal funding is expected.
The research would be conducted at the University of West Virginia
in Morgantown and at off campus sites with a variety of potential
cooperators and the anticipated completion date for the original
objectives is fiscal year 2000.
The agency will evaluate the progress of this project on an annual
basis. The university will be required to submit an accomplishment
report each year when the new proposal is submitted to CSREES for
funding. Since this is the first year of the program, CSREES will
conduct an external peer review of the proposal.
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. In
fiscal year 1996 the water quality component of the program was not
included in the proposal. The project undergoes merit review by the
university and by the CSREES Program Leader on an annual basis. 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 farmed-
raised catfish industry accounts for over 55 percent of the total U.S.
aquaculture industry. Research funded in this program is directed
towards improved feeds and feeding strategies. In addition, research is
directed towards acoustical monitoring and inventory of catfish in pond
production systems.
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 ratios of protein to energy in catfish feed formulations
using conditions that closely reflect commercial production ponds.
Vitamin supplements are also being evaluated. Research findings from
this program have had a direct impact on feed formulations utilized by
the commercial feed mills resulting in reduced cost of commercial feeds
without reducing performance and productivity. 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; and fiscal years 1992-1993, $700,000 per year; fiscal year
1994, $658,000; and fiscal years 1995-1997, $592,000 each year, and
$642,000 in fiscal year 1998. A total of $9,045,000 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; $601,473 in fiscal year 1996; and
$463,990 in fiscal year 1997. 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 is 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 2000.
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 1997
review indicated that the research addresses important opportunities in
the farm-raised catfish industry, significant progress has been
reported on specific research objectives, experimental design and
scientific design are sound, there are excellent linkages between the
researchers and the catfish industry leading to accelerated adoption of
research findings, and the scientists involved in the project are
leading authorities in this area of research. This program has had a
tremendous impact on improving production efficiency in commercial
catfish ponds through improved feeds and feeding strategies.
The 1998 CSREES review will be completed within three weeks of
submission of the proposal. The researchers are asked to develop a
research proposal consistent with the NSTC's Strategic Plans for
Aquaculture Research and Development.
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. 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. dairy
cattle 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 mid-west 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''. The Great Lakes Dairy Sheep Symposium was sponsored in 1995
and 1996. A World Wide Web site was created 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. An analysis of the
impact of changes in European dairy policies has been completed. The
Institute sponsored a Minnesota-Wisconsin Dairy Policy Conference to
provide insights into current agricultural programs and policy issues
in the dairy sector of the U.S. economy.
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 1995-1998, $312,000 per year. A total of $1,648,000 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 1994-1997.
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 US 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. The Babcock Institute has remained true to its original
objective of linking Wisconsin and the US to dairy industries around
the world. 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, 1999.
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. The objectives of the proposal are within the mission of the
United States Department of Agriculture and the Cooperative State
Research, Education, and Extension Service.
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.
The project was subjected to a merit review.
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. 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 fiscal year 1996 and the
appropriation for fiscal year 1996 was $250,000, for fiscal year 1997,
$500,000, and in fiscal year 1998, $600,000. The total appropriation is
$1,350,000. Nonfederal funds for this project were $160,000 in 1996 and
$174,500 in 1997.
Research is conducted at Montana State University and the project
is proposed for completion following fiscal year 2001. Progress toward
the objectives have been reported by the principal researcher. The
project was peer reviewed annually through the project approval
process. Progress has been made toward the goal of identifying feed
quality parameters for barley and quantifying it's value as cattle
feed. Additional work will address the development of cultivars with
improved feed quality.
binational agricultural research and development program (bard)
The Binational Agricultural Research and Development Program, or
BARD, is a competitive grants program that supports agricultural
research of importance to both the United States and Israel. The areas
of research supported by the BARD program include plant and animal
sciences, water and soil science, aquaculture, economics and
engineering. Research projects submitted for funding must involve
collaboration between U.S. scientists and Israeli scientists. Proposals
competing for the fiscal year 1998 funding were due by September 1,
1997. Those proposals are currently under review and funding decisions
are expected by May of 1998. The funds available through the BARD
Special Research Grants Program are used to support the U.S. portion of
projects receiving BARD awards.
All proposals receiving awards through the BARD Program have
national, regional and/or local significance to agriculture in both the
United States and Israel. Thus, applicants must convince the review
panel of the global significance of the proposed work in order to
receive funding. The fundamental research supported by the BARD program
provides the knowledge base needed to solve important agricultural
problems in the U.S. and Israel as they arise.
The goal of the BARD program is to support fundamental research
that is important to agriculture in both the U.S. and Israel. Many
fundamental discoveries and accomplishments have been made in the
research areas supported by BARD. These discoveries and accomplishments
will lead to reduction of livestock diseases, increased livestock
production, improved production of plants under harsh environmental
conditions, and improved resistance of plants to disease. In the period
between 1979-1997, a total of 796 grants were awarded, over 1,000
scientific articles were published, and 8 patents awarded. As an
example, work supported by the BARD program at the University of
Florida resulted in the DNA sequencing of the citrus tristeza virus.
This virus has caused major economic losses to the citrus industry in
both the U.S. and Israel. The sequencing information can now be used to
develop effective methods to protect citrus trees by creating safe
strains of the virus that protect the trees from disease-causing
strains.
In 1977, an agreement was signed between the U.S. and Israeli
governments which established BARD. An initial endowment fund of $80
million was established through equal contributions from each country.
Subsequently, that endowment was increased by $30 million for a total
of $110 million. Funds for BARD are available from the interest earned
on that endowment. In the early part of this decade, a reduction in
interest rates, combined with increased research costs, impeded the
ability of the BARD program to adequately meet the agricultural
research needs of each country's producers and consumers. In fiscal
year 1994, the Department directed that $2.5 million of funding, which
had been appropriated for CSREES's National Research Initiative
Competitive Grants Program, be used for the BARD Program to supplement
the interest earned from the endowment. The supplementary funds were
matched by Israel. In fiscal year 1995, Congressional language directed
that CSREES again use $2.5 million of the National Research
Initiative's appropriation for BARD, and in fiscal year 1996, the
Department directed that a third $2.5 million increment of the National
Research Initiative's appropriation be used for BARD. CSREES received a
direct appropriation in the amount of $2 million for BARD in fiscal
year 1997, and $500,000 in fiscal year 1998.
The supplemental funds provided by CSREES are matched each year by
the Israeli government. Each BARD grant funded by CSREES is for the
U.S. portion of a collaborative project between U.S. and Israeli
scientists. The Israeli portion of the project is supported by
supplemental funds from Israel or from interest on the endowment.
Therefore, a significant portion of each project is supported by non-
federal funds.
The objective of BARD is to support fundamental science of
importance to agriculture in the U.S. and Israel. The generation of
knowledge is an ongoing process. Every year new research projects are
awarded funding through the competitive review process. The trust fund
was established to provide a long-term source of funding to conduct
priority research for both the U.S. and Israel. The creators of the
BARD Program determined that a ten-year review should be conducted to
ensure its relevance and impact. The ten-year external review panel y
endorsed the success of BARD and recommended its continuance and
enhancement. Due to the ongoing nature of scientific research, the
annual funding of grant awards is focused n development and application
of state-of-the-art science. Each grant project is funded for two or
three years and the results feed into the greater scientific body of
knowledge generated by these and other scientists.
The USDA and the Israeli Ministry of Agriculture conducted a ten-
year External Review of the BARD program and published the report in
September of 1988. The objective of that external review was to
evaluate the effectiveness of BARD and the suitability of its concept
for bi-national collaborative research. The report concluded that the
BARD program had achieved its objectives. The Report of the Review
Committee concluded that ``BARD'' is working well, with efficiency.
``The project evaluation and management infra-structure has been
paramount in allowing BARD's programs to evolve. The Report made
recommendations relative to operational procedures for managing the
grant proposals and emphasized the need for increasing the corpus of
the endowment. BARD is now commissioning a twenty-year external review
of its oepration to evaluate its efficiency and economic impact.
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 part of the market 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.
This project undergoes merit review at the University of Missouri
College of Agriculture. The initial work is being conducted 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 will result in
increased investment in local communities, additional jobs, and
increased value added in the farm and rural community sectors.
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 at least $4.00 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 an increase of $9.6 million in total economic activity in
the region. 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 for 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, 1996, 1997, and 1998 $152,000
annually. A total of $799,000 has been appropriated. The source of non-
federal funds is state appropriated funds. The level in 1994 was
$7,310. The funding level 1995 was $74,854. Cost sharing by the
University of Missouri each year for fiscal year 1996 and fiscal year
1997 was $80,000 and $86,000 respectively. Total cost sharing for the
project by the University of Missouri has been $242,224. 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 and 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 result in
more value added opportunities for farmers and rural communities. Also,
much of the work in commercializing biodiesel has been with the B20,
twenty percent blend, with petroleum-based diesel. This biodiesel
research is evaluating the use of biodiesel in much smaller blends,
such as one percent or one-half percent. At this use level, biodiesel
would be considered an additive rather than as a fuel extender. With
this scenario, the primary benefit would be a cost competitive
lubricant with superior performance characteristics, thereby making the
product more valuable as a lubricant that as a fuel.
The evaluation of using biodiesel as a complete fuel and in a blend
has been met. Also, the cost of biodiesel, when produced by a new
generation cooperative and used by members, has been evaluated.
However, the most promising commercial uses appear to be when it is
used for non-fuel uses and in very low blend levels. This project is
evaluated on an annual basis based on the annual progress report,
discussions with the principal investigator as appropriate, and agency
participation in collaborative activities related to this project. The
review is conducted by the cognizant staff scientist and it has been
determined that the research is performed in accordance with the
mission of this agency.
broom snakeweed
Current research addresses several areas for broom snakeweed
control, including efforts to understand 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. Grants are
awarded competively based on a peer review panel administrated by an
executive committee to researchers at the New Mexico State University.
The project holds an annual update meeting whereby investigators
present findings to outside scientists.
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.
Research is addressing three general areas which are ecology and
management, biological control, and toxicology and animal health. One
specific accomplishment is the biological control arena; several plant
pathogens and insects are proving to be effective in broom snakeweed's
control. Grazing management techniques and feeding studies to minimize
toxicological effects on livestock have shown that a 10 percent diet of
broom snakeweed did not impair fertility or semen characteristics in
test animals which were 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; fiscal
year 1997, $175,000; and fiscal year 1998, $185,000. A total of
$1,684,00 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 appropriation in 1995, and an estimated $300,000 in state
appropriation in each fiscal year of 1996 and 1997.
Research is being conducted at New Mexico State University on the
project since it 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.
Each year the grant is peer reviewed with oversight by an
administrative executive committee within the College of Agriculture
and Home Economics at New Mexico State University. Additionally
CSREES's senior scientific staff review the progress of the grant.
Those reviews indicated progress in achieving the objectives.
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 a farm 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. Two on-site reviews of the program have been conducted by the
CSREES Project Officer and a third is planned during 1998. The animal
and farm models have been published in peer reviewed scientific
journals.
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.
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.
Grants have been awarded from funds appropriated in fiscal year
1993 for $134,000 and in fiscal year 1994 for $126,000. In fiscal years
1995-1998, $113,000 was appropriated each year. A total of $712,000 has
been appropriated.
Research is being conducted at the University of Pennsylvania,
College of Veterinary Medicine and the University researchers
anticipate that work currently underway will be completed by September,
1999. 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.
The Center for Animal Health and Productivity project was last
reviewed in June, 1997. 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 the
USDA and CSREES, and the institution is well equipped and qualified to
carry out the research project. The institution has made excellent
progress towards the completion of the original goals of the project,
but still must evaluate the effectiveness of the use of the new tools
developed in reducing nutrient runoff from commercial dairy farms in
the watershed of the Chesapeake Bay.
center for innovative food technology, ohio
Funds from the fiscal year 1997 grant are supporting research
projects on using neural network/fuzzy logic tools to develop a model
of a growing and processing cycle for canning tomatoes, using membrane
filtration to remove organic material from fluid dairy wastewater,
combining several non-thermal processing techniques to sterilize liquid
foods, developing a system to eliminate the contamination of turkey
carcasses during slaughter, developing a non-contact, real time system
for evaluating grain hardness, and developing a dry process to apply
calcium carbonate, a hardening agent, to diced vegetables. Fiscal year
1997 funds support research from February 1, 1997 through February 28,
1998. CSREES has requested, but not yet received, a proposal in support
of the fiscal year 1998 appropriation. Projects included for funding in
the proposal submitted to CSREES have been reviewed by industry
representatives for relevance and by industry and university scientists
for scientific merit.
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. The principal researcher believes that, although the initial
impact of this research will be regional, the recipient organization of
this grant is part of a technology transfer network and proactively
seeks opportunities to deploy technologies developed through this
research to the food industry on a national basis.
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 developed a model for
predicting the harvesting time that will optimize product quality and
economic return to the grower, processor, and consumer. The fecal
contamination control project has led to the development of a system in
current operation that allows a turkey processor to operate within the
zero fecal material tolerance guidelines established by the Food Safety
and Inspection Service. The filtration project will allow fluid milk
processors to lower their costs and increase water quality at municipal
treatment systems. The sterilization project will lower processing
costs by increasing the shelf life of liquid products.
The work supported by this grant began in fiscal year 1995. The
project received appropriations of $181,000 in fiscal years 1995
through 1997 and $281,000 in fiscal year 1998. A total of $824,000 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. In fiscal year 1997, non-federal funds
included $35,000 in state funds and $95,000 in industry memberships.
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. At the current funding level, it is
anticipated that funding will be required through fiscal year 2000 to
achieve the goal of self-sufficiency.
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 1998 proposal, the last review of the proposal was
conducted on March 4, 1997. 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 Center for Rural Studies Project involves applied research
focused on developing and refining social and economic indicators used
to evaluate the impact of economic development programming and
activities. They are perfecting a delivery format for technical
assistance for community and small business development. A major
component of current research relates to utilization of the World Wide
Web as a delivery vehicle. Project proposal undergoes a merit review
within the agency.
The original goal was to create a database and analytical
capability for rural development programming in Vermont. Examples of
past accomplishments include maps presented to target child hunger
programs, targeted areas for other types of rural development program
intervention, analytical reports to guide the development of retail
shopping areas, an ``Economic Handbook for Vermont Counties'', and
strategies for using the World Wide Web to disseminate information.
The grant was initiated in fiscal year 1992. Appropriated amounts
are: fiscal year 1992-93, $37,000; fiscal year 1994, $35,000; fiscal
year 1995-98, $32,000 for total appropriations of $237,000. Fiscal year
1991 included $91,130 in state matching funds. Fiscal years 1993,
$143,124; 1994-96, $3,547 state matching funds. Fiscal years 1997 state
dollars were $2,931 plus researcher's salary. Fiscal year 1998 dollars
are not known at this time.
Applied research and outreach is being carried out through the
University of Vermont. and the original completion date was September
30, 1993. The original objectives of this research have been met, and
additional objectives will be completed by August 31, 1998. A proposal
for fiscal year 1998 has not been received to date.
The agency evaluates the merit of research proposals as they are
submitted. No formal evaluation of this project has been conducted. The
principal investigators and project managers submit annual reports to
the agency to document impact of the project. Agency evaluation of the
project includes peer review of accomplishments and proposal objectives
and targeted outcomes.
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 good balance between basic and applied research. The university
awards grants based on an internal competitive peer review and the
CSREES Program Manager reviews the proposal each year. 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.
The original research goal was to generate new knowledge that can
be utilized by the aquaculture industry to address serious 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. Progress has been
made in developing controlled artificial spawning techniques and
refining the nutritional requirements of striped bass. Scientists
continue studies to optimize water quality in closed systems.
Researchers indicate that intermediate salinity levels may improve the
feed conversion efficiency in juvenile striped bass.
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 1995-1998 $370,000, each year. A total of $3,572,000 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; in fiscal year 1996, $536,000; and in fiscal year 1997
approximately $400,000. 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 and the
original specific research objectives were to completed in 1993. 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 2000.
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 1997
review indicated the proposal was well written with objectives clearly
stated; excellent progress is reported on previous work; scientific and
technical expertise is excellent; and the proposal addresses high
priority research needs. The researchers are asked to develop a
research proposal consistent with the NSTC's Strategic Plans for
Aquaculture Research and Development.
citrus decay fungus, arizona
The research being funded under this proposal is crucial to the
development of effective management strategies for Coniophora
eremophila, brown wood rot of citrus. Basic studies will include
research on the life cycle of the fungus and its secondary hosts.
Chemical control methodologies will be conducted to determine if any
commonly available fungicides are effective and tree management for
maintaining tree vigor will be determined. The decline appears in
certain scion/rootstock combinations and therefore the
incompatibilities of graft unions will be investigated. This project
was not awarded competitively but will undergo peer review at the
university level and merit review at CSREES. The principal researcher
believes this research is of local need as of now but could potentially
be a problem on lemon trees in other desert citrus production areas of
the United States.
The objectives of this research to be conducted are to determine
the extent of brown heartwood rot in mature lemon trees in Arizona;
determine the relative susceptibility of various types of citrus to the
fungus; evaluate the possible effects of different rootstocks on brown
heart rot development; determine the fungus origin and secondary desert
hosts; and explore the potential chemical control of the disease.
Fiscal year 1998 was the first year funds were appropriated for
this grant. A total of $250,000 was appropriated. The non-federal funds
and sources provided for this grant is $110,155 in state appropriations
for 1998.
The research will be conducted at the University of Arizona,
Tucson, and the field studies will be carried out by the extension
facility at the Yuma Agricultural Center, Yuma, Arizona and the
anticipated completion date for the original objectives is 1999. This
is a new project and will be evaluated when received by the agency.
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. Funds are awarded
competitively among scientists working at this location. The proposed
research under this project has regional significance for coastal zone
land in the South Eastern US on potential new plants for the growing
market for ornamentals and speciality fruits and vegetables for the
area. 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 began in fiscal year 1997 and
funds appropriated as follows: fiscal year 1997, $200,000 and fiscal
year 1998, $250,000. A total of $450,000 has been appropriated. The
non-federal supporting this project in 1997 was $50,150.
Research will be conducted at the University of Georgia coastal
garden and this project was initiated in 1997 with the anticipation of
meeting the major objectives in four years. A [eer panel has been
established to set priorities and review subproposals from eligible
scientists at the Georgia Agricultural Experiment Stations. Subprojects
are selected competitively based on scientific merit from among
proposals that address high priority issues associated with production
of new cultivars for the region. The combined proposal is then reviewed
by CSREES for scientific merit. This review process has been used for
both fiscal years 1997 and 1998.
competitiveness of agriculture products, washington
Competitiveness of forest products research is conducted at the
University of Washington. Competitiveness of food products is conducted
at Washington State University. Export opportunities for forest
products continue to increase although they have been substantially
impacted by environmental restrictions on harvest and the Asian
economic crisis. Research has been focused on the more complete
transfer of U.S. light frame construction building technology primarily
to Japan in direct support of the efforts to deregulate the Japanese
housing sector, thereby opening their markets. Research has also been
focused on the causes of declining wood resource availability and
forest management alternatives that can better satisfy environmental
goals with less negative impacts in serving global consumer needs for
products. Research project priorities are first prioritized by an
outside Executive Board. Faculty then review the technical merits of
each project proposal.
Export of food improves the global competitiveness of the Pacific
Northwest region's value-added agricultural products. Research results
are disseminated 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 technology that can add
value to U.S. agricultural products and to meet the changes brought by
international trade agreements. This grant is awarded competitively at
the state level. The agency's last formal review was in 1992.
While there is a very large opportunity to increase the export of
materials and building systems to Asian markets, the companies are
generally small and are not able to provide their own research.
International markets have a long history and cultural appreciation for
different construction technologies that are both higher cost and lower
in construction quality than U.S. technology. Research on these market
opportunities has been critical to the deregulation of foreign markets,
development of acceptable product and building standards, understanding
the quality and service needs, and the understanding and training in
the customization of U.S. construction technology to foreign consumer
values.
Research on forest management alternatives for the Pacific
Northwest has also demonstrated that more wood, higher quality wood,
and substantial increases in critical forest habitats can be produced
using more advanced technologies, thereby reducing the substantial
economic and market share losses that have been caused by harvest
constraints to protect certain species.
The goal of the research in both wood products and food is to
provide the information on markets and product technologies that can
open higher valued international markets to U.S. exporters. Critical
information is needed to support the deregulation of foreign markets,
the education of foreign purchasers on the advantages of U.S. products,
the education of potential U.S. exporters on the substantially
different quality and service requirements for serving foreign markets.
The food production research has given Pacific Northwest producers
high-value options never before available, such as Wagyu beef, which
retails at twice the price of traditional U.S. beef; azuki beans, which
sell for 50 percent above other dry beans; and wasabi radish, which
sells for up to $60 per pound and is especially suited to small
holdings. Burdock is arousing a lot of interest among Japanese buyers.
In food processing, the Center has found beneficial uses of new
technologies, such as hurdle techniques for shelf-stable foods, pulsed
electric systems for pasteurization, microwave for drying, and high
hydrostatic pressure for cheese and egg processing.
The work began in fiscal year 1992. The appropriation for fiscal
years 1992-1993 was $800,000 each year; fiscal year 1994, $752,000; and
fiscal years 1995-1998, $677,000 each year. A total of $5,060,000 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 $2,000,000 gift of a ranch due to the
International Marketing Program for Agricultural Commodities and Trade
Center's research on Wagyu cattle, for a total of $3,637,970 in 1995;
$844,000 State appropriations, $45,000 product sales, $900,000
industry, and $45,000 miscellaneous, for a total of $1,834,000 in 1996;
and $876,000 State appropriations, $1,606,000 industry, for a total of
$2,482,000 in 1997.
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. The project
is projected for 3 years duration and, therefore, should be completed
following fiscal year 2000. New opportunities arise continuously as
international markets undergo change.
Two evaluations of the Washington State University component of the
project were conducted in 1992 by the U.S. Department of Agriculture.
The State of Washington Legislative Budget Committee gave the
Washington State Center exemplary marks for meeting its objectives. We
anticipate a follow-up evaluation in 1999. On-site reviews are
conducted annually of the University of Washington component of the
project through annual meetings of the project's executive board,
attended by the agency's staff. Both components are reviewed annually
by the agency. The project is meeting the key objective of trade
expansion through innovative research. The University of Washington
project was formally reviewed by the agency in 1991. State reviews were
completed in 1992 and 1994. A formal review by the University was
completed in 1997. A broad survey of constituents impacted by the
research was completed, resulting in a very favorable review of the
Center's activities and a recommendation to continue this research.
Another state review is currently scheduled to start this coming year.
cool season legume research
The Cool Season Legume Research Program involves projects to
improve efficiency and sustainability of pea, lentil, chickpea and fava
bean cropping systems collaborative research. 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. This project is
subjected to a merit review by peer scientists. The principal
researcher indicates that 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.
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; and fiscal years 1996 through 1998, $329,000 per year. A
total of $2,603,000 has been appropriated. The nonfederal funds
provided for this grant were as follows: 1991, $304,761 state
appropriations, $14,000 industry, and $18,071 other nonfederal; 1992,
$364,851 state appropriations, $15,000 industry, and $14,000 other
nonfederal; 1993, $400,191 state appropriations, $19,725 industry, and
$10,063, other nonfederal; and 1994, $147,607 nonfederal support.
Nonfederal support for 1995 was $150,607, for 1996 it was $386,887, and
for 1997 it was $384,628.
Research has been conducted at 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. This research
has provided vital information which is already being used to improve
production management. However, a number of critical issues related to
insect and disease control as well as crop quality remain to be
addressed. Breeding for insect and disease resistance is given the
highest priority, while crop management alternatives to help reduce
disease and insect pest problems will continue to be studied.
cotton research, texas
CSREES has requested the university to submit a grant proposal that
has not yet been received. The proposed project is expected to help
support a broad based program to address priority research needs of
cotton grown on the Texas high plain. The goal of this project is to
improve cotton production in West Texas.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $200,000. Nonfederal funding for
the project is not yet known.
The work will be conducted at the Texas A&M University Research and
Extension Center, Lubbock and Texas Technical University Campus. The
initial phase of this work is projected to require 3 years, this
project is just starting this year, and results are not yet available.
The proposal will be evaluated by the institution project approval
process.
cranberry-blueberry disease and breeding, new jersey
The 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 fruit-
rotting 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 finding here are being shared with experts in
Wisconsin, Michigan, and New England.
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 with wild blueberry
accessions resistant to secondary mummy berry infections were moved
into advanced testing. 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 maggots 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 cranberry were
determined. It is likely that resistance to fruit rot 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
year 1988-1989, $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 1995-1998, $220,000 each year. A total of $2,989,000 has
been appropriated. State and non-federal sources are providing funds in
the amount of $95,000 for this grant in fiscal year 1998.
This research is being conducted at the New Jersey Agricultural
Experiment Station. The 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 estimated that an
additional five to nine years will be required.
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 materials and environmentally-balanced pesticides being areas of
major impact. Some specific accomplishments included differentiating
isolates of a fungus classified into different fungicide sensitivity
groups using DNA-based probes, testing blueberry varieties with DNA for
leafhopper resistance, and development of an infection assay for
evaluating cranberry germplasm for Phytophthora root rot.
critical issues
These funds support research on critical issues related to new or
emerging pests and diseases of animals and plants. The program is
expected to initiate research in a short time period until other
resources can be secured to address the issue. The program began in
fiscal year 1996 when potato late blight and vesicular stomatitis in
animals were the two targeted emerging problems chosen for funding.
Funding for vesicular stomatitis research was continued through fiscal
year 1997 in an effort to identify either insect carriers of the virus
that could transmit the disease among animals or the wildlife
reservoirs of the virus which could contribute to initiation of future
outbreaks. In fiscal year 1997, the critical issues funding continued
to support research on potato late blight so that growers will be able
to manage disease outbreaks more effectively with integrated pest
management programs. Research is being conducted to identify molecular
markers for specific strains of the fungus, develop epidemiological and
prediction models, and educate growers about improved management
approaches. Proposals for this research program are reviewed by
scientific peer panels utilizing both USDA and non-USDA staff members.
When appropriate, investigators may be asked to revise or improve
certain components of the project to ensure that it meets the highest
priority issues.
Vesicular stomatitis is of national impact due to its similarity to
foot and mouth disease and the negative effect on movement of horses,
cattle and swine during an outbreak. The last outbreak in 1995 had a
very large impact on the economics of horse and cattle owners in the
far western US. Since 1992 new, highly virulent strains of the potato
late blight fungus Phytophthora infestans caused severe losses in
potato and tomato production throughout the United States, resulting in
what some experts term a national crisis. From 1993 to 1995, a series
of meetings involving growers, consultants, industry, academia and
government assessed the growing problem and participants concluded that
extraordinary steps were needed to mobilize research efforts that would
help address the problem in the near term.
In animals the goal was to discover natural reservoirs of the virus
and insects which are capable of transmitting the disease among
animals. At this time, we have been unable to find significant wildlife
hosts which could serve as a reservoir for the virus during periods
between outbreaks nor have the researchers been able to isolate the
virus from insects in areas affected during the most recent outbreak.
Research was initiated to provide growers with the knowledge and
technologies they need to reduce economic losses resulting from potato
late blight with less reliance on pesticides. Research initiated with
fiscal year 1996 funds is making progress in developing modeling tools
and management approaches that are an important step towards reducing
the devastating effects of late blight. The National Late Blight
Fungicide Trial provided important information on the efficacy of an
array of fungicide programs. A World Wide Web site was established to
provide growers, researchers and industry with the latest information
on management of potato late blight. Funds appropriated for fiscal
years 1996-1998 were $200,000 for each year, for a total appropriation
of $600,000 to date.
The vesicular stomatitis work is being conducted at the University
of Arizona and Colorado State University. The potato late blight work
has been conducted at Washington State University, Oregon State
University, University of Idaho, University of Wisconsin, and
Pennsylvania State University, and North Carolina State University.
The Critical Issues funds are intended to support the initiation of
research on issues requiring immediate attention until other, longer-
term resources are available. The objectives of the projects are short-
term and are expected to be completed within a 1-2 year period. This
has been true for the vesicular stomatitis and potato late blight work.
These projects have been reviewed to ensure compliance with the
original goals during fiscal year 1997. All projects were reviewed for
scientific merit before funding decisions were made. Also, scientists
being supported with these funds are in close contact with CSREES'
National Program Leaders in these areas so that the agency is kept
abreast of developments as they occur. In addition, site visits are
arranged when convenient to include as part of other official travel to
that state. Project locations have been visited and progress reports
submitted to document expected progress. Results are also shared with
APHIS scientists to ensure implementation of findings and verify that
we are meeting their needs.
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 assess the
economics of alternative breeding and rearing systems for goats in the
southeastern region of the U.S., to study the incidence and impact of
intestinal parasites, and to develop least-cost health management
strategies for parasite control. 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.
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
1995-1998. A total of $1,206,000 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 1999.
The Dairy/Meat Goat Research grant was reviewed in June, 1997 and it
was determined that the institution is well equipped and qualified to
carry out the research project.
delta rural revitalization, mississippi
The Delta Rural Revitalization, Mississippi Project involves
applied research and outreach focused on creating new and expanded
economic development opportunities for the Mississippi Delta region.
The project has gone through several phases in the delineation of a
strategy for long range development within the 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 and includes to development and
refinement of data bases and development statistics. The proposals are
submitted for internal review and evaluation within the agency.
Recommendations are presented to enhance impact on regional and
national agendas and provide greater impact on targeted region.
This is an on-going pilot to demonstrate the effective development
and implementation of applied research, training, education, and
technical assistance related to job and business development as a
development strategy. The principal researcher believes that the
databases, technical assistance, and analytical capability will
increase the effectiveness of economic development and entrepreneurial
activity in the region. The applied research and outreach project was
designed to increase ability to strategically guide economic
development through target industry attraction. They developed an
analytical baseline for the Delta region to benchmark economic
development progress and to profile potential arenas of opportunity. An
entrepreneurial forum was established to help new business ventures
with start-up advice and assistance. A venture capital association was
formed to help both inventors and businessmen find capital resources to
carry out development initiatives. The emphasis of the project is now
shifted to technical assistance for existing industries.
Grants have been awarded from appropriated funds in the following
amounts per year: fiscal year 1989, $175,000; fiscal year 1990,
$173,000; fiscal year 1991-93, $175,000; fiscal year 1994, $164,000;
and fiscal year 1995 to 1998, $148,000 per year. A total of $1,629,000
has been appropriated and awarded. 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; fiscal year 1998, $57,404. Reports for other years are
incomplete at this time.
Applied research and outreach is being carried out through
Mississippi State University and sub-contractors. The original
completion date was September 30, 1990. The original objectives of this
research have been met. The additional objectives being presented for
the current year should be completed by September 30, 1999.
The agency evaluates the merit of research proposals as they are
submitted. No formal evaluation of this project has been conducted. The
principal investigators and project managers submit periodic reports to
the agency to document impact of the project. Significant suggestions
have been offered to improve the relevance and impact of this project.
Time lines tend to lag on targeted accomplishments. An assessment of
the project was conducted by the Social Science Research Center at
Mississippi State University and a report compiled in November, 1996.
drought mitigation, nebraska
This grant supports the National Drought Mitigation Center program
in the School of Natural Resource Sciences 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. This grant has not been awarded
competitively, largely because of the national and international
reputation of the University of Nebraska for research in the field of
drought mitigation and management. The grant proposal is reviewed
annually by the University of Nebraska for its scientific merit.
Studies conducted by the principal researcher show that drought is
a normal feature of the climate of virtually all regions of the United
States. The Federal Emergency Management Agency has recently estimated
that annual losses attributable to drought in the United States are
between $6-8 billion. Losses resulting from drought have increased from
an estimated annual loss of $7 million to $1.2 billion in the mid-
1970's. Drought impacts are escalating in response to increasing
demands for water and other natural resources, increasing and shifting
population, new technologies, and social behavior. These impacts are
diverse and affect the economic, environmental, and social sectors of
society. This fact was reinforced dramatically in 1996 in the
Southwestern United States. Impacts in Texas alone were estimated to be
more than $5 billion.
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, local, and tribal level. Rather than the ``crisis management''
approach of the past, a ``risk management'' approach is needed where
the emphasis is on preventive measures, such as contingency planning,
mitigation strategies, and public education. Until the creation of the
Center in 1995, little attention has been focused on drought among the
long list of natural hazards that affect the Nation. The Center is
receiving non-federal funds in support of this research from the
University of Nebraska. In addition, the Center is attracting support
for specific projects that are an integral part of its mission from
federal and state sources.
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 and is delivering information to a diverse
audience of users through its home page. Over 50,000 users now access
the Center's home page each month. The Center's award winning 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 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. In addition to
providing timely and relevant information on drought severity and
alternative response, mitigation, and planning measures, the Center
participated in the Multi-state Drought Task Force workshop organized
at the request of President Clinton and helped 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 Drought Task Force. This task force also made
recommendations to reduce the risks associated with drought in the
western United States.
There have been several notable outcomes of the Western Governors'
Association actions and the Center has been closely associated with
each of these outcomes:
1. A Memorandum of Understanding was signed between Western
Governors' Association and key federal agencies to develop a
partnership to improve drought management and preparedness in the West.
2. A Western Drought Coordination Council was formed in 1997 to
implement these actions. The National Drought Mitigation Center is
serving as headquarters for the Council and the Director of the Center,
is serving as the administrative director of the Council.
3. The Center has worked closely with both the Senate and the House
in the formulation of the National Drought Policy Act. This bill was
passed by the Senate in November 1997 and will be considered by the
House in early 1998. This bill would create a Commission to review
federal, state, and local drought programs and make recommendations to
the President and Congress on the needs for a national drought policy.
The Commission's work will be done in consultation with the National
Drought Mitigation Center.
4. The Center has been organizing and conducting a series of
training workshops on drought contingency planning. The purpose of
these workshops is to train representatives of local, tribal, state,
and federal governments on how to develop a drought contingency plan.
Two workshops were held in 1997; three workshops are planned for 1998.
5. The Center continues to work with specific states and tribal
governments on drought contingency planning efforts. The number of
states with drought plans has increased dramatically since 1982--from 3
to 27 states; and the Director of the Center has been instrumental in
this increased attention to drought planning at the state level. His
research is the basis for recent drought planning efforts in Texas and
Oklahoma. In addition, the Center will begin working with New Mexico in
1998 in the development of a long-term drought mitigation plan.
The work supported by this grant received an appropriation of
$200,000 in fiscal years 1995 through 1998, for a total appropriation
of $800,000. 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, and $61,545 in fiscal year 1997. The
University of Nebraska will contribute $67,819 in fiscal year 1998.
The research will be conducted at the University of Nebraska-
Lincoln. The research conducted under this project is being undertaken
under a series of nine tasks. Significant progress on each of these
tasks has been made, but these activities are ongoing. The information
clearinghouse has been created, but new information and documents are
continuously added to the home page in response to users' needs and
requests. In addition, the drought watch section is updated monthly to
assist users in evaluating current climate and water supply conditions.
Research on new climatic indices to monitor drought and water supply
conditions are being tested and mitigation technologies and existing
state drought plans are continuously evaluated. New activities are also
being initiated in response to the growing interest and awareness in
drought mitigation in the United States and elsewhere. For example, the
activities of the Western Drought Coordination Council provides the
Center with a broadening range of activities on an annual basis.
ecosystems, alabama
This is a collaboration between Auburn University, Faulkner State
Community College, and the Alabama Southern Community College. The
Faulkner State Community College's research will focus on marine and
estuarine environmental issues, including water quality, habitat loss,
non-point source pollution and watershed management in the Gulf of
Mexico region. The Alabama Southern Community College's research will
focus on issues facing the forestry industry in the southeastern United
States, including the reduction of chemical discharge from wood and
pulp processing. Goals for this project are still being refined, and no
work on this project has been initiated. However, we anticipate that
work will begin during the Spring 1998, and the appropriation for
fiscal year 1998 is $500,000.
Research will be conducted at the Faulkner State Community College
Aquaculture Center and the Alabama Southern Community College Center
for Forestry, Paper, and Chemical Technology. Objectives for the
project and a timetable for completion should be included as part of
the proposal, which has not been received by the agency. This project
has not yet been evaluated, as it is still in the early stages. The
first evaluation of the project will be a review of the research
proposal, and will be conducted when the proposal has been received by
the Agency.
environmental research, new york
The environmental research in New York has several major goals.
These are: (1) to better understand the impacts of nutrient flows,
principally nitrogen, from agriculture on non-agricultural ecosystems,
forests, wetlands, and water resources in mixed ecosystem landscapes;
(2) to improve knowledge of agricultural contributions to greenhouse
gas emissions and effects of projected climate change on crop
production; and (3) to develop innovative approaches and technologies
for improving the efficiency of agricultural production and/or reducing
environmental impacts of agriculture. New goals for the coming year
include: (1) to improve understanding of the impacts of land
application of biosolids on the sustainability of New York agriculture
and on water quality, and to develop management practices and
guidelines for sustainable use of biosolids in New York agriculture;
and (2) to evaluate spatial and temporal variability of crop yields
within fields and to develop management practices that increase
productivity, increase the efficiency of use of inputs, and reduce
environmental impacts of agriculture.
Interactions between agriculture and the environment are many and
complex and require multi-disciplinary efforts to both understand the
interactions and to develop effective management strategies.
Traditionally, research and research funding, has been discipline-based
and, hence, uni-dimensional. Programs supported by the special grant
are multi-disciplinary in nature, involving technical scientists from a
range of disciplines, together with social scientists and economists.
Additionally, translation of knowledge from plot or field studies to
larger scales, such as landscape to regional and global, is needed to
provide information that is useful to policymakers.
One goal of the program is to identify impacts of nitrogen flows
from agricultural lands on adjacent natural ecosystems, forests and
wetlands, and water resources and to devise management strategies to
minimize these impacts. Nitrogen leaching from maize-based cropping
systems has been shown to be higher when organic sources of nitrogen,
manures, and plow-down alfalfa are used as nitrogen sources for crop
growth compared to use of inorganic fertilizers. Attempts to use an
interseeded cover crop to capture and recycle excess nitrogen left over
after the cropping season were only marginally successful due to
limited growth of the cover crop following maize harvest in New York's
climate. Studies demonstrated that protection of groundwater resources
in New York from contamination by nitrate in areas of intensive dairy
farming must rely on dilution by water from non-intensively used areas
within the watershed and on ammonia volatilization from manure. A
computer based nitrogen decision support system to improve
recommendations for on-farm nitrogen management was developed and
implemented in New York.
A second goal of the program is to investigate several interactions
between agriculture and climate change. Studies have included:
--Impacts of agricultural use of land on methane fluxes to/from
soils;
--Effects of interactions between elevated carbon dioxide and
environmental variables on yields of vegetable crops;
--Effects of climate variability on crop production;
--Agronomic and economic effects of gradual climate change on grain
yields, cropping patterns and food prices; and
--Carbon sequestration in agricultural soils.
Studies of methane fluxes to/from soils showed that northern
hardwood forests are both a source and a sink for this powerful
greenhouse gas and overall may be a net source of methane. In contrast,
upland agricultural systems were consistently found to be a sink for
methane; thus the surface land smoothing and improved drainage of
upland agricultural lands has had a mitigating effect on atmospheric
methane levels. Flooding land for rice production is known to create a
substantial source of methane. Use of legume green manures to supply
nitrogen in an organic production system increased methane emissions
two-fold, creating a conflict between a sustainable agriculture
practice and the environment.
Climate, crop production, and economic models were linked to
provide an integrated framework for assessment of the impact of
climatic change at the farm level. The model projected that a grain
farm in a cool climate, Minnesota, could effectively adapt to climate
change; whereas a similar farm in a warmer climate, Nebraska, would
have reduced crop production and income.
No-tillage agriculture was shown to increase preservation of
existing soil organic carbon but accumulation of carbon derived from
crop inputs was higher with conventional tillage. Inputs of carbon to
soils from root exudates and residues were found to be more important
to carbon sequestration in soils than were residues from the tops of
plants. The effects of soil texture and soil aggregation, coupled with
tillage management, on carbon sequestration in soil organic matter are
being investigated.
A third goal of developing innovative approaches to management,
systems, and technologies has had the following components:
--Whole farm analysis and planning;
--Use of weather forecasts to predict weed management impacts on corn
production;
--Soil quality changes in the Chesapeake farms sustainable
agriculture project; and
--Use of constructed wetlands to mitigate phosphorus run-off from
barnyards.
Assessments of nutrient use and management on farms have been
carried out in Cayuga County, New York, and in Pennsylvania, in
conjunction with Rodale Institute. In New York, mass nutrient balance
data on dairy farms has shown that, because of nutrient imports in feed
and inadequate cropland area, nutrients excreted in manure exceed crop
requirements. Coupling of models for nutrient management and animal
diets was used to develop improved management practices. On one farm,
production of nitrogen in manure was reduced 25 percent by more
accurate balancing of animal diets and on a second farm modification of
the cropping pattern reduced the imported nitrogen in feed by 13
percent. In Pennsylvania, it was demonstrated that management of a
mixed grain and livestock farm without external chemical inputs was
economically feasible. Appropriate crop rotation was found to be the
key element.
Soil quality assessments at the Chesapeake farms sustainable
agriculture project on Maryland's Eastern shore, where various cropping
systems are being compared with the conventional corn-soybean rotation,
have shown that soil quality improves as the cropping system becomes
more complex, involves less tillage, and has more organic inputs.
Mitigation of phosphorus in runoff from barnlots by a constructed
wetland system is being evaluated on a 500-head dairy farm in New York.
Different substrates in the wetland beds are being evaluated, including
soil, limestone, norlite, and wollastonite. To date, the soil and
norlite materials are proving to be the most effective at phosphorus
removal.
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 1998, $486,000 each year. A total of $3,931,000 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 5-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 govern-
mental perspectives and needs. Estimated completion dates for current
program elements are:
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 agriculture project (a 10-year project)
The project was peer reviewed in 1997 and 1998. Overall, the
project was rated very high. Specific ratings included the following:
1. Outstanding scientific merit.
2. Appropriate methodology
3. Excellent previous accomplishments.
4. The project has potential for significant impact concerning the
relationship of agriculture to global change.
5. The proposal is well conceived and well written.
environmental risk factors/cancer, new york
The American Cancer Society estimated that over 184,000 women in
the United States were 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. This project,
emphasizing risk reduction prevention information, will work at filling
that void.
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, pubic 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 began in fiscal year 1997, and
appropriations were as follow: fiscal years 1997-1998, $100,000 for a
total of $200,000. 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) were requested for fiscal year
1997.
Research is conducted at the Cornell University, Ithaca, New York
and the anticipated completion date is March 31, 1999. As a relatively
new project, an evaluation has not been conducted, although the
proposal is currently under review. Periodic progress reports have been
made throughout the year and the project is moving towards achieving
its desired goals. A final evaluation will be made after March 31,
1999.
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 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.
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-
1998, $285,000 each year. A total of $2,954,000 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, for 1996 were $120,000, and
for 1997 were $190,510.
The research is being done at Oklahoma State University and 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.
This program has not been subjected to a comprehensive review.
However, each year's funding cycle is reviewed internally by CSREES
scientists for scientific merit and relevance. Results from this
project are currently being used by ranchers to help with management
decisions concerning stocker cattle grazed on wheat that will be
harvested for grain. Current work is designed to refine the current
information and identify wheat cultivars and grazing management for
optimum economic return.
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 US Environmental
Protection Agency (EPA) review status of pesticides, crop losses caused
by pests, status of minor use registrations (IR-4), current research in
progress, and priorities of IPM implementation teams are components of
the Pest Management Information Decision Support System (PMIDSS). With
the information in the current data bases, commodity/pest problems are
prioritized using a science-based logic. 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 recognizes IPM as
helping to provide workable solutions to pest problems. The decision
support system is incorporating increased information to address these
needs. The PMIDSS 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 identify
crop protection gaps and to find alternatives to pesticides under
regulatory review or those being lost due to pest resistance. The
system has identified priorities for the Pest Management Alternatives
Program request for proposals for the past two years. 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-setting process and the ultimate result
is to help insure that farmers have adequate alternatives for managing
pests at the specific local level.
The goal of the PMIDSS 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 were
reported for inclusion in the decision support system. Twenty-five
minor commodities on which 40 specific pests were identified in the
1997 request for proposals. Results were also used by the regional IPM
request for proposals. The Pest Management Alternatives Program
WorkBench ( a major component of PMIDSS) has been refined and placed on
the CSREES local area network and is available to all pest management
national program leaders.
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 years 1997-
1998, we are expending $177,000 per year to Purdue University and
Argonne National Laboratory. The total resources to date are $887,425.
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 part of the Pest Management Information Decision Support
System.
The work is carried out by the Argonne National Laboratory which
has a Washington, D.C. office where information, decision support
personnel are housed and there are frequent interactions between CSREES
and other USDA staff. Interactions and information is provided by every
state in our system.
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.
PMIDSS underwent a formal review in June, 1997 and a major piece of
the system, the Pest Management Alternatives Program WorkBench was
reviewed by regionally selected land grant scientists in November,
1997. The June review recommendations included: focus of the system on
the needs of the Pest Management Alternatives Program, delivery of the
software product to USDA, and development of a plan to sustain the
system in a user-friendly, widely available format. Evaluation of the
WorkBench in November brought the following comments and
recommendations: the WorkBench provides good linkages to relevant data
bases and brings together essential information on pest management
issues; the system should be placed on the World Wide Web for greater
access and utility; tell potential users that it is available; and
invest in high quality data bases to support and enhance data integrity
of the WorkBench. In addition, we have a PMIDSS guidance committee that
gives us input on an ongoing basis.
farm and rural business finance: illinois and arkansas
Federal funding for this project provides partial support for the
Center for Farm and Rural Business Finance which conducts an on-going
program of research and information focused on financing of farms and
rural businesses in the United States. The long-range plan of work for
this program focuses on three principal areas: (1) financial management
and performance or rural businesses; (2) research on financial markets
and credit institutions serving rural America; and (3) the impact of
public policies and programs on the financial health of rural America.
The need for the program is national in scope with some of the
individual projects focusing on regional or local needs associated with
particular commodities or situations. The need is greater now than when
the program was first initiated because government commodity programs
which reduced financial risk for agricultural producers have been
substantially altered. 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. 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.
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 are examining time and risk attitudes of decision
makers, risk-adjusted returns on Illinois farms, management performance
and the role of nontraditional lenders, financial implications of
property tax reform at the State level and investment options for
farmers and businesses during high income periods. Other projects are
weighing regulatory costs in rural lending, conducting statistical
analysis of Chapter 12 bankruptcy filing data and identifying
determinants of the type and terms of leases used in agriculture, and
their impact on firm profitability.
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, $106,000 in fiscal year 1995 through fiscal year 1997, and
$87,000 in fiscal year 1998. Appropriations through fiscal year 1998
total $773,000.
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, $125,000 was appropriated
from State sources, $103,000 was received through a National Research
Initiative grant, and $150,879 was received from the Council on Food
and Agricultural Research. Non-federal support for fiscal year 1998 has
not been identified.
The work is being carried out by the Center for Farm and Rural
Business Finance. Investigators are located at the University of
Illinois and the 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 initial objectives have
been met, changing conditions and new financial environments call for
continuing work to address new dimensions of the objectives as
originally proposed. Anticipated completion date of these related
objectives extend to August, 1998.
The project is evaluated periodically during the year through
direct contact with the Director of the Center, as reports are
received, and annually when proposals are received. The Project
Investigators also prepare a biannual summary which details
accomplishments during that period. The general objectives are met on a
continuing basis with specific aspects being addressed as they evolve
from year to year. One dimension, accomplished annually, is the
sponsorship and conduct of a National Symposium for Agricultural
Finance Executives which provides a valuable service as well as
visibility for the Center. During this past year, the projects have
addressed financial structure and efficiency of grain farms, vertical
coordination in hog farms, competitive challenges to bankers, farm
business planning, stochastic simulation analysis of Farm Credit System
income allocations, and the impact of banking structure on rural
financial markets. Evaluation of the program considers the focus of
specific projects on current issues as well as review of the conduct
and products from the various projects.
floriculture, hawaii
The research carried out with these funds involves wholesale and
retail U.S. 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 anthurium, 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.
The original goal of the research was to develop superior Hawaii
anthuriums, orchids, protea, 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 1995-1998 $250,000 each year. A
total of $2,762,000 has been appropriated. The non-federal funds and
sources provided for this grant were as follows: State appropriations
of $87,937 in 1995, 1996, and 1997.
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. 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 State 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.
The original goal was to develop the analytical capability to
assess and evaluate U.S. farm policies on the U.S. agricultural sector
and disseminate this information to farmers, farm and other
agricultural organizations, 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. This update was especially valuable for
conducting analyses to assess policy options for the 1996 farm bill.
During the past year, the FAPRI completed roughly 50 studies addressing
policy issues such as assessments of the 1996 Farm Bill, alternative
ethanol programs, the impact of changing interest rates, alternative
crop insurance programs and the impact on U.S. agriculture of the
European Union's Agenda 2000 policy reform. Numerous studies were
completed addressing improvements made to the empirical modeling system
to improve domestic and international policy capabilities. The FAPRI
staff has made numerous public appearances throughout the U.S. before
agricultural groups and Congressional committees and Executive branch
groups addressing policy issues.
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 years 1997 and 1998, $800,000 each year. The total amount
appropriated is $9,471,000.
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 1991; $321,074 State
appropriations, $51,500 industry, and $35,100 miscellaneous for a total
of $407,674 in 1992; $234,796 State appropriations and $70,378 industry
for a total of $305,174 in 1993; $78,286 State appropriations, $43,925
industry, and $29,750 miscellaneous in 1994 for a total of $151,961 in
1994; $80,155 State appropriations, $37,128 industry, and $42,236
miscellaneous for a total of $159,519 for 1995; $124,123 in State
appropriations with no other funding for 1996; $79,000 in State
appropriations, $50,000 industry and $25,000 miscellaneous for a total
of $154,000 in 1997; and $88,800 State appropriations, $75,200
industry, and $34,687 miscellaneous for a total of $198,687 in 1998.
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 other policies and proposed actions likely
to affect the agricultural sector and its components. The annual
proposal is carefully reviewed for adherence to stated objectives and
progress before the special research grant is awarded. No formal
evaluation of this program has been conducted.
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 non-irradiated 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. Research on the
effect of packaging materials on quality of irradiated meat is in
progress. 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. The recent massive
recall of over 25 million pounds of ground beef due to illness caused
by E. coli 0157:H7 contamination has resulted in huge economic losses.
With the recent FDA clearance of irradiation of red meat, research
needs leading to commercialization of this technology have been
enhanced. Additionally, researchers from eight other research
institutes have used the irradiation facility for research projects.
Thus, the principal researcher believes this research to be of
national, regional and local need.
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; fiscal years 1995-1997, $201,000 each year; and fiscal year
1998, $200,000. A total of $1,600,000 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; $72,772 in state funds,
$100,000 in industry grants and $55,211 in user fees in fiscal year
1995; $81,540 in state funds, $115,300 in industry grants and $50,963
in user fees in fiscal year 1996; and $77,963 in state funds, $253,450
in industry grants and $46,550 in user fees in fiscal year 1997.
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. Research on the factors affecting the quality of irradiated
red meat will be primarily conducted using the Iowa State University
facility.
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 supporting the fiscal year 1997 appropriation
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 research on
food and agricultural marketing and related policy questions. The
general intent is to provide information that can contribute to
improved performance of the food production and marketing system. The
Policy Center is primarily an economic research organization, but
conducts interdisciplinary research when appropriate and communicates
results to the public. Key users include farmer and consumer
organizations, agribusiness firms, public agencies, state legislatures,
and the U.S. Congress. The Center facilitates research at cooperating
institutions by organizing research workshops twice annually,
furnishing common data bases, preparing research publications, and
providing leadership for joint research efforts including the
sponsorship of research conferences. 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.
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 serves as a core
research group for Regional Research Project NE-165, Private
Strategies, Public Policies, and Food System Performance. The research
agenda includes industrial organization, strategic marketing, food
safety economics, agricultural cooperatives, and public policy
including antitrust and regulatory issues. The Center conducts research
on food marketing, including descriptions of food quality issues and
enhancement policies; private label branding; advertising strategies
for agricultural cooperatives; assessment of food retail mergers and
competition; evaluation of 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 has prepared 45 working papers, 35 policy research
reports, 16 policy issue papers, 8 books, and has reprinted and
distributed 61 important journal articles to researchers, industry, and
Federal and State legislators, and decision makers. This grant will be
used to support research on nine projects with research targeted at two
problem areas: analysis of impacts of changes in strategies,
technologies, consumer behavior and policies on the economic
performance of the food system, and to provide economic analysis of
private and public strategies in order to assess their impact on
improvement in food safety and other quality attributed. Projects
include competitive strategy analysis of cooperatives and investor-
owned firms; firm dominance in food manufacturing; advertising and the
U.S. food system; mergers, product relatedness and performance
outcomes; effects of market structure and concentration on promotional
activity; testing theories of oligopoly conduct; relationships between
market structure, firm position and price levels; strategic responses
to food safety and nutritional regulation; and, trade agreement effects
on food quality and trade.
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, for fiscal years 1995-1998, $332,000 each year. A total
of $3,684,000 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; $134,399 in fiscal year 1996; and,
$135,490 in fiscal year 1997. The decline reflects a change in
reporting only salary and related fringe benefits and excludes overhead
for facilities and utilities.
The research is being carried out by the Agricultural Experiment
Station at Storrs, and at the University of Massachusetts. The original
proposal in 1987 was for 24 months. According to the principal
researcher, the objective of conducting policy-oriented research on
food manufacturing and distribution industries to assist state and
Federal policy makers in improving the performance of the food system
is still an ongoing public concern, given increasing levels of
concentration in food processing. The current phase, initially funded
in fiscal year 1997, will be completed in 2001. CSREES annually reviews
project reports, succeeding annual project proposals, research studies
and educational programs. A merit review of the fiscal year 1997
proposal was conducted in January 1997. An outside review is scheduled
for April 1998. Assessment criteria include peer review of results and
publications, administrative review and approval of proposals, and
reports by external sources.
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.
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 181
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 1995-1998
each year. A total of $315,000 has been appropriated. The Food
Processing Center received $300,054 in State funds and $1,515,721 in
food industry grants and miscellaneous sources from 1992 through 1997.
Research is being conducted at the University of Nebraska. Because
this project supports ongoing technical assistance to clients, the
objectives are ongoing. 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 12,
1998. Progress under previous grants for this project appears to be
satisfactory, with numerous examples of assistance cited and summaries
of short-term projects provided by the principal investigator.
food safety
This program is to provide funding for competitively-awarded
research grants. It is the intention of this program to focus on very
high priority issues each year and reflect major concerns under the
Food Safety Initiative. The Request for Proposals (RFP) for fiscal year
1998 is planned to have a focus on major issues related to safety of
fresh and minimally processed fruits and vegetables which are of
increasing concern to the public. As a part of the needed research
effort under the President's Food Safety Initiative, this program will
address gaps in information available to support control measures in
food safety. Several agencies have combined to establish priorities for
research in support of regulatory actions in food safety and the RFP
will reflect these priorities. The goal of this research program is to
provide needed information about sources of contamination of food
products, develop rapid sampling and detection systems, and provide
support for various interventions to reduce contamination of food with
human pathogens. Because this is new program and no awards have yet
been made, there are no accomplishments to report at this time. The
work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $2,000,000.
Research projects will be funded at several land-grant universities
after the proposals have been reviewed for scientific merit and
responsiveness to the RFP. This program has been proposed for one year
at this time but additional funds are being requested for fiscal year
1999 to support this important area. Because no projects are in
progress as yet, no review of the program has been scheduled at this
time. It is anticipated that reviews of progress on funded projects
will be performed at regular intervals of 6-12 months.
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, and
technological changes. Research is needed to determine the effects of
these changes on the system's organization and performance, and to
ascertain needed adjustments in public policies based upon sound
research. There is a national need to assess and evaluate the
organization and performance of the Nation's food industry to ensure
that it continues to satisfy performance expectations of farmers and
consumers and adheres to acceptable standards of conduct.
The original goal was 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. Alterative
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 1995-1998, $221,000 per year. A total of
$4,247,000 has been appropriated. The non-federal funds and sources
provided for this grant are as follows: State appropriations of
$120,304 in 1991; $119,448 in 1992; $85,188 in 1993; $96,838 in 1994;
$59,435 in 1995; $50,636 in 1966; $56,421 in 1997; and $69,626 in 1998.
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 2001. CSREES
performed a merit review of the project in January 1997, as it
evaluated the 1997 project proposal, and concluded that the project's
researchers have done unique work 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 peer
reviewed professional journals and the popular press, and researchers
have ongoing dialog with private and public decision makers.
forestry research, arkansas
The Arkansas Forest Resources Center offers programs of teaching
and research to the landowners of Arkansas and the surrounding region.
This has been done through continuing education workshops for
landowners, the development of a series of educational distance-
learning tutorials, and the funding of 10 graduate assistantships for
the first class in the new forest resources master's program. A partial
list of workshops includes: Uneven-aged Silviculture of Loblolly and
Shortleaf Pine Forest Types, Environmental Law & Policy, Timber Income
Tax Update, Thinning Methods and Operations, Introduction to ArcView
3.0, Estate Planning, Forest Finance Applications: Basic Tools for
Daily Practice, and Opportunities in Forest Regeneration. The
educational thrust has combined Center and private dollars to establish
one of only three ArcView Learning Centers for natural resources. To
better provide the highly educated professionals needed to meet the
challenges of natural resources, new educational tutorials are being
developed in dendrology, tree ID, plant morphology, silvics, that aid
in the (1) transitioning of transfers to institutions with forest
resources offerings and (2) forest resources education of non-majors at
institutions without forest resources faculty. Furthermore, Arkansas
will activate a new Master's-level graduate program in the Fall 1998.
Research projects address issues of species diversity, richness,
redundance, and the resilience of disturbed and undisturbed hardwood
stands of the Delta. Furthermore, evidence exists that neo-tropical
migratory birds are indicators of ecosystem health. Factors implicated
as influencing their breeding range include habitat destruction/
alteration, forest fragmentation, etc. Thus, issues of re-establishment
and structure of regenerated hardwood stands are important for timber,
nontimber values, and the quality of life enjoyed regionally,
nationally, and internationally. Also, other projects are contributing
to the development of (1) a biological control agent for the southern
pine beetle, (2) alternative forest crops for the economically
oppressed Delta region, and (3) technologies for enhanced fiber and
wood production from nonindustrial and industrial lands. These issues
will grow in importance as southern forests assume greater proportions
of the national demand for 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 producing 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.
The thrust of goal one is developing alternative forest management
strategies of 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 pubic
forest lands. Significant progress has been made in several areas. Some
examples include: developing intensive fiber farming systems as
alternatives to soybeans for Mississippi Delta 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 studies in artificial cultures, delivery systems for
introduction of the bait, and conducting the first survey of
nonindustrial landowners in Arkansas for 15 years. The survey show some
areas for concern, such as the fact that the average age of 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 institutions for
transitions and to design more effect 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, stream-
side buffer zone effectiveness, effects of winter logging, and
secondary processing efficiency.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $470,000, and for fiscal years
1995-1998, $523,000 each year. A total of $2,562,000 has been
appropriated. The non-federal funding and its source provided to this
grant in 1994 was $411,726 State appropriations and $380,000 industry
for a total of $791,726; $491,301 State appropriations and $785,262
industry for a total of $1,276,563 for 1995; a total of $695,204 from
State and industry sources for 1996; a total of $1,115,341 from these
sources in 1997; and an estimated total of $1,000,000 for 1998.
The Arkansas Forest Resources Center is administered from the
School of Forest Resources on the campus of the University of Arkansas
at Monticello. Grants were received in 1994-1998 with funds distributed
for use over the 5 years following the activation year. This means
projects initiated in 1994 will commonly mature in 1999, 1995 projects
in 2000, 1996 projects in 2001, and so on. Projects are on schedule.
Projects from 1994 funding are nearing completion. Forestry research is
long term. Center objectives and selected projects will be continued
using the infrastructure and capacity developed with these Special
Research Grants. In 1991, an agency 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; however, the agency is planning one in fiscal
year 1998, pending fund availability.
The objectives outlined for fiscal year 1997 were to develop and
evaluate alternative forest management strategies for achieving multi-
resource objectives on private industrial and non-industrial forest
land and to evaluate the environmental implications of forest
management alternatives. Ongoing work addresses these issues.
Presently, the only criteria used to assess the projects would be
the scientific review process, prior to publication. Since some of this
research funding is used for extension and education, there are no
commonly used assessment criteria other than attendance at courses and
workshops. This makes an outside review by the agency extremely
important in evaluation, since review team members will be selected
with expertise in all these areas.
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 such as environmental, trade, labor, and food
safety. 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 policy makers,
industry organizations, producers, and other users. Proposals have been
submitted that outline long-range plans and specific projects for
funding. Models have been developed for 17 major (as measured in
production, consumption, and trade) U.S. fruits and vegetables with one
additional crop model, strawberries, to be completed in the coming
year. Trade models for those commodities with a significant import and/
or export sector have also been 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
1995-1998, $296,000 each year. A total of $1,513,000 has been
appropriated. The non-federal funding and its source provided to this
grant in 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 1995; a total of $62,400 from State and
industry sources for 1996; $50,000 from these sources in 1997; and an
estimated $50,000 for 1998.
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.
We have conducted no formal evaluation. However each annual budget
proposal is carefully reviewed and work progress is compared with prior
year's objectives. Informal discussions with congressional staff, USDA
officials and industry representatives indicate that these analyses are
extremely useful.
generic commodity promotion, new york
The grant supports, in part, the National Institute on Commodity
Promotion Research and Evaluation which provides objective analysis of
national and state commodity checkoff programs designed to enhance
domestic and export demand. The overall project proposal was merit
reviewed at the university level; a competitive peer review process was
used to select specific research projects. 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. The 1996 FAIR Act requires all Federally-constituted research and
promotion boards to evaluate their programs at least every five years.
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;
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
1995-1998, $212,000 each year. A total of $1,083,000 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 1994-96; $125,650 for 1997; and $130,430 for
1998. Collaborating institutions performing work under subcontract also
contribute non-federal matching funds.
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 need to
evaluate the benefits of commodity promotion and research programs is a
growing regional and national concern, as producers take on greater
responsibility for marketing their products. An increasing number of
promotion and research programs are being evaluated. The current phase
of the program will be completed in 1999. CSREES performed a merit
review of the project in January 1997, as it evaluated the 1997 project
proposal, 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 peer reviewed
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 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, 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. 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 Inter-
agency 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 twenty-six monitoring sites across the United States,
including Hawaii. The researchers plan to have additional sites in
Florida, Alaska, Puerto Rico, Southern California, Oregon, North
Carolina, Tennessee, and Oklahoma operational by the summer of 1998.
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 resulted in a much
larger and more difficult instrument to deploy has been developed. The
first two advanced instruments will be deployed at two test sites
during the spring or summer of 1998.
To gain experience in network operation, broadband instruments
along with ancillary instruments were installed at ten sites and have
been in operation for the last 40-48 months. These sites are now
equipped with a full compliment of instruments including the new multi-
band instrument. Additional sites developed during the last 12 months
are similarly equipped with broadband and the new multi-band UV
instrument. Data from each site is transmitted daily to Colorado State
University for preliminary 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 at Department of Commerce facilities in Boulder, Colorado. The
purpose of the central calibration facility is 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; fiscal year 1997 was $1,567,000; and
fiscal year 1998 is $1,000,000. A total of $10,982,000 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 four years, and twenty-six sites are now operational with new
generation instruments. The research level network will begin with the
first instrument to be installed at the Table Mountain, Colorado
instrument intercomparison site and the second possibly 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 be an ongoing
need for the predictable future. These measurements will provide
information 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 project has now met its first
objective of the establishment of a climatological network to monitor
UV-B radiation at the surface of the earth. Years of operation will be
required to measure trends in UV-B radiation and to develop models to
predict the climatology of UV-B radiation.
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 is in contact with program management
on a weekly basis and has visited the program headquarters six times
during the last year. A review of the UV-B Monitoring Program by a
panel of technical experts from outside the Department is planned for
1998.
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 worldwide present unprecedented opportunities for
cooperative public-private-university research to develop expertise in
world markets. 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; for 1995 through 1997,
$92,000 a year; and for 1998, $127,000. A total of $450,000 has been
appropriated. The non-federal funds and sources provided for this grant
were $90,000 per year in State appropriations for 1994 through 1996;
$51,700 for 1997; and $80,000 for 1998. State appropriations to date
total $401,700.
This research is being conducted at the University of Arkansas,
Fayetteville. The original proposal in 1994 was for a period of 12
months, but the objective of expanding the export capacity of small to
medium-sized agribusiness firms will not be met until 2000. CSREES
performed a merit review of the project in January 1997 as it evaluated
the project proposal that year. The proposal was sent back to the
university for revision because two of the three objectives did not
adequately reflect the kind of work being done and the project was
falling behind in the initiation of new research and the distribution
of results. The project proposal was subsequently revised by the
university and approved by CSREES. The main purpose of this project has
been to encourage global business expansion as a means of economic
development in Arkansas. To accomplish this purpose, the project
leadership discovered that most of their effort had to be focused on
the development of educational materials, training, and technical
assistance to get firms ready for and involved in exporting. The
initial objectives focused only on the development of primary research
data and analysis of demand in international markets and lacked the
emphasis on education. A February 1998 review of the project documented
continued progress with the educational component.
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. These funds are awarded by the institutions to scientists at
Kansas State University working on sorghum. 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. 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. Studies conducted
this past year have made progress toward identifying genetic
characteristics controlling grain yield under a range of climatic
conditions. Fiscal year 1998 request for proposal has been issued.
The work supported by this grant began in fiscal year 1997 and the
appropriation for fiscal years 1997 and 1998 is $106,000 per year.
Total appropriations to date are $212,000. 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. The research
proposal will be peer reviewed prior to awarding of funds. Preliminary
results contribute toward the understanding of factors controlling
grains yield and the development of higher yielding sorghum cultivars
for Kansas. The project is subjected to the institutional review and
approval process as well as CSREES review.
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. Funds from this grant
are awarded competitively to scientists at Oregon State University, the
University of Idaho, and Washington State University engaged in
research on grass seed production. Each award has been merit reviewed
by a peer scientist. 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. 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
1995-1998, $423,000 each year. A total of $2,162,000 has been. The
nonfederal support for this project in fiscal year 1994 was $266,055,
$298,052 for fiscal year 1995, $282,053 in 1996, and $301,650 in 1997.
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. 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. Considerable progress has
been made toward identifying the consequences of phased out field
burning of straw residue on grass seed production. Current and future
efforts are directed toward development of sustainable systems without
field burning. This program is subject to annual comprehensive
evaluation by a team of scientist, industry representatives and
farmers. The results are used to guide research for the next year.
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 1997
grant supports research efforts of 25 investigators from six
disciplines through June 1998. 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. The
principal researcher believes this research to be of national,
regional, or local need.
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 results indicate 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,
and human feeding trials demonstrated lowered blood cholesterol in
people fed the modified pork. The isoflavone daidzein, a novel health-
protective component of soybeans, was demonstrated to lower circulating
cholesterol in a mouse feeding study. Studies of isoflavone
bioavailability suggested different human phenotypes in the intestinal
breakdown of isoflavones. Ongoing studies are assessing the ability of
soybean isoflavones during menopause to maintain bone density and
reduce menopausal symptoms. Further evidence has been found that
oxygenated carotenoids potentially found in processed fruits and
vegetables have greater antioxidant ability and would 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 1998. A total of $3,662,000 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; $613,770 university
and $207,811 private in 1996; and $690,736 university and $1,024,196
private in 1997.
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 2000. The
grant proposal for fiscal year 1996 was subjected to extensive peer
review. In 1997 comprehensive merit review conducted by the university
lead to major revisions proposed for fiscal year 1998.
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. Will reducing dietary fat reduce the risk for obesity? Do
lean and obese subjects respond differently to changes in dietary fat
intake and how is this influenced by exercise and weight loss? And
finally, how do specific dietary fats affect the response to insulin
and the development of insulin resistence? The fiscal year 1997 grant
supports research through July 1998. CSREES requested that the
university submit a revised comprehensive grant proposal for fiscal
year 1998 which is now being reviewed.
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. They have identified a
taste system which responds selectively to some fatty acids. The
importance of this system in humans and its relation to obesity are
under study. In the second experiment they have shown that carbohydrate
intake is well regulated, but fat intake is not. In the third set of
experiments the relation between basic genetic make-up and the response
to dietary fat and insulin is being evaluated.
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 1994-1998 was $752,000 per year. A total of $6,160,000 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; $1,471,000 state
appropriations and $2,488,000 private in 1996; and $1,998,000 state
appropriations and $2,104,000 private in 1997.
Research will be conducted at the Pennington Biomedical Research
Center, Louisiana State University. The anticipated completion date for
the original objectives is fiscal 2000. The grant proposal for fiscal
year 1996 was subjected to extensive peer review, and in January 1998
an on-site panel of researchers evaluated the proposed objectives and
experimental protocols. On the basis of the critiques from the
reviewers, the proposal for fiscal year 1998 was revised.
human nutrition, new york
The general objective is improving the knowledge base needed to
evaluate and, when appropriate, implement, the increased reliance of
plant-based foods that is at the core of current Federal dietary
guidelines. Current dietary guidelines use this approach as a principal
strategy to control energy consumption, reduce fat intake, modify the
composition of ingested lipids, enhance the consumption of foods
associated with reduced cancer risk, and simultaneously insure that
macro-and micronutrient needs are met. The work brings together
investigators whose expertise ranges from basic nutritional molecular
biology to the behavioral sciences that are key in enabling consumers
to adopt newly discovered knowledge easily and effectively. The fiscal
year 1997 grant supports research through September 1998. CSREES has
requested that the university submit a comprehensive grant proposal for
fiscal year 1998.
Inappropriate diets and physical activity patterns are the second
leading etiology of preventable morbidities and mortality in this
country. As greater emphasis is given to strategies that permit
individuals to take increasing responsibility for their health and that
are designed to achieve goals related to health promotion and disease
prevention, the knowledge gained by work sponsored by this grant
becomes increasingly valuable. This knowledge is expected to be of use
to consumers in making informed food choices and to food producers and
processors in anticipating consumer demands. 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 molecular, behavioral 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 identified in the promoter of lipoprotein lipase a
silencing element that may play a major role in accounting for the
tissue-specific expression of the enzyme and for its regulation. Using
band shift assays it was demonstrated that the inhibitory factor is
much more abundant in liver nuclear extracts that in fat or heart
tissue.
The amount of essential sulfur amino acids is also altered by
shifting to more plant-based foods. A researcher found that the
cellular signal for the dramatic changes in rates of sulfur amino acid
metabolism that occur in response to changes in dietary protein levels
is the amino acid cysteine itself, not methionine or a metabolite of
methionine or cysteine, and not an indirect response to the cellular
redox state.
Work also has been done on strategies for improving food security
by encouraging community-based initiatives linking research and
extension. Approximately 300 food system stakeholders, from producers
to consumers, were mobilized to develop community-based initiatives.
These stakeholders are forming into 30 working groups across the region
to implement their plans.
Another portion of the work focuses on the interrelationships among
the behavioral factors that influence food choice at the community,
family and individual levels. The approach involves a unique
integration of research and intervention. They developed a model for
understanding the development of trajectories for fruit and vegetable
choice over the life course, and a conceptual framework for
understanding the influence of ethnic identity on fruit and vegetable
choice.
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 1995-1998, $622,000 each year. A total of $6,211,000 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; $348,127 in state appropriations and $39,593
private in 1996; and $133,162 state appropriations in 1997.
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 new related objectives
was submitted in 1997 and will be the research focus for the next three
years. The grant proposal for fiscal year 1997 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 1997 the Alliance awarded five
research grants at three institutions totaling $1,012,859. The Alliance
also issued a third call for proposals and received 20 proposals from
10 different universities. The proposals are being reviewed for
awarding of fiscal year 1998 funds.
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 is critical
to domestic food security and United States competitiveness in global
agricultural markets. Alliance grants are awarded on a regional basis
to advance corn and soybean production in the Midwest. 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.
Alliance grants are awarded to projects with a clearly defined
marketable product or service derived from biotechnology research.
Fiscal year 1997 was the third 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 bio-technology 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
1997 include efforts to: (1) obtain greater control of cell death in
plants with a molecular suppressor of cell death from maize, (2)
enhance the use of core technologies for genome based food analysis,
(3) develop soybean varieties resistant to nematode infection, (4)
reduce the environmental impact of higher corn yields, and (5) study
industrial networks in biotechnological structure and significance.
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. In fiscal year 1998,
$1,184,000 was appropriated, bringing the total appropriations to date
to $5,214,000.
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 years 1995
through 1997 are being conducted at the University of Illinois, the
University of Missouri, Iowa State University, Northwestern University,
and Southern Illinois 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.
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. The
supplemental information was received and we are satisfied that the
program is being administered in compliance with the purpose of the
grant. A peer review panel of government and academic scientists will
re-evaluate the project for scientific merit in 1998.
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. Individual research projects funded
by the grant are determined by a competitive peer review process
administered by the Institution using peers from other Institutions
located primarily in other States. 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.
The original goal of this research 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 1995-1998. A total of $2,183,000 has been appropriated.
During fiscal year 1992, $354,917 were from State funds, and $16,000
from Industry, for a total of $370,917. 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 1994-1997.
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 1998 appropriation will
be complete in September, 2000. 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 has conducted on-site review 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 Integrated Management System
as well as to aspects of animal production systems on animal well-being
and impact on the environment.
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. 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
1995-1998, $445,000 each year. A total of $2,274,000 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. The nonfederal funds for 1997 totaled $752,500.
Research will be conducted at Michigan State University. The
Principal Investigators have reported significant progress toward
improved cultural practices for these speciality crops which is
expected to reduce the need for chemical pesticides. This project has
not been subjected to a comprehensive review. The annual proposals
including all of its sub projects are subjected to CSREES before they
are approved. The project has progressed toward the objective of
developing management practices and strategies for economical
production of speciality crops in Michigan with reduced chemical
pesticide use. This program is evaluated at the end of each research
cycle and priorities adjusted for the next years funding. The
evaluation is performed by scientist at Michigan State University.
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 thirty-seven 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, four additional research projects have been approved
but are awaiting funding from industry. The next request for proposals
by the Institute will be issued in February 1998. 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,
was activated on January 1, 1997. Fiscal year 1997 funds are supporting
research from March 1, 1997 through February 28, 1998. CSREES has
requested and received a proposal in support of the fiscal year 1998
appropriation. Projects included for funding in the proposal submitted
to CSREES have been reviewed by industry representatives for relevance
and by scientists at the recipient institution for scientific merit.
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
and a high multiplier effect from the research. The Institute will
develop and disseminate scientific information and provide educational
programs related to value-added further processing, storage and
marketing of food products. These efforts will assure food safety,
improve the sensory and nutritional quality of food and meet the
nutritional requirements and food preferences of a changing society.
The original goal of this research is to establish an Institute of
Food Science and Engineering at the University of Arkansas-
Fayetteville. Research helped determine the cause of post-millage
breakage of rice kernels and subsequent effects on quality and end use
functionalities of rice products. A patent has been filed for a machine
that uses new defect recognition methods and algorithms for high-speed
accurate sorting of fruits and vegetables. Research has shown that
bacteria, including Salmonella typhimurium and Campylobacter jejuni, in
salt solutions and poultry processing water, either chiller water or
scalding water, could be reduced or eliminated using low voltage pulsed
electricity in a treatment tank or a flow-through system with a food
grade electrolyte. A commercial brine chiller will be designed with the
electrical pasteurization system, flow-through type, first for lab-
scale tests and then for pilot-plant tests. Other research produced an
enzymatic method to produce rice bran protein from non-heat treated,
defatted rice bran and determining the effects of processing and
storage on flavor of dill pickles. The initiative to provide technical
support to new food entrepreneurs has generated 13 requests for
assistance. Individuals interested in starting a food processing
business were provided with information on such topics as regulations,
safety, labeling, ingredients and packaging. In addition, information
was provided on financial aspects of starting a business and on
marketing products. Also, improvement in product quality and safety was
provided. 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. An introductory
publication and a comprehensive volume on ``Starting a Food Business''
were published. An Institute Newsletter is prepared quarterly.
The work supported by this grant began in fiscal year 1996. The
appropriation for fiscal years 1996 and 1997 was $750,000 each year and
$950,000 for fiscal year 1998. A total of $2,450,000 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 $320,403 industry funds in
fiscal year 1997. Thus far in fiscal year 1998, industry has provided
$93,599, with firm commitments of an additional $55,000. In just over
two years, industry has donated new equipment valued at $360,000. The
state has also provided facilities and administrative and clerical
support estimated at $303,694 through June 30, 1998. The Institute
received, as a donation worth $200,000 from industry, a trained sensory
panel to qualify and quantify sensory properties of foods.
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 2001. The goals of this
project related to establishing the centers of the Institute are
sequential and have not been fully met. The Center for Food Processing
and Engineering is fully operational and successful, the Center for
Food Safety and Quality is operating well, and the activation of the
Center for Human Nutrition is scheduled for 1999. The objectives
related to research and service to industry, food entrepreneurs, and
the general public would continue to be ongoing.
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 8, 1998. The
assessment was that satisfactory progress was demonstrated in meeting
the goals of the Institute. The progress report submitted as part of
the proposal is compared with stated objectives. If all goals are not
met, then the reviewer considers issues that may have hindered
completion of expected goals which may include equipment failure and
methodology problems that were not anticipated.
integrated pest management
This special research grant develops new pest management tools to
address critical pest problems identified by farmers and others in a
crop production region, and to find new approaches to managing pests
without some of the most widely used pesticides. Farmers have
identified the lack of effective alternative pest management tactics as
a primary reason for not implementing IPM on their farms. Where
effective alternative tactics have been developed, they are widely and
rapidly implemented by farmers. These projects are a key element of
USDA's goal of helping U.S. agriculture implement IPM practices on 75
percent of U.S. crop acreage, and will help the Nation's farmers adjust
to changes in pesticide availability resulting from implementation of
the Food Quality Protection Act of 1996.
The goal of this research is to provide farmers with options that
allow them to shift from sole dependence on pesticides to a greater
reliance on natural control methods. At the core of the integrated pest
management approach is a dual focus on improving profitability and
protecting vital natural resources. The research supported by this
special grant has made an important contribution to increasing
knowledge about new approaches to pest management, but the need for
continued investment in this area of research is greater than ever.
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 1989, $2,940,000 per year; 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 1995-98, $2,731,000 each year. A total of $55,399,000 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 currently being carried out by State Agricultural
Experiment Stations in more than 40 states. The economic and
environmental pressures facing U.S. agriculture today are at least as
great today as they were in 1981 when Federal funds were first
appropriated for this special research grant. There will be a need for
continued investment in research to develop new approaches to managing
pests for the foreseeable future. Proposals are evaluated by multi
disciplinary panels. The projects supported by this special research
grant have consistently provided key knowledge needed in developing new
approaches to pest management.
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 request for proposal has been issued, the grant will be
competitively awarded to scientists working at the West Watkins
Agricultural Research and Extension Center based on a merit review
conducted by Oklahoma State University personnel. 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. 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 1995-1998, $161,000 each year. A total of $2,830,000 has
been appropriated. The nonfederal 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, for 1996 were
$146,000, and for 1997 were $152,000.
This research is being done at the West 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 a production system for alternative
crops with economic potential for southeastern Oklahoma. Each year's
funding cycle addresses 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 have not been completed.
Each of the annual project proposals has been put through the
institutions review and is 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.
This project is evaluated internally at the end of each year in order
to set priorities for the next year.
international arid lands consortium
Fiscal year 1997 was the fourth 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 arid and semiarid lands.
Projects that began in 1994-1997 will continue to be funded to address
issues of land reclamation, land use, water resources development and
conservation, water quality, and inventory technology, and remote
sensing. All proposals are peer reviewed and awarded competitively,
whereby the principal investigator must be from a Consortium member
institution. The principal researcher believes the consortium is
devoted to the development, management, and reclamation of arid and
semi-arid lands in the United States, Israel, and elsewhere in the
world. The International Arid Lands Consortium will work 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, and Nevada's Desert Research Institute. 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 Consortium's affiliate members
include Egypt's Ministry of Agriculture and Land Reclamation Under
secretarial for Afforestation and Jordan's Higher Council for Science
and Technology.
The original goal of the Consortium was and continues to be
acknowledged as the leading international organization supporting
ecological sustainability of arid and semi-arid lands. To date, 45
projects have been funded, 31 of which are to conduct research and
development, 12 for demonstration projects, and 5 for international
workshops. Funds approximating $2.68 million have been used to fund
these projects.
The 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 1998 for total
appropriations of $1,645,000 for the 5-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 in fiscal years 1993 and 1995,
respectively. Additional funds of $34,000 were received during 1996
from the Egyptian affiliate member to enhance future collaboration.
Amounts for fiscal year 1998 will be available during March 1998.
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. Almost all research and demonstration
projects that started during 1993 and 1994 have been completed. The
projects started in 1995-1997 are expected to be completed within 6
months to 2 years depending upon the nature of the research. Several
demonstration projects were completed and 5 international workshops
were held during 1994 through 1997. The International Arid Lands
Consortium is an organization with long-term goals that will require
research and development for many years. All projects are evaluated
every 6 months and require progress reports that are peer reviewed by
scientists identified by the Consortium. The completed projects have
met all proposed key objectives. The cognizant staff scientist has
reviewed the project and determined that the research is conducted is
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.
Whenever possible, efforts will be made to convert by-product materials
in agricultural wastes into useful new products. Both fundamental and
applied research studies will be conducted with the goal of enhancing
the recovery and utilization of byproduct materials through studies
involving fermentation, enzyme catalysis and bioprocessing. The
expectation is that new and improved technologies will be developed
from the research to reduce the burden of agricultural bioprocessing
wastes on municipal waste management systems and to transform
components of these agricultural wastes into commercially viable
products. This overall project involves a coordinated approach by a
diverse group of investigators, and funding decisions within each
participating institution for individual studies are based on a
competitive process with a peer panel review and evaluation. In
addition, the project proposal submitted to CSREES, which combines the
selected individual studies, is also peer reviewed for scientific merit
by a biotechnology panel designated by the Agency.
Developments in biotechnology have added to the national need for
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. The principal
investigators consider this research to be of national, regional, and
local importance.
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. A cadre of scientists has
been established by the Consortium to assist them in finding uses for
the by-product waste streams generated by agricultural processing. The
Consortium is also making important progress in bioconversion,
biocatalysis, membrane concentration, and bioseparation of by-products.
In fiscal year 1998, new studies are being initiated on value-added
products related to culture of polysaccharide-producing bacteria,
screening of agricultural seed processing fractions for biocatalysts,
conversion of lignocellulose to lactic acid, and the use of waste by-
products as feeds for livestock and aquacultural species.
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; fiscal year 1997, $1,738,000; and $1,564,000 in fiscal year 1998.
A total of $17,293,000 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. More recently, the diversified
economic base of the Cedar Rapids area has attracted new biotechnology
industries, which have added greatly to the volume of industrial waste
streams. No firm date was established to complete this research at the
beginning of the project. The researchers have worked closely with the
City and the industries generating these agricultural wastes since
1989, and the nature of the studies have evolved as significant
progress has been made 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. Thus, several years will be needed for these tests and to
refine the existing separation technologies.
The Iowa Biotechnology Consortium proposal for fiscal year 1998
will be evaluated for scientific merit by a biotechnology peer review
panel on January 29, 1998. The panel recommendations related to past
progress and proposed future experiments will be used in the approval
process for the project. The Consortium was also featured in a
biotechnology special grant seminar hosted by the Agency at which the
principal investigators presented research progress and highlights to
an audience of agency scientists, administrators, and awards management
staff as a part of the program's post-award management. A site visit to
the research facilities by the Program Manager for an assessment is
anticipated during next year.
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.
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, noninfested 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, $346,0000 was appropriated in fiscal
year 1998, bringing total appropriations to $1,563,000. 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 each fiscal
year 1996 and 1997, 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. Each year the grant is peer reviewed and reviewed by
CSREES's senior scientific staff. Grants are awarded on a competitive
basis using a peer review process. An external review is being planned
for 1998.
landscaping for water quality, georgia
The project is a comprehensive, multi-disciplinary, multi-
institution, 5 phase, 5-year study directed by the University of
Georgia, in partnership with private producers and other agencies. The
researchers believe it will lead to development of management
guidelines for animal-based agriculture based on landscape-scale
environmental quality considerations. Participating institutions and
agencies include: the University of Georgia; the Joseph W. Jones
Ecological Research Center; the Middle South Georgia Soil and Water
Conservation District; the U.S. Department of Agriculture's
Agricultural Research Service, Natural Resources Conservation Service,
and Cooperative State Research, Education, and Extension Service; and
the Georgia Department of Natural Resources. Key partners in this
project include growers from Brooks and Thomas counties in Georgia.
This project undergoes merit review by the Cooperative State Research,
Education, and Extension Service.
The economies of scale associated with modern animal production and
processing have led to concentration of livestock operations within a
very small geographic area. This has often led to problems of regional
water quality degradation. In the southeastern United States, these
water quality problems have often been exacerbated by location of
livestock confinement facilities on sites lacking adequate good
cropland for proper management of manure and waste management. One such
region experiencing rapid growth in poultry production is the Gulf-
Atlantic Coastal Plain of Georgia. Research is needed to create the
information necessary to develop land management strategies to prevent
environmental degradation, while maintaining profitability, with the
intensification of animal-based agriculture in this region and similar
regions of the country.
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 5 years.
The planned research is on schedule. Since the project began on
February 1, 1996, progress has been made on three of the five
objectives and work on the final two objectives was initiated during
fiscal year 1997. 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.
4. Installation of stream sampling sites is now in progress in the
Ichawaynochaway Creek Drainage Basin--the final of the three study
watersheds.
5. One year of chemical and biological water quality data has now
been collected from the Piscola Creek Watershed and 2 years of data
from the Little River Research Watershed.
6. Preliminary macroinvertebrate samplings were conducted in the
Piscola Creek Watershed during 1997. Regular sampling is to begin in
1998. These samples will provide a good indicator of how non-point
source pollution is affecting the streams' ability to support aquatic
life.
The work supported by this grant began in fiscal year 1996 and the
appropriation for fiscal years 1996, 1997, and 1998 was $300,000 per
year. A total of $900,000 has been appropriated. Information provided
by the University indicates that $202,000 in state funds was 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 non-federal
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 of the entire project
is February 2002. Each of the project's five objectives will be
completed by preset deadlines. The first deadline is January 31, 1998.
The $900,000 in Federal funds appropriated for this project will
provide a good foundation for completing the objectives. Good progress
has been made on the five objectives of this project, as determined by
the agency's review of the progress reports and meetings with the
principal researcher. We are working with the principal researcher to
schedule a peer evaluation of the project during 1998.
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 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 sector-
level dairy policies, and Texas A&M focuses on policies affecting
livestock and dairy at the farm level.
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. 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 policymakers promptly of possible outcomes. This goal has been
achieved and the program continues to provide timely 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
integrally involved in several current studies relating to dairy
provisions in the 1996 farm legislation. These studies have contributed
to the development of regulations called for in this legislation. Both
institutions maintain extensive outreach programs to disseminate
results of their analyses throughout the United States. They have
organized a National Dairy Markets and Policy Extension Committee to
advise and assist them in this effort.
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
1995-1998, $445,000 each year. A total of $4,817,000 has been
appropriated. The non-federal funds and sources provided for this grant
are as follows: $37,420 State appropriations in 1991; $162,086 State
appropriations and $133,278 product sales for a total of $295,364 in
1992; and $301,817 State appropriations, $1,412 industry, and $7,121
miscellaneous for a total of $310,350 in 1993; $24,702 State
appropriations, and $5,961 industry for a total of $30,663 in 1994;
$235,526 State appropriations for 1995; $250,000 in State
appropriations for 1996; and approximately $245,000 in State funding
for each of the years 1997 and 1998.
The research is being conducted at Cornell University and Texas A&M
University. This program is of a continuing nature for the purpose of
assessing existing issues and proposed policy changes affecting the
livestock and dairy industries. We have conducted no formal evaluations
of this project. Annual proposals for funding, however, are carefully
reviewed and work progress is noted.
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.
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 non-chemical 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, 1997, and 1998 at $220,000 each year. A total of $1,830,000
has been appropriated. Direct industry support from blueberry tax funds
has been about $65,000 in 1996 and 1997.
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 and have requested that funding be continued until
then. 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 is designed to increase understanding of how water
moves from the soil into and through the maple trees affecting tree
growth and sap production. It also examines the relationships of maple
decline to acid precipitation. Moreover, the research measures the
effectiveness of various fertilizer combinations in improving the
health of declining maple trees. Lastly, the project is designed to
identify sources of lead contamination in maple products and to begin
testing lead-free equipment and possible commercial methods for
removing lead from maple syrup. The project is annually subjected to
the University's merit review process.
Maple products are an important cultural heritage, and a source of
seasonal income in maple growing areas of rural America. Identifying
source(s) of contaminants during processing and commercial methods to
remove contaminants from products is important to assuring consumers
that these food products are not harmful. The goal of this research is
to conduct research on maple tree physiology, management of sugar maple
stands, and related aspects of the maple syrup industry in Vermont and
the Northeast. The U.S. Department of Agriculture approved an amendment
to these goals to permit research on lead in maple syrup products.
Work under this project began in fiscal year 1985. Annual
appropriations in support of this project are 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; fiscal years 1995-1997--$84,000 each year;
and fiscal year 1998--$100,000. This sums $1,331,000. Non-federal
fiscal support for this project is provided by two primary sources and
one secondary source. The primary sources are state appropriations and
product sales. The secondary source is local support, but that support
is not available each year. The total non-federal contribution from
these sources provides an average ratio of .86 to 1. The low ratio was
.6 to 1 early in the project. More recently, the ratio has been 1.1 to
1.
This research is being conducted at the Vermont Agricultural
Experiment Station. The work, from this project, relative to maple tree
physiology and management of maple stands has been completed. The new
objective of identifying sources of heavy metals in maple syrup
products and, subsequently, reducing them is underway. The anticipated
completion date is 1999. Project proposals and progress reports are
reviewed and evaluated annually by the U.S. Department of Agriculture.
Satisfactory progress has been made on tree physiology and maple tree
management. Progressive work on identifying sources and controlling
maple syrup contaminants is in place and is being monitored by the
Department.
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, and to reduce the need to import foreign petroleum.
Using the tools of bioprocessing, agricultural resources can be
transformed into products equal in function and value to those
currently made from petroleum. Bioprocessing may include fermentation,
an enzymatic step, chemical catalysis, or physical modification of
agricultural raw materials. The 1998 grant proposal will be peer
reviewed for scientific merit. The principal researcher believes the
results from the research will help to develop bioprocessing
technologies to manufacture value-added products from agricultural raw
materials, which increases their utilization, reduces commodity
surpluses, reduces environmental costs, decreases the need for foreign
petroleum, and will contribute to regional and national priorities.
Besides increasing utilization, reducing surpluses and
environmental costs, the goals of this research remain to select and
develop market-viable technologies that form the basis for new
companies, new jobs, and additional tax revenues for state, local and
Federal governments. The Consortium has succeeded in developing
numerous technologies that are now in the marketplace. Examples include
the following: Production of lactic acid through fermentation using
corn as the feedstock resulting in a polymer for biodegradable plastics
and a disinfectant. A $200 million plant has been built in Nebraska to
produce lactic acid by this process for domestic and foreign markets.
Corn was used as a feedstock to develop plant growth formulations to
enhance plant growth and productivity and to reduce nitrogen fertilizer
requirements. These growth promoters have shown productivity increases
of greater than 15 percent with a reduction in nitrogen fertilizer use
greater than 25 percent in a variety of crops. Biodegradable plastic
resins developed from cornstarch were made to produce compostable films
for lawn and leaf litter bags, agricultural mulch films, and other
soluble films. Compostable bags are used widely throughout the United
States. Biodegradable plastic resins from cornstarch were also
developed for moldable products such as disposable cutlery, plastic
containers, and 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-flavored compound
that can replace monosodium glutamate in low sodium foods.
Low-cost, readily-available carbohydrates--from whey--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 farms was developed to cost-effectively
separate manure from sand and recycle both components. Biodegradable
adhesives have been developed from agricultural resources. Numerous
enzymes have been characterized and are now in use to provide value
added modifications in the processing of agricultural products. A
stabilized phytase has been developed to improve digestibility of
forage-based animal feeds and reduce animal wastes. Improved methods to
clean up herbicides, pesticides and other agriculturally important
materials have been developed.
Many of these products have been commercialized through licensing
agreements with industrial partners or new company start-ups. In
addition, there are many agri-based industral products under
development including: natural succinate-based green chemicals for
surfactants and detergents; paint removers; green solvents from corn-
derived materials; plant stress promoters; natural food preservatives;
biobased membrane polymers for liquid crystal, medical device coatings,
metals recovery and other uses; improved enzymes for processing starch
and fructose production; food flavors and pigments; and production of
animal feed additives from agricultural wastes.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $1,750,000; 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; fiscal years 1996 and
1997, $750,000 per year, and fiscal year 1998, $675,000. A total of
$17,259,000 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;
$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 and $6,000,000 from miscellaneous in 1996; and
$402,500 from industry and $10,000,000 from miscellaneous in 1997. A
total of $29,947,500 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 International.
Demonstrations of technology occur throughout the United States. The
Consortium reports specific milestones for technology development over
a five year period. Specific milestones for technologies which will be
commercialized in fiscal year 1998 were established in fiscal year 1994
and updated annually. Historically, work under this grant has shown
that it requires five years to successfully move commercially-promising
technologies from the bench scale to the marketplace. The Consortium
has been successful in effectively closing the gap between research and
commercialization in the five year period. Each year, new projects are
initiated that require five years to complete. The principal researcher
believes that continued funding is necessary to successfully transfer
new technologies under development to the marketplace. 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. A peer panel of government and
academic scientists re-evaluated the scientific merit of the project in
1998.
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. Specific research
projects are awarded on a competitive basis to university scientists
with matching funds from non-federal sources for research involving the
processing, packaging, storage, and transportation of food products.
Projects selected for funding are merit reviewed by non-participating
university scientists, industry scientists and scientists from
professional organizations. 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 are supporting research from June 1, 1997 through May 31,
1998. CSREES has requested and received a proposal in support of the
fiscal year 1998 appropriation. 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 Alliance is positioned to fill the void in longer range research
and development for the food industry.
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 a research proposal competition among
faculty from the 12 participating universities to fund research
projects where matching funds are available from industry. Fourteen
projects were funded from fiscal year 1994 funds with completion and
final reports due by May 1, 1996. Ten projects were funded from fiscal
year 1995 funds with anticipated completion and final reports due by
August 31, 1997. Ten projects were also funded from fiscal year 1996
funds with anticipated completion and final reports due by May 31,
1998. Eleven projects were funded from fiscal year 1997 funds with
anticipated completion and final reports due by May 31, 1999. Proposals
are reviewed for scientific merit by independent scientists, and final
selection of projects includes consideration of industrial interest and
commitment on 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
1995-1998, $423,000 each year. A total of $2,162,000 has been
appropriated. Industry matching funds were $823,148 in fiscal year
1994, $414,164 in fiscal year 1995, $576,600 in fiscal year 1996, and
$429,579 in fiscal year 1997.
The work is being coordinated by the Nebraska Agricultural
Experiment Station at Lincoln. Specific research projects are also
being conducted at ten other universities that are part of the
Alliance. The overall objectives of the Alliance are ongoing. Funding
supports the continuing and evolving needs and opportunities for foods
manufactured and processed from U.S. produced crops and livestock. 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 12, 1998. The principal
investigator has provided descriptions of projects funded by this
grant. Scientifically-sound, industry-relevant projects appear to be
the basis of the project, with impactful results expected.
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; development of new/improved U.S. products to meet
foreign needs. The overall project proposal received a merit review at
the university level and individual research activities are reviewed by
the principal investigator and other faculty. 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 the Pacific Rim and in emerging 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. This project meets the needs of
these firms at the local, regional , and national level.
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. 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; 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 1995-1998, $592,000 per year. A
total of $4,426,000 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 1992;
$183,192 State appropriations and $318,966 industry for a total of
$502,158 in 1993; $127,948 State appropriations and $500,394 industry
for a total of $628,342 in 1994; $258,053 State appropriations and
$389,834 industry for a total of $647,887 for 1995; $165,425 State
appropriations for 1996; $162,883 State appropriations for 1997; and
$165,000 State appropriations for 1998. Industry contributions continue
but were not reported for 1996-1998.
The program is carried out by Iowa State University. The original
proposal in 1992 was for a period of 24 months, however, the objective
of 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 2000.
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 an impressive record of producing high quality, useful research and
trade information for agribusinesses in the Midwest and other states.
Research results appear in several peer-reviewed professional journals
and the 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. Projects are selected for funding
each year based on competitive, peer reviews by scientists outside the
recipient institution. The fiscal year 1997 grant will support research
through June 30, 1999. CSREES has requested the University to submit a
proposal in support of fiscal year 1998 funds, but the proposal has not
yet been received due to the University's merit review process to
select projects for funding. The principal researcher believes that the
question of microbial safety is of paramount interest to the milk/dairy
industry at all levels-national, regional and local. 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. Ensuring safety of
dairy products impacts not only consumer health and confidence in the
safety of the food supply, but economic viability as well.
The research is aimed at minimizing or eliminating future foodborne
disease outbreaks from milk and dairy products. Researchers
demonstrated that when subjected to a sublethal heat shock prior to
pasteurization, Listeria monocytogenes becomes much more heat-resistant
than previously thought, likely requiring the design of new
pasteurization guidelines that will ensure the safety of dairy
products. In addition, they developed a simple, fast, sensitive,
specific and inexpensive method for the detection of Listeria
monocytogenes in dairy products that will allow dairy processors to
rapidly and easily screen for the presence of this pathogen both in
their products and in the processing environment. 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. Another 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. 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
1994-1998, $268,000 per year. A total of $3,512,000 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. Continuing and evolving needs
related to the safety of milk and dairy products are expected to reveal
new related objectives. 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 1998 appropriation, the review of the
proposal supporting the fiscal year 1997 appropriation was conducted on
March 13, 1997. At that time, the agency science specialist believed
that the projects addressed important issues related 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 the Food and Drug
Administration (FDA) approval of animal drugs intended for use in minor
species and for minor uses in major species. The objectives of the
program are to identify the animal drug needs for minor species and
minor uses in major species, generate and disseminate data for the
safe, effective, and legal use of drugs used primarily in therapy or
reproductive management of minor animal species, and facilitate the
Food and Drug Administration in obtaining approvals for minor uses.
Studies are conducted to determine efficacy, target animal safety,
human food safety, and environmental safety. 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 approval program. The NRSP-7 funds are being
utilized by the State Agricultural Experiment Stations where the
regional animal drug coordinators are located as well as by other
stations to develop data required for meeting approval requirements.
Participants in the research program consist of the regional
coordinators, State Agricultural Experiment Stations, USDA's
Agricultural Research Service, the U.S. Department of Interior, schools
of veterinary medicine, and the pharmaceutical industry. Research
priorities are continually updated through workshops and meetings with
producer groups representing species categories such as small
ruminants, game birds, fur-bearing animals, and aquaculture species.
Each request for drug approval is evaluated by the technical committee
according to established criteria which include significance to the
animal industry, cost of developing the necessary data, availability of
a pharmaceutical sponsor, and food safety implications. The fiscal year
1997 research grants terminate in April 1999. The 1998 grant proposals
have been requested by the agency. All grants are reviewed by the
university and the agency for relevance to industry needs and
scientific merit.
Animal agriculture throughout the U.S. has relied on chemical and
pharmaceutical companies to provide their industry safe and efficacious
drugs to combat diseases and parasites. The high cost incurred to
obtain data to approve these drugs, when coupled with limited economic
returns, has limited the availability of approved drugs for minor uses
and minor species. The economic losses due to the unavailability of
drugs to producers for minor species and minor uses threatens the
economic viability of some segments of the animal industry. The need
for FDA/Center for Veterinary Medicine approved 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 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, certain
aquaculture and the game bird industries are concentrated in specific
geographic sections of the country. The administration believes this
research to be of national, regional or local need.
The original NRSP-7 goal to obtain approval by the Food and Drug
Administration for 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 were recently received from the game bird. 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, 286
drug requests have been submitted to the Minor Use Animal Drug Program
for approval. Working in conjunction with many universities. Twenty
five public master files have been published in the Federal Register
providing approval for drug use in minor species and 30 active research
projects are being conducted in 15 states involving 18 animal species
and 17 different drugs. Therefore, whereas a total of 286 animal drug
requests have been submitted to the program since 1983, program funding
has been available for only about one out of every five requests. In
1997, a Public Master File was prepared and published in the Federal
Register for the use of clorsulon for control of liver flukes in goats.
The research for this project was conducted in Florida. It is also
anticipated that in the next year, ivermectin will be approved for use
in bison.
The Center for Veterinary Medicine of the Food and Drug
Administration 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 commodity 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 1995-1998.
A total of $6,291,000 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; $191,835 non-federal support in 1996, and
$357,099 non-federal support in 1997.
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,
the Agricultural Research Service, 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 FDA 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 presenting new challenges to
agriculture. Especially with the new sensitivities about food safety
and environment protection, 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 1997. An external review team of experts representing animal
drug research and development, the veterinary profession, the
pharmaceutical industry, and academia, found the program to be very
productive. Recommendations from the review included a) improve the
visibility of the Minor Use Animal Drug Program, b) improve working
relationships with the veterinary and pharmaceutical communities, c)
and acquire additional support for the program by pharmaceutical
companies, universities, and the federal government to meet the
identified national needs with emphasis on responsiveness to industry
needs and food and environmental safety. Annually, grant proposals are
peer reviewed and twice a year the agency and representatives of the
program meet with representatives from the Food and Drug Administration
to evaluate progress and to prioritize research requests. Workshops are
held periodically to identify priorities for the program whereby
producers, pharmaceutical companies, FDA, and researchers participate.
GAO also conducted a review in 1991 and recommended additional support
for the program.
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. Researchers are currently evaluating selected
families in cooperation with the industry. The proposal is put though
the university's peer review process and is reviewed by the CSREES
Program Manager. 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.
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 U.S. and abroad. During the first two years
of the program an oyster broodstock selection program was implemented
in partnership with industry. Performance trials of selected stocks
will continue at commercial sites.
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 and 1998 is $400,000. A total of $1,350,000 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 and 1997 no cost sharing was provided.
Research will be conducted at Oregon State University. 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 2002.
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 1997
review, indicated that the researchers were well qualified to conduct
the research, the research complements other research being funded
though USDA, the research does address an important opportunity for the
industry and that the research is being conducted in close cooperation
with the private sector. The 1998 CSREES review will be completed
within three weeks of submission of the proposal. The researchers are
asked to develop a research proposal consistent with the NSTC's
Strategic Plans for Aquaculture Research and Development.
multi-commodity research, oregon
The purpose of this research 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 by Pacific Northwest
agriculture through improvements in food production, processing, and
trade by assisting decision makers in developing economic and business
strategies. The grant is not competitively awarded at the state or
regional level, but the proposal is merit reviewed at the Experiment
Station and the departmental levels. The principal researcher believes
that Oregon and the other Pacific Northwest States produce a wide
variety of agricultural commodities and products with commercial
potential to 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 strategics tailored to specific Pacific Rim
markets. The principal researcher believes this research to be of
national, regional and local need.
This goal of this research is to gain better specific 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. This project will
investigate and develop innovations in value-added agriculture to
improve the economic performance of the agricultural and food
manufacturing sectors in the Pacific North-west. The current research
plan will examine economic variables that underlie competition in food
production, processing and marketing in the Pacific Rim; address
technological challenges in transport, storage, and quality
maintenance; assist in testing and evaluating new product ideas; and,
monitor the economic performance of the Oregon value-added agricultural
industry.
Work in progress has resulted in research output in 4 topic areas:
market research, packaging research, sensory research, and food
processing industry strategic planning. Research output includes
development of a pilot World Wide Web site for Pacific Northwest
exports, data bases, survey work, and collaborative research activity
with industry and with institute and university researchers in selected
Asian countries. Manuscripts, working papers, journal articles, and
several Masters of Science theses are outputs to date.
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 1998 appropriations were $364,000 for each year. The
total amount appropriated is $2,038,000. Non-federal funding for this
grant was $168,824 in State appropriations in fiscal year 1991,
$177,574 in State appropriations in 1993, and $162,394 in State
appropriations in fiscal year 1994. Due to a change in university
policy regarding indirect costs, the university has not reported the
amount of non-federal funds appropriated for fiscal years 1995-1998.
The research program is carried out at Oregon State University in
Corvallis and at the Northwest Food Innovation Center in Portland,
Oregon. This Special Grant is awarded on a year-by-year basis. Oregon
State University traditionally requests funds for this project on an
annual basis and has budgeted the funds to individual sub-projects on
that basis. Progress on the original objectives is as follows: baseline
data have been accumulated; an economic growth assessment model is
being formulated and refined; 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 in industries to meet the demands for noodle production for Asian
markets. Anticipated complection date is currently 1998. A CSREES merit
review was dated July 1997. The work was found to be scientifically
sound and of high priority to the region.
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 water quality characterization to accelerate permitting
of aquaculture systems. Field testing of alternative species is
underway. The proposal is placed through the university's peer review
process and is reviewed by the CSREES Program Manager. 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.
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. Researchers are
currently characterizing differences in water quality in fish ponds to
establish criteria for fish pond permitting and management.
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 1995-1998, each year. A
total of $1,705,000 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 1995-1996 and $116,730 in
fiscal year 1997. 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 1999. 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 1997
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. The
researchers are asked to develop a research proposal consistent with
the NSTC's Strategic Plan for Aquaculture Research and Development.
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 scientist 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 agency
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
1995-1998, $254,000 per year. A total of $2,446,000 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
his 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.
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 plants which will shorten the time
frame to produce transgenic plants. This project was not awarded
competitively but has undergone peer review at the university level and
merit review at CSREES. The principal researcher believes that the
successful development of these techniques and subsequence transfer of
nematode resistant genes into agronomic plants will provide an
environmentally sound system for all plants susceptible to plant
parasitic nematodes. The principal researcher believes that project has
the potential for both regional and national application.
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 resistance
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 trails on potato and eggplants.
The work supported by this grant began in fiscal year 1991 and the
appropriations for fiscal years 1991-1993 were $150,000 per year;
$141,000 was appropriated in 1994; and $127,000 in fiscal years 1995-
1998, each year. A total of $1,099,000 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 state appropriations 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
were no matching non-federal funds. In 1998, $48,000 state appropriated
funds were provided.
Research is being conducted at the New Mexico State University, and
at collaborating universities in the region. The completion date for
this project is estimated to be in 2001.
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 technology to develop pesticide capability in plants of
agronomic importance. A plant transformation system was developed to
improve the historically difficult transformation efficiently of
monocots. In field trails of transformed eggplants and potatoes, high
levels of effectiveness against insects have been found. Several potato
and alfalfa lines have been transformed and established in field plots
and are being tested at this time. Other constructs are being used in
many crops to determine resistance to nematodes and other crop pests.
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. Projects are merit
reviewed internally at the University of Nebraska. 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.
The objectives 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. We are currently negotiating a licensing agreement
with Biofoam for the commercial use of this technology. 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. Bruning Grain
Company is currently working with us on a Drip Oil II product that they
hope to market in the summer of 1998. 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. More recent studies have improved the
process for converting tallow to esters for fuel use. Starch has been
converted to levulinic acid using acid hydrolysis and an extruder. A
patent is pending and commercialization efforts are underway. A patent
application has been prepared on our micro-crystalline cellulose
production technologies. CSREES is currently working with M.C.C.
Technologies on commercialization. Their goal is to commercially
produce microcrystalline cellulose in 1998.
The work supported by this grant began in 1990 and the
appropriation for fiscal year 1990 was $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 1996-1998 per year. A
total of $827,000 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;
fiscal year 1996, $251,000; fiscal year 1997, $250,000; and fiscal year
1998, $340,000. 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, Bioplastics, Inc., Biofoam, Inc. and M.C.C. Technologies,
Inc.
This work is being conducted at the Industrial Agricultural
Products Center, L.W. Chase Hall, 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. This project is evaluated annually based on an annual progress
report. The cognizant staff scientist has reviewed the project and
determined that the research is conducted in accordance with the
mission of this agency.
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. A peer panel of government and academic scientists is
expected to re-evaluate the scientific merit of the project on January
29, 1998.
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.
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 years 1997 and 1998, $175,000 per year. A total of $1,724,000
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 to 4 years. The application of this research
for improved management of natural resources will evolve and expand as
technology in the area advances. 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. A peer panel of government and academic
scientists is expected to re-evaluate the scientific merit of the
project on January 29, 1998.
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 medium. 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 tool for the industrial sectors dealing with
potash and paper waste. The principal investigator believes this
research to be of local, regional and national importance.
The original goal of the research was and continues to determine
the feasibility of simultaneously composting 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 I, to determine the feasibility of simultaneous
composting dairy waste with available high carbon wastes from
agriculture and industry, has been completed. Phase II, to determine
the appropriate ratios of waste to carbon substrate for successful
composting, is almost completed.
The work supported by this grant began in fiscal year 1996 and the
appropriation for fiscal year 1996 was $150,000, and for fiscal years
1997 and 1998 $100,000 per year. A total of $350,000 has been
appropriated. The non-federal funds for the duration of this grant from
the state appropriation is $75,000. There is another $50,000 in-kind
support from the industrial partners. Additionally, a sum of $15,000
from the New Mexico State Highway Department has been leveraged by this
project.
This work is being carried out in New Mexico under the direction of
the Waste-Management Education and 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 March 1999. Objectives are being met as the project
continues. The project has been progressing according to the specified
targets. Phase 1 of the projects has been completed and phases 2 and 3
are being completed according to the identified targets. This project
has been evaluated based on the semi-annual progress report and
research findings presented at the annual Composting Council
Conference. The cognizant staff scientist has reviewed the project and
determined that this research is conducted in accordance with the
mission of this agency.
pasture & forage research, utah
This research is designed to develop and evaluate management
systems for grazing-based livestock production systems appropriate to
the needs and conditions faced by Utah producers. Utah State University
will conduct field research to determine optimal forage, appropriate
nutrition and management for cattle and sheep in a forage-based
production that will optimize returns with minimum environmental
impact. Results from simulated intensive grazing management studies
indicate six harvest cycles between May 15 and October 1. Orchard
grass, meadow bromegrass and tall fescue were most promising forage
plants. Future work will address weed control, stocking rate, animal
performance and economic returns. This information will be incorporated
into production in Utah.
The work supported by this grant in fiscal year 1997 was $200,000
and appropriation for 1998 is $225,000. A total of $425,000 has been
appropriated. Non Federal funds in support of this work for fiscal year
1997 was $360,200.
The research is being conducted at the Utah Agricultural Experiment
Station. The principle investigators anticipate the completion date for
these objectives to be in 2002, at which time the pasture management
guides using these results are anticipated. The initial proposal for
fiscal year 1997 received a complete peer review through the
institution's project approval process and was reviewed by CSREES
scientists. The fiscal year 1998 proposal and those for each year
thereafter, will be subjected to the same level of review.
peach tree short life in south carolina, south carolina
Progress continued in 1997 with focus on the evaluation and
longevity and productivity of Guardian rootstocks on peach tree short
life sites in the southeast and replant sites throughout North America.
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 bacteria. This project was not awarded
competitively but has undergone peer review at the university level and
merit review at CSREES.
According to the principal researcher the problem of 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. Research continued in 1997 on the improvement of
rootstocks and the use of the cultivar Guardian BY520-9 has potential
to benefit the entire peach rootstock industry including California,
New Jersey and Michigan where bacterial canker is a problem. The goal
of this research was the continued evaluation of productivity of peach
Guardian BY520-9 rootstocks on peach tree short life and investigations
into novel management for ring nematodes by bacteria. Recent
accomplishments include the increase in bulk commercial production of
Guardian seed while two new Guardian selections have had very good
nursery trails. Guardian rootstock continues to be tested in 22 states
and is performing well. A marker for a gene for rootstock resistance to
two root-knot nematode species was sequenced and successfully use to
correctly sort current commercial rootstocks according to their known
nematode resistance or susceptibility. A major find is that the egg-
kill factor produced by the bacteria kill root-knot nematode eggs as
well as ring nematode eggs.
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; fiscal years 1995-1998, $162,000 per year. A total
of $3,203,000 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 appropriations in 1994; $193,976 in state
appropriations in 1995; $169,806 in state appropriations in 1996 and
1997; and $150,693 state appropriations in 1998.
This research is being conducted at South Carolina Agricultural
Experiment Station. The researchers anticipate that the work may be
completed in fiscal year 1999. Adequate progress has been made to
assure that the objectives will be met before the completion date. The
last agency evaluation of this project 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 area of
research in that it can enhance disease management by protecting the
peach rootstocks. Progress was made in all the objectives in 1997. Some
accomplishments were the increased production and release of commercial
Guardian seed and continued evaluation of rootstock in 22 states and
provinces. A molecular techniques that separates resistant and
susceptible peach rootstocks was validated.
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.
Contributions from the South Carolina work are projected by South
Carolina to impact vegetable production in the Southern region and
consumers of vegetable production from the Southern region.
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.
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 1998, $106,000. A total of $792,000 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 as
we reported to you last year. Objective A: Develop and evaluate
microbial pest control agents for control of plant pathogens and insect
pests of vegetables, is defuse and non-conclusive. It would be far
superior for continued work in this area to 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. Objective B: Determine the efficacy of innovative
cultural practices for vegetable production systems in South Carolina.
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 and has been cited in the
accomplishments in my response to your earlier question. We feel that
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. Objectives D: Evaluate and develop
germplasm, breeding lines and cultivars for resistance to major
pathogens of commercially important vegetables. Objective E: Transfer
new technology to user groups, has not demonstrated any progress that
would not be anticipated from ongoing conventional sources of funds. We
evaluate this project annually when we process the grant. An on-site
comprehensive merit review of this project is scheduled by CSREES for
June of 1998.
pest management alternatives
This special research grant supports projects that help farmers
respond to the environmental and regulatory issues confronting
agriculture. These special grant funds support research that provides
farmers with replacement technologies for pesticides that are under
consideration for regulatory action by EPA and for which producers do
not have effective alternatives. The passage of the Food Quality
Protection Act of 1996--FQPA--makes this special research grant of
critical importance to the Nation's farmers.
New pest management tools are being developed to address critical
pest problems identified by farmers and others in a crop production
region, and to identify new approaches to managing pests without some
of the most widely used pesticides. Farmers have identified the lack of
effective alternative pest management tactics as a primary reason for
not implementing IPM on their farms. Where effective alternative
tactics have been developed, they are widely and rapidly implemented by
farmers. These special research grant funds are awarded on a
competitive basis to all eligible research institutions through the
Pest Management Alternatives Program or PMAP. Research priorities for
PMAP are established with the help of a database analysis system, which
draws upon the expertise of the land-grant university system, commodity
groups, and others.
The ability of the Nation's agricultural production system to keep
pace with domestic and global demand for food and fiber is dependant on
access to safe, profitable and reliable pest management systems. For a
variety of factors, farmers and other pest managers have fewer chemical
control options available to them than they did at the beginning of the
decade, and this trend is likely to continue at an accelerated rate.
The Food Quality Protection Act of 1996 (FQPA) will have significant
impacts on pest management systems in the United States over the next
decade, and the ``minor use''--high value crops grown on relatively few
acres--will be particularly hard hit. For these reasons and others, it
is essential that farmers be provided with new pest management tools
and better information so they can remain competitive in today's global
marketplace.
This research is conducted to help farmers respond to the
environmental and regulatory issues confronting agriculture by
providing them with new options for managing pests. The research
supported by this special grant is identifying new ways to manage pests
without key pesticides that may no longer be available as FQPA is
implemented. Some highlights of the research funded through PMAP
include progress on surface amendment to reduce air pollution by
Telone, a fumigant; latent infection assessment and fungicide mixtures
for brown rot control; development of a pesticide use/pesticide
recommendation database; implementation of alternatives to carbofuran
for control of rice water weevil; substitution of behavavioral control
for organophospate sprays against apple maggot; pheromone mating
disruption in orchards; biodegradable fiber barriers for root maggot
control; pesticide risk mitigation by improved application technology;
and integration of natural enemy thresholds for greenbug management in
wheat. Progress on additional research has been made to collect data on
alternatives for pest management in watermelon insects and diseases of
cucurbit crops in the South Central States; on developing IPM and
monitoring networks in Northeastern vegetable crops; assessment of
insecticide and IPM usage in alfalfa and small grains; and alternative
management practices for minor tree fruit crops.
Grants have been awarded from funds appropriated as follows: fiscal
years 1996 through 1998, $1,623,000 per year. A total of $4,869,000 has
been appropriated. Non-federal funds are not required by this grants
program. All states are eligible to compete for this funding. This
research is currently being carried out by State Agricultural
Experiment Stations and other research institutions located in 23
states.
The economic and environmental pressures facing U.S. agriculture
today are at least as great today as they were in 1996 when federal
funds were first appropriated for this special research grant. There
will be a need for continued investment in research to develop new
approaches to managing pests for the foreseeable future as the Food
Quality Protection Act of 1996 is implemented.
Proposals are evaluated by multi disciplinary panels. The projects
supported by this special research grant have consistently provided key
knowledge needed in developing new approaches to pest management.
pesticide clearance (pest management for minor crops--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 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. In many cases, the agricultural chemical industries cannot
economically justify the time and expense required to conduct the
necessary research for pesticides with small market potential. With
assistance from IR-4 registration-related costs are manageable, and
producers of a large number of small acreage crops such as vegetables,
fruits, nuts, spices and other specialized crops have access to
necessary pest control products. 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. The research program then assimilates the data
from all the participating experiment stations, 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 corp
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 and regional as well as
local needs. The goal is to obtain minor use and specialty us pesticide
registrations and assist in the maintenance of current registrations
and to assist with the development and registration of biopesticides
and safer pesticide produce useful in IPM systems for minor corps.
During the past five year period, over 1600 new minor food use
clearance requests were submitted to IR-4 from growers, state and
federal scientists and extension specialists. After evaluation and
prioritization, nearly 1300 studies were conducted involving 2610 field
reports and 2230 laboratory reports. Accomplishments included the
registration of a fungicide to control eastern filbert blight on
filberts resulting in an economic benefit of $4 million per year.
Without the availability of this product, it is estimated that one-
third of the filbert orchards in the producing states of Idaho, Oregon
and Washington would have gone out of business. IR-4 recently provided
data for a national registration for a new herbicide on cucumbers for
broadleaf weed control. It is estimated by Washington scientists that
growers will realize a savings of $1,000,000 in herbicide and labor
costs on 2500 acres of the crop grown in that state alone. With more
than 130,000 acres of cucumbers produced nationally, the potential
savings are enormous.
IR-4 provided residue data to support the FIFRA 88-mandated
reregistration of more than 600 minor uses identified by growers as
critical needs. One of these was streptomycin for the treatment of
edible dry beans grown for seed on 15,000 acres in California and
valued at $4 million annually. California seed is sold to growers in
Colorado, Nebraska, Minnesota, the Dakotas, Wisconsin, Michigan and New
York where a disease known as halo blight can devastate untreated bean
plantings. For this reason, growers will not purchase seed that is not
treated with streptomycin.
Registrations for the control of insect disease and weed pests of
commercially grown ornamental crops continues to be an important
objective of the IR-4 Project. Since 1977, IR-4 has assisted with the
registration of over 5000 pesticides and biological pest control agents
on woody nursery stock, flowers and turf grass. During the past two
years, IR-4 has developed data to allow the use of a herbicide for the
control of yellow nutsedge and other grassy weeds in woody and
perennial ornamental crops. In California alone, over 100,000 acres are
treated with this herbicide, thereby saving growers $1.6 million
compared to hand weeding. IR-4 also continues to work closely with
nurserymen and growers to develop pesticides such as azadirachtin, a
naturally occurring insecticide, for integrated pest management
systems.
Biopesticides have been an important IR-4 thrust since 1982. IR-4
conducts a competitive grants program to develop research data to
support the registration of microbial and biochemical pest control
products on minor crops. Equally important, IR-4 interacts with public
sector and venture capital registrants to assist with Experiment Use
Permits and provide guidance on EPA registration procedures. The
Pesticide Clearance program continues to have a high productivity
which, according to EPA, supports 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
years 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; fiscal year 1995 through 1997,
$5,711,000 per year and fiscal year 1998, $8,990,000. A total of
$61,519,000 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 each year of 1996 and
1997.
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 analyzes.
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
and also IR-4, 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, and the eventual
loss of a large number of conventional pesticide registrations for
minor crops because of the 1996 Food Quality Protection Act. 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 1997, IR-4's updated its strategic plan to
focus on the registration of biopesticides and safer pest control
technology for minor crops in addressing the Food Quality Protection
Act. That Act calls for more extensive residue data requirements which
would take into account an additional safety factor for infants and
children. The IR-4 program thrust will be carried out along with the
traditional minor crop pesticide clearance program.
Each year the program is peer reviewed and reviewed by CSREES'
senior scientific staff. A summary of those reviews indicate excellent
progress in the achieving the objective of providing safe pest controls
for minor users.. In December, 1997, CSREES sponsored a nine-member
peer panel review of the IR-4 program, conducting an on-site review at
Rutgers University. A final report is expected in early 1998. In
addition to the yearly evaluations, the program received an on-site
external review sponsored by CSREES in December 1990, and a GAO review.
These previous reviews have resulted in significant improvement in the
IR-4 programs productivity and quality of research. Additionally, the
customers served by IR-4 have provided input to the program to enhance
its effectiveness.
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 or availability of key pesticides through voluntary
cancellations or regulatory action. NAPIAP data augments National
Agricultural Statistic Service (NASS) data by conducting commodity
based assessments and crop profiles on minor-use or small acreage
crops. All projects are peer reviewed through a regional competitive
process.
This program provides the Environmental Protection Agency (EPA) and
the USDA with information on the use, importance and effectiveness of
pest management alternatives essential to U.S. agricultural crops and
livestock production. NAPIAP, in responding to the information needs of
EPA for implementation of the Food Quality Protection Act, has focused
its studies on minor crop production systems. To insure relevance and
focus, minor crop producers provide input to NAPIAP, thus permitting
coordination of studies and information gathering with NASS, the
Environmental Protection Agency, and the United States Department of
Agriculture's Office of Pest Management. Nationally, EPA uses these
data in making environmentally sound regulatory decisions within the
regulatory framework of the Food Quality Protection Act 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 interactions with
scientists in all State Agricultural Experiment Stations and
Cooperative Extension Services. Through this cooperative interaction,
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 1995-1998, $1,327,000 per year. A total of $43,571,000 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 remaining program expenses, beyond the federal
program funds, of program participant salaries, facility costs,
clerical support expenditures, supplies and program costs of the
program's State Liaison Representative have been born by each state and
these costs are considered the state funding provided to support this
program. State estimates of their matching support for 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
50 states and 5 Territories. The distribution of competitively awarded
regional research grants is coordinated through a lead state in each of
the four regions of the United States: namely, California--West; Ohio--
North Central; Pennsylvania--Northeast; and Florida-South. The National
Agricultural Pesticide Impact Assessment Program has been an on-going
research effort to gather relevant pest management information
necessary for changing. A federally coordinated network of state
scientist contacts was developed in the intervening years to address
the information needs of the regulatory agency. NAPIAP is a multi-
agency on-going program which attempts to address the increasing needs
for pest management information by EPA. The combined data needs of the
Food Quality Protection Act, IPM implementation documentation, and
Government Performance and Results Act will is resulting in an even
greater need for pest management information. Thus the original
objectives have been met but data needs continue to change and grow.
A comprehensive evaluation and review of the National Agricultural
Pesticide Impact Assessment Program 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, commodity groups, the
federal government, and the Land Grant System. A recurring theme which
emerged from the 1995 review was a directive to focus the NAPIAP
program on data collection on the benefits of pest management
alternatives. In response to this recommendation, CSREES brought
together the programmatic and budgetary components of the program into
a single coordinated NAPIAP effort. Each of the 14 recommendations
provided by the review panel were addressed and implemented. In 1997,
the USDA Office of Pest Management policy assumed programmatic
leadership for NAPIAP to direct the program's activities to the
informational needs of FQPA.
phytophthora root rot, new mexico
Work has continued to focus in general on the 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 tolerant genes,
investigation on irrigation modification as a means to manage root rot,
and soil bed temperature control as a means to manage disease. This
project was not awarded competitively but has undergone peer review at
the university level and merit review at CSREES. The principal
researcher believes that since Phytophthora disease threatens chili
production in west Texas, New Mexico, and Eastern Arizona, this problem
is of state-and regional significance. 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 field.
The work supported by this grant began in fiscal year 1991 with an
appropriation of $125,000 for that year. The fiscal years 1992-1993
appropriation was $150,000 per year; $141,000 in fiscal year 1994; and
$127,000 in fiscal years 1995-1998, each year. A total of $1,074,000
has been appropriated. Non-federal funds from state appropriations and
the California Pepper Commission were $255,614 in 1997; and $253,614 in
1998.
Research is being conducted at New Mexico State University. The
anticipated completion date for the original objectives was 1995. These
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 objectives of these programs should be met by 2002.
The last agency evaluation was made in December, 1996. In summary,
the development of resistant cultivars and research on interactions of
Capsicum and Phytophthora for developing strategies for irrigated crop
growers to be competitive in the international economic arena
continued. More than 26,564 seedlings were screened for resistance to
root rot and/or foliar blight in the greenhouse. This technique allows
the resistant plants to be saved and used in the breeding program.
Field evaluations of advanced lines continued with 11 green chile lines
and 18 paprika lines tested for release. Two jalapeno lines were
released by this program.
plant, drought, and disease resistance gene cataloging, nm
The objective of this work will be to identify important genes in
crop plants that result in the ability to resist stress caused by
drought and disease organisms. CSREES has requested the university to
submit a grant proposal that has not yet been received. The focus of
this research will be to improve plant resistant to drought and disease
for New Mexico crops. However this information can have application
through out the nation especially in the arid/semi arids.
The goal of this research is to produce better adapted crops for
New Mexico. The work will be started in 1998 and therefore no results
have been obtained at this time. The work supported by this grant
begins in fiscal year 1998 and the appropriation for fiscal year 1998
is $150,000. The project has not yet started and the availability of
nonfederal funds has not been determined.
The research will be conducted at New Mexico State University and
is anticipated to require four years to meet the major objectives. The
project is anticipated to be reviewed annually by the project approval
process of the institution.
postharvest rice straw, california
The postharvest rice straw special grant was initiated in May 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. Although this special research grant is
awarded noncompetitively, the proposal is reviewed for merit by the
university before submission to CSREES and reviewed by CSREES for
technical merit and allowable costs and procedures. 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. 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. This project is only
recently initiated and is fully organized, including outreach to the
rice industry.
The work supported by this grant began in fiscal year 1997. The
appropriation for fiscal year 1997 was $100,000 and fiscal year 1998 is
$300,000. A total of $400,000 has been appropriated. 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. Since 1997 was the first year for the
postharvest rice straw project, no evaluation has been conducted.
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.
CSREES published a request for proposals in the Federal Register and
awarded eight grants competitively based on a scientific peer review.
The principal researcher believes this research effort addresses
needs of the potato producers and processors. 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. 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
1998, $1,214,000. A total of $16,652,000 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 each of 1996 and 1997.
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 is developing new potato varieties takes from 5
to 10 years. Beginning in fiscal year 1997, these funds have been
awarded on a competitive basis using a scientific peer review. In
addition, the agency has at least one formal meeting with
representatives from the potato industry to review research needs.
poultry carcass removal, alabama
This is a new grant which is being funded for the first time in
fiscal year 1998. This project is intended to examine the problem of
disposal of dead chickens using alternative procedures. The procedure
to be investigated is to pelletize and dehydrate the chicken carcasses
so that they can then be used as a safe and high quality animal feed
product. The disposal of dead chickens is an increasing problem due to
refusal by most land fill operations which take solid waste to continue
to accept animal carcasses. This is a need that is being recognized at
all levels, national, regional and local. The goal of this research is
to develop an economically-feasible procedure for disposal of chicken
carcasses using a process that pelletizes and dehydrates the carcasses
and produces a safe and high quality animal feed. Because it is a new
project there is no progress to report at this time.
Fiscal year 1998 is the first year of funding for this project and
$300,000 has been appropriated. Information is not available on non-
Federal funding support. The research work will be carried out at the
University of West Alabama and Alabama Protein Recycling. The
anticipated completion date is March 15, 1999. Because the work is just
now being initiated, there has been no evaluation.
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 is designed to provide information about small and
large cow-calf operations in Kansas. This project was reviewed for
merit by three scientists in CSREES prior to the initial award and for
the renewal in fiscal year 1997. 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. Other organizations such as the National Cattlemen's
Beef Association and the Livestock Conservation Institute have given
strong support for increased numbers of projects on topics related to
preharvest food safety such as this one. The principal researcher
believes this research to be of national and regional need.
The original goal of this research was to determine the relative
incidence of shedding of E. coli 0157: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 utilizing nested PCR and enriched culture systems for
identifying the E. coli organism in feces of cattle. They have
demonstrated significant increases in recovery of E. coli from feces
using these methods when compared to prior culture systems that were in
use. The cooperating herds have been identified and sampling is in
progress. 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''. Data
collected to this time supports the concept that stressful incidents
such as calving caused a marked increase in shedding of E. coli in
feces of cows. 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, 1997, and 1998 was $212,000 per
year. A total of $636,000 has been appropriated. Non-Federal funds have
been contributed to this project as follows: In fiscal year 1996 non-
federal funds provided to this project were $150,000 in state
appropriations and $91,450 in contributed indirect costs; 1997 non-
federal funds provided to this project were $90,300 in contributed
indirect costs and $165,000 in state appropriated funds.
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 01 and Year 02 of the grant and
are working on the objectives for Year 03. Because of a slight delay in
the start of the funding, it is anticipated that the other original
objectives will be completed by March 1999 and the project should be
finished by September, 1999.
The project was evaluated on October 28-29, 1997 during a site
visit by W. C. Wagner on the Kansas State University campus. The group
has excellent collaborative activities in place and they are proceeding
very well. It was impressive to see how they have utilized this
approach to be successful in meeting their objectives. There are
multiple units involved in the project and they are coordinating this
work with the Food Safety Consortium which includes Kansas State
University, Iowa State University and the University of Arkansas. They
have met their objectives as listed in the original proposal for the
first two years of the project. Their results to date suggest that the
infection of cattle with E. coli is probably a rather transient event
and may not establish the true carrier state as one normally thinks of
it. While certain events such as calving increase the rate of shedding
in the feces and was thought to be a response to stress at that time,
other types of stress such as trucking for 150 miles do not result in
an increase in shedding of E. coli by the animals.
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 being finalized to develop a fruit orienting
mechanism for incorporation 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 are supporting research through June
30, 1999. CSREES has requested, but not yet received, a proposal in
support of the fiscal year 1998 appropriation.
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. New
environmentally friendly processing systems have been developed and are
being commercialized in Oklahoma which have broad application to
numerous crops with international marketing potential. 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. New extraction
facilities will also have a positive impact on local economies,
incorporating a new value added processing industry and providing local
employment opportunities.
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. Funding has been secured for construction of a commercial
extraction facility in Oklahoma, pending successful pilot testing which
is underway. 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 2000. Research from this
project provided the basis for commercial high relative humidity
storage of peaches and to attract companies to the state to construct
new value added food processing facilities.
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 1995-1998, $226,000 each year. A total of $3,251,000 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;
fiscal year 1996, $366,570; and fiscal year 1997, $397,881; for a total
of $1,858,287 in state funds. An additional $16,100,000 was 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. The Oklahoma State University
Division of Agriculture Sciences and Natural Resources appropriated
approximately $2 million dollars in recurring funds 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 1997
grant would support work through June 1999. It is expected that ongoing
research will be completed in 2002. Additional related objectives
beyond this date would address further opportunities for horticulture
industry growth and economic development. 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 supporting
the fiscal year 1997 appropriation 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.
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 1998 grant proposal has been requested but
not yet received. All funds are awarded on a competitive basis.
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. 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
1995-1998, $348,000 each year. A total of $3,018,000 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. Nonfederal funds
were $163,000 for 1996 and $178,240 in 1997.
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.
Agronomically-important barley genes identified through this work is
being used in barley breeding across the nation to improve yield and
quality of the crop. Additions to this map are expected to aid future
breeding efforts. This project is made up of many competitively awarded
sub projects 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 multi institutional-
multi disciplinary competitively awarded research project.
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. There is
a national 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.
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.
Approximately 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., land tenure arrangements for program crops in connection
with the implementation of the 1996 FAIR Act, conservation reserve
program impacts on farms west of the Mississippi river, 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. Various
income and estate tax options, including capital gains proposals, for
the 1997 tax legislation were analyzed for their impacts on
representative United States farms.
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 1998. A
total of $2,893,000 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 1991;
$45,661 State appropriations in 1992; $33,979 State appropriations in
1993; $40,967 State appropriations in 1994; $161,876 State
appropriations in 1995; $187,717 State appropriations for 1996;
$137,100 in 1997; and $161,400 for 1998.
Research is being conducted by the Texas A&M University and
University of Missouri at Columbia. 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. No formal evaluation of this project has been carried out;
however, the CSREES representative is in frequent communication with
the principal investigator concerning policy analyses procedures and
studies.
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. It has been, and is being used to analyze the impacts
of farm policy proposals on the U.S. rice industry, to analyze the
impact of World Trade Organization (WTO) and the Uruguay Round
agreements on U.S. trade, and to analyze the impact of emerging rice
importing and exporting countries on U.S. rice exports. The principal
researcher believes this research addresses national, regional, and
local needs. The original goal of this research was to develop improved
global, national and regional models to analyze the impact of foreign
and domestic policy changes, and forecast changes in production, trade,
stocks, prices of substitute crops, farm prices, and consumption.
The work actually began about four years ago and federal research
grants from various sources have totaled roughly $2 million prior to
this year. The work supported by this grant began in fiscal year 1996.
The appropriation for fiscal years 1996 and 1997 was $395,000; for
1998, the appropriation is $296,000, for a total of $1,086,000. The
non-federal funds over the 4 years prior to this year totaled
approximately $500,000. For the 1996 fiscal year, state appropriations
were $178,000; for 1997, $150,000; and for 1998, are estimated to be
roughly $150,000 as well.
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. The purpose of constructing the models, however, is to
provide on-going analyses of the impact of various policy proposals on
the U.S. rice industry.
We have conducted no formal evaluation of this project. However,
each annual budget 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. These projects have
undergone a merit review. The number of research faculty who are
addressing broader rural issues id declining in many places. The multi-
disciplinary, 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 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 of rural
clients.
The Rural Development Center mission is to strengthen rural
families, communities, and businesses by facilitating collaborative
socioeconomic research and extension through higher education
institutions in the various regions. 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 research study funded by the Northeast Rural Development Center
assessed the consumer credit knowledge of rural poor and ethnic
minorities and determined their use and management practices. An
educational program that focuses on the wise use of consumer credit was
developed and offered to a diverse extension audience. In-service
workshops also were offered to extension educators in several states in
the Northeast. Two additional Northeastern states, New York and New
Jersey, have duplicated the curriculum for distribution to all
counties. This program was coordinated with and contributed to the
development of a short video that promotes the Money 2000 program, a
program that encourages participants to save and/or reduce debt by
$2,000 by the end of the year 2000. The video was distributed widely to
extension personnel within the region and nation, and to financial
counselors at several military bases.
The Southern Rural Development Center partially funded and provided
all logistical support for a National Conference, ``Linking Family and
Community Strengths.'' The conference was also supported by CSREES, W.
K. Kellogg Foundation, Farm Foundation, National 4-H Council and the
other regional rural development centers. The conference was funded to
support 12 mini-grant ($1,000) projects that would transform learning
at the conference to action.
Using a Western Rural Development Center supported Business R&E
(retention and expansion) program, New Mexico State University
Extension has assisted seven communities expand their economic base by
saving and creating local jobs. Seven jobs were saved in Silver City
when task force members facilitated a propane company's move to a new
location. The Clovis task force intervened with city officials to save
a $1 million business complex. The R&E staff in Torrance County created
75 jobs by helping a commercial greenhouse find suitable land. BC Hydro
in Burnaby, British Columbia recently requested and received permission
to adapt the Business R&E program materials for use in rural Canada.
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 1995-1998, $423,000 per year. A total
of 10,118,000 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
land-grant 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 1998.
The Centers enlist the help of academic and private/public
foundations personnel on advisory committees and boards of directors to
help establish operating rules and provide professional, technical
counsel and peer evaluation of Center projects and the principal
investigators. The projects are evaluated annually by the advisory
committees and the boards of directors against the five key issue areas
and the objectives of each project for relevance, achievement, and
initial impacts. Follow-up evaluation is carried out by the Center
staffs in order to assess long-term impacts of these projects on local
communities.
rural policies institute
The Rural Policy Research Institute 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. The principal research believes this
research to be of national, regional, or local need.
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 expert panels and other collaborative
research have, over the life of RUPRI, involved 150 scientists
representing 16 different disciplines in 60 universities, 40 states,
and three foreign countries have participated in RUPRI projects.
Currently 50 nationally recognized scientists and policy practioners
from 38 institutions and organizations serve on RUPRI panels, task
forces or work groups.
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 1995-1998, $644,000 each
year. A total of $4,662,000 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; and $584,516 in
fiscal year 1995, for fiscal year 1996, $576,782; and $186,859 in 1997.
Total 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
1999; however the original objectives were directed at building a
permanent, on-going, policy analytical capability. We have conducted no
formal evaluation, however, annual project proposals are carefully
reviewed.
russian wheat aphid, colorado
Funding will support two key areas of research that are needed to
assure long-term and sustainable Russian wheat aphid management. These
are: 1) Discovering new crop genes which provide resistance to the
Russian wheat aphid and incorporating them into commercially acceptable
wheat varieties, and 2) Integrating the available control tactics into
the most effective, efficient, and environmentally sound production
systems for the Great Plains.
The Russian wheat aphid is an exotic pest that entered the western
United States without its normal complement of biological control
agents. This insect was first discovered in North America in 1986 and
rapidly became the most important insect pest of wheat in the western
United States. From 1986-1991 the total economic impact was estimated
to be in excess of $657 million. In the same period, some 17.5 million
pounds of insecticides were used nationally for Russian wheat aphid
control. The cost to American farmers of insecticide treatments was
over $70 million. In addition, the intense use of insecticides on a
crop that previously received little insecticide treatment raised
concerns about the impact on water quality, human health, food safety,
non-target organisms, and general environmental quality. Since the
onset of the infestation, Colorado has lead all states in economic
losses due to the pest. Direct losses in Colorado have been as high as
$27 million in a single year with an average direct loss of above $11
million per year, since 1987. The goals of the research are to: (1)
discover new crop genes which provide resistance to the Russian wheat
aphid and incorporate them into commercially acceptable wheat
varieties, and (2) integrate the available control tactics into the
most effective, efficient, and environmentally sound production systems
for the Great Plains.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $200,000. State appropriations
and the Colorado Wheat Administrative Committee have demonstrated
strong support for this effort. Research will be conducted on the
campus of Colorado State University, at Colorado State University
research stations, and on the farms of cooperators throughout Colorado.
Outreach and extension activities will be focused on wheat growers in
Colorado, Nebraska, Wyoming, Kansas, New Mexico, Texas, and Oklahoma.
This is a new project and has not been evaluated by CSREES.
seafood harvesting, processing, and marketing, mississippi
Research related to seafood safety, quality and by-product
utilization has been supported by this grant. Funds from the fiscal
year 1997 grant are supporting research through September 30, 1998.
CSREES has requested the University to submit a proposal, which has not
yet been received, in support of fiscal year 1998 funds. It is expected
that funds from the fiscal year 1998 appropriation will support
research to screen domestic and foreign aquaculture products for the
presence of bacteria resistant to currently used antibiotics, to
develop and evaluate a rapid method to detect histamine in seafood, to
evaluate processes for the recovery of value-added flavor extracts from
shrimp processing by-products, and to determine impact of
implementation of HACCP regulations on microbial quality of seafood
products.
The principal researcher believes that national 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 over
exploitation. Other national needs addressed in this project include
reducing pollution during seafood and aquaculture food processing by
converting byproducts into value-added food ingredients or materials.
Regionally, much is unknown about the short and long-term effects of
the new seafood HACCP regulations on the livelihood of Mississippi
seafood and aquaculture food producers and processors who are typically
small and lack sufficient resources to remain competitive. Continuation
of this project will provide continued assistance to Gulf-Coast seafood
processors in meeting new U.S. regulations as well as new international
regulations that are important for Mississippi export products.
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. 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. FDA has
passed rulings affecting the potential viability of Mississippi seafood
and aquaculture harvesters and processors; emphasis is thus being
placed on addressing possible adverse consequences resulting from these
changes.
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 1995-1998, $305,000 each year. A total of
$3,010,000 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. Continuing needs by
Mississippi seafood and aquaculture harvesters and processors related
to improved quality, safety and utilization will require research and
development of new technologies to expand this industry.
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 1998 proposal, the last review of the proposal was
conducted on March 7, 1997. 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. Proposals are selected after examination of their
relevance to priorities identified within the region.
The principal researchers believes 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. 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 fiscal 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 1995-1998 are $212,000 each year. A total of
$1,582,000 has been appropriated. The nonfederal 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. A complete accounting of 1996 funds is not yet available from the
states involved.
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 are still
valid. Therefore, this is a continuing process with some priorities
changing somewhat but still within the objectives. The project
proposals are evaluated through a peer review mechanism and the
adherence to the research priorities.
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 multi-disciplinary 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. All grants
made to the participating Institutions are awarded competitively by a
scientific peer review process.
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. This research is
highly significant to national, regional and local needs. The original
goals of this Consortium remains 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. Since its inception in 1985, the Southwest
Consortium has provided essential support for the establishment of
baseline data on new, forward thinking research relevant to the
improvement of arid lands agriculture. Several area of accomplishment
are noted. One are is the identification of chromosome regions
conferring water use and transpiration efficiency in wheat; another the
impact of water stress on host plant resistance to aphids and
whiteflies on melon; a third, the genetic variation for deposition and
demobilization of stem water-soluble carbohydrates in spring wheat; and
the biochemical and molecular mechanisms of salt-tolerance.
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 1995-1998 $338,000 each year. A
total of $4,748,000 has been appropriated. The Consortium's host
institution, New Mexico State University, reports matching non-federal
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 each of the fiscal years of 1996 and 1997. 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. 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. An external review is
being planned for 1998.
soybean cyst nematode, missouri (biology and management of heterodera
glycines)
The research being funded by this grant is crucial to the
development of effective management strategies to understand host
parasite relationships of the pathosystems and each of its components.
Work has dealt mainly with identifying Heterodera glycines-resistant
genes and incorporating them into agronomically superior cultivars.
Basic studies elucidate the fundamental biology of the cyst nematode in
regard to new management strategies. Applied work dealt with evaluating
production systems and to new management strategies. This project was
not awarded competitively but has undergone peer review at the
university level and merit review at CSREES. The principal researcher
believes that although this research is focused on the soybean cyst
nematodes in Missouri, the problems is of regional and national
significance. 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. The original goal of this research was managing
soybean cyst nematode through the development of new resistant soybean
varieties and the use of biological and cultural management strategies.
To date, several nematode resistant soybean line have been or will be
released. 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.
Accomplishments in these areas include use of a fungal pathogen of
nematode eggs and the use of trap crops to reduce nematodes and
improved soil health.
Grants have been awarded from funds appropriated as follows: fiscal
year 1979, $150,000; fiscal years 1980-1981, $250,000 per year; fiscal
year 1982, $240,000; fiscal years 1983-1985, $300,000 per year; fiscal
years 1986-1989, $285,000 per year; fiscal year 1990, $281,000, fiscal
year 1991, $330,000; fiscal years 1992-1993, $359,000, fiscal year
1994, $337,000; fiscal years 1995-1997, $303,000 per year and fiscal
year 1998, $450,000. A total of $5,955,000 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 in 1995 and 1996; $33,723 in state
appropriations in 1997; and $37,445 in state appropriations in 1998.
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 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 in 1999. The last evaluation of this project was a merit
review in December, 1996 and the renewal project will be evaluated in
1998. In summary, continued development of new management strategies
for the soybean cyst nematode is extremely important. Progress in
meeting the objectives in each goal continues with new varieties with
nematode resistance being released yearly as well as excellent progress
in other management strategies. Two new soybean strains were developed
with resistance to soybean cyst nematodes and root-knot nematodes. A
Plant Variety Protection has been applied for the cultivar Maverick
that is nematode and root rot resistant. A chitinase gene was
successfully cloned in Rhizobium that may protect soybean plants from
soybean cyst nematodes.
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 site-specific farming as precision farming to improve the
level of Crop Management and thereby improve farm income and while
avoiding advise 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 project is composed of sub projects representing the contribution
disciplines. The sub projects are selected using a competitive peer
review process from proposal from scientist within the institution.
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
every site-specific or precision farming systems are used. 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 was $350,000, and fiscal year
1998 is $600,000. A total of $950,000 has been appropriated. The
estimated state support for this project in 1997 was $297,000.
Research will be conducted at the Mississippi Agricultural
Experiment Station. The principal investigators anticipate the
completion date for these objectives to be in 2002. The project is
evaluated by a coordinating committee at the end of each year in
preparation for the next cycle of field work. To date research studies
have been initiated for all of the objectives. These are designed as
multi-year studies and definitive results are not yet available. These
initial results are being used to refine and focus the research for
subsequent cycles.
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. An open call for research
proposals is held by each of the three states, Idaho, Oregon, and
Washington. Awards are made competitively after both internal and
external peer reviews within the states, and merit review by the
agency. 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.
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 that growers of wheat, barley, and other
alternative crops 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 conservation
compliance requirements in managing crop residues on agricultural lands
for soil and water management purposes.
STEEP programs have helped position farmers with new conservation
technologies, such as direct seeding management systems, 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 1996-1998, $500,000 per year. A total of $6,190,000 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, $169,628
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 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. In 1997, Washington received $197,234
state appropriations; Oregon continues to have Measure 5 as law and
continues to be unable to provide non-federal cost-sharing or matching
funds; and Idaho contributed $27,235 state support and $24,525 in
estimated non-federal grant support for a total non-federal
contribution of $51,760.
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, and the
results were compiled in a final, 5-year report in January 1997. The
STEEP III project started in 1996 and will continue through the year
2000 as a 5-year project.
The agency's program manager annually reviews progress reports,
proposes new research on the STEEP Program, and attends the annual
meetings to assess progress. The program is evaluated within the states
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. The most recent annual meeting
held in January 1998, highlighted direct-seeding technology, and
attracted over 950 attendees, of which 70 percent were growers from the
tri-state region. Farmer surveys are distributed at each annual
meeting, and results are compiled to assess the extent to which the
objectives are being successfully achieved.
sustainable agriculture, michigan
This project is intended to develop agricultural production systems
that are 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 grant is
allocated, by the Michigan Agricultural Experiment Station, to priority
areas within the general area of sustainable agriculture. Within each
of those areas grants are awarded based on research merit and proposal
submission. The projects and proposals undergo annual formal review
within the Michigan system prior to submission to CSREES, and then
review within CSREES.
The principal researcher believes there is a need to understand the
biological processes occurring 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.
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
trails 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 1998, bringing total appropriations to $2,274,000.
Matching funds were provided at the state level for $511,900 in fiscal
year 1994, $372,319 for fiscal year 1995, and $359,679 in fiscal year
1996. 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.
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.
A formal evaluation of the Principal Investigator's program was
concluded in 1997, commissioned by the C.S. Mott Foundation through an
independent consultant. The project continues to have annual peer
review.
sustainable agriculture and natural resources, pennsylvania
This project studies the cycling of nutrients in soil and crops
with special emphasis on the development of indices for measurement of
soil health. This project is awarded on the basis of peer evaluation to
scientists working in the Northeast U.S. on indices for soil health
especially with regard to animal waste application to soil. The project
undergoes regular internal evaluation and assessment as part of Penn
State's major effort in soil quality and nutrient management research.
Degradation of soil health/quality by excessive application of animal
waste is a most serious problem for agriculture both in the mid-
Atlantic region and throughout the nation. State governments both
regionally and nationally are attempting to address the issue of soil
and water degradation by intensive animal agriculture. Traditional soil
test results are not providing the needed answers for effective
nutrient--manure--management.
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.
With continued growth in numbers and size of concentrated animal
operations (CAO's) and the increasing number and severity of water
related problems (Pfisteria) in the region, it is apparent that our
understanding of nutrient cycling is not sufficient to prevent such
outbreaks. Research in 1996 and 1997 has indicated that many factors
not usually considered in manure management may influence the amount
and kinds of soil organic matter (SOM) and associated microbial
populations. SOM and its associated microbial biota plans a major role
in nutrient accumulation and release from soils. This research has now
elucidated at least one SOM indicator of soil health that will be
useful in more effectively managing manure application to soils. It is
hoped that in the next year others will be identified.
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 1998 for a total
of $570,000. A total of $369,574 in matching support from university,
state and private industry sources was provided in fiscal year 1997.
Research is be conducted by the Pennsylvania State University with
cooperators throughout the state. The anticipated completion date for
the overall original project objectives is in June 30, 1999. The
project is meeting the key objectives set forth in 1996. A significant
indicator for soil health has been identified. Further work is
continuing to determine if it will be useful as a guideline for manure
management especially with regard to the high end soil loading problems
associated with CAO's. Interim evaluation of this project will be done
prior to June 30, 1998. Criteria used to assess the quality of the
science will be peer reviewed throughout the northeast region. 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. The grant was awarded competitively within the University of
Nebraska, and the integrated farm project has been reviewed annually
for technical merit and progress toward goals by the internal review
process of the university.
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 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 necessary to provide recommendations to farmers for how to
manage fragile lands.
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 1998. Total appropriations to date are $442,000. 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; $36,091 in fiscal year 1995 and fiscal year 1996
$24,267.
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.
Findings from this project have shown that young cattle can be fed
with lower costs it cornstalks are used as part of their rotation. 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. The
proposal addresses pest management issues under cropping sequences and
tillage practices utilized in the region for wheat production.
Objectives of the research are to evaluate the sustainability of
pest management using four cropping sequences and two tillage systems
on large experimental blocks representing different farming regions in
Montana and to investigate the interaction of crop rotation, tillage
systems, and pest management. In addition, the researchers will analyze
physical and biological properties of soil as affected by cropping
sequence and tillage systems and evaluate weed species composition as
affected by cropping sequence, tillage system, and weed management
decisions. Presence and impact of plant pathogens as affected by
cropping sequence and tillage systems will be determined. Part of the
study will also be to ascertain the arthropod community within each
cropping system and determine the impact of tillage on species
composition. Profitability, marketing, and environmental benefits of
diversified cropping systems will be examined. Study results will be
assimilated and transferred into practical solutions to farmers'
problems relative to confines of dryland wheat production. Study sites
were surveyed in fall of 1997, baseline soil samples were taken, and
replicates measured. Winter wheat was seeded in designated treatment
rows in each replicate. To facilitate seeding under no-till conditions,
a Conservation Pak air seeder was purchased with funds awarded in
fiscal year 1997 to this project. The remaining crop treatments will be
seeded in spring 1998.
This work supported by this grant began in fiscal year 1997 and the
appropriation for fiscal year 1997 was $200,000 and fiscal year 1998 is
$400,000. A total of $600,000 has been appropriated. Non-federal funds
of $42,000 from the Montana Wheat and Barley Committee were provided
for project support during 1997.
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. 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.
Yearly progress reports will be used to track the effectiveness of the
program of research.
swine waste management, north carolina
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 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.
This project was funded following merit review of the proposal by
scientists within CSREES with expertise in animal waste research. The
principal researcher has stated that North Carolina now ranks second in
the US in both pork and poultry production. The problem of waste
management has become critical because adequate land for application of
waste is 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.
The original goal of this research was to enhance the design,
development, and implementation of alternative swine waste management
strategies and treatment systems. The institution also is enhancing the
capability of an Environmental Analysis Laboratory which supports this
project as well as other projects on animal waste management. The work
supported by this grant began in fiscal year 1997 and the appropriation
for fiscal year 1997 was $215,000 and fiscal year 1998 is $300,000. A
total of $515,000 has been appropriated.
During fiscal year 1997 there were $114,000 in state funds and
$82,389 for in kind support from industry (donated equipment) that were
provided from non-federal sources in support of this work. This
research is being conducted at North Carolina State University in
Raleigh, North Carolina.
The original anticipated completion date was October 1, 1997. Due
to funding not starting until March 1, 1997, the original objectives
are now approaching completion and should be done by March, 1998.
Additional objectives have been proposed which will have a completion
date of March, 1999. CSREES conducted an evaluation of the progress of
this work during January 26-28, 1998.
tillage, silviculture, and waste management, louisiana
This research has five components: Rice and Cotton Tillage, Bald
Cypress and Water Tupelo Silviculture, and Dairy and Poultry Waste
Management. More specifically, the Rice Scientists are looking for ways
to improve stand establishment; the Cotton Scientists are focusing on
the use of tillage systems 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 on
factors affecting Bald Cypress and Water Tupelo regeneration. The
project is annually subjected to the university's merit review process.
The principal researchers hypothesize that since the crops, forests,
and waste issues addressed by this project extend beyond the state
borders this research has, at a minimum, multi-state to regional
application.
The original goals were to: improve conservation tillage in rice
and cotton farming, to determine the effectiveness of no-discharge
dairy waste treatment facilities, to determine acceptable land
treatment levels for poultry waste disposal, and to evaluate wetland
forest regeneration processes. All components of the project have
established research studies and monitoring progress. Each year the
principal investigator initiates a review of the sub-projects. In this
fashion, he promotes good dialogue and cooperation among the sub-
project investigators and their respective departments.
The work began in fiscal year 1994. The appropriation for fiscal
year 1994 was $235,000. For fiscal years 1995-1998, the appropriation
was $212,000 per year. This sums $1,083,000. 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, Louisiana. The original work was scheduled for
completion in 1999. Early term objectives have been met. Most of the
added experiments are scheduled for closure in 1999 as well.
The last field evaluation was completed on December 12, 1995. The
evaluation summary complimented the scientists on the interdisciplinary
components associated with this project, along with their investigative
procedures, report writing, and external networking. A 1998 field
review is tentatively scheduled for March 9-10.
tropical and subtropical research
The Tropical and Subtropical Research--T STAR--Program is operating
in coordination with the T STAR Caribbean and the T STAR Pacific
Administrative Groups. 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. The
proposals are peer reviewed and are then selected for funding by the
administrative groups.
Non-member institutional interests are represented by the Executive
Director of the Southern Region Agricultural 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 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 1998 proposals
have been requested. The principal researcher believes 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.
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 years 1997 and 1998. A
total of $49,270,000 has been appropriated.
For fiscal year 1997, 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.
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 This project has been evaluated annually by CSREES.
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 ingredients 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.
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. Additionally, an objective is to improve the
management of subterranean termites through studies of the termite
genome, cuticular chemistry, morphometric characteristics and termite
behavior. Specific accomplishments in the termite research are as
follows: Collection of three full years of data on over 80 different
subterranean termite colonies in four of the major soil provinces in
Georgia was completed in early 1997. Research with conventional
termiticide chemistry has demonstrated the interaction between soil
type and termite tunneling activity and the potential role these
interactions play in the incidence of reported termite treatment
failures using these currently registered materials. The past years
research also involved investigations of a naturally occurring fungus
as a potential control agent. Research on the concept of baits as a
termite control tactic have raised concerns about the practical
application of this recently registered technology.
This work 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
through 1998 the appropriation was $64,000 each year. A total of
$555,000 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, 1995--$59,539, 1996--
$30,000, 1997--$80,000.
This research and technology transfer program is being conducted at
the University of Georgia, Department of Entomology, Athens, 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.
This project has been evaluated on an annual basis by CSREES
through the progress reports. This year a site visit by CSREES has been
scheduled by CSREES on February 10. This is a new project and has not
been evaluated by CSREES. The project will be evaluated by review of
the proposal and the annual project reports.
vidalia onions
This is the first year that the research on Vidalia onions is
funded. CSREES has requested the university to submit a grant proposal
that has not yet been received. This research is important to the State
of Georgia and is directed to improving the quality of Vidalia onions.
The proposed goal of this research is to investigate production
practices to improve Vidalia onion culture. The specific objective is
to improve onion quality and enhance competitiveness of the product.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $84,000. Since this is the first
year funding was provided for this project, non-federal funding
information is not available. Research will be conducted in Georgia and
the anticipated completion date for the original objectives is five
years based on objectives reachable within a year time frame. As this
is the first year of funding for this project, an evaluation has not
yet been done.
viticulture consortium, ny and ca
The University of California and Cornell University in New York
conducted research on varietal responses of grapes, modeling of water
requirements, management of diseases including phyloxera and other
cultural aspects of grape production. Funds were used by the lead
institutions to fund projects in the various grape producing states
within their region. Grants were made based on peer reviewed proposals
and selected competitively by regional groups based on priorities
developed by researchers, extension, and industry personnel.
The research being carried out is designed to help the viticulture
and wine industries remain competitive in the U.S. and in the global
market. Both these industries have a positive effect on the U.S.
balance of payments. The original goal of this research is to maintain
or enhance the competitiveness of the U.S. viticulture and wine
industry in the global market.
Grants have been awarded from funds appropriated as follows: fiscal
year 1996, $500,000; fiscal year 1997, $500,000; and fiscal year 1998,
$800,000. A total of $1,800,000 has been appropriated. In 1997, the
viticulture industry provided $500,000 for projects following the same
criteria and priorities as in the federally funded ones. In effect,
this is an industry match of funds. Research is being conducted in
various states which include California, Washington, New York, and
Pennsylvania.
The research priorities set by the guidance group were not all
addressed nor will they be in the near future. No evaluation has been
made yet. However, proposals for continued funding are evaluated for
progress by a guidance group made up of research, extension, and
industry persons.
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 sixth 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 13 years of operating pressures and
flow rates;
2. Evaluate utilization of livestock effluent with subsurface drip
irrigation and its effect on water redistribution and corn water use
patterns;
3. Develop best management practices for nitrogen fertigation using
subsurface drip irrigation systems for corn;
4. Estimate the long run economic impacts of irrigation efficiency
improvements for irrigated corn, wheat, and grain sorghum in the farm
sector and affiliated sectors of the High Plains economy;
5. Disseminate irrigation research information and best management
practice recommendations to Kansas irrigators through a series of
extension bulletins and updates based on research-based information.
Results from a 4-year study were summarized into a Best Management
Practice for nitrogen fertigation for corn using subsurface drip
irrigation on deep, well-drained, loessial silt loams in western
Kansas. Corn yield, crop nitrogen uptake, and water use efficiency all
plateaued at the same level of total applied nitrogen, 160 pound per
acre nitrogen fertigation rate, with an average yield of 213 bushels
per acre. The results emphasize that high-yielding corn production also
can be efficient in nutrient and water use. Using earlier studies as a
guide, a new study was initiated in 1997 to use the best management
practice of daily subsurface drip irrigation with periodic additions of
nitrogen fertigation. Results from 1997 showed that reducing the
irrigation capacity from full irrigation to 50 percent irrigation did
not reduce yields. Corn yields averaged an extremely high 277 bushels
per acre for these treatments. This sub-study was initiated as a result
of the changes in the Federal farm program which allow greater planting
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 sub-study along with economic
and system longevity analyses will be continued in 1998.
The principal researcher indicates that corn is the principal
irrigated crop in Kansas and throughout the Great Plains. The principal
researcher believes any realistic attempt to address overdraft of the
High Plains Aquifer must address improvements in irrigation efficiency
in corn production. The most common irrigation methods are furrow and
sprinkler irrigation. The need to conserve water has focused attention
on more efficient alternatives such as subsurface drip irrigation. This
research will be of particular significance within the state and
region. However, it also has national and international applications as
advanced irrigation systems, such as subsurface drip irrigation, will
be needed to improve irrigation water use efficiency in the next
century.
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. Subsurface drip irrigation acreage is increasing in Kansas and
farmers are obtaining results on their own farms.
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 1995-1998 each year. The total funds appropriated are
$498,000. 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; $868,408 state
appropriations, $37,543 product sales, $35,484 industry and
miscellaneous in 1992; $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. The original objectives of the project appear to be on track
for completion by that date. One of the most important objectives of
the study is to evaluate longevity of the subsurface drip irrigation
systems. These sites are unique to the region and very little
information is available on system longevity. Pressing water quality
problems of a regional and national scope has necessitated a change in
the objectives to developing nutrient management practices under
subsurface drip irrigation and utilization of livestock wastewater with
subsurface drip irrigation. Additionally, changes in the federal farm
program which allow greater planting flexibility has an effect on how
irrigators make water/land allocation decisions. Field and economic
studies related to allocation strategies, nutrient management and
wastewater utilization should be completed in 3 years. The project has
been peer reviewed. The reviewers felt the project concept to be valid
and the timetable for accomplishments to be on target.
water quality
The agency continues support of the national, competitively-awarded
grants program as part of the Department's Water Quality Initiative.
This 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 projects
as part of the Midwest Initiative on Water Quality to develop new
farming systems that protect water quality, with research located at
ten sites throughout the Corn Belt. This program is conducted jointly
with the State Agricultural Experiment Stations, the U.S. Department of
Agriculture'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 Management Systems Evaluation
Areas 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.
The public is concerned about the possible risks to the
environment, to soil quality, and to water quality resulting from the
use of agricultural chemicals. Improved methods of detection of very
minor amounts of chemicals in water have made the public, farmers, and
policymakers 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 groundwater quality, and to develop new
and improved, cost effective agricultural systems that enhance ground
water quality. During the past 3 years, focus and allocation of
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. Ohio's Management System Evaluation Area project has identified
agricultural systems components that maintain profitability and
minimize groundwater impact of farming on the bottomlands of the Scioto
Valley.
2. Nebraska's Management System Evaluation Area indicates that
irrigated corn can be produced profitability with less water and
nitrogen than most farmers apply.
3. Ohio's Lake Erie Agricultural Systems for Environmental Quality
project, along with other State and Federal projects, is making
excellent progress in reducing phosphorus loading in two major
watersheds that discharge into Lake Erie. Watershed phosphorus budgets
indicate that the net annual accumulation of phosphorus in the Maumee
watershed has dropped from 23,000 metric tons to 2,600 metric tons.
Farmers are no longer applying ``buildup'' levels of phosphorus to
their fields--a major cultural change.
4. In Indiana, the Indian Creek and the Little Pine Creek
Agricultural Systems for Environmental Quality watersheds, located near
West Lafayette, are providing data from 22 stations to test and
calibrate models for water quality management.
5. In North Carolina, a 7-acre wetland is effectively removing
nitrates from the runoff and drainage of a 950-acre watershed during
the warm season; a Site-Specific Farming workshop was held at
Greensboro, North Carolina, and attracted some 200 participants and
several industrial and educational displays have been developed for the
Agricultural Systems for Environmental Quality project.
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 1995-1997; and $2,461,000 in 1998. A
total of $47,527,000 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 per year 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 Management System Evaluation Area
projects of the Midwest Initiative on Water Quality areheadquartered 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 Department's Water Quality Research Plan
were to: (1) assess the seriousness and extent of agriculture's impact
on groundwater quality, and (2) develop new and improved agricultural
systems that are cost effective and enhance ground water quality. These
original goals have been met; however, water quality programs need to
have a long-term focus. The physical processes that link production
practices to water quality, and the socioeconomic processes that
characterize adoption can both be of long duration. The adoption
process, from first learning about a practice through implementation,
can take years. While assistance is designed to speed up this process,
overall progress can still be slow. Therefore, adequate resources must
be made available for an extended period of time to ensure successful
completion of the project.
The original project was developed for 5 years with the expectation
that it would be reviewed and possibly extended beyond the 5-year
period if warranted. The 1995 review of the program identified a need
for increased attention to surface water quality problems. In 1996 and
1997, new water quality problems emerged--hypoxia, pfiesteria, etc.--
which required renewed efforts. The research funded under the Special
Research Grants Program has produced significant progress in
understanding the impacts of agricultural practices on surface and
groundwater 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 5 years will be on developing
and implementing agricultural systems that reduce the nutrient and
contaminant loadings in the waters and watersheds.
An external review team evaluated the Management System Evaluation
Areas and associated component projects in 1995. All Management System
Evaluation Area projects have an impressive record of successfully
implemented interdisciplinary teams to study water quality problems. A
major conference on Management System Evaluation Area and Agricultural
Systems for Environmental Quality results is being planned for 1999.
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 crop production practices; weed biology and
herbicide resistance; and 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.
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 per year in fiscal years
1995 through 1998. A total of $3,162,000 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 each of the fiscal years of 1996 and 1997.
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. Each year the grant is peer
reviewed and reviewed by CSREES's senior scientific staff. The review
indicated progress in 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 Nation's 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.
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; fiscal years 1995-1997, $176,000
each year, and $261,000 in fiscal year 1998. A total of $1,651,000 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, $457,840 of non-federal support for 1996 and $495,820 in 1997.
This research is being conducted at Kansas State University by the
Wheat Genetics Resource Center. The collection, evaluation and
enhancement of Wheat germplasm is a continual process. Therefore this
project does not have a defined completion date. 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 research includes: meeting environmental objectives in timber
harvesting and forest products manufacturing; exploiting pesticides
developed from forest trees; wood machining; reduced chemical needs for
pulping and bleaching of paper; helping small and mid-sized wood
products companies remain or become competitive in the global economy;
assessing the impact of international standards adoption on the demand
for certified wood products; and developing new products from wood and
recycled materials. Each Center has a somewhat different procedure for
awarding grant monies to individual projects.
Four research centers conduct research to improve the utilization
of species that grow in their regions; i.e., western conifers, southern
pines, Lake States hardwoods, and northeastern forests. The other two
research centers conduct research in machining of wood and incubator
technology transfer. Wood industry incubator work contributes to rural
development of local economies. The forest products industry ranks
among the top ten manufacturing employers in 46 of the 50 States. Many
local economies are dependent on these jobs.
The goal is to generate new knowledge that will benefit the forest
industry. Additional emphasis has been placed on environmental
stewardship, resource extension, technology transfer, and scientist
education. Extending the resource benefits forest ecosystems and
increases the competitiveness of the forest products industry.
Consumers benefit from more efficient production. Hand-held 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. Systems analysis of woodworking 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 a dielectric wood defect detection
system to improve automated production systems. Research developed
control of emission of volatile organic compounds into the atmosphere
during drying and pressing of lumber through microbial degradation of
contaminants in an air stream. Research has found ways to recycle used
treated wood into usable commodities.
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 years 1995 and 1996, $3,758,000 per year; and fiscal
years 1997 and 1998, $3,536,000 per year. A total of $45,845,000 has
been appropriated.
Mississippi State University non-federal funds were: State
appropriations, $2,498,800, $2,178,725, $2,353,225, $2,331,691,
$2,650,230, $2,778,535, and $2,582,617 for 1991, 1992, 1993, 1994,
1995, 1996, and 1997, respectively. In addition, industrial funds
averaged $667,700 for the 5 years from 1993 to 1997 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, $1,117,000, and $1,100,000 for 1991, 1992, 1993, 1994,
1995, 1996, and 1997, respectively. Estimated non-public support
averages $500,000 per year. Michigan State University non-federal
contributions for 1997 totaled $580,500. Three new locations were added
in 1994: University of Minnesota-Duluth non-federal match was $590,000,
$550,000, $560,000, and $371,930 for 1994, 1995, 1996, and 1997; North
Carolina State University was $126,000, $165,000, $135,000, and
$163,216 for 1994, 1995, 1996, and 1997; University of Maine was
$600,000, $445,723, $459,100, and $477,464 for 1994, 1995, 1996, and
1997.
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 three strong
regional centers of wood utilization research. These centers have been
established and three more centers have been added. Projects begun in
1998 will be completed by 2002.
On site reviews of centers are conducted on a rotating basis. Each
center's plans are reviewed yearly or more frequently. Progress reports
are reviewed yearly. Center directors last met together for joint
planning in June 1996. Centers all have advisory committees or research
committees which meet periodically. We conduct informal on-site reviews
periodically. The Minnesota and Oregon sites were visited in 1996. The
North Carolina site was visited in 1997. A Departmental panel reviewed
the original three centers in 1992 and 1993. At that time, the original
objectives were broadened to include more consideration for
environmental concerns. The centers have increased their focus on
helping industry meet 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 to develop objective
measures of wool, mohair, cashmere and other animal fibers to improve
the quality of wool products while enhancing the profitability of the
U.S. 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 fabrics
made from these fibers.
Collaboration exists among researchers in Texas, Wyoming, and
Montana associated with this grant and other federal, university and
industry scientists to assure responsiveness to the needs of those
involved in wool and mohair production, marketing, and processing. The
sheep and goat industries and the principal researchers believe that
this research to be of national, regional and local need. The research
on wool, conducted by means of this grant, represents the only research
efforts in the U.S. focused on improving the efficiency of measuring
and assuring wool, mohair and cashmere quality for garments made from
these fibers.
The overall goal for this research is to develop objective measures
of wool, mohair, cashmere and other animal fibers with a focus on
improving the efficiency of determining the quality of products made
from these fibers while enhancing the profitability of the sheep and
Angora goat industries. Computer software programs have been developed
to provide an automatic image analysis system to make rapid and
inexpensive measurements of the average diameter and distribution of
animal fibers as well as other fiber properties including fiber length
and color. Each of these properties are used for grading and processing
to determine ultimate softness, durability, dye characteristics,
comfort, and garment price.
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 years 1992-1993; $235,000 for
fiscal year 1994;, $212,000 per year for fiscal years 1995-1997, and
$300,000 for fiscal year 1998. A total of $2,881,000 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 sales, $36,484 industry
and $3,556 miscellaneous in 1994; and $67,345 state appropriations,
$10,000 product sales; $34,325 industry contributions in 1995; $39,033
non-federal support in 1996, and $174,486 non-federal support in 1997.
The research is in progress at the Texas A&M University, Texas
Agricultural Experiment Station at San Angelo, the University of
Wyoming at Laramie, and Montana State University at Bozeman. 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 research priorities for the
wool, mohair, and cashmere industries and to satisfy consumer demands
for products from these fibers. It is anticipated that five years will
be required to complete the current research.
Each year grant proposals are peer reviewed. The principal
investigators meet annually to evaluate progress and re-evaluate
research priorities according to industry needs. Because the research
encompassed in this grant is a component of a regional research
project, accomplishments are reported annually to scientific peers and
representatives from the sheep, goat, wool, mohair, and cashmere
industries. In addition, the overall regional research project is peer
reviewed every third year. Annually, an agency representative reviews
grant proposals and periodically visits the research facilities and
assesses progress. The most recent visit was in May of 1994 whereby it
was determined that the stated objectives were being addressed and that
they were consistent with industry needs. An external review of the
overall program is being planned by the agency for May of 1998. Program
effectiveness and relevance to industry needs will be assessed by
experts representing the sheep and goat industries and peers from the
scientific community.
agricultural development in the american pacific
The Agricultural Development in the American Pacific (ADAP) project
is a primary means for 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 Pacific tropical agriculture and
communities. ADAP is a mechanism to address common regional client-
based issues while maintaining cultural, rural, economic and
environmental integrity. This special research grant is awarded
noncompetitively to a program planned and approved by the five involved
land grant institutions.
The principal researcher believes the five participating
institutions are geographically dispersed yet facing many similar
issues which can be served through extensive networking and
communication. 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. In 1997, each ADAP institution self-
determined their best means for electronic communications. ADAP brings
together the five Deans/Directors to discuss agriculture and human
resources issues facing isolated, tropical ecosystems in the Pacific,
and to plan and implement activities to address those issues.
Priorities are categorized in three areas: sustainable systems,
collaborations/partnerships, communication systems. Activities range
from joint/collaboration efforts to overcome taro leaf blight in the
Pacific, to seeking recognition of Pacific tropical agriculture by
NASULGC.
ADAP's original goals are to develop human resources within the
institutions, to more effectively manage agricultural programs within
and among the institutions, and to focus resources available on
agricultural issues of the Pacific. Projects include: animal health
survey, livestock waste management, dietary guidelines for Pacific
foods, 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 1996, 1997, and 1998 were $564,000
each year. The appropriation total to CSREES is $2,300,000. 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.
A formal review of the ADAP program was conducted July 1-10, 1997,
and included visits by review team members to American Samoa Community
College, College of Micronesia, Northern Marianas College, University
of Guam and University of Hawaii. The review focused on the degree of
achievement of goals set forth in the five-year 1992 strategic plan.
Recommendations were made to improve the structure and effectiveness of
delivery of programs to address Pacific tropical agriculture issues for
island communities. At the conclusion of the review, ADAP incorporated
review recommendations, and prepared and adopted the new, five year
1997 strategic plan.
agricultural waste utilization, west virginia
The Poultry Waste and Energy Recovery Project, commonly referred to
as the POWER Project, applies American technology to a traditional
European waste treatment technology. It is a documented demonstration
of a high-rate resource recovery system that converts municipal and
agricultural waste into valuable energy and odorless, pathogen-free
products. The projects main research goal is to reduce the nutrient
run-off to the Potomac River. The research will also assess the
biological and environmental value of the fertilizer produced.
The current need for this technology is local, national, and
international. The beneficiaries of this technology will be both the
people and the environment anywhere in the world where problems of
food, fertilizer, and energy shortages are currently in conflict with
the preservation of environmental quality. The direct benefits include
enhanced and expanded waste water treatment capacity and municipal
solid waste capacity, creation of new jobs, and revenue from by-
products and water quality improvement.
The research goal will go beyond the testing of waste materials in
the digester and proceed with a program to compare the microbiological
loading of rivers, where known environmental pollution is measurable,
and where the total viable counts of the rivers could be determined in
real-time with a bioprobe. Specific microbial analysis may be able to
correlate specific microbial counts with either inorganic nutrient
pollution or organic pollution from farming activities.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $360,000. This is a new project
in fiscal year 1998 and specific information on the source and amount
of non-federal funding for this project is not yet available.
Research will be conducted at Moorefield, West Virginia. The
anticipated completion date of the original objectives is approximately
two years. Since this is a new project in fiscal year 1998, the agency
will conduct the initial review of this project when the proposal is
submitted to CSREES for funding.
national alternative fuels laboratory
Research addressed the effects on fuel economy and power output of
ethanol addition to petroleum blendstocks, environmental effects of
ethanol addition to conventional and reformulated gasoline, and
development and demonstration of an economical, ethanol-based,
biodiesel-containing alternative to leaded aviation gasoline.
Information dissemination activities included promoting ethanol fuels
in the Red River Valley and the upper Midwest through speeches,
presentations, and published articles.
The researchers believe it is crucial to U.S. energy security that
renewable domestic fuels are represented accurately in the marketplace
by easily accessible unbiased scientific data on their performance and
environmental effects. These data are generated and publicized through
partnerships developed between the research organization and both
public and private sectors. The regional need for the research is
derived from recent and ongoing disease problems and world market
demand trends with barley and wheat, in which North Dakota ranks first
and second, respectively, in U.S. production. Current effort is focused
on implementing a cooperative project to build a biomass-to-ethanol
plant that would spur market-driven crop diversification based on the
need for regionally-optimized feedstocks.
The original goal was to develop a database of at-the-pump-sampled
conventional, reformulated, and alternative transportation fuels sold
in the upper Midwest and throughout the United States to enable current
and historic comparisons of different gasolines. The database provides
a means of diagnosing and tracking fuel performance and environmental
effects resulting from different fuel formulations, additives, and
contamination problems. The database is used in conjunction with
another primary objective, which is to provide consumers and potential
alternative fuels marketers with information on conversion of crop
residues, agriculture processing wastes, high-cellulose-content
municipal wastes, and other biomass materials to alternative fuels.
The work began in fiscal year 1991 and was, in part, sponsored by
this grant. Appropriations in fiscal years 1991-1993 were $250,000 per
year. In fiscal year 1994, it was $235,000; $204,000 in fiscal year
1995; and $218,000 per year in fiscal years 1996, 1997, and 1998. A
total of $1,843,000 has been appropriated. In fiscal year 1997,
approximately $140,000 in non-federal collaborative research funding
was secured by project personnel. A total of $985,000 in non-federal
funds have been allocated toward performance of program objectives over
the duration of this grant. For fiscal year 1994, non-federal funding
was $105,000. Fiscal year 1995 and 1996 totals were $50,000 and
$60,000, respectively. Over fiscal years 1991-1993, non-federal funding
was $630,000.
The University of North Dakota Energy and Environmental Research
Center located in Grand Forks conducts the work. The completion date
for the original objectives was April 30, 1992. That work was
completed, and its results published. In 1995, the program scope was
expanded and industry collaborations increased. Development of an
ethanol-from-biomass production facility and commercialization of bio-
based vehicle and aviation fuels could be completed within five years,
by fiscal year 2003.
In July 1996, the U.S. Department of Agriculture conducted an on-
site evaluation. Based on its ability to collaborate with industry and
its performance of much needed biofuels development work, the program
was given a favorable review. Research objectives, including those
involving dissemination of research results to the public and
performance of unbiased scientific research on energy and environmental
issues impacting alternative fuel development and use, are being met. A
summer 1998 evaluation is planned.
animal waste management, oklahoma
This research project is designed to develop sustainable,
environmentally-safe, and ecologically-sound best management principles
and practices for beneficial animal waste applications for ``High
Plains Agriculture'' in support of rural economic development through a
Federal-state-local partnership. Emphasis will be placed on the rapidly
expanding hog industry in the semiarid region, but information gained
will also be applicable to the beef and dairy industries.
The Oklahoma Panhandle is the most productive agricultural region
in the state with agricultural receipts in excess of $800 million.
Nationally, Texas County in the Panhandle ranks number one in the state
and in the top 15 of all counties in the U.S. relative to cash
receipts. The rapid expansion of the hog industry in this semiarid
region will only strengthen that position. The rapidly expanding swine
industry was projected to add $650 million in pork and value added
products in Oklahoma in 1997 with the slaughter and processing of over
4 million hogs per year. Information gained from this study will
provide the data base to develop best management practices to maximize
beneficial nutrient use and minimize nuisance odor in semiarid soil/
cropping and rangeland production systems. Practices developed will
have significant implications regionally, nationally, and
internationally. The semiarid agro-ecosystem is unique with climatic
conditions consisting of low rainfall that promotes both dryland and
irrigated agricultural practices; extremes in high and low
temperatures; soils characterized with alkaline pH, low in organic
matter, and high in calcium carbonate. This unique agro-ecosystem makes
information gained from more humid environments inapplicable.
The original goal of this research is to develop best management
practices that will: protect ground water supplies from pollution of
nutrients, salts, and pathogens; maintain air quality; and minimize
odors derived from the entire hog-house, lagoon, land-application,
soil-cropping and or rangeland production system, thus maintaining the
quality of life in the rural sector.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for the fiscal year 1998 is $250,000. Specific
information on the source and amount of non-federal funding for this
project is not yet available.
Research will be conducted at The Oklahoma Panhandle Research and
Extension Center located in Goodwell, Oklahoma. The Center will provide
the land area and a portion of the facilities and equipment necessary
to conduct the major portion of the study. Other study sites will be
developed on private land in cooperation with hog operations in the
panhandle region. This is a new project and an application has not yet
been submitted. The agency will conduct the initial review of this
project when the proposal is submitted to CSREES for funding.
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 improved 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. The goal is 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. Theoretical studies and empirical and
descriptive analyses of policy issues and technical problems pertaining
to the Uruguay Round of negotiations were completed and provided to
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 the Uruguay Round
Agricultural Agreement (URAA).
This grant supports six projects focusing on URAA and World Trade
Organization (WTO) monitoring and implementation problems; implications
of the URAA and WTO 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, $74l,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, for fiscal years 1997
and 1998, $355,000 each year. A total of $6,414,000 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 1991; $113,779 State appropriations and $173,117
miscellaneous for a total of $286,896 in 1992; $120,138 State
appropriations and $164,707 miscellaneous for a total of $284,845 in
1993; $161,673 State appropriations and $32,000 miscellaneous for a
total of $193,673 in 1994; and $161,000 State and $30,000 miscellaneous
for a total of $191,000 in 1995; $70,000 State appropriations and
$44,000 for a total of $114,000 in 1996; and $60,325 in State
appropriations and $61,500 in miscellaneous funds for a total of
$121,825 in 1997. Information is not yet available on non-federal
funding in 1998.
The research program is carried out by the Center for Agriculture
and Rural Development at Iowa State University and university
researchers anticipate that the work should be completed in 1998 with
analysis of the final agreement of the Uruguay Round and related trade
agreements and dissemination of these results. An informal evaluation
of this project takes place as a part of each annual project review and
approval process.
center for human nutrition, maryland
This research aims to assess the severity and causes of obesity
among inner city, suburban, and rural school children in the state of
Maryland. Specifically, the research will provide information on the
role of food and physical activity as factors potentially leading to
excess weight in children and adolescents. According to the latest
national surveys, there are over 90 million overweight adults in the
U.S. It is believed that weight gained during childhood and adolescence
poses the greatest risk for an adult to become permanently overweight.
Obesity, in turn, contributes to important chronic conditions such as
diabetes, hypertension, and heart disease. It is acknowledged that the
prevalence and causes of obesity vary in different social and
geographic settings. Understanding this information is essential for
the implementation of nutrition education programs and prevention
activities.
The goal of this research will be to determine the prevalence of
obesity, and will attempt to identify risk factors in children
attending public schools in Baltimore City, Baltimore County, and
Washington County in Maryland. The study will provide information on
dietary energy intake, food preferences, and physical activity in
children and adolescents.
The work supported by this grant began in fiscal year 1998 with an
appropriation of $150,000. The projected non-federal funds and sources
provided for this grant are as follows: $56,000 university, $23,000
industry, and $7,000 miscellaneous.
Research will be conducted at the Center for Human Nutrition, John
Hopkins School of Public Health, in Baltimore, Maryland and the
anticipated completion date is 2000. The grant proposal for fiscal year
1998 will be subject to extensive peer review.
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 research proposal received a
merit review at the university prior to submission to CSREES. 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 to
resolve potential social, economic, and environmental conflicts.
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 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 with an appropriation of $94,000
in fiscal year 1994; $81,000 in 1995; and $87,000 per year for 1996
through 1998. A total of $436,000 has been appropriated. The non-
federal funds and sources provided for this grant are as follows:
$39,000 State appropriations in fiscal year 1994; $54,000 in 1995;
$60,000 in 1996 and 1997; and $84,500 in 1998.
The program is being carried out at Texas A&M University through
the Texas Agricultural Experiment Station in collaboration with other
segments of the Texas A&M University System and Louisiana State
University Agricultural Center. The original proposal in 1994 was for a
period of 12 months. The current phase of the program will be completed
in the year 2001.
CSREES performed a merit review of the project in July 1997, as it
evaluated the 1997 project proposal, and concluded that progress on all
four objectives continued to be good: U.S.-Mexican linkages resulted in
a successful conference on NAFTA and some new research projects;
potential markets for U.S. dairy and other products in Mexico were
completed; impact of eliminating the Canadian Grains Transportation Act
was studied; and several training programs were conducted.
data information system questions
Cooperative State Research, Education, and Extension Service--
CSREES--has funded two major activities, both currently underway, that
underlie the design and development of the Research, Education, and
Economics Information System--REEIS. A cooperative agreement with the
University of Arkansas has been funded to provide national leadership
in coordinating the efforts of our university partners in helping us
determine appropriate content for REEIS. The University of Arkansas is
also providing essential services in managing and coordinating a
national Steering Committee responsible for overseeing the overall
design, development, testing, and implementation of the Research,
Education, and Economics Information System--REEIS. The Steering
Committee had its first meeting in June of 1997. It held its second
meeting in February 1998 to review progress on REEIS developments to
date and to formulate action plans and strategies for future tasks. In
addition, work under a contract with a major private sector information
technology firm is in progress. The contract calls for conducting a
strategic information audit of databases and information practices
within the Research, Education, and Economics mission agencies and
State partner institutions. Deliverables from the first phase of the
audit include an inventory of existing databases currently targeted for
inclusion in REEIS, specifications for a comprehensive needs assessment
that will identify gaps between current user needs for information, and
the ability of exiting databases to satisfy those needs, and
specifications for a retrieval language that will assist users in
accessing and searching REEIS databases.
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 access to 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 economic 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 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.
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 analysis; 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.
The first phase of a strategic information audit is underway. To
date, a total of 36 REE mission area databases have been targeted as
candidates for inclusion in REEIS. Detailed descriptions of each of the
databases are the main components of a prototype REEIS database catalog
that has been developed and which is intended to serve as an inventory
and descriptive, interactive tool for locating information about
databases in REEIS. World Wide Web access to the database catalog via
the Internet has been demonstrated, and this feature is currently
undergoing review and evaluation within the agency, by partner
institutions, and by an outside expert as an appropriate, publicly-
accessible user interface to REEIS. In addition, specifications for a
comprehensive needs assessment as well as specifications for a
controlled vocabulary for use in searching databases in REEIS have been
prepared and are being submitted to the REEIS National Steering
Committee, the REE mission agencies, and State partner institutions for
review and comment.
Congress first appropriated $0.4 million for REEIS in fiscal year
1997 to begin planning its design and development. An additional
$800,000 was appropriated in fiscal year 1998, for a total of $1.2
million. In fiscal year 1997 the REEIS National Steering Committee was
established to provide advice and guidance throughout the development
and implementation process. Since its inception, the Committee has met
twice, first recommending a plan of action and work specifications for
conducting a strategic information audit and comprehensive needs
assessment, and second to review and evaluate contract deliverables.
The Committee is comprised of both users and producers of Research,
Education, and Economics agencies' data and includes program officials,
program leaders, and information system managers from USDA and other
Federal agencies, and program/project leaders representing partner
institutions. Also in fiscal year 1997 a private sector firm was
engaged to conduct the first phase of a strategic information audit
which is in progress. Specifications are being developed for conducting
a comprehensive needs assessment in fiscal year 1998. Results of the
needs assessment are expected to form the base of data on which
detailed design specifications for a REEIS prototype are to be
developed. Non-federal funding does not apply at this time.
Leadership responsibility for REEIS resides within the CSREES's
Science and Education Resources Development division. This provides for
effective linkage within the REEIS platform of the Current Research
Information System, the Food and Agricultural Education Information
System, and appropriate extension databases. CSREES is working closely
with all REE mission 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. A
sizeable effort is currently underway through a contract with a major
private sector information technology firm to design, develop, test,
and implement REEIS. The first phase of a strategic information audit
is presently being conducted by the firm and is expected to form the
basis for system design specifications for REEIS. One staff person has
been assigned full time to manage and coordinate agency contracting
activities and serves as the REEIS technical information program
manager.
It is anticipated that REEIS can become operational during the year
2000. The fiscal year 1997 appropriation of $400,000 covered start-up
costs such as establishment of a National Steering Committee,
preparation and specifications for contracting with an outside firm,
contractor selection, pre-award negotiation and, subsequently, pre-
design system analyses currently conducted under contract by a major
private sector information technology firm. Contract efforts include
preparation of an inventory and prototype catalog of REE mission agency
databases, a World Wide Web user interface to the catalog,
specifications for a comprehensive needs assessment, and specifications
for a controlled vocabulary to assist user access to REEIS databases.
The $800,000 increase for fiscal year 1998 will allow for implementing,
testing, refining, and maintaining the catalog prototype and its World
Wide Web interface, the conduct of the needs assessment, creation and
maintenance of a comprehensive data dictionary, and development of
detailed specifications for designing and developing the system,
including recommendations for in-house hardware, operating system, and
platform.
The requested increase for fiscal year 1999 will allow for the
development, testing, and refining of the REEIS prototype, and cover
operating costs associated with updating and maintaining the REEIS
database catalog and data dictionary. Based on the recommendations of
the REEIS National Steering Committee, the first year effort included
the objective of conducting a strategic information audit as a
prerequisite for the development of design specifications. The first
phase of the audit is nearing completion, as planned. The conduct of
the comprehensive needs assessment comprises the second phase of the
audit and is targeted to begin in April, 1998. Results of the
assessment are to form the basis for the development of detailed design
specifications.
The Research, Education, and Economics Information System meets a
high priority national need for an operational, up-to-date and
continually responsive 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. To achieve
effective response for its users, annual maintenance costs will be
ongoing.
Products generated from the first phase of the strategic
information audit are currently undergoing review and evaluation by the
REE mission agencies, the REEIS National Steering Committee, our State
partner institutions, and outside sources. In August, 1997, prior to
start of the information audit, a project management plan for
conducting the first phase of the audit and specifications for the
REEIS database catalog were reviewed internally by a REEIS team of
information professionals and program leaders representing each of the
four REE mission agencies. The Web-accessible interactive catalog
prototype is being demonstrated this week for review and evaluation by
the REEIS National Steering Committee, and action plans are being
formulated by the Steering Committee to review drafts of additional
contract deliverables. The most recent evaluations involved independent
reviews by both the REEIS team and the National Steering Committee of
draft specifications for a comprehensive needs assessment and a
critique of the REEIS catalog prototype by a well-known and highly
regarded information technology expert. At the REEIS National Steering
Committee (February 25-26, 1998), these reviews will be reported.
Evaluations of final specifications of the needs assessment, the REEIS
database catalog, and specifications for a controlled vocabulary are
scheduled to be completed by March 16, April 15, and May 15, 1998,
respectively.
geographic information system
The program is designed to transfer evolving geographic information
systems technologies to state and local governments and others in the
public and private sectors. The current program is being carried out by
a non-profit corporation, The National Center for Resource Innovations.
The directors and participants of the Center are the sub-contractors
who are carrying out the program by working on agro-environmental
problems at the national, regional, state and neighborhood levels. They
represent a wide spectrum of site-based expertise including four
academic institutions, one regional development authority, and one non-
profit corporation. A new site at the Southwest Indian Polytechnic
Institute has been added by Congress this year. This institutional
arrangement has helped fill a role in linking some of the otherwise
disparate efforts of agencies and academic institutions to apply them
in the now seven regions of the country. This project is needed to
transfer relevant technology to state and local governments whose
limited training budgets and, sometimes, isolated location make it
difficult to use the latest technology. This is particularly true for
Native American communities.
The technology developed in the Center program is useful in
improving the management of 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, and makes it possible
to use analyses at the state and local levels which were initiated at
the federal level. While the early phases of the geographic information
system concentrated on building information systems related to rural
physical and natural resources, the current challenge is to integrate
human economic, social and demographic information in order to better
understand the relationship of human communities to the landscape. 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 is the subject of a current
study group.
The original goal of this work was to serve as a pilot project for
the transfer of geographic information systems technology related to
natural resources to local governments. The Center has carried out this
function. Economic and biological data are being presented in maps and
tabular formats to state and local governments and individuals. The
Chesapeake Watershed project has linked national and regional programs
with seven state conservation entities in an effort to develop better
watershed models and decision support systems. This year, the Center
will reach Native American communities using their own distance-
learning networks originating at the Southwestern Indian Polytechnic
Institute. It is anticipated that the fiscal year 1998 grant will
support work under this program through March 1999.
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 years 1997 and
1998, $844,000 per year. A total of $7,756,000 has been appropriated
since the beginning of the program.
For fiscal year 1990 through fiscal year 1997, to date, the work in
this program had $5,009,834 in non-federal support. In fiscal year
1990, non-federal support was $714,940 consisting of equipment,
databases, 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 was
$456,582 in fiscal year 1997. In 1998, it is anticipated that non-
federal dollars will exceed $1,000,000.
The National Center for Resource Innovation-Chesapeake Bay is
located in Rosslyn, Virginia. This group is working under a cooperative
agreement with the U.S. Department of Agriculture's Natural Resources
Conservation Service to work with 13 northeastern states. The
southeastern center in Valdosta, Georgia, in affiliation with the South
Georgia Regional Development Center, has developed a comprehensive plan
of the City of Adel as a model for other urban centers in the 10-county
region. The southwestern center, in Fayetteville, Arkansas, serves
several local governments through its training facilities at the
University of Arkansas, basing its technical approach on expertise and
past experiences with the Federally-developed system known as GRASS.
They have developed pilot projects for some local jurisdictions and
state level databases which they have provided online. Central
Washington University focuses on training for state planning and on
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. 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. Native American
communities will be reached through the Southwestern Indian Polytechnic
Institute facilities in Albuquerque, New Mexico.
The original objectives to build institutional frameworks for
developing and disseminating geographic and related information to
local decisionmakers is constantly evolving. Each site has developed
approaches to addressing regional needs for modern technologies, and
many innovative applications have been implemented. Technologies,
including Internet-based educational and information exchange, have
been developed to respond to the Center's customers. The Center has
been asked to include these new technologies in order to bring its
primarily rural users into new eras of public education and information
management.
Proposals have been internally reviewed by Departmental personnel
in different agencies. Over the last 3 years, the program has also been
externally reviewed by local advisory committees and qualified
professionals inside and outside of government. Their various comments
and suggestions are sent to the agency for the merit review.
gulf coast shrimp aquaculture
Work under this program has addressed research needs 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 to
viral infections that have impacted the U.S. shrimp farming industry.
Researchers will intensify efforts aimed at preventing new
introductions of exotic viral pathogens. In fiscal year 1998, emphasis
will be placed on the industry seed supply, disease control,
biosecurity in production systems and the evaluation of shrimp viruses
moving through processing and commodity channels.
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.
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; and fiscal
years 1992-1993, $3,500,000 per year; fiscal year 1994, $3,290,000; and
fiscal year 1995, $2,852,000; fiscal year 1996, $3,054,000; and fiscal
years 1997 and 1998, $3,354,000 per year. A total of $38,748,000 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 1991-1997. 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 1999.
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 1998 review of the program
indicates that the progress during the last twelve months has been well
documented; the proposal is well written; the proposed research is
consistent with the NSTC Strategic Plan for Aquaculture Research and
Development; close linkage between the research and the U.S. shrimp
farming industry has greatly enhanced the commercialization of research
findings; and facilities and expertise are very good. The CSREES
Program Manager met with the technical committee of the consortium
during the proposal development for the fiscal year 1998 proposal.
mariculture, north carolina
CSREES has requested the university to submit a grant proposal that
has not yet been received. The proposal is reviewed by the university's
peer review process and is reviewed by the CSREES Program Manager.
Since this is the first year of this project, CSREES will send the
proposal out for external peer review. The researchers indicate that
there is a regional and national need to develop aquacultural
production systems for a variety of marine finfish. The researchers
also indicate that the proposed research is consistent with the NSTC's
Strategic Plan for Aquaculture Research and Development. The goals of
this research program is to develop sustainable aquaculture production
systems for marine finfish. The researchers will develop culture
technologies and evaluate marine finfish species that have some
potential for commercial aquaculture production. Research is likely to
focus on reproduction, growth and nutrition, and system design.
Technologies developed may also have some application to stock
enhancement programs to support restoration of depleted commercial
stocks of fish.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $150,000. The university
estimates a minimum of $90,000 of non-federal funding in fiscal year
1998 primarily from state sources. As the program develops, additional
non-federal funding is expected.
The research will be conducted at the Center for Marine Science
Research at the University of North Carolina at Wilmington. The
anticipated completion date for the original objectives is fiscal year
1999. The project will be initiated in fiscal year 1998.
The agency will evaluate the progress of this project on an annual
basis. The university will be required to submit an accomplishment
report each year when the new proposal is submitted to CSREES for
funding. Since this is the first year of the program, CSREES will
conduct an external peer review of the proposal. The researchers have
been asked to the develop a research proposal consistent with the
NSTC's Strategic Plans for Aquaculture Research and Development.
mississippi valley state university
Funds were used for curriculum development, and to generally
strengthen academic programs, including accreditation and re-
accreditation. 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 project has been merit
reviewed.
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 master's program in Elementary Education have
been reinstated.
The original goal was to provide funding to strengthen the academic
programs of the university. The academic programs have been
strengthened as evidence 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 benefitted 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, $593,000; fiscal year 1995,
$544,000; and fiscal years 1996--1998, $583,000 per year. A total of
$7,481,000 was appropriated.
Mississippi Valley State University received State and private
funding during the period of this grant. The State figures provided
here are for enhancement funds gained above the University's standard
formula generated funds. The sources and amounts are as listed:
----------------------------------------------------------------------------------------------------------------
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
1997............................................................ 309,717 755,629 1,065,346
----------------------------------------------------------------------------------------------------------------
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, 1998.
The program has been evaluated on an annual basis by the agency.
The annual progress report for fiscal year 1997 revealed 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. The major objectives of this
project have been met. The funds are now used to maintain the level
attained since receiving these funds. The fiscal year 1998 proposal
will be peer reviewed.
national center for peanut competitiveness
This is a new research project initiated by the Congress in fiscal
year 1998. CSREES has not received the grant proposal which was
recently requested from the University of Georgia. The goal is to
conduct economic, genetic, and biotechnological research to develop
globally competitive production systems. The work supported by this
grant begins in fiscal year 1998 and the appropriation is $150,000.
This research is being conducted at the Griffin, Georgia research
station of the University of Georgia. The anticipated completion date
is September 2000. CSREES will review the project proposal when it is
received and later evaluate the results of the research.
pm-10 study, california and washington
The research on the effect of PM-10 particulate emissions from
agricultural land on air quality is being conducted by scientists at
the University of California-Davis and Washington State University.
Also cooperating in these studies are: the Department of Agriculture's
Agricultural Research Service and Natural Resources Conservation
Service; State Cooperative Extension Services; U.S. Environmental
Protection Agency; California Air Resources Board and Washington Air
Quality Control District; Washington Department of Ecology; and farm
and agricultural organizations; and private farmers, ranchers, and
growers in both states. 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 California research has been
expanded beyond the harvesting of crops to include emissions from
cattle feedlots, dairies, and the poultry industry. This is in direct
response to the monitoring data that shows that peak emissions occur in
November through January, which do not coincide with crop production
activities. 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 U.S., research on the role of
agricultural operations in intensively cultivated soils in California
and the Columbia River Basin, as sources of PM-10 pollution, will
assist growers to develop alternative agricultural management practices
to control PM-10 emissions.
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 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. Plans have also been developed to
study the impacts of land preparation techniques on emissions.
A Light Detection and Ranging system has been developed at the
University of California at Davis. This instrument allows a snapshot of
the shape of an emission plume from a source such as a harvester. It
will allow estimates on the amount of material emitted into the
atmosphere and its subsequent transport.
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, 1997, and 1998, $873,000 per year.
A total of $4,374,000 has been appropriated. In California, the program
is matched by State funds in the form of salaries, benefits, and
operating costs. In Washington, there were no state or non-Federal
funds in support of the PM-10 project in 1994 and 1995. In 1996, state
support was $22,566, and in 1997, state support was $102,364.
This work is being directed by participating scientists at the
University of California-Davis, and at the Washington State University
and 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 anticipated to be completed in 1999. The
objectives on field control will continue. A manual of control
practices is being developed for use by growers to reduce wind erosion
on agricultural land. Implementation and development of these
management practices will be a major role of this project in the
future. Quarterly and annual reports on the entire project to date are
available.
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. Grower and
public advisory committees are consulted for input on research progress
and objectives. A formal on-site review by a panel of experts was
conducted of the Washington program in November 1997, and a formal
review report was prepared.
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 groundwater, 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 is to work toward providing a
scientifically-valid basis upon which 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 concerns of the agencies charged with protection of
environmental quality. Projects supported with Consortium funding are
peer reviewed by researchers at 35 different universities and agencies
from across the Nation, and results are presented and critiqued
annually at the Consortium's Research Planning Conference. Examples of
projects currently under study supported with Consortium funding
include:
1. The Role of Flooding and Land Use Practices on Erosion Rates and
Agrichemical Loadings in the Southwestern Illinois Sinkhole Plain;
2. Mechanism of Transport of Nutrients in Alluvial Aquifers During
Normal and Flood Conditions;
3. Dynamic Modeling of Sediment, Nutrient, and Pesticide Transport
in Agricultural Watersheds During Severe Storm Events;
4. A Community Based Sampling Program for Evaluating Long-Term
Flood Impacts on Rural Well Water Quality;
5. Management Strategies for Riparian Water Supply Wells;
6. An Investigation of Temporal Changes in Soil Permeability Within
the Vadose Zone of Areas Inundated by Floods;
7. Effects of Flooding on Salamanders in the Horseshoe Lake
Conservation Area;
8. Developing a Geographic Information System Database to Monitor
Plant Population Dynamics in the Floodplain: A Model Based on Boltonia
Decurrens, a Threatened Species;
9. Modeling Flood Flows in Flat, Tile Drained Watersheds; and
10. The Effect of Flood Dynamics on Chemical Fate and Transport:
Implications for Agricultural Management.
The fiscal year 1998 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/groundwater, 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 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, strengthen the
capabilities of the Consortium. The priorities of the Consortium are:
(1) the funding of research upon which public policymakers working on
land use or groundwater protection issues in flood plain areas can base
decisions and (2) the broad dissemination of this information. The
projects funded by the Consortium are providing researchers
opportunities to obtain data upon which larger projects can be built.
Without this initial data, funding from other competitive sources would
be difficult to obtain.
The Illinois Groundwater Consortium was established to coordinate
and support research on agricultural chemicals in Illinois groundwater.
The recent Midwest flood of the Mississippi, Missouri, and Illinois
Rivers, and their tributaries, created devastating effects on farm
lands that have major implications for agricultural practices and water
quality in the region as well as effects in other states in the
Midwest. The Consortium provides information to facilitate short-term
and long-term systems studies of the effects of flooding on groundwater
and surface water upon which to base policy management decisions.
Research areas characterizing short-term and long-term projects
completed, underway, or proposed for each research area include:
Short-Term
--Effect of extended inundation on soil productivity
--Movement of chemicals (pesticides, herbicides, heavy metal, other
chemicals) from flooded soils into surface and groundwater
--Impacts on soil fertility and nutrient balance caused by flooding
--Changes in nitrogen-fixing bacteria or pesticide microbic activity
due to flooding
--Impacts of flooding on plant and aquatic life, including endangered
and dangerous species, and microbial communities
--Effectiveness of riparian buffer strips under flooded conditions
--Groundwater quality changes resulting from flood related land-use
developments in both the bottomlands where farming practices
change and in the uplands where new communities are being
developed
Long-Term
--Effectiveness of methods of remediation for flooded soils
--Changes in surface and groundwater quality over time with changes
in flooding conditions
--Changes in soil chemistry and productivity over time
--Long-term effects and recovery of microbic activity
--Effects of time on recovery (and eradication) of plant and aquatic
life
--Recommendations for long-term, systems-based planning and
management for watershed and bottomland management
--Examination of public policy decisions with implications for
agriculture and water quality in light of flooding effects and
recovery
--Long-term implication for public policy decisions and management of
the river systems
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; fiscal year 1996, $468,000; and fiscal
years 1997 and 1998, $492,000 per year. A total of $5,172,000 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
1995-1997 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-Carbondale, the
Southern Illinois University-Edwardsville, the Illinois State
Geological Society and the Illinois State Water Survey at locations
across the State of Illinois and in Missouri.
This project was planned as a 5-year study of the impacts and
recovery of flooding in the Midwest. In the original proposal and
subsequent proposals, we identified both short-term objectives which
are project goals that could be accomplished within 1-2 years and long-
term objectives which are project goals that could be accomplished
within 2-5 years. In calendar year 1997, we completed 3 years of
studies involving 26 projects, and in calendar year 1998, we will begin
4 new projects and continue 12 projects. 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. Results of projects completed in previous
year and progress reports on projects underway are published each year
as part of the Proceedings of the annual conference of the Illinois
Groundwater Consortium and in the Illinois Groundwater Consortium's
Groundwater Bulletin. Dissemination of both of these publications is
broad-based, utilizing mailing lists to public and private institutions
and individuals kept by the University of Illinois Cooperative
Extension Service, the Illinois Groundwater Consortium, as well as
dissemination through related conferences and workshops. 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. Due to waterborne contaminant problems within the
Mississippi River Basin and sub-basins, it is anticipated that the
projects will continue beyond the year 2000.
From its beginning, the projects funded through the Illinois
Groundwater Consortium involve reviews by at least three faculty/
researchers drawn from 35 different universities, state, and federal
labs and surveys, U.S. Department of Agriculture's research
laboratories, and other research centers. The reviewers rate proposals
on criteria pertaining to scientific merit, quality of the research
team, likelihood of the work resulting in publications and grant
support from other sources, and relatedness of the project to the key
objectives of the Illinois Groundwater Consortium. This peer review
system enables the Consortium's Advisory Committee to select projects
with high scientific merit from the group of proposals submitted for
funding consideration. The titles, principal investigators' names and
affiliations, and budgets are submitted to the U.S. Department of
Agriculture for review along with the Consortium's proposal for
funding.
water quality--north dakota
The original goal of this research was 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. In 1996, the scope of the program was expanded to
include additional 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 Red
River Water Management Consortium is to use results from the initial
phases of this research program to find economical, practical, and
timely technological solutions to water problems of the region. By
providing cofunding for the program, Red River Water Management
Consortium members become active stakeholders in the research and
ensure the practicality of the work performed.
The focus of current work is on: (1) the assessment, development,
and implementation of new technologies for addressing water quality and
quantity concerns within the basin; (2) water resource assessment and
analysis, including the development of mechanisms for providing easy
access to water-related information so proper water management
decisions can be made; (3) the determination of agricultural,
industrial, municipal, and recreational impacts on water resources,
both current and potential, and the identification of potential
solutions to water quality and quantity problems and needs; (4) water
quality monitoring and coordination of monitoring activities; (5)
education and information dissemination on water issues facing this
region of the United States; and (6) the development of a watershed
management strategy for the Red River of the North Basin focusing on
water quality and quantity to ensure continued economic development of
the area.
The original focus of the work was on agricultural chemicals in
groundwater which potentially presents both a public health and an
environmental quality problem of significant short-and long-term
importance. The goal of this work was to provide a scientifically valid
basis upon which meaningful agricultural chemical management and
regulatory decisions could be made. The establishment of the Red River
Water Management Consortium provided a mechanism for transferring
results of the initial research to vested stakeholders of the region
and for addressing water quality and quantity issues resulting from
agricultural practices and development. The overall goal of the Red
River Water Management Consortium is the development of a long-term
watershed management strategy focusing on water quality and quantity
which can be used as a model for watershed management in other
agricultural regions in the United States.
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
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 surficial aquifers under
irrigated agriculture and to determine the source and trends for
sulfate.
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 quality and quantity problems resulting from
agricultural practices and agricultural development.
In 1989, $1.0 million was appropriated under the groundwater
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 1996-1998. A total of
$5,922,000 has been appropriated for this water quality research
program.
Red River Water Management Consortium members provide co-funding to
support their participation in the program. Co-funding provided by Red
River Water Management Consortium members for fiscal year 1996 totaled
$59,700 and for fiscal year 1997 totaled $80,000. Interest in this
program continues to grow, and it is expected that at least $100,000 in
cost-share will be obtained during fiscal year 1998 through membership
fees. These funds are provided directly to the program and do not
include in-kind costs incurred by the participants which are estimated
to be several hundred thousand dollars.
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, which is
providing an estimated cash equivalent funding in the amount of $33,660
for sample analysis and approximately $12,000 for field
instrumentation. Instrumentation of sites occurred in fiscal year 1997,
and sampling and analysis will continue through fiscal year 1999.
Consortium members' dues are also used to provide in-kind services
for match in other projects being performed by the Red River Water
Management Consortium. A major project sponsored by the U.S.
Environmental Protection Agency and local contributors to restore
riparian areas in the Red River of the North Basin has been funded and
will provide $175,000 for consortium activities over the next 4 years.
The amount of in-kind services provided from Consortium member fees is
$9,000 per year.
The U.S. Corps of Engineers has contracted through the Red River
Water Management Consortium a $100,000 6-month effort to improve the
decision-making capability regarding ongoing flooding within the Devils
Lake Basin, a sub-basin of the Red River of the North Basin. This work
is intended to produce decision support tools, forecasts, data, and
forums that can be continued to be used by the Corps St. Paul district,
the states of North Dakota and Minnesota, the International Joint
Commission, and the people of the Devils Lake region after the project
has been completed.
Research is being conducted at the University of North Dakota
through its Energy and Environmental Research Center and at field sites
and agricultural product-processing facilities in North Dakota,
Minnesota, 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 the 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 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.
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. All project objectives were
met for the first-year Consortium activities. A meeting of this group
will occur in March 1998.
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 approach the Arkansas Beef Improvement Program is
taking is conducting workshops presented at the county level. The
Arkansas Beef Improvement Workshops are usually scheduled for three
evenings for two hours each evening and teach producers techniques
learned in the Arkansas Beef Improvement Program to enhance efficiency
and profitability. Other than an annual CSREES review, the project has
not undergone a merit review.
Although local problems and situations are addressed, the decision-
making process used to solve those problems is universal. Goal setting,
evaluation of resources, and selection of management practices that
complement those goals are foundations for the decision-making process.
It is this process that is the backbone of the Arkansas Beef
Improvement Program and Workshops.
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. The average production cost per
farm decreased 35.4 percent from 1993 to 1996. 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:
--The break-even cost/pound of beef sold decreased from $0.54 to
$0.37 ($0.17/pound).
--Net calf crop percentage increased from 85.6 to 92.3 percent--an
increase of 6.7 percent.
--Total pounds of beef sold per animal unit had a net increase of 46
lb., 451 to 507 lb.
--Cow cost decreased from $246.70 to $159.36.
--Supplemental feed costs decreased by $16.73 per animal unit
resulting in a total farm saving of approximately $2,100.
--Return over specified cost increased from $100.37 to $213.37 per
cow--a 113 percent increase (based upon 1993 price per pound
received).
The sum of $200,000 per year has been devoted to this project from
fiscal year 1993 through 1995. In fiscal year 1996 through 1998,
$197,000 was appropriated per year for a total appropriated amount of
$1,191,000. Non-federal state funds of $95,000 have been provided
annually, from 1993 to 1997, for a total of $475,000.
Six Arkansas demonstration farms were selected the first year of
the Arkansas Beef Improvement Program, and four more were selected the
second year. The first six farms have completed their fifth and final
year of the program. Five new farms were added to the Arkansas Beef
Improvement Program. Therefore, the program has used 15 farms--one in
each of 15 counties to reflect the different types of cattle operations
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 as well as an Arkansas
Beef Improvement Program Producer Survey and County Agent Survey will
be collected and summarized for evaluation. Arkansas Beef Improvement
Program Workshops were developed and have been implemented at the
county level. The next phase of the program is to introduce Arkansas
Beef Improvement Projects. These projects--stocker cattle, cow herd
performance, calving and breeding season, pasture renovation, and hay
quality and supplementation--are designed to increase the number of
county Extension agents and producers involved with the Arkansas Beef
Improvement Program and to evaluate on a more in-depth level these
important management situations. 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.
delta teachers academy
The Delta Teachers Academy project is provides approximately 525
teachers at 35 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. It is
also supports the professional development of over 650 Academy
graduates throughout the region. The subjects focused on during these
training opportunities are English, geography, history, mathematics,
and science. The Delta Teachers Academy grant is not awarded
competitively; however, we require annual applications reporting the
previous year's accomplishments and describing activities and
expenditures planned for the upcoming year. These applications undergo
merit review by at least three of our Ph.D. level staff before grant
awards are made.
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
workforce 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 non-
competitiveness.
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 525 teachers at 35 new sites across the entire seven-state
region. In addition, there are over 650 graduates of the program whose
professional development is sustained through the Academy's Fellows
Program and who are leading teacher in-service training back at their
home schools.
A total of $17.161 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, $3.850 million
dollars in fiscal year 1997, and $3.500 million dollars in fiscal year
1998. 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 35 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 and for the 15 additional teams
established in 1995. One new team established in fiscal year 1996 has
received two years of training, and 19 new teams established in fiscal
year 1997 have received one year of training. As of the end of the
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 1998 grant include providing
training activities to 300 teachers at the 20 continuing sites,
sustaining the professional development of the project's 650 graduates
through the Academy's Fellows Program, and expanding professional
development activities to 225 teachers at 15 new sites throughout the
seven-state Delta region. The anticipated project completion date for
the 20 current sites is September 30, 2000, while the completion for
any new program sites established in fiscal year 1998 would be in the
year 2001.
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 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 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, arkansas
This program develops, refines and validates technology for family
farm production systems that enhance biological and economic
efficiencies and product qualities of the Ozark Highlands in the south
central United States. The applied research and extension programs help
small farmers in the region to improve their production efficiency,
minimize risk when no risk capital is available, combine enterprises on
limited acres to make more efficient use of labor and equipment, and
improve family record-keeping systems. The program promotes
sustainability of small family farms in a whole farm context including
land resources, labor resources and capital.
The program addresses research and educational needs of limited
resource hill-land family farmers producing forages, ruminant animals
and horticultural crops. In many cases, technologies applicable to
small farms have not been assembled into systems that these farmers can
adopt with confidence and limited risk. The regional center conducts
research to develop profitable systems and through the Extension
programs, extends these systems to people who wish to improve
productivity while remaining in rural areas. With the small/family farm
focus, there is need to evaluate the economic applicability of various
research projects; and to transfer research information that can be
used by these farmers to evaluate alternative enterprises, improve
efficiency for conventional and value-added products, and enhance their
incomes.
The goal of the project was to develop a small/family farm
management and marketing education program for the area serviced by the
South Central Family Farm Research Center located at Booneville,
Arkansas. Currently, the general objective is to further develop and
extend an educational program that transfers useful technology
developed by the Center to small/family farmers in the Center's ten-
State service area. This program provides support in alternative
agriculture and marketing to county and state Extension personnel who
assist local producers in evaluating these technologies and adopting
those which are economically feasible. Within the past two years, a
computerized farm management record keeping system has been developed
and disseminated to assist producers in the region and nationwide to
enchanted their profits. Scientifically-based data on enterprise
planning, production and marketing of alternative crops and livestock
has been provided directly to clientele in 15 states and two foreign
countries to assist them with their operations. Sound credible
information has been provided to over 10,250 stakeholders through
direct contacts, meetings, mailings and telephone conversations.
Program personnel have worked with commodity organizations and other
groups to form a network that delivers comprehensive programs on
sustainable agriculture to end-users.
The project has been underway since 1992. Appropriations of
$100,000 have been made in each of the fiscal years 1992 through 1995.
Appropriations in fiscal year 1996 and fiscal year 1997 were $99,000
for each year. The same amount, $99,000, has been appropriated for
fiscal year 1998 bringing the total to $697,000. State matching funds
have been provided through the Arkansas Cooperative Extension Service
in fiscal year 1992 through fiscal year 1997. The amounts are $59,040
in fiscal year 1992, $55,680 in fiscal year 1993, $54,250 in fiscal
year 1994, $54,446 in fiscal year 1995, $54,446 in fiscal year 1996 and
$46,346 in fiscal year 1997. The total is $324,200.
The work is headquartered at the South Central Family Farm Research
Center located at Booneville, Arkansas. It is being carried out
primarily in Alabama, Arkansas, Georgia, Kentucky, Louisiana,
Mississippi, Missouri, Oklahoma, Tennessee and Texas, the 10-state area
served by the Center. The original proposal in 1992 was for a 12-month
period. However, the program emphasis has changed over time with the
educational needs of the target audience and as the research program of
the Center has evolved. During the current year, the emphasis is on
development, management and dissemination of whole-farm systems
consistent with the farm enterprise mix that exists within the region.
Current program objectives are to be met by February 1998.
CSREES conducted a merit review of the program in January 1997 when
the proposal for the current year was received. An Executive Summary of
the previous year's activities indicated the objectives of developing
and disseminating a computerized recordkeeping system had been met; and
that direct assistance had been provided to clientele within 15 states
and two foreign countries. Publications on alternative farming systems
have been completed and educational materials were made available to
county Extension agents, agency personnel and producers. Evaluation
efforts during the current year include documentation of requests and
the compilation of address lists that will be used by Extension agents
in follow-up activities.
extension specialist, mississippi
The Basic Weather Service and Extension project is designed to fill
a void in weather data due to closure of the Ag Weather Service
facility in Stoneville, Mississippi. The funding will be used to gather
and disseminate critical agricultural weather data for producers and
researchers in Mississippi and surrounding states to use to make
management decisions and formulate research projects. The funds are not
awarded competitively.
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. The goal of the project is
to collect, maintain, and disseminate weather information for producers
and researchers in Mississippi and surrounding states. Electronic
weather stations and links with other web sites to deliver weather data
are being installed and developed.
The funding for fiscal years 1997 and 1998 is $50,000 each year,
for a total of $100,000. The State of Mississippi through the
Mississippi Cooperative Extension Service and Delta Research and
Extension Center is providing $41,350 in state appropriated funds to
support this project in 1997 and 1998. The project will be conducted at
the Delta Research and Extension Center in Stoneville, Mississippi, is
expected to continue into a Phase II program It will be evaluated in
Phase II.
income enhancement demonstration, ohio
CSREES funds support the Agricultural Business Enhancement Center
which plays a role in the development of the agricultural sector of
Northwest Ohio. The Center provides a variety of management training
programs, helps farmers and other agribusinesses develop comprehensive
business plans, and facilitates business networking. CSREES performs an
annual merit review of this project.
The Center seeks to enhance economic opportunity and agricultural
competitiveness Northwest Ohio. To be successful in business, 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 dealing with change.
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
workshops to improve the management and marketing capacity of local
farms and agribusiness firms. Business planning has been a major topic
at workshops and several firms have been assisted in completing plans.
The Center completed its tomato processing plant feasibility study and
accompanying business plan but was unsuccessful in finding a sufficient
number of producers to invest in a cooperative or to find a private
investor. At the close of the fourth annual workshop for women in
agriculture, 65 percent said their participation would improve
management of the family farm. A new study is underway to determine the
feasibility of farmers markets at Ohio Turnpike plazas.
The project began in 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 through 1998. Appropriations to
date total $1,883,000. The State of Ohio has appropriated the following
funds: $35,100 in fiscal year 1991; $72,368 in 1992; $56,930 in 1993;
$30,547 in 1994; $49,935 in 1995; $51,432 in 1996; $48,664 in 1997; and
$50,500 in 1998. Non-federal funding provided to date totals $395,476.
The Agricultural Business Enhancement Center is located in Bowling
Green, Ohio and serves eight counties in the Toledo Metropolitan Area.
Project leadership and some 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 months,
however, the ongoing needs of producers and agribusinesses to adjust to
major changes in the agricultural sector continues to provide the
Center with many challenges. The current phase of the program will be
completed in September 1998.
CSREES performed a merit review of the project in January 1997 as
it evaluated the proposal for that year, and concluded that the project
plays a 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 the area.
integrated cow/calf management--iowa
The CHIPS program is an integrated cow-calf resource management
(IRM) program that 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 that utilize highly erodible land
(HEL), including land to be released in the CRP program. The
geographical area where CHIPS services are offered has systematically
expanded from the original target area, with services extended to over
36 Iowa counties in 1997. Further expansion of the CHIPS program in
area covered, services offered, and cooperators served is currently
underway, with technical support being extended to an additional 14
counties in central and northwest Iowa in 1998.
The majority of Iowa's beef cow operations utilize extensive areas
of marginal land that is 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. Fiscal year 1996 marked the beginning of the release of
Conservation Reserve Program (CRP) contracts--with thousands of these
acres categorized as HEL. The CHIPS program assists producers in making
management decisions regarding these CRP acres. CHIPS's supports cow-
calf production on this marginal ground and provides one-on-one
assistance as economic and production decisions are made.
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 Iowa about cow-calf production on highly erosive
land and the IRM concept.
--Provide CHIPS cooperators 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 farm program compliance. It is anticipated that
200 cow-calf operations will be involved in this technical
assistance program during 1998.
--Help producers develop management skills to improve efficiency and
reduce costs of production as CHIPS recommendations are
implemented.
During 1997, over 130 cooperators, involving approximately 11,000
beef cows, participated in the CHIPS program. Four full-time
technicians have conducted over 600 farm/office consultations during
fiscal year 1997 to develop specific on-the-farm recommendations and to
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 80
cooperators have incorporated the Cow Herd Appraisal of Performance
Software (CHAPS) and Standardized Performance Analysis (SPA) programs
in their operations. During fiscal year 1997, 3,300 head of beef
animals were permanently identified to facilitate record and data
collection. More than 13,000 cattle were weighed and monitored to
evaluate performance and production levels. Approximately 400 forage
samples were collected and analyzed, with the information being
utilized in over 200 individualized ration recommendations. CHIPS
technicians on a monthly basis highlight selected management
recommendations. These financial and/or performance impacts are
summarized and reported to personnel associated with the program.
`Networking' projects have been developed and initiated 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 ten CHIPS cooperators. The
goal of this project was (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, EPD
use, and nutritional management. Over 95 percent of the enrolled
heifers were diagnosed pregnant at the end of the project, with
approximately 65 percent bred by artificial insemination. These results
are both above industry averages. A CHIPS Feedlot Program has also been
developed and reviewed. The purpose of this effort would be to 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. Survey results indicate that
cooperation with existing feedlot operations may be necessary to make
this proposed program successful. Further review will occur at a later
date. CHIPS personnel in conjunction with the Iowa Cattlemen's
Association are also monitoring a statewide bull test evaluation.
For fiscal years 1992 and 1993, $138,000 was approved; $276,000 for
fiscal year 1994; $350,000 for fiscal year 1995; $345,000 for fiscal
year 1996; $345,000 for fiscal year 1997; and $300,000 in fiscal year
1998. Federal funding through fiscal year 1998 totals $1,892,000. 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 $75,000 have been collected from CHIPS cooperators.
The CHIPS program is currently being operated in 16 counties in
southeast Iowa, 7 counties in the south central area, and 14 counties
in east central and southwest Iowa. The expansion effort currently
underway will extend the CHIPS IRM concept to an additional 14 counties
in Iowa, offering program services to northwest and central Iowa.
The initial CHIPS program had a three year time period. Objectives
and goals of the CHIPS program will continue to be modified and adapted
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 `new' emerging
objectives. These industry challenges strongly support the need for the
CHIPS program. An example is the closing of the Monfort beef packing
plant in Des Moines, Iowa. This closure depressed market prices and the
profit potential of beef producers. To address this issue, CHIPS is
expanding value-added services to its cooperators. A retained ownership
demonstration in cooperation with Iowa State University and
agribusiness partners is currently being finalized. This would support
value-added ownership, incorporate the latest technologies, and provide
birth-to-market information to the producer. A new projections program
is also being incorporated into the CHIPS program that will utilize
past production and financial records to analyze available resources
and develop a systems approach to the operation's future direction.
Discussions with representatives from Precision Beef Alliance, a value-
added pasture-to-plate program, have also been initiated. These
innovative program services combined with the one-on-one technical
support, record systems, and available networking opportunities will
assist CHIPS cooperators in being flexible and adaptive to the ever
changing economic conditions which exist in today's cattle industry.
A `Think Tank' of beef industry representatives will be assembled
in 1998 to review the CHIPS program. The objective of this group will
be to make recommendations regarding the focus, direction, and future
of this IRM program. This is the initial step in determining how the
program will be funded in the future, where CHIPS fits in the
industry's service area, and what industry groups will be involved. The
`Think Tank' process will help determine the services, technical
assistance, and administrative structure of the CHIPS program in the
future. This process should also improve the efficiency, flexibility,
and impact potential of the services offered to participants. These
recommendations will be incorporated with funding requests as other
potential funding sources are investigated.
Evaluation of the CHIPS program is currently underway. The intent
of the evaluation process is to (1) determine the production and
financial impact of the program to participating producers, (2) analyze
the services and technical assistance being offered, and (3) determine
which programs should continue to be supported. This evaluation effort
was initiated in December, 1997 with an anticipated completion date of
April, 1998. To determine if the project's key objectives are being
met, three areas of the program are being reviewed. (1) The
reproductive (CHAPS) and financial (SPA) records are currently being
analyzed to evaluate both short-and long-term operation impacts, (2) a
questionnaire is being prepared to determine the production changes
that have been incorporated by cooperators, and (3) the future needs of
the cooperators will be surveyed. Three Iowa State University Extension
personnel are conducting the study with the assistance of the CHIPS
technicians.
The record evaluation process will analyze the production changes
realized by incorporating the record keeping programs. This will
compare production trends reflected by the record analyses, actual
productivity changes, and financial impact. The questionnaire will
summarize managerial changes that have occurred during the producer's
involvement with the CHIPS program. If possible, economic impact
associated with these changes will be reported.
national center for agricultural safety
Fiscal year 1998 is the first year for funding this project. CSREES
has requested the university to submit a grant proposal that has not
yet been received. The project director believes this training center
to be of national, regional and local need. Farming continues to be one
of the most dangerous occupations in our nation. An estimated 800
farmers, family members and farm employees die in work incidents
annually. Most of these incidents are preventable if safe procedures
are adopted while performing farm chores. The adoption of safe work
habits is dependent upon the relevance of safety education to the at-
risk agricultural audiences.
The original goal of this center is to provide practical, hands-on
training methods for reducing the level of preventable injuries,
illnesses and deaths among farmers and ranchers in the United States.
It has been surmised that trainees and students will respond more
positively to real life scenarios and actual simulations of farming
hazards. The National Education Center for Agricultural Safety (NECAS)
is offering practical training initiatives concentrating on the hazards
that negatively impact farm work, including hazardous work: with
equipment and chemicals; around livestock; in confinement facilities;
and while harvesting grain and forage crops.
The work supported by this grant begins in fiscal year 1998 and the
appropriation for fiscal year 1998 is $195,000. Specific information on
the source and amount of non-federal funding for this project is not
yet available.
Training under this grant will be conducted at the National
Education Center for Agricultural Safety, located on the campus of
Northeast Iowa Community College in Peosta, Iowa. The anticipated
completion date of the original objectives is approximately March 31,
1999. The agency will conduct the initial review of this project when
the proposal is submitted to CSREES for funding.
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 University of Wisconsin--
Stout's Northwest Wisconsin Manufacturing Outreach Center (NWMOC) 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
project also draws on many other state resources to add expertise and
capacity to network facilitation and in-plant extension activities. The
project has undergone a merit review.
America'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 costs 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 of information and solve
complex problems.
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 new
manufacturing technologies to support global competitiveness of
manufacturers. Productivity improvements were reported by the companies
showing economic impact to the region through implementation of:
a. Client operations assessment/plant evaluation and strategy
development.
b. Opportunities for productivity improvements.
c. Implement new organizational and operational methods.
d. Investigate new manufacturing technologies.
e. Establish quality assurance/total quality systems.
f. Establish ongoing training programs.
g. 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, fiscal
year 1997, and fiscal year 1998 for a total of $1,149,000. No non-
federal funds have been provided for this project.
The work will be carried out by the University of Wisconsin-Stout
and 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. 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 phase of the program will be completed in 1998.
To measure the success of the project, a client evaluation process
has been developed which includes an evaluation questionnaire.
Evaluations indicate forward strides in job creation, new businesses,
expanded productivity, and enhanced international competitiveness.
range policy development, new mexico
The Range Policy Development project has collected local economic
data throughout the State. Local data have been used to develop an
economic model to help explain the relationships among local economies
and primary industries. The model is intended to enable policymakers to
better understand how local and State economies are tied to primary
industries, especially those industries that use public lands. The
initial focus of the project has been on the livestock grazing
industry.
In New Mexico and throughout the western states, many local
economies are dependent on the use and management of public range and
forest lands. However, there exists a great deal of disagreement about
the true level of dependence of individual communities on these public
land-based industries and, consequently, disagreement about the local,
statewide, and regional impacts of public policies that alter the use
and management of these lands. Through better understanding of how
public lands impact local and regional economies, we may be better able
to predict the outcomes of potential legislation or amended land use
policies, resulting in policies that enhance, rather that detract from,
local economies. Early results from this project have been encouraging
and have spawned a six-state collaboration to design a regional
economic model, based on the New Mexico prototype.
New Mexico is in the process of developing detailed input-output
models for each county, from local and state tax revenue data.
Economists are following up with workshops across the state to present
information from economic forecasts to local decisionmakers. Further,
the project calls for increasing the utility of the models by expanding
the scope of the database to include industries in addition to the
grazing enterprises.
This project was initiated in December 1994. In fiscal years 1994
through 1998, $142,560 was appropriated each year for a total of
$767,240. The $197,000 appropriated for fiscal year 1998 has yet to be
awarded, as we have to receive and review a request from the
institution. The project budget does not indicate any non-federal
support. However, Agricultural Research Stations in five other States
have economists currently working to expand upon the New Mexico
project, ultimately to build a regional model.
According to the project director, most of the original objectives
have been accomplished. In this second phase of the project, the
investigators are collecting data to allow incorporation of other
industry and government sectors into the model. Objectives for this
phase should be completed near the end of 1998.
The proposal for continued funding underwent merit review by an
agency team of National Program Staff in May 1997, and a review of
progress to date was conducted by the project liaison in September
1997. The reviews focused on criteria including the relevance of the
project goals, the suitability of the proposed research methods, and
the extent of progress made toward addressing the goals of the project.
Both reviews found that phase one objectives had been met, and progress
had been made toward the objectives of the second phase of the project.
rural development, oklahoma
This program provides financial and technical assistance to small
business to create and retain jobs in rural Oklahoma and to stimulate
the local economies. The program is carried out through financial
services, business incubators, problem-solving assistance to small and
medium-sized manufacturers and technical assistance to rural small
businesses. The program is expanding to include assistance to rural
small businesses to enter international trade. The program continues to
evaluate new products and processes that may result in new industries
or be applied to improve existing manufacturing processes. The project
has undergone a merit review.
The increased demand for small business financing and technical
assistance verifies the need for the program. Each year financing
secured for small businesses has significantly increased. The demand
for business incubators is also on the rise. Last year, Rural
Enterprises (REI) agreed to manage two more business incubators
bringing the total REI-managed facilities to thirteen. Also small
businesses continue to need access to technical and business management
assistance, worker training, and international trade assistance in
order to stay competitive in domestic and world markets.
The original goal of the program was to create jobs in rural
Oklahoma by providing a systematic access to improved technology,
training, financial and business management assistance. Many
accomplishments have resulted included financial assistance. REI is a
Certified Development Corporation for the Small Business Administration
as well as a designated Certified Development Financial Institution. As
a result, REI has been successful in obtaining financing for
entrepreneurs and rural small businesses totaling $119,060,129. Special
technical assistance efforts have included 1) problem-solving
assistance to small manufacturers; 2) training and dissemination of
information on ISO9000 to assist rural businesses compete with a global
market; 3) providing manufacturers with a ``Quick View Assessment''
program which enables manufacturers to compare their facilities and
operations with other companies across the United States and 4) working
one-one-one with small businesses providing on-site assistance with
inventory control, cash flow management and marketing.
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; $150,000 in 1998. Appropriations total
$3,669,000. No non-federal funds have been provided for this project.
The work is being carried out at Rural Enterprises, Inc., in
Durant, Oklahoma and 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 phase of
the program will be completed in 1998.
REI itself conducts an on-going 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. Over 6,000 jobs have been created and retained for
new and expanding businesses as a result of this program. The program
has met its key objective of job creation in rural Oklahoma.
rural development through tourism, new mexico
The Rural Economic Development Through Tourism Project involves
applied research and outreach focused on locally-based tourism
development strategies to enhance economic opportunity in small and
rural communities in New Mexico. Components of the agenda support
training of local leadership and tourism professionals, strategic
planning and market development, and technical assistance to
communities. The proposals submitted are submitted for internal review
and evaluation within the agency. Recommendations are presented to
enhance impact on regional and national agendas. This is an on-going
pilot to demonstrate the effective development and implementation of
applied research, training, education, and technical assistance related
to rural tourism as a development strategy.
The applied research and outreach project was designed by the State
Cooperative Extension Organization to increase the ability of the
public sector to enhance economic opportunity for rural communities
through tourism development. A regional task force composed of
Extension professionals and community leaders from business, industry,
education, and local, state, and Federal government was developed to
guide and advise the development and implementation of locally-based
programming and research. The results include video training materials,
a public relations package, image studies and profiles, regional
tourism guides, development of tourism bus packages, festival planning
workshops, development of regional tours, and a mini-grants program for
tourism development.
In fiscal years 1992 through 1996 the amount of $230,000 was
appropriated per year. The fiscal year 1997 appropriation was $227,000
and $247,000 was provided in 1998. Total appropriated funds to date are
$1,624,000. Fiscal year 1992 included $38,764 in state matching funds.
Fiscal years 1993,1994, 1995, and 1996 included $39,360 of state
matching funds. Fiscal years 1997 and 1998 include $39,040 state
matching funds.
Applied research and outreach is being carried out through New
Mexico State University. The original completion date was September 30,
1993 and the original objectives of this research have been met. The
additional objectives being presented for the current year will be
completed by March 31, 1999.
The agency evaluates the merit of research proposals as they are
submitted. No formal evaluation of this project has been conducted. The
principal investigators and project managers submit annual reports to
the agency to document impact of the project. Impacts include increases
in attendance of local festivals, increase in number of tour bus visits
to New Mexico, training to over 700 tourism employees in the region,
and establishment of a number of new businesses. Agency evaluation of
the project includes peer review of accomplishments and proposal
objectives and targeted outcomes.
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. Functional illiteracy is
regarded in Georgia as a form of disability. The extent of adult
functional illiteracy is similar throughout much of rural America. 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. Over the past nine years, test scores and attendance and
completion rates of students in the satellite-based program have shown
that distance learning 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 1998, appropriations for this program have been as follows:
$129,000 in fiscal year 1989; $256,000 in fiscal years 1990, 1991, and
1992; $250,000 in fiscal years 1993, 1994, and 1995; and $246,000 in
fiscal years 1996, 1997, and 1998. Funds appropriated to date total
$2,385,000. These Federal funds are typically used for program
innovation and quality improvement.
The fiscal year 1998 source of non-federal funds provided for this
program are state appropriated funds 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 1998, the total amount of non-federal funds
provided for the project has been $8,006,901. 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; $1,319,320 in fiscal year 1997; and $1,309,320 in fiscal year
1998.
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 Rehabilita-tion
Technology, 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 has been provided.
It was anticipated that it would take three years to demonstrate
that distance learning 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, and to continually upgrade the quality of class
programming and the technical capacities of the system. The fiscal year
1997 technological upgrades expanded 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 made materials
available as supplemental tools to all Georgia literacy classes. As of
December 1997, the Georgia Tech Satellite Literacy Program is in a
period of transition from that of providing literacy instruction via
direct television broadcasts to classrooms to that of development and
dissemination of technology-based instructional aids. The project has
been renamed the Lifelong Learning Network, or LNN. This change is
being made based upon the request of the major sponsor, The Georgia
Department of Technical and Adult Education, Office of Adult Literacy.
The LNN will develop and produce video-based instructional supplements,
technology-based curriculum and training for adult literacy
practitioners, and multi-media projects for literacy students.
The agency receives annual reports on the project that are used,
together with agency merit review, to assess its progress. 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 applied 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 involved the transfer of uncommercialized
technologies from Federal laboratories and universities to rural
businesses and communities. 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. This project has undergone a merit review.
Manufacturing extension programs throughout the country have
identified one-on-one engineering technology assistance as a need for
small manufacturers as they attempt to become more competitive and
profitable. 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 and 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, 1997 and 1998. Appropriations to
date total $5,000,000. Oklahoma State University and Mississippi State
University have provided considerable amounts of matching support from
state funds over the life of the project. Over the past four years,
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 Sate University. 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
manufactures: (2) conduct joint workshops, client referral, and joint
research and application projects; and (3) demonstrate a value of
service to clients many times project operating costs. The current
phase of the program will be completed in 1998.
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 job creation, productivity enhancement, and
local community economic activity. The Technology Transfer program has
impacted the integration of emerging technologies that are benefitting
the citizens, ranging from assisting small businesses and industries in
integrating new computer hardware and software for conducting
electronic commerce to providing extensive online information
resources. The Technology Transfer Funds have served as a catalyst for
the development of a long range telecommunications network plan for the
total Extension Service to link all county extension offices and
research centers directly to the Mississippi date/video backbone and
provide access to the Internet.
wood biomass, new york
The objective of this project is to expand, implement, and gain
acceptance of wood biomass as a sustainable, renewable, and
environmentally-affable fuel source. In addition, the project is deemed
to support the promotion of alternative forest products for the
Nation's Central and Northern Hardwood forests regions.
The principal researchers hypothesize that the project is of
national interest. Biomass research studies through the U.S.
Departments of Agriculture and Energy span 20 or more years.
Henceforth, the Nation is in a position to scientifically produce
environmentally-affable fuels for power generation systems.
Complementing the planned fuel supply are many sidebar benefits
including carbon sequestration, rural economic development, wildlife
habitat, and soil erosion and sedimentation associated with
conventional agriculture.
The goal of this project is to promote, through applied research
and technology transfer, wood biomass as a sustainable wood supply for
(1) power generation, (2) alternative farm products, (3) wise
stewardship of land resources, and (4) enhanced farm profitability. To
accommodate these goals, scientists at the State University of New York
are planting willow trials on several sites and under several
conditions. Site preparation and planting has occurred on several
locations, and more are planned. Cornell University, a partner
institution in the project, has hired a technology transfer specialist
to coordinate educational activities resulting from this work. Common
events include field days, news articles, videos, and exhibits.
The original program began with an appropriation of $200,000 in
fiscal year 1995. An additional $197,000 was appropriated by the
Congress for fiscal years 1996, 1997, and 1998 for a total of $791,000.
Four state partners and approximately 18 private partners contribute
resources at a ratio of nearly 1.5 to 1 nonfederal funds for this
project.
The field work is being conducted on private and state land near
Syracuse, New York. Electronic and print media allows Cornell
University's technology transfer activities to extend far beyond that
point. 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 March 31, 1999. Because of the timing of one of
the fiscal awards, some weather-related problems, and some land-
contract problems, all of the original objectives have not been met.
Most of the unmet objectives should be completed by early spring 1999.
A field review of the project was conducted on August 20-21, 1997.
Excerpts from the review report include (1) positive accolades for
their quarterly progress reports, (2) positive accolades for the
outreach program being conducted by Cornell University, (3) praise for
the scientific outreach by the principal investigators, (4) praise for
connecting the willow biomass program to the poultry waste and riparian
issues in New York State, and (5) praise for gaining the acceptance of
willow biomass as an agricultural crop for state property tax purposes.
On the concern side, the Agency's project administrator flagged the
delay in establishing the demonstration farm and requested diligence in
bringing this aspect of the project to fruition. This is a new project
which will not begin until Spring 1998; therefore, no evaluation has
been conducted.
csrees 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 below.
CSREES BUILDINGS AND FACILITIES PROGRAM--STATUS OF PROJECTS
[Dollars in thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Federal Funds needed
Name and locationof facility Total cost of funds Match obtained to complete Plan to complete facility and source of Status of facility
project appropriated \1\ \2\ project funding \3\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Poultry Science Facility, Auburn $15,000 $6,000 $2,652 $6,348 Total funds needed to complete the Design work is underway.
University (Auburn, AL). facility will come from the State and
private sources.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alternative Pest Control Containment/ 38,118 10,921 265 26,932 Total funds needed to complete the Design work has been completed at the
Quarantine Facility, University of facility will come from the State and Riverside campus; some construction has
California (Davis/Riverside). private sources. As an option, they been approved. There has been no
would reduce the size of the facility to activity approved at the Davis campus.
meet the total amount raised.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Agricultural Biotechnology Laboratory, 20,000 3,915 10,000 6,085 Matching funds in the amount of $10M were Programming and design work has been
University of Connecticut (Storrs). obtained from the State. Plans include completed.
building the facility in 3 phases as
funds become available. Funds needed to
complete project will be sought from
private sources.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Center for Applied Aquaculture, Oceanic 11,450 6,375 1,350 100 Remaining funds needed will be coming Design and construction work underway at
Institute (Waimanolo, HI) \1\a. from private sources. multiple sites.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Agricultural Biotechnology Facilities, 13,479 5,900 5,500 2,079 Funds needed to complete the facility Design work is underway.
University of Idaho (Moscow). will be sought from a combination of
State and private sources.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Holmes Hall Renovation, University of 1,105,220 561,000 .............. 544,220 Funds needed to complete the facility Efforts have been focused on obtaining
Maine (Orono). will be sought from the State. the required matching funds.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Institute for Natural Resources and 20,000 10,000 3,415 6,584 Funds needed to complete the facility Design work is underway.
Environmental Sciences, University of will be sought from the State. Plan
Maryland (Multiple locations). includes reducing the number of project
components from 6 to 3.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Center on Hunger, Poverty and Nutrition 15,850 7,350 7,924 .............. Not applicable. This project was included Design work is underway.
Policy, Tufts University (Boston, MA) on this chart to show information in
\1\b. footnote 1b.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Center for Molecular Biology, Rutgers 47,200 17,836 27,200 2,164 Funds needed to complete the project will Phase I has been completed. Design work
University (New Brunswick, NJ). be sought from public and private is underway for Phase II.
sources.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Center for Research on Human 108,607 18,108 50,607 39,892 Funds needed to complete the facility are Construction ongoing.
Nutritionand Chronic Disease being sought from private donors. Plan
Prevention, Wake Forest University includes an option to change the scope
(Winston-Salem, NC). of the facility if the campaign is
unsuccessful.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Animal Care Facility, North Dakota State 10,058 1,918 5,000 3,140 Facility will be completed in two phases. Design work is underway.
University (Fargo, ND). Funds in hand will build Phase I
(Livestock Care Research Facility).
Phase II will build a Laboratory Animal
Care Research Facility. No plan has been
offered to obtain funds needed to
complete Phase II.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Food Processing Pilot Plant, North 1,478 750 15 713 Funds needed to complete the facility Efforts have been focused on obtaining
Dakota State University (Fargo, ND). will be sought from a combination of in- the matching funds needed.
kind contributions and contributions
from private sources.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Grain Storage Research and Extension 975 495 240 240 Funds needed to complete the facility Would like to begin the design phase of
Center, Oklahoma State University will be sought from private sources. the project.
(Stillwater). Plan to complete the facility are
unchanged.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Coastal Institute on Narragansett Bay, 41,194 12,500 1,990 26,704 Costs incurred for match purposes are Design work is underway.
University of Rhode Island (Kingston). under review by CSREES. Plans to
complete the project include reducing
the number of the buildings to be built
from six to four.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Agricultural, Biological, and 38,500 10,434 5,468 22,598 Funds needed to complete the facility are Efforts have been focused on obtaining
Environmental Research Complex, being sought from the State. the required matching funds.
University of Tennessee (Knoxville).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All funds have been obligated except for the following:
a. Oceanic Institute--Funds from fiscal years 1994 and 1995 in the amount of $3,581,000 pending receipt and approval of a proposal.
b. Tufts University--Funds from fiscal year 1997 in the amount of $820,000 pending receipt and approval of a revised proposal.
\2\ Matching funds are required equivalent to the total Federal funds appropriated less the 3 percent administration fee.
\3\ All plans were submitted within the required time frame. Plans are under review but have not been approved by CSREES.
fund for rural america
Question. Of the fiscal year 1997 funds made available from the
Fund for Rural America for research, please provide a list of the
projects approved, including a description of the project, where the
center will be located/or research will be carried out, and the amount
of the award.
Answer. Fund awards have been made from fiscal year 1997 funds as
part of two programs--the Planning Grant Program with awards made in
September, 1997 and the Standard Grant Program with awards made in
February and March, 1998. The Planning Grant awards totaled $881,000
and are summarized in Table 1. Standard Grant awards are being made as
the administrative work is completed. Awards totaling $19.2 million
were made February 27, 1997 and the remaining standard grants will be
made over the following 2-3 weeks. Standard Grants will ultimately
total $32 million and exhaust fiscal year 1997 funds. Table 2
summarizes the Standard Grant awards made as of March 2, l998.
Table 1.--Planning Grant Awards
Principal investigator/institution/State/title Amount
Jonhannes, J., Montana State University, MT, Planning Grant:
Rural Development System.................................. $25,000
Simon, M., Kentucky State University, KY, Small Farm Center... 25,000
Blase, M., University of Missouri, MO, Diversifying U.S.
Cropping System........................................... 24,800
Young, R., University of Missouri, MO, Farm/Environmental
Policy Support System..................................... 24,000
Skees, J, University of Kentucky Research Center, KY, Managing
Catastrophic Risks in the Farm and Food System and Rural
Communities............................................... 24,900
Barrick, R., University of Illinois, IL, Virtual Center for
Rural Community Development Planning Grant................ 25,000
Downing, J., Iowa State University of Science and Technology,
IA, Agro-Oceanic Nutrient Flux Center..................... 25,000
McKean, J., Iowa State University of Science and Technology,
IA, National Corsortium for Pork Technology and Education. 25,000
Olson, D., Iowa State University of Science and Technology,
IA, Center for Sanitary Barriers to U.S. Meat Exports..... 25,000
Smith, W., Louisiana State University of Agricultural Center,
LA, FRA Gulf-States Forest Production International Trade
Center.................................................... 24,500
Legg, L., University of Minnesota, MN, A Consortium for Site
Specific Resource Management.............................. 25,000
Schoeneberger, M., USDA/FS-Colorado, CO, Acceptability for
Conservation Buffers...................................... 25,000
Lemenager, R., Purdue University, IN, ``Center for Innovative,
Coordinated Beef System in the Eastern Corn Belt''........ 25,000
Baughman, M., University of Minnesota, MN, Center for
Nonindustrial Private Forestry Education.................. 25,000
Hoover, M., North Carolina State University, NC, International
Center for Decentralized Wastewater Treatment Planning
Grant..................................................... 25,000
Harris, T., University of Nevada-Reno, NV, Policy for Western
Public Lands.............................................. 25,000
Cropp, R., University of Wisconsin-Madison, WI, Center for
Cooperative Enterprise.................................... 25,000
Rosson, C., Texas Agricultural and Experimental Station, TX,
International Trade Extension to Rural Communities of the
Mid-Conti-
nent...................................................... 25,000
Carey, H., Forest Trust, NM, ``Developing the Research
Capacity of Rural, Forest Dependent Communities''......... 25,000
Shelton, A., Cornell University, NY, Center for Biologically-
Based Pest Management: Identifying Opportuntites for Rural
Agriculture............................................... 24,100
Cannell, R., Virginia Polytechnical Institute, VA, Planning
Grant for Establishing a Recirculating Aquaculture Center. 25,000
Gilbert, J., University of Wisconsin-Madison, WI, Maintaining
Land and Community: Planning Grant Proposal for a FRA
Center on Minority Land Loss and Recovery................. 25,000
Hamilton, T., USDA/Madison, WI, Value-Added Wood Products
Consortium for Rural Economics............................ 25,000
Endter-Wada, J., Utah State University, UT, Proposal for An
Intermountain West Center for Sustainable Agriculture and
Environmental Stewardship................................. 24,600
Beasley, D., North Carolina State University, NC, National
Center for Manure and Animal Waste Management............. 25,000
Desjarlais, J., Turtle Mountain Community College (1), ND,
Planning for a Rural Development Center for the Turtle
Mountain Band of Chippewa................................. 5,000
McLellan, M., Cornell University, NY, Planning Grant: Food
Venture and Process Technology Center..................... 25,000
Rochin, R., Michigan State University, MI, Latino Population
and Agro-Industrial Expansion: Implications for Community
Development............................................... 25,000
Andre, P., National Agricultural Library (1), MD, Increasing
the Availability for Electronic Information in Rural
America................................................... 25,000
Jojola, M., Southwestern Indian Polytechnical Institute (1),
NM, Southwest Indian Virtual Extension Center (SIVEC)..... 25,000
Nault, L., Ohio State University, OH, Cereal and Oilseed
Quality Cen-
ter....................................................... 25,000
Berg, M., Little Hoop Community College, ND, Land Grant
Relationships Between LHCC and North Dakota State
University................................................ 5,000
Hoffman, M., Cornell University, NY, Center for Land
Stewardship Focusing on Vegetable Production in the NE
U.S....................................................... 25,000
Carlson, C., ``Fort Kelnap College, MT (1)'', MT, Fort Kelnap
College FRA Center Planning Proposal...................... 5,000
Maier, D., Purdue University (1), IN, Center for Value-Adding
Rural Enterprise (CARE)................................... 5,000
Seronde, J., ``Navajo Community College, AZ (1)'', AZ,
Planning for Native American Rural Development............ 5,000
Godfrey, G., Haskell Foundation/Haskell Indian Nations
University (1), ``International Extension, Education, and
Research Center''......................................... 25,000
Lee, J., Mississippi State University, MS, Center for Policy
Devolution and the Rural South............................ 25,000
Wissman, D., ``Grain Industry Alliance, KS (1)'', KS, Planning
Grant for Center Grain-Based Rural Enterprise............. 5,000
Bonsi, W., Tuskegee University, AL, Planning Grant for
Integrated Study of Food Animal and Plant Systems
(CISFAPS)................................................. 25,000
Table 2.--Standard Grants Made as of March 2, 1998
Proposal No./PI last name/institution/State/title Amount awarded
9704746, Jones, University of Arizona, AZ, Food Losses from
the Farm to the Consumer.................................. $540,000
9704750, Glenn, USDA-ARS, MD, Integrated Manure Management on
Dairy Farms for Conservation of Natural Resources and
Profitabil-
ity....................................................... 380,000
9704752, Krissoff, U.S. Department of Agriculture Economic
Research Service, DC, Market Development for Organic
Agricultural Products..................................... 200,000
9704763, Peeples, ``Peeples Consulting Associates, Inc.'', VA,
``Premium Diesel''--Evaluating U.S. Market Opportunities
for Biodiesel as a Motor Fuel Additive''.................. 31,000
9704765, Daniel, ``Boehringer Ingelheim/NOBL Laboratories,
Inc.'', IA, Implementation of a Food Safety Improvement
System For Sustaining the Competitiveness of the
Independent Pork Producer and Packer...................... 340,000
9704777, Rochin, Michigan State University, MI, Latinos in the
Rural Midwest: Community Development Implications......... 185,000
9704783, Swallow, University of Rhode Island, RI, Decision
Information and Support Structures to Sustain Farm Forest
and Open Space in Rural Communities of Southern New
England................................................... 400,000
9704785, Paustian, Colorado State University, CO, Developing
Soil C Sequestration as a Commodity for Co2 Emission
Mitigation in U.S. Agriculture............................ 400,000
9704796, Humenik, North Carolina State University, NC,
Advanced Waste Treatment for Environmentally Sound and
Sustainable Swine Production.............................. 350,000
9704808, Rice, Kansas State University, KS, Implementation of
Best Management Practices in the Blue River Basin of KS
and NE.................................................... 400,000
9704812, Moser, Michigan State University, MI, ``Enhancing
Rural Economies Through Comprehensive Extension, Research,
and Partnering Approaches Using Multi-county Clusters in
Michigan with''........................................... 450,000
9704827, Halbrendt, University of Vermont and State
Agricultural College, VT, Balancing Economics and
Environmental Impacts of Phosphorus Management............ 395,000
9704830, Wyman, University of Wisconsin, WI, Leveraging
Community and Industry wide Resources to Foster
Biointensive IPM.......................................... 50,000
9704844, Goldman, University of Wisconsin, WI, Are Value Added
CV Health Claims Valid for Vegetables? Onion-induced
Antiplatlet Activity...................................... 378,918
9704852, Kastner, Kansas State University, KS, HACCP
Implementation and Evaluation in Small and Very Small
Meat/Poultry Plants....................................... 440,000
9704879, Jones, Washington State University, WA, Development
and feasibility of perennial wheat for highly erodable
lands..................................................... 370,000
9704882, Gillespie, Cornell University, NY, ``Retail Farmers'
Markets and Rural Development: Entrepreneurship,
Incubation, and Job Creation''............................ 325,000
9704889, Hall, ``Michael Fields Agricultural Institute,
Inc.'', WI, Diversifying Corn-Soybean Rotations for Profit
and Environment in Upper Midwest.......................... 420,000
9704916, Klonsky, University of California, CA, Increasing
Adoption of Sustainable Agriculture and Positive Community
Impacts................................................... 400,000
9704922, Spittler, Cornell University, NY, Safe Practice
Assessments for Gleaned Fresh Produce in Food Rescue...... 447,826
9704928, Camazine, Pennsylvania State University, PA,
Improving the Health and Productivity of Honey Bee
Colonies.................................................. 450,000
9704950, Swan, Pennsylvania State University, PA, Economic and
Environmental Benefits of Watershed Restoration in Rural
Communities............................................... 365,000
9704985, Emara, University of Delaware, DE, DNA Marker
Technology in Commercial Broiler Breeder Selection
Programs.................................................. 300,000
9704986, DiMaio, Tri-Community Action Agency, NJ, New Jersey
Cooperative Gleaning Program.............................. 574,591
9704998, Souza, University of Idaho, ID, Improved
Marketability for Wheat Grown in the Pacific Northwest.... 400,000
9705019, Fauth, ``Land O'Lakes, Inc.'', MN, Community Food
Sourcing to Facilitate Rural Economic Development......... 400,000
9705048, Grohn, Cornell University, NY, Optimizing and
Delivering Dairy Herd Health and Management Decisions..... 300,000
9705078, Ray, University of Arizona, AZ, Development of
Guayule as New Crop for the Production of Hypoallergenic
Latex..................................................... 500,000
9705126, Hedrich, Iowa State University, IA, Legume Phyto
Chemicals: Improving Utilization.......................... 490,000
9705135, Grauke, USDA-ARS Pecan Breeding & Genetics, TX,
Conservation and Utilization of Pecan Genetic Resources... 310,000
9705157, Etter, University of Arizona, AZ, Revitalizing the
Navajo Wool and Mohair Industry........................... 25,000
9705162, Sapers, ``USDA, ARS, NAA, ERRC'', PA, Ensuring the
Microbiological Safety of Fresh Apples.................... 420,000
9705205, Milner, Pennsylvania State University, PA, Inhibitory
Effects of Allium Foods................................... 300,000
9705216, Akridge, Purdue University, IN, Distance Delivered
Master of Business Administration Degree in Food/
Agriculture............................................... 400,000
9705218, Parker, University of Vermont, VT, Improved
Greenhouse Technologies Supporting New England Family
Farms..................................................... 140,000
9705247, Vaillancourt, North Carolina State University, NC,
Mobilizing National Resources to Combat Emerging Food
Animal Diseases........................................... 450,000
9705301, Miles, Center for Public Interest Research, MA,
National Student Food Salvage Program..................... 64,440
9705364, Baker, Purdue University, IN, A Comprehensive Risk
Management Education Program for Corn Belt Agriculture.... 300,000
9705407, Hagan, Manomet Center for Conservation Sciences, MA,
Integrating Economic and Ecological Goals on Private
Industrial Forestland in Maine............................ 425,000
9705412, Kimmerer, Suny College of Environmental Science and
Forestry, NY, Native American Model of Ecological
Restoration and Community Enhancement..................... 300,000
9705450, Shackelford, USDA-ARS, CO, Consumer evaluation of
beef classified for tenderness............................ 400,000
9705513, Henkel, Jr., University of New Mexico, NM, Rural
Agricultural Enterprise Network........................... 330,00
9705546, Smith, Tuskegee University, AL, A Biotechnical
Experimental Learning Program for Rural Alabama........... 193,800
9705570, Swan, Washington State University, WA, Distance
Delivery of a B.S. Degree in General Agriculture in a Tri-
State Region.............................................. 450,000
9705599, Johnson, 228 Cheatham Hall, VA, The Forest Bank:
Concept to Reality........................................ 420,000
9705633, Punches, Oregon State University, OR, Evaluation of
Small-Diameter timber for Value-Added manufacturing....... 435,000
9705634, Bundy, Iowa State University, IA, Development of
Standard Method of Odor Quantification using Olfactory and
Chemical Analy-
sis....................................................... 375,000
9705645, Schmidt, University of Vermont and State Agricultural
College, VT, CyberSkills: A Prototype for Regeneration in
Rural Communi-
ties...................................................... 300,000
9705682, Fluharty, University of Missouri-Columbia, MO,
Innovations for Increasing Equity Capital in Rural
Communities............................................... 435,000
9800477, Bomash, University of Minnesota, MN, Enhancing Rural
Development Agribusiness Through Electronic Commerce...... 250,000
9800499, Griegio, Northern New Mexico Community College, NM,
Northern New Mexico Distance Education Project............ 204,427
9800503, Travis, Pennsylvania State University, PA, Improving
Farmer's Access to Pest Management Tools Through
Integration with the NII.................................. 219,645
9800507, Crawford, Iowa State University, IA,
Telecommunications Education Partnership Program for Rural
Development in Southwest
Iowa...................................................... 175,000
9800516, Medeiros, Ohio State University, OH, Using Technology
to Provide Nutrition Education for High Risk Students..... 150,832
9800527, Carlascio, United Tribes Technical College, ND, 1994
Tribal Land-Grant Colleges Information Infrastructure
Development............................................... 199,712
9800537, Michaelson, Eastern Washington University, WA,
``Rural Schools, Careers, and Community Development''..... 161,539
9800545, Civille, Center for Civic Networking, MA, Public
WebMarket Expansion Project............................... 112,000
9800550, Dunham, University of Minnesota, MN, Integrating
World Wide Web Technology into Our Teaching and Learning
Environ-
ment...................................................... 227,827
9800552, Gallagher, Oregon State University, OR, Rural West
Internet Masters Project.................................. 123,121
9800554, Stark, National Center for Small Communities, DC, An
Off-System Road to the Information Superhighway........... 75,539
9800555, Smith, University of Georgia, GA, Internet and
Computer Technology of Transfer of Information to Dairy
Producers................................................. 212,358
--------------------------------------------------------------
____________________________________________________
Grand Total of 1997 Standard and Telecommunications
Grants..................................................19,267,575
Question. Please explain in detail the review and selection process
for center and research proposals. How were the peer panels selected
and who served on these panels? What criteria were used to evaluate the
proposals within the three broad areas of: (1) international
competitiveness, profitability, and efficiency; (2) environmental
stewardship; and (3) rural community enhancement?
Answer. The proposal review and award selection process was based
on a competitive, peer evaluation of applications submitted in response
to an open solicitation. The selection of peer panel members was made
by Fund staff working with: the university, client, and stakeholder
communities; professional associations; federal, state, and local
governments; private industry and not-for-profit organizations; and the
Research, Education, Extension, and Economics Advisory Board. Peer
evaluators were organized into subject panels, with the panels chaired
by a university principal assisted by a Fund program manager. The
panels followed the same general guidelines of primary, secondary, and
tertiary review and open panel discussion of each proposal that is used
by the National Research Initiative and the National Science
Foundation. However, the concept of ``peer'' was expanded to include
experts drawn from across disciplines (e.g., the biological, physical,
and social sciences) and functions (e.g., research, education, and
extension).
All proposals were evaluated initially by a subject-specific panel.
Approximately 30 of these panels made the first round of funding
recommendations for Planning Grants in the summer of 1997 and Standard
Grants in the fall of 1997. In both cases, the results of these first
level panels were evaluated by a second-level overview panel designed
to integrate results across crop and livestock science, environment,
rural development, etc. to ensure Fund dollars were allocated to
maximize their problem-solving impact.
The criteria used in the subject and overview panels are summarized
below in Table 3. The subject panels focused most heavily on merit and
relevance but also considered potential contribution to the Fund's
broader program goals. The overview panels focused more on the third
criterion and generally assumed that the first level panels had covered
merit and relevance questions. The same criteria were applied across
the three broad areas identified in the Fund's mandate: agriculture,
environment, and rural development. However, the panel chairperson and
members were asked to draw on their expertise, the FAIR Act language
establishing the Fund, and the language included in the USDA Request
For Proposals to make the more specific judgements regarding the
substantive content of the proposals necessary to make a final rating
and recommendation for funding.
Table 3. Fund Grant Selection Criteria
--Scientific and Technical Merit.
--Relevance
--Relevance to agriculture, the environment, the rural development
and USDA activities in these areas; priority given to
proposals that address activities in two or more of these
areas
--Involvement of appropriate agriculture, environment, and rural
development ``communities of interest'' in problem
prioritization i.e., addressing user-identified/community-
problems agendas.
--Contributions to Broader Fund Goals
--practical, multidimensional problem solving with measurable short
to intermediate term (2-5 and 5-10 year) impact
--leveraging previous public and private investment in research,
education and extension; targeting ``break through''
activities
--forging research, education, and extension partnerships; building
inter-institutional and interdisciplinary physical,
biological, and social science teams that foster ``system''
approaches;
--establishing partnerships with clients and stakeholders to
address crosscutting problems and strengthens
dissemination/adoption
--potential for replication--i.e., duplication, adoption, or
adaption in other problem areas or different locals
--facilitating the transition from ``a program-based agriculture to
a science and technology-based'' agriculture; comparable
shifts for environmental and rural development activities.
Question. How many proposal were received? How many were approved?
Please breakdown this data by the three broad areas above for which
proposals were solicited.
Answer. Statistics on Fund applications and awards follow.
------------------------------------------------------------------------
Planning Standard
grants grants \1\
------------------------------------------------------------------------
Proposals Received...................... 461 1,181
Primarily Agriculture............... 184 459
Primarily Environment............... 62 223
Primarily Rural Development......... 121 161
Primarily Food...................... .............. 111
Other \2\........................... 84 227
Proposals Awarded/Pending Award......... 36 115-120
Primarily Agriculture............... 19 47
Primarily Environment............... 6 23
Primarily Rural Development......... 7 29
Primarily Food...................... .............. 14
Other \2\........................... 4 7
------------------------------------------------------------------------
\1\ As of 3/1/98, 61 Standard Grants had been awarded and another 59
were in final administrative review. Hence, the range of 115 to 120;
subject area subtotals add to 120 although a final decision on as many
as 3 to 5 awards is pending the outcome of administrative review.
\2\ Includes proposals focusing on education, information systems, etc.,
topics applicable to all subject areas.
Question. How were project applications screened to prevent
projects funded through special research or administrative grants or
other competitive grant programs from also receiving funds under this
program?
Answer. Two approaches were taken. First, applicants were required
to submit to CSREES information on other funding sources. The Fund
staff and CSREES administrative staff reviewed this information on
support from other sources--both support already in hand and applied
for. Second, reviewers were asked and Fund staff focused on the
relevance of a proposal to the Fund's particular program goals. This
entailed determining if a proposal was eligible for support from
another, possibly more appropriate, funding source. This consideration
lead to the elimination of several excellent proposals when the work
was judged more appropriately supported through the National Research
Initiative Program or the Small Business Innovation Research Program.
government and performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. The Cooperative State Research, Education, and Extension
Service (CSREES) has developed an annual Performance Plan that links to
that of the Research, Education, and Economics (REE) Mission Area. The
Plan relates program activities to the mission and goals of the agency
(as described in the Agency strategic plan) to the budget request
submitted in support of research, extension and education activities.
More importantly, it reflects the role of CSREES in enabling land-grant
universities and other partners who carry out the research and
extension activities authorized in the CSREES budget.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. In framing the agency strategic plan, a number of forums
were utilized to focus on goals and objectives that would direct the
use of budget resources toward shared national priorities. This
included the establishment of a Partnerships Working Group, comprised
of CSREES administrators and partner university administrators to link
program activities with outputs and outcomes; planning and hosting
regional orientation sessions to share the strategic planning concept
with agricultural research, extension, and education administrators and
evaluation staff; the development of electronic planning and reporting
software to facilitate planning and reporting by partner institutions;
and the appointment of a joint agency-university task force to consider
alternative planning and reporting and insure that GPRA accountability
standards are met through the preparation of performance plans and
reports.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. The agency performance plan is linked to performance
measures that relate to the President's budget. Because of the
complexity of the agency budget and the large number of components in
its accounts, individual components were aggregated around five agency
goals for more efficient planning and reporting. Using the five goals
gives a national focus to programming that is planned and conducted in
a dynamic process in the states by partner institutions and other award
recipients. In this process, all program activities relate to the
following goals: an agricultural production system that is highly
competitive in the global economy; a safe and secure food and fiber
system; a healthier, more well-nourished population; greater harmony
between agriculture and the environment; and enhanced economic
opportunities and the quality of life among families and communities.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. Because of the complexity of the agency budget and the
large number of components in its accounts, activities were aggregated
in the performance plan around the five agency goals for more efficient
planning and reporting. This means that the individual components in
the account and activity structure do not have performance measures
that are specifically linked to those accounts.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. CSREES does not plan to propose any changes to its account
structure for fiscal year 2000.
Question. How were performance measures chosen?
Answer. Performance measures were chosen to reflect critical
actions necessary to achieve shared and national priorities in
agriculture and which describe the purposes and impact of the federal
investment in research, extension, and education.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. The agency response to data collection and verification
under GPRA relies on existing data sources--enhanced Current Research
Information System (CRIS), Food and Agricultural Education Information
System (FAEIS), and university information systems, new joint data and
analysis activities and collaborative efforts to collect data from
states. Strategies were developed to solicit input from our university
partners in the design of an electronic planning and reporting system.
Under this strategy the partner universities provide data collection
and verification as program plans and reports made to USDA. In
addition, the agency is developing an integrated management information
system, Research, Education, and Economics Information System (REEIS),
to link databases and provide improved analytical capacity.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. No. The agency plan includes performance measures for which
reliable data will be available for the first performance report.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. In the development of our performance plan, we included
critical program goals that can be used to track short and intermediate
program results. These include research and education in food safety,
pesticide clearance and other pest management initiatives, and expanded
competitive grants to enhance the nation's agricultural knowledge base,
to name a selected few.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. The agency plan reflects substantial internal and
partnership discussions to identify outcome/output measures which
demonstrate that the goals in the plan have been met, including those
noted in the previous answer.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Yes, the plan specifies agency and collective program
activities as outputs and university partnership and grantees' work as
the outcomes which address objectives.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers?
Answer. Customer satisfaction measures for the agency will include,
but not be limited to expert assessments (such as would be needed to
assess impacts of genome research and discovery), customer surveys
(such as would be needed to measure scope and effectiveness of selected
extension programs), economic data or social survey data, and physical
monitoring (such as would be valuable to determine effects of research-
based changes in best management practices affecting environmental
quality or public health indicators). Examples of customers would
include Federal agencies (e.g. Agricultural Research Service,
Department of Energy, National Science Foundation, Environmental
Protection Agency, etc.), land-grant universities, agricultural
producers and consumers of information related to the food and
agricultural sciences.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The agency identified approaches to addressing relevant
national issues (e.g. food safety, water quality, waste management,
youth and families at risk, food genome initiative, small farms, etc.)
in the formation of the budget. The measurable goals--and budget
necessary to achieve the goals--contribute to achieving the strategic
plan of CSREES.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. In collaboration with university partners, we will be able
to describe the likely impact on programs and achievement of goals.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. We are working to develop the technological capability to
measure and report performance throughout the year. We have completed
modernization of CRIS, are developing REEIS, and are in the final
phases of a three-year project to establish integrated grants tracking
and financial management. With university partners, we have developed a
National Impact Database and are updating the form and format of state
plans and reports so that they can be submitted and updated through a
World Wide Web-based system.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Answer. Because of the complexity of the agency budget and its many
lines, individual programs were aggregated around five general agency
goals for more efficient planning and reporting. While the current
account structure has offered a challenge in the way we respond to the
requirements of GPRA, we feel we have been successful in using the five
goals to give a national focus to programming that is planned and
conducted in a dynamic process in the states by partner institutions
and grantees.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. Although changes in the budget account structure might
clarify linkage of dollars to results in a meaningful way, that is not
the solution to the challenges CSREES faces in responding to GPRA.
Through a partnership with the system of State Agricultural Experiment
Stations, land-grant and other colleges and universities, and other
public and private research and education organizations, CSREES is
USDA's principal link to the university systems for the initiation and
development of agricultural research and education programs.
Additionally, CSREES is the Federal partner in the Cooperative
Extension system, a nationwide non-formal educational network. The
challenge CSREES faces is capturing and reporting research and
education results of our partners who conduct and deliver activities
supported in the CSREES Budget. We are currently engaging our Partners
in dialogue to help them understand the role of the Federal partner in
response to GPRA. This will allow CSREES to be more responsive to the
GPRA mandate. In concert with our Partners, we have prepared impact
statements highlighting research, education, and extension
accomplishments supported by the Federal investment.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee that the present structure?
Answer. CSREES does not propose to modify its budget account
structure at this time.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. CSREES does not propose to modify its budget account
structure.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. The Strategic plan includes this information in detail, but
it is not included in the performance plan.
Question. If so, what steps have you identified to prepare,
anticipate, and plan for such influences?
Answer. CSREES funding, in concert with State and other sources of
funding, encourages and assists State and other public and private
institutions in the conduct of agricultural research and education
activities. These activities contribute to the five goals of the
agency. CSREES will work with its university partners, other Federal
agencies, and private sector organizations to address external factors
that could influence goal achievement.
Question. What impact might external factors have on your resource
estimates?
Answer. The achievement of national priorities and shared goals
related to agricultural knowledge is dependent not only on Federal
funding, but also state and private dollars. In addition, advances in
related sciences have substantial impact on technology development and
adoption in agriculture.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. There are no overlapping functions or program duplication
in the plan, however there is substantial ongoing need for coordination
with the Agricultural Research Service and among institutions.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that: To what extent are your performance measures sufficiently mature
to allow for these kinds of uses?
Answer. The questions raised under the Results Act are new in terms
of its accountability measures. Initially, there will be deficiencies.
However, over time, the measures will mature and provide the desired
responses.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Although we strive for accurate resource estimates,
externalities, including program leveraging, unanticipated costs of
conducting research and extension, and breakthroughs or problems in
research may influence resources.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No, we do not see a need to make substantive revisions in
our strategic plan.
______
Questions Submitted by Senator Gorton
special research grants
Question. The regional research grants are all but zeroed out in
CSREES's budget. Does USDA understand the importance of regional
research? For example, rice research cannot be conducted in Washington
state just as apple research cannot be conducted in Arkansas. Does
CSREES understand the importance of NOT nationalizing research
programs?
Answer. As a part of the Administration's efforts to balance the
budget and direct spending to higher priority areas, projects earmarked
for specific institutions were proposed for elimination. Funding
distributed by formula under the Hatch Act could be used to continue
aspects of these projects if they are deemed to be of high priority at
State or local levels. Additionally, researchers could apply for
funding under the National Research Initiative competitive research
grants program or obtain funding from State and local governments and/
or private sources, such as industry, to continue these projects.
regional research
Question. I am seriously concerned about the fact that smart,
experienced agriculture scientists are being frightened away from doing
any public related research. Does the USDA understand the breakdown of
morale in the agricultural research community as a result of continued
elimination of regional research?
Answer. Regional research is part of the formula funding mechanism
authorized by the Hatch and Evans-Allen Acts. Over the last several
years funding for these programs, both regional research and state-
specific research, has remained constant, but resulted in an erosion of
real dollars because of inflation. Most federally-funded research
programs have increased the availability of competitive funding for
research relative to formula funding. Recently, the National Science
Foundation, members of the US Congress, and others have urged USDA to
increase competitive research funding relative to formula funding as a
way to improve the quality of research. We agree with that
recommendation. In fiscal year 1999 the budget includes, for the first
time, a small, $15 million reduction in Hatch funding to be offset by
about a $40 million increase in competitive funding. This proposed
change in federal policy is causing some concern among scientists and
administrators at land grant universities because formula funding has
provided a substantial support base for agricultural researchers. That
base provides a foundation for on-going basic and exploratory research;
it provides support for new researchers and others less capable of
acquiring competitive grants. Overall, we believe the change will
improve the effectiveness of agricultural research.
Question. Does USDA realize that if all regional funding is
privatized there could be a serious breakdown in the varieties of
commodities produced in this country?
Answer. Large amounts of public and private research and
cooperation between the public and private sectors have made US
agriculture the marvel of the world. We intend to continue that
effective research partnership by investing public research dollars in
critical areas where there is a significant public interest and where
private industry is unlikely to take the risk. We have no intention of
privatizing regional research. In fact, many regional research
activities provide a critical mass of researchers working together to
solve complex problems. However, the mix of formula funding and
competitive funding is likely to shift in the years ahead, as explained
in the answer to the above question. USDA is very concerned about
having a very broad genetic base from which to create new varieties and
is proposing a $10 million Food Genome Competitive Research Grants
Program as part of the fiscal year 1999 budget proposal for CSREES. The
proposed program will enable USDA to cooperate with similar programs of
the National Science Foundation and the National Institutes of Health
on plant and animal genetics.
______
Questions Submitted by Senator Bumpers
decreases in csrees aquaculture centers
Question. Aquaculture is rapidly being recognized as one of the
great growth potential industries in U.S. agriculture. Yet, the budget
proposal recommends a decrease for the Aquaculture Centers program. How
do you justify this decrease at a time when the industry is most at
need for more research and development?
Answer. Funding for the Aquaculture Centers program would be
reduced so that other high priority National issues can be addressed in
keeping with the Administration's goal to reduce the Federal deficit.
The reduction is not expected to have a negative impact on the program,
as alternate funding from formula programs, State and local
governments, and private sources could be used to support projects that
are deemed to be of a high priority.
Question. What other actions might the agency be taking to ensure
U.S. aquaculture remains competitive?
Answer. The agency has taken steps to assure that aquaculture
research and development can be addressed through the various funding
authorities used to support other sectors of agriculture including
formula funds, the National Research Initiative (NRI), and the Fund for
Rural America. The agency has also provided leadership for coordination
of all Federal programs in support of aquaculture development through
the Joint Subcommittee on Aquaculture, under the National Science and
Technology Council, Office of Science and Technology Policy. In
addition the Joint Subcommittee on Aquaculture is currently revising
the National Aquaculture Development Plan.
delta teachers academy
Question. Please provide an update on activities of the Delta
Teachers Academy.
Answer. The Delta Teachers Academy is a 100 percent USDA-funded
program of The National Faculty. The Delta Teachers Academy is
administered from The National Faculty's regional office in New
Orleans, Louisiana. In addition to USDA funds, the project sometimes
realizes cost savings when participating school districts do not bill
The National Faculty for their incurred released time costs, choosing
instead to absorb those expenses themselves.
The Delta Teachers Academy continues to serve the Lower Mississippi
Delta Region, which is comprised of 219 counties and parishes clustered
around the Mississippi River and encompassing portions of Arkansas,
Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee.
The project focuses on educational improvement in the core subject
areas of English, geography, history, mathematics, and science by
providing long-term academic enrichment to approximately 525 elementary
and secondary school teachers at 35 sites by teaming them with
university scholars for in-service training sessions during the school
year and continuing with summer institutes. Through its Fellows
Program, the Delta Teachers Academy is also sustaining the professional
development of over 650 Academy graduates throughout the region.
The fiscal year 1998 project is providing orientation sessions at
15 sites established in fiscal year 1997 and is training 225 new
participants. The 1998 project is also conducting 125 academic sessions
to 35 continuing teacher teams and will conduct 15 two-week summer
institutes for 525 school teachers in the Delta Region. The project is
also conducting 10 one-day seminars for 90 Delta Teachers Academy
Fellows and is planning the first conference for Academy graduates. As
part of the fiscal year 1998 project, the Delta Teachers Academy will
also publish three issues each of its newsletters entitled ``Currents''
and ``Fellows Exchange.''
Question. Please provide an evaluation of the accomplishments of
the Delta Teachers Academy in terms of educational improvement and the
socio-economic implications of the program.
Answer. This project addresses the problem of insufficient
professional development opportunities for K-12 teachers in a region of
pervasive poverty and depressed economic conditions. Over the past six
years of its operation, the Delta Teachers Academy has demonstrated
proven benefits for participating teachers including increased content
mastery, revitalized classroom teaching, and enhanced ability to
initiate curricular and instructional change. In addition, this project
potentially could have a significant regional impact by helping to
achieve long-range goals for economic development through improved
educational performance. Past project evaluations conducted by USDA,
the General Accounting Office, and by private firms, have documented a
positive impact on student learning and motivation resulting from
increased enthusiasm and improved effectiveness of teachers involved in
the project.
Results of a recent survey of 144 Delta Teachers Academy
participants conducted by Westat, Inc., using a stratified random
sample methodology, indicate that 89 percent of the teachers agree that
the program provides useful information that strengthens their subject
matter competency and the content of their classroom work, 92 percent
reported developing challenging new teaching skills and strategies as a
result of the program, and 90 percent felt more prepared to assume a
leadership role in their schools and school systems as a result of
their experience. Analysis of program impacts indicate that the longer
a teacher is in the program, the greater and more positive the impact.
In addition, the analysis found that teachers who increased their
knowledge of the tools and procedures used in their subject area had
exceptionally strong impacts on student performance measures such as
student work habits, attitudes, interests, aspirations, and
achievement.
Question. Would you agree that a well educated population is an
important goal for the revitalization of rural areas and if so, do you
think the Delta Teachers Academy is working toward that goal?
Answer. Yes, a well educated population and a work force equipped
with modern technological, scientific, and communications skills are
vital components for rural revitalization and economic competitiveness.
The Delta Teachers Academy, through its teacher development programs
and activities, is providing a very real service and helping to build a
solid foundation toward the goal of rural revitalization in the Lower
Mississippi Delta Region.
______
Questions Submitted by Senator Kohl
sustainable agriculture research and education professional development
program
Question. I continue to follow with interest the sustainable
agriculture extension funding known as the Professional Development
Program. The program provides for competitive grants for training and
outreach activities to promote sustainable agriculture practices. Can
you tell us what the program has accomplished to date? How many
projects have been funded? How many training events have been held?
Nationwide, what percentage of Extension agents and NRCS field staff
have participated to date?
Answer. In the four years since the Professional Development
Program was first funded, 125 projects have been funded through a
regional competitive grants process. In addition, small grants of
approximately $10,000 per year have been made to each state and island
protectorate to conduct state-level programming complementary to the
regionally funded projects.
To date, 226 training events have been held, involving 11,541
participants. Of those, 6,720 were Extension faculty and 875 were NRCS
staff. Thus virtually 100 percent of the approximately 2,500 Extension
agents nationwide who have agriculture and natural resources
responsibilities--the primary audience for the program--have been
exposed to sustainable agriculture concepts and information sources
through one or more SARE-funded events. In addition to this
accomplishment, our state extension leaders for SARE report that a
smaller proportion, which varies greatly from state to state, are at an
advanced stage where they are experienced at applying sustainable
agriculture concepts in their day-to-day work and are able to teach
others. In most states, NRCS field staff are participants, but no more
than one-third of those field staff have participated to date. Farm
Services Agency field personnel have also expressed interest in SARE's
Professional Development Program in some states, and represent another
high-priority audience that has barely been tapped.
Question. The budget request for this program is for level funding
at $3.3 million. What funding level would be necessary to fulfill the
Farm Bill mandate for this program, including comprehensive curricula
development, complete field staff training, and innovative outreach
projects in each region of the country?
Answer. The SARE Professional Development Program, authorized as
the Sustainable Agriculture Technology Development and Transfer
Program, was authorized up to $20 million per year. If fully funded,
comprehensive curriculum could be developed and extended to all
agricultural professionals in Extension, Natural Resources Conservation
Service, Farm Services Agency, and other interested agencies, as well
as reaching a critical mass of private-sector professionals, for
example, crop consultants, pest consultants, and agricultural lenders
whom our agency staff tell us also influence producers' decisions.
Question. Why does the budget request not include an increase to
begin to reach those program mandates?
Answer. The budget request does not include an increase for this
program because other competing priorities were judged more critical in
the current environment of very limited budgets.
______
Questions Submitted by Senator Leahy
sustainable agriculture research and education (sare)
Question. I was pleased to hear the President give such strong
support for research programs in his State of the Union Address and in
the fiscal year 1999 budget proposal. However I am concerned about
several areas of research which I believe did not receive the funding
they need in the Administration's budget. In particular, while the
Department did increase funding for the SARE program by $2 million,
this increase is inadequate to meet the increasing demand for this
critical program. The President's Council on Sustainable Development
concluded that ``sustainable U.S. agriculture will require research
that focuses on integrating productivity, profitably, and environmental
stewardship.'' I appreciate that the Department did increase funding in
the ATTRA program to $2 million. However, $15 million is also needed to
fund the SARE program. In addition to the current heavy demand for the
program, implementation of the Food Quality Protection Act and the
Organic Foods Production Act will leave many producers desperately
seeking information on alternative practices. What impact is the
Department expecting implementation of the Food Quality Protection Act
and the Organic Foods Production Act to have on the SARE and ATTRA
programs, and how will the funding increases in these programs be used
to address it?
Answer. The Food Quality Protection Act requires EPA to establish
new risk-based standards for a very large number of pesticides. USDA's
Office of Pest Management Policy has been created to more fully engage
EPA as it implements FQPA. USDA and EPA have signed a Memorandum of
Understanding that commits the two agencies to work together when
regulatory action by EPA would reduce farmer competitiveness, limit
producers ability to adopt practices such as IPM, and ensure consumers
a safe, abundant, high quality of food and other agricultural products.
It is likely, however, that a number of pesticides, including some
commonly used chemicals, will be restricted or even unavailable.
Producers who rely on these materials for effective pest control will
be looking for alternatives from SARE, ATTRA and other sources. SARE-
funded research will contribute to the CSREES and department-wide
effort to provide producers with research-based alternatives. Eighteen
percent of SARE projects funded over the past ten years have dealt
primarily with pest management, and many others have included pest
management in the study of crop and livestock production systems.
CSREES and its land-grant university partners have been directing
resources from several programs to begin providing science-based
solutions to the challenges presented by FQPA: the Minor Crop Pest
Management Program, IR-4; the National Agricultural Pesticide Impact
Assessment Program, NAPIAP; the Pest Management Information Decision
Support System; the Pesticide Applicator Training Program; the Pest
Management Alternatives Program; and the Integrated Pest Management
(IPM) Program. SARE will coordinate its efforts in pest management with
these other programs through interaction with national program leaders
and through interaction at the regional level such as through service
on SARE technical review committees. One of SARE's particular strengths
in pest management is that it includes research and extension of pest
management alternatives in the context of whole farming systems,
including such factors as soil and crop management, water management
and marketing. Another great strength of SARE is that producers are
directly involved at all levels of the program: they serve on the
Administrative Councils that set program direction and recommend
projects to fund and they are active participants in SARE projects.
These characteristics help ensure that SARE findings are useful to
farmers and therefore aid greatly in their rapid adoption.
The Organic Foods Production Act will stimulate greatly increased
interest by producers, processors and marketers who want to take
advantage of this emerging market which has been expanding by about 20
percent per year. SARE has funded dozens of research and education
projects on organic production and marketing in its ten-year history.
An increased communications effort will be required to ensure that the
public has the information it needs from these projects, and new
research and education projects will be needed to find answers to the
many questions that organic producers will face as they take advantage
of the organic market.
The Appropriate Technology Transfer for Rural Areas (ATTRA) is the
national sustainable farming information center that links people
involved in full-or part-time farming to information and resources on
sustainable agriculture. ATTRA program service are available to
farmers, Extension agents, researchers, farm organizations, and others
involved in commercial agriculture, including market gardeners and
small farmers. ATTRA is funded through a cooperative agreement between
the private nonprofit National Center for Appropriate Technology (NCAT)
and the USDA Rural Business--Cooperative Service (USDA-RBS). Congress
must annually approve ATTRA's funding because is is included as part of
USDA's budget proposal.
Question. How could additional funding for the SARE program, over
the $10 million recommended by the Department, be used to further aid
producers?
Answer. Additional SARE funds could be used to aid producers who
are eager for new information on a variety of sustainable agriculture
topics such as improving soil quality, reducing nutrient run-off into
surface and groundwater, managing pests effectively with reduced
reliance on pesticides, diversifying cropping systems in ways that
improve profits as well as protect the environment, taking advantage of
new marketing opportunities, and enhancing communities through locally-
owned value-added production and marketing. These benefits would come
from increased communication of results from the more than 1,000
projects that SARE has funded over the past ten years, plus new
research findings from an increased number of SARE grants. An increased
communications effort could tailor packages of information to specific
types of producers who have different needs and interests, for example,
limited-resource producers, ranchers, market gardeners, organic
producers, large conventional grain producers, and so forth. Increased
funding would also develop new information on production and marketing
alternatives that are both scientifically sound and of practical use to
farmers and ranchers in the short term, and would allow additional
investments in longer-term trials that are critical to our
understanding of long-term impacts of farming methods.
hatch act/mc intire-stennis cooperative forestry act
Question. In light of the Administration's support of research
programs, I cannot understand the Department's dramatic reduction in
funding for the basic land grant research funding programs. The Hatch
Act, the McIntire-Stennis Cooperative Forestry Act, and the Smith-Lever
Act form the basis of Land Grant College research programs. The kinds
of cuts the Department is proposing would be devastating, certainly to
the University of Vermont, and I am sure to other Land Grants around
the country. Over the last ten years base funds for Land Grant research
has declined sixteen percent even while other research program budgets
were increasing. The National Association of State Universities and
Land-Grant Colleges recommended $178,352,000 for the Hatch Act,
$21,665,000 for the McIntire-Stennis program, and $283,797,000 for the
Smith-Lever program---all modest increases, well below the increases
provided for other research areas. Instead, the Department has proposed
$153,672,000 for the Hatch Act, $19,882,000 for McIntire-Stennis, and
$257,753 for Smith Lever almost $50 million below the NASULGC request.
For Vermont alone this would mean a reduction of $355,000. Has the
Department identified the areas of research which would be affected by
this dramatic decline in funding for the basic Land Grant Research?
Answer. The laws authorizing Federal formula programs enable the
States to determine how to use their formula allocations to address
critical issues facing agriculture in their States, region, and the
Nation. The Department has not identified the areas of research which
would be affected by the proposed reductions in the Hatch Act and
McIntire-Stennis Cooperative Forestry formula programs because such
decisions will be made by the States according to priorities at the
State, regional, or local levels. Extension activities affected by the
proposed reductions in the Smith-Lever formula program will also be
made by the States according to priorities at the State, regional, or
local levels.
Question. What are those areas of research?
Answer. The areas of research affected by the proposed reductions
in the Hatch Act Act and McIntire-Stennis Cooperative Forestry formula
programs will be determined by the States. Extension activities
affected by the proposed reductions in the Smith-Lever formula program
will also be made by the States according to priorities at the State,
regional, or local levels.
Question. What are the fiscal year 1998 funding levels through
these three programs to each of the Land Grant Colleges, and what would
those institutions receive if the cuts recommended by the Department
were adopted?
Answer. The information follows:
HATCH ACT FORMULA DISTRIBUTION, FISCAL YEARS 1998 AND 1999
------------------------------------------------------------------------
Fiscal year--
Recipient -------------------------------
1998 1999
------------------------------------------------------------------------
Auburn University....................... $3,554,184 $3,269,684
University of Alaska.................... 887,889 827,373
American Samoa Community College........ 651,903 610,913
University of Arizona................... 1,740,990 1,599,741
University of Arkansas.................. 3,076,640 2,821,266
University of California................ 4,567,954 4,144,190
Colorado State University............... 2,313,753 2,212,237
Connecticut Agricultural Experiment 719,210 663,751
Station................................
University of Connecticut............... 922,295 844,775
University of Delaware.................. 1,160,606 1,072,459
University of District of Columbia...... 611,810 565,100
University of Florida................... 2,616,878 2,361,333
University of Georgia................... 4,241,530 3,849,347
University of Guam...................... 766,901 714,266
University of Hawaii.................... 1,163,101 1,080,424
University of Idaho..................... 1,881,933 1,713,749
University of Illinois.................. 5,023,952 4,426,547
Purdue University....................... 4,432,430 3,978,822
Iowa State University................... 5,436,781 4,875,947
Kansas State University................. 3,041,700 2,755,126
University of Kentucky.................. 4,447,022 4,027,825
Louisiana State University.............. 2,854,321 2,620,624
University of Maine..................... 1,637,451 1,500,825
University of Maryland.................. 2,202,469 2,014,626
University of Massachusetts............. 1,984,927 1,818,457
Michigan State University............... 4,581,853 4,137,827
College of Micronesia................... 665,539 620,933
University of Minnesota................. 4,408,023 3,966,039
Mississippi State University............ 3,646,818 3,379,946
University of Missouri.................. 4,203,065 3,779,792
Montana State University................ 1,872,053 1,707,550
University of Nebraska.................. 2,982,940 2,694,402
University of Nevada.................... 1,085,480 1,004,493
University of New Hampshire............. 1,284,440 1,176,522
Rutgers University...................... 2,550,764 2,357,458
New Mexico State University............. 1,447,638 1,335,273
Cornell University...................... 4,073,261 1,160,533
Geneva Agricultural Experiment Station, 844,749 3,303,057
New York...............................
North Carolina State University......... 5,832,192 5,336,874
North Dakota State University........... 2,140,714 1,953,390
Northern Marianas College............... 618,931 578,649
Ohio Agricultural Research and 5,239,762 4,713,040
Development Center.....................
Oklahoma State University............... 2,769,030 2,514,850
Oregon State University................. 2,534,798 2,296,891
Pennsylvania State University........... 5,478,414 4,955,275
University of Puerto Rico............... 3,732,045 3,528,403
University of Rhode Island.............. 1,105,048 1,023,684
Clemson University...................... 3,054,848 2,811,649
South Dakota State University........... 2,191,946 1,991,904
University of Tennessee................. 4,297,820 3,929,481
Texas A&M University.................... 5,796,678 5,232,730
Utah State University................... 1,663,792 1,532,426
University of Vermont................... 1,296,705 1,192,929
College of the Virgin Islands........... 750,754 698,789
Virginia Polytechnic Institute.......... 3,716,142 3,397,715
Washington State University............. 3,282,091 2,909,660
West Virginia University................ 2,390,045 2,197,781
University of Wisconsin................. 4,528,655 4,082,223
University of Wyoming................... 1,380,124 1,270,939
-------------------------------
Subtotal.......................... 159,380,193 145,142,514
Biotechnology Risk Assessment........... 203,600 203,600
Current Research Information System..... 219,318 218,900
Federal Administration.................. 4,826,409 4,374,549
Small Business Innovation Research...... 4,097,690 3,732,437
Undistributed........................... 6,790 ..............
-------------------------------
Total............................. 168,734,00 153,672,000
------------------------------------------------------------------------
MC INTIRE-STENNIS FORESTRY DISTRIBUTION, FISCAL YEARS 1998 AND 1999
------------------------------------------------------------------------
Fiscal year--
Recipient -------------------------------
1998 1999
------------------------------------------------------------------------
University, Alabama..................... $668,802 $648,208
University of Alaska, Fairbanks......... 441,352 427,762
Northern Arizona University............. 151,177 146,522
University of Arizona................... 151,177 146,522
Agricultural Experiment Station, 567,713 550,232
University of Arkansas.................
California Polytechnic State University. 30,281 29,349
California State University, Humbolt.... 90,843 88,046
University of California................ 484,497 469,578
Colorado State University............... 277,083 268,551
Connecticut Agricultural Experiment 160,427 155,486
Station................................
Storrs Agricultural Experiment Station.. 53,475 51,829
University of Delaware, Agricultural 74,905 72,599
Experiment Station.....................
University of Florida Agricultural 529,805 513,491
Experiment Station.....................
University of Georgia School of Forest 694,074 672,702
Resources..............................
University of Guam...................... 36,996 35,857
University of Hawaii.................... 125,449 121,586
University of Idaho..................... 428,716 415,515
Southern Illinois University............ 163,813 158,769
University of Illinois.................. 163,813 158,769
Purdue University....................... 352,899 342,032
Iowa State University, Agriculture and 239,174 231,809
Home Economics Experiment Sta- tion...
Kansas State University................. 163,358 158,328
University of Kentucky Agricultural 390,808 378,774
Experiment Station.....................
Louisiana State University, School of 406,244 393,735
Forestry...............................
Louisiana Technological University, 174,105 168,744
School of Forestry.....................
University of Maine..................... 542,441 525,738
University of Maryland.................. 226,538 219,562
University of Massachusetts............. 251,810 244,056
Michigan State University............... 197,662 191,576
Michigan Technological University....... 197,662 191,576
University of Michigan.................. 197,662 191,576
University of Minnesota................. 491,896 476,749
Mississippi State University............ 618,257 599,220
University of Missouri, School of 403,444 391,021
Forestry...............................
University of Montana, Forestry and 416,080 403,268
Conservation Experiment Station........
University of Nebraska.................. 175,994 170,575
University of Nevada, Mac C. Fleischmann 112,813 109,339
College of Agriculture.................
University of New Hampshire............. 314,991 305,292
Rutgers State University, Agricultural 188,630 182,822
Experiment Station.....................
New Mexico State University, Las Cruces. 264,446 256,303
Cornell University New York College of 157,723 152,866
Agriculture & Life Sciences............
State University of New York, College of 473,170 458,599
Environmental Science and Forestry.....
North Carolina State University......... 656,166 635,961
North Dakota State University of 87,541 84,845
Agriculture and Applied Sciences.......
Ohio Agricultural Research and 365,535 354,279
Development Center.....................
Oklahoma State University............... 340,263 329,786
Oregon State University................. 681,438 660,455
Pennsylvania State University, 479,260 464,503
Agricultural Experiment Station........
University of Puerto Rico, Agricultural 100,177 97,092
Experiment Station.....................
University of Rhode Island.............. 62,269 60,352
Clemson University College of Forestry 504,533 488,997
and Recreation Resources...............
South Dakota State University........... 150,721 146,080
University of Tennessee................. 453,988 440,009
Stephen F. Austin State University, 277,538 268,992
Texas..................................
Texas A&M University Agricultural 277,538 268,992
Experiment Station.....................
Utah State Agricultural Experiment 138,085 133,833
Station................................
University of Vermont................... 289,719 280,798
College of the Virgin Islands........... 49,633 48,105
Virginia Polytechnic Institute and State 517,169 501,244
University.............................
University of Washington, Seattle....... 353,941 343,042
University of Washington, Pullman....... 289,588 280,671
West Virginia State University.......... 378,171 366,526
University of Wisconsin, Agricultural 466,624 452,256
Experiment Station.....................
University of Wyoming, Laramie.......... 201,266 195,069
-------------------------------
Subtotal.......................... 19,373,368 18,776,820
Biotechnology Risk Assessment........... 10,560 11,670
Federal Administration.................. 614,910 596,460
Small Business Innovation Research...... 497,052 497,050
Undistributed........................... 1,110 ..............
-------------------------------
Total............................. 20,497,000 19,882,000
------------------------------------------------------------------------
SMITH-LEVER ACT FORMULA DISTRIBUTION, FISCAL YEARS 1998 and 1999
------------------------------------------------------------------------
Fiscal year--
Recipient -------------------------------
1998 1999
------------------------------------------------------------------------
Auburn University, Alabama.............. $5,738,475 $5,562,676
University of Alaska, Fairbanks......... 870,391 828,156
American Samoa Community College........ 736,517 703,019
University of Arizona................... 1,513,585 1,449,471
University of Arkansas.................. 4,850,041 4,696,680
University of California................ 6,064,473 5,779,244
Colorado State University............... 2,373,372 2,269,074
University of Connecticut............... 1,781,924 1,707,114
University of Delaware.................. 1,025,832 978,127
University of the District of Columbia.. 969,600 930,816
University of Florida................... 3,558,379 3,378,724
University of Georgia................... 6,493,544 6,257,748
University of Guam...................... 777,947 741,084
University of Hawaii.................... 1,074,339 1,030,628
University of Idaho..................... 2,153,613 2,056,420
University of Illinois.................. 7,905,234 7,582,368
Purdue University....................... 7,150,565 6,837,316
Iowa State University................... 7,598,038 7,267,756
Kansas State University................. 4,409,772 4,234,361
University of Kentucky.................. 7,466,040 7,176,537
Louisiana State University.............. 4,307,994 4,163,916
University of Maine..................... 1,790,309 1,711,553
University of Maryland, College Park.... 2,697,447 2,586,754
University of Massachusetts............. 2,225,754 2,132,773
Michigan State University............... 7,194,178 6,898,070
College of Micronesia................... 803,547 766,721
University of Minnesota................. 7,086,676 6,789,427
Mississippi State University............ 5,909,404 5,749,625
University of Missouri.................. 7,004,428 6,716,369
Montana State University................ 2,014,211 1,920,762
University of Nebraska.................. 4,010,637 3,840,410
University of Nevada, Reno.............. 880,746 837,279
University of New Hampshire............. 1,295,027 1,229,026
Rutgers State University................ 2,190,333 2,097,562
New Mexico State University............. 1,619,830 1,552,146
Cornell University...................... 6,745,302 6,480,044
North Carolina State University......... 9,737,913 9,414,296
North Dakota State University........... 2,759,959 2,654,162
Northern Marianas College............... 715,969 678,974
Ohio State University................... 8,698,850 8,329,015
Oklahoma State University............... 4,424,317 4,258,973
Oregon State University................. 2,847,258 2,708,483
Pennsylvania State University........... 8,460,245 8,115,338
University of Puerto Rico............... 5,924,226 5,816,432
University of Rhode Island.............. 868,752 828,474
Clemson University...................... 4,733,086 4,571,842
South Dakota State University........... 2,867,580 2,746,539
University of Tennessee................. 7,111,332 6,869,667
Texas A&M University.................... 9,966,767 9,577,519
Utah State University................... 1,323,262 1,268,151
University of Vermont................... 1,422,167 1,358,636
Virginia Polytechnic Institute and State 5,910,496 722,398
University.............................
College of the Virgin Islands........... 757,647 5,699,938
University of Washington................ 3,352,109 3,202,163
West Virginia State University.......... 3,430,810 3,312,357
University of Wisconsin................. 7,086,051 6,781,845
University of Wyoming................... 1,202,245 1,147,478
-------------------------------
Subtotal.......................... 225,888,545 217,002,436
Special Needs Formula................... 1,043,883 1,002,128
Special Needs Projects.................. 477,852 458,738
CSRS Retirement \1\..................... 15,023,000 14,422,080
FERS Retirement......................... 3,841,500 3,687,838
Penalty Mail............................ 15,221,000 14,612,160
Federal Administration.................. 6,997,220 6,567,620
-------------------------------
Total............................. 268,493,000 257,753,000
------------------------------------------------------------------------
\1\ Estimated based on fiscal year 1997 actual.
Question. Why did the Department choose to cut funding for these
basic research programs even as the Administration was promoting the
need for increased funding for research?
Answer. The Administration advocates a broad range of funding
mechanisms in support of university-based agricultural research,
education, and extension. These mechanisms, including formula programs,
competitive grants, special grants and projects, and other programs--
such as Smith-Lever 3(d)--are interdependent and jointly contribute to
the success of our knowledge-based system of agriculture. The
priorities which define Federal support for programs in agricultural
science and education are developed through a collaborative, State/
Federal process of consultation with stakeholders, mutual planning, and
in almost all cases, joint investment. Due to budget constraints, we
have proposed decreases for Hatch Act, McIntire-Stennis Cooperative
Forestry, and Smith-Lever formula funding to generate the resources
needed to address issues of broad public concern that cut across State
lines or other boundaries.
fund for rural america
Question. I am a strong supporter of the Fund for Rural America and
was especially pleased with the innovative approach the research office
took to implementing its portion of the program. However, I am growing
increasingly concerned about the results of the first round of funding.
I wrote to the Department in support of several Vermont applications to
the Fund almost a year ago. Decision dates on the awards have slipped
continually from an original target date of October I believe. To this
day, to my knowledge no announcements have been made regarding funding
awards. In addition, I have heard from a number of organizations which
had applied for funding, voicing confusion about calls they had
received from the Department which appeared to award them grants on one
hand, and then warn them that they might not actually receive the
funding. When will the Department be making Fund for Rural America
research awards?
Answer. The first round of Fund Planning Grants was made in
September, 1997. The second round of Fund Standard Grants is being made
in two increments; the first half was made in late February, 1998 and
the second half will be made in March, 1998 after completion of final
programmatic and administrative review.
Question. Will Congressional offices receive early notification as
is standard with grant awards? What caused the delay in making grant
awards?
Answer. Congressional Offices are being notified as is standard,
but with the lead time slightly reduced to get the Fund awards out
sooner. The USDA Congressional Relations Staff has been in contact with
their counter parts in the Members' Offices and notifications have been
hand delivered to expedite the process.
Delays in the first round of Fund awards relate to several factors.
Initial delays involved in designing and starting-up a new program.
These delays will be substantially reduced in the future. Secondly,
innovative design of the first round of Fund grants. The January, 1997
Request For Proposals included provision for two simultaneous proposal
submission, evaluation, and award tracks--one for Planning and Center
Grants and the other for Standard Grants. We plan to streamline
processes in round two by combining scientific and technical review
activities for all types of proposals related to similar problems,
issues, or scientific disciplines. In addition, the competitive grants
program of the Fund did not allocate dollars to issues prior to
receiving and reviewing proposals. This decision to support the best
proposals across a wide range of disciplines and functions required new
processes to support award recommendations. An overview panel to
evaluate the merit of grant recommendations across subject areas was
conducted to guide final award recommendations. The Fund legislation
also calls for a ``relevance review'' by the Research, Education,
Extension, and Economics Advisory Board. Together these factors worked
to delay awards 2-3 months beyond our plans.
Question. What problems led to the confusion with potential
recipients about awards, and what steps is the Department taking to
ensure that these problems do not recur?
Answer. In an effort to fund as many high quality proposals as
possible, Fund staff entered into discussions with investigators about
focusing proposed work on specific objectives and possible budget
savings. Many applicants interpreted budget negotiations and poorly-
worded staff correspondence as a commitment prior to final award. The
Department decided to postpone Center Grant awards. This allowed Fund
staff to expand the number of grants funded, but also entailed changing
signals to grant applications who otherwise would not have been funded.
Given the number of proposals received and the dollars available
for award, the Fund success rate is about 10 percent. This means there
are substantial numbers of excellent proposals which cannot be
supported by the program this year.
Question. I am also very concerned about the gap in funding for the
Fund. A drafting error in the Farm Bill inadvertently eliminated
funding for the initiative in fiscal year 1998. I have been working
with my colleagues on the Agriculture Committee to restore this funding
in a agriculture research authorization bill. However, I have been
disappointed by the lack of active support from the Department for
efforts to resolve this problem and restore the Fund in fiscal year
1998. If funding for the program is restored for fiscal year 1998, will
the Department be ready to publish a request for proposals and
administer a competition in fiscal year 1998, and when would that RFP
be published?
Answer. The Department will move expeditiously to announce a fiscal
year 1998 competition should the language in question be passed. Even
if the language remains as in the original enabling legislation, we
plan to release the second Fund Request For Proposals later in fiscal
year 1998 in order to make the second round of grants as early in
fiscal year 1999 as possible.
Question. The fiscal year 1997 competition focused on several
specific areas of research. What areas of research, education, or
extension will the Department focus on in an fiscal year 1998
competition?
Answer. The first program description and request for proposals
(RFP) for the FRA competitive grants program emphasized integrated
research, education, and extension activities designed to address
practical, short to intermediate term problems that cut across
agriculture, environment, and rural development. This first RFP was
designed to solicit a broad range of proposals in which the importance
of problems would be established through community relevance as
described in the proposal. The second Request For Proposals will
address these same concerns, but with a significant tightening in award
criteria and more program explanation designed to reduce the number,
while maintaining the quality, of the proposals submitted.
For example, we will clarify integration, client/stakeholder
linkage, and evaluation criteria. We also plan to include extensive
reporting of award examples in the RFP text in an effort to improve
guidance to the research, education, and extension communities.
Hopefully, these efforts will allow us to continue funding an unusually
strong, balanced portfolio of grants, while reducing the cost of
competition to the community and program managers.
Question. Will the Department consult with the authorizing and
appropriation committees when deciding on the focus of a potential
fiscal year 1998 competition?
Answer. The Department is considering authorizing and appropriating
committee concerns about the next RFP as expressed though vehicles such
as these hearings and other communications. We also are prepared to
brief committee and member staff in greater detail on the awards made
from fiscal year 1997 funds and regarding plans for the next round of
Fund activities.
______
Economic Research Service
Questions Submitted by Senator Cochran
food and nutrition program research
Question. The President when signing the fiscal year 1998
Appropriations Act last November, noted in his statement his concern
about the provision in the bill transferring funding for research on
nutrition programs from the programs' administration to the Economic
Research Service (ERS). The President's fiscal year 1999 budget
proposes to transfer this funding back to the Food and Nutrition
Service (FNS). Would you please explain how the ERS is executing the
nutrition research and evaluation program transferred to it from the
Food and Nutrition Service for fiscal year 1998 and why the
Administration believes that ERS is not the appropriate agency to
oversee and administer these research funds?
Answer. The Economic Research Service has developed a comprehensive
research program for addressing the needs of the Nation's food
assistance and nutrition programs. The ERS food and nutrition
assistance research program includes three broad areas of research: (1)
dietary and nutrition outcomes, (2) program targeting and delivery, and
(3) program forecasting and budget analysis. The dietary and
nutritional outcomes area includes studies of program impacts on
enhancing the access and choice of palatable, nutritious, and healthy
diets of program participants. The program targeting and delivery area
addresses how successful the programs are at targeting and reaching
needy, at-risk population groups; program gaps and overlap; difference
between rural and urban program delivery; outreach; waste, fraud and
abuse; commodity procurement and distribution; public and private
partnerships; and alternative benefit delivery mechanisms. The third
area, program forecasting and budget analysis, focuses on how program
needs change with local labor market conditions, economic growth,
recession, food price inflation and general inflation; how changing
State welfare programs interact with food and nutrition programs; and
projections of program participation, benefit levels, and overall
budgetary needs.
ERS has consulted with many government agencies, private and
nonprofit organizations, universities, and the Food and Nutrition
Service to solicit input for program development. A recent conference
conducted under the auspices of the National Academy of Sciences was
sponsored by ERS to help design and focus the program. ERS plans to
operate a nationally diverse program which draws on the research
capabilities of the public and private sectors, including the nation's
academic institutions.
Despite the excellent work that ERS has done, the Administration
believes this research and evaluation program should be administered by
the Food and Nutrition Service. FNS has detailed knowledge of the
country's food programs and, because they administer and have oversight
responsibility for the programs, they understand their research and
evaluation needs.
Question. How has shifting the $18.5 million for evaluations of
food stamp, child nutrition, and WIC programs to the ERS from FNS
affected full-time equivalent (FTE) personnel requirements?
Answer. ERS has not used any of the $18.5 million allocation to
hire new staff nor has any of this money been used to support existing
staff. ERS has, however, reallocated existing resources to address this
important activity and has assigned some of the most senior management
and research staff to this. A new position, Deputy Director for Food
Assistance Research, was created to help administer the program. Nearly
20 researchers have been directed to focus on food assistance issues.
These researchers will help implement our extramural research program.
ERS's senior administrative officer has also been detailed to this
project to manage the business side of the operation and the
Agriculture Research Service's Contracts Office that supports this
project has also given this activity its highest priority.
Question. What FTE reductions, if any, are associated with the
fiscal year 1999 budget proposal to transfer funding for the research
program from ERS back to the FNS?
Answer. Since ERS has reallocated and detailed existing staff to
support this project, we do not foresee any need for FTE reductions
associated with the transfer of funding back to FNS in the fiscal year
1999 budget proposal.
situation and outlook reports
Question. There was concern earlier this year among some commodity
groups regarding the possible reduction in frequency of the publication
of certain Situation and Outlook Reports. Please summarize for the
Committee which groups expressed concern and the nature of their
concern. What change was made in the distribution of these reports and
why? Has ERS now reassured the concerned commodity groups that they
will have continued access to all necessary information provided in the
Situation and Outlook Reports?
Answer. Field crop and livestock reporting has been reduced in most
cases from 12 monthly reports to 6 reports annually. Annual yearbooks
for these commodities continue to be produced. Specialty crop reports
have been reduced by 1 issue each year.
Report frequency has been reduced in order to free a small amount
of additional time for ERS analysts to pay more attention to
maintaining and improving the quality of ERS and USDA forecasts and
market analysis. In past years, short-term outlook reporting has been
maintained and even expanded as staff has declined, at the expense of
research and analysis to support USDA forecasts and commodity analysis.
In the judgement of Agency management, this could not continue without
compromising the quality of Departmental analysis. ERS continues to
fully participate in the monthly Departmental estimates process, and
the additional research will improve the quality of these estimates and
commodity analysis support for the Department and other clients.
ERS has heard directly from: the American Sugar Alliance; the
National Cotton Council; a number of firms and associations concerned
with cottonseed production and marketing; and several private purveyors
of livestock information, news, or newsletters. Members of the American
Sugar Alliance (ASA) expressed an overall concern about the quantity of
ERS resources devoted to sugar market analysis and reporting, as well
as specific concerns about frequency and accessibility of sugar market
information reporting, and of ERS's role in the Department's
interagency commodity estimation committee process. They were greatly
relieved to learn that ERS is not planning any modification of its role
in the interagency process, at least for the short run. But ASA appears
to remain concerned about ERS levels of resource allocation to sugar
market analysis.
The National Cotton Council's (NCC) communication with ERS took the
form of a request for more information about and explanation of planned
changes, rather than a particular complaint. ERS staff briefed an NCC
official, with apparent success.
Cottonseed interests were dismayed by ERS cancellation of a
monthly, autoFAXed fact sheet on the forecasted supply of and demand
for cottonseed. As a consequence of feedback from the industry, that
cottonseed data series has been reestablished and now appears in the
agency's Oilseeds Situation and Outlook Report, although it is now
available 6 rather than 11 times per year.
The private firms that make their livelihood by repackaging,
summarizing, or interpreting periodic information released by ERS on
livestock market indicators remain concerned that they will have less
frequent access to the information that acts as a feedstock for their
own services. ERS plans to help direct these firms to the original
sources (such as the Commerce Department) of some of that ERS-reported
information, and will continue to make the full set of information
available at a reduced frequency of reporting.
ERS is expanding its electronic distribution of material through
developing commodity briefing rooms on our Web site, through continued
monthly e-mail dissemination of critical data, and through some
increase in the content of tables in Agricultural Outlook magazine. We
have also been meeting and talking with commodity and industry groups,
and listening to their needs and concerns. We have accommodated most of
the concerns expressed by our clients and are convinced that we will be
delivering products that are better and more useful for most of them.
electric utility deregulation
Question. ERS is requesting an increase of $200,000 for an
interagency research activity with USDA's Rural Utilities Service (RUS)
and the Department of Energy (DOE) to expand REE's capacity to assess
the potential impacts of electric utility deregulation. Will this
project be completed in fiscal year 1999, or do you anticipate funding
request in future fiscal years? Will RUS and DOE fund any portion of
the research project? If so, how much is being provided by each agency?
If not, why? What will be the role of each agency in this project?
Answer. We expect that ERS will be asked to extend its research on
issues associated with electric utility deregulation for one additional
fiscal year beyond fiscal year 1999.
DOE is not funding any portion of the research project beyond its
commitment to provide a series of model runs, using its Policy Office
Energy Modeling System, (POEMS), to provide input into the analytic
framework being developed by ERS. RUS has agreed to provide $100,000 in
fiscal 1998 to partially support ERS analysis of electric utility
deregulation issues of interest to them. In addition, RUS has indicated
a willingness to fund necessary POEMS model runs required to support
the ERS analysis, in the event DOE does not provide ERS the needed
model runs.
Using ERS developed scenario assumptions, DOE has committed to
provide ERS with the output of several model runs of its POEMS model.
DOE has not yet provided the requested model runs because it is still
calibrating its POEMS model. RUS has made operational and trade area
data on rural electric cooperatives available to ERS. ERS is making
available its rural economic and farm cost and returns survey data
bases, certain modeling capability, and providing primary support to
persons who are conducting analyses on the effects of electric utility
deregulation on rural consumers, businesses, farmers and on the
competitiveness of rural regions.
food safety initiative
Question. ERS is requesting an increase of $906,000, for a total
budget request of $1,391,000, for an interagency research effort to
understand the benefits and costs of programs and policies to improve
the safety of the Nation's food supply. Considering that this is a
collaborative effort, please provide the Committee with a prioritized
account of how the ERS funds will be spent, and what other agency
funding will be contributed to this effort, by agency. How will the
research being conducted by ERS differ from that conducted by other
USDA agencies, the Food and Drug Administration, and the Centers for
Disease Control? What measures are being taken to ensure there is no
duplication of research efforts?
Answer. Our funding request falls into three categories. The first
is surveillance activity--ERS is asking for $253,000 (an increase of
$253,000 from fiscal year 1998). Other agencies contributing to this
effort include the USDA Food Safety and Inspection Service (FSIS)--
$1,500,000 (no change from 1998), Food and Drug Administration (FDA)--
$6,038,000 ($2,200,000 increase from 1998), and the Centers for Disease
Control and Prevention (CDC)--$19,000,000 ($4,500,000 increase from
1998).
The second category is for risk assessment and cost/benefit
analysis--ERS is asking for $686,000 (an increase of $653,000 from
fiscal year 1998). Other agencies contributing to this effort are USDA
Agricultural Research Service (ARS)--$4,818,000 (increase of $320,000
from 1998), USDA Cooperative State Research, Education, and Extension
Service (CSREES)--$1,962,000 (increase of $1,812,000 from 1998), FSIS--
$1,000,000 (increase of $1,000,000 from 1998), USDA Office of the Chief
Economist (OCE)--$158,000 (increase of $98,000 from 1998), and FDA--
$13,532,000 (increase of $7,200,000 from 1998).
The third category is for educational efforts to promote food
safety. ERS is asking for $420,000 (no increase from fiscal year 1998).
Other agencies contributing to this effort are CSREES--$7,365,000
(increase of $5,000,000 from 1998), FSIS--$2,500,000 (increase of
$2,500,000 from 1998), USDA Food and Nutrition Service (FNS)--
$2,000,000 ($2,000,000 increase from 1998), and OCE--$420,000 (no
increase from fiscal year 1998).
ERS plans to use the increased appropriation to support
collaborative research in food safety economics. We plan to fund
extramural research with cooperators in the land grant university
system, and to work cooperatively with economists from the Centers for
Disease Control and Prevention, Food Safety and Inspection Service, and
the Food and Drug Administration. Working collaboratively in this
manner will allow us to leverage our resources to support expanded
research without adversely affecting other components of the ERS
program.
ERS is the only USDA agency conducting research on the economics of
improved food safety--the benefits of safer food and the economic
consequences of interventions in the food system to reduce or prevent
microbial contamination of the food supply. We are collaborating with
economists from CDC and FDA in the ``FoodNet'' surveillance program to
develop better national-level estimates of the benefits of improving
food safety. We are also conducting research on how providing
information on food safety through education, outreach, and food
labeling can help influence consumer behavior and encourage safer food
handling and preparation practices. We will be working with FSIS to
provide guidance on how consumers make choices regarding safe food
handling and preparation. This will enable USDA to more effectively
target educational efforts under the Food Safety Initiative to promote
awareness of food safety and help consumers protect themselves from
foodborne health risks.
ERS is represented on multiple committees charged with the
development of research plans under both the National Food Safety
Initiative and the Initiative to Ensure the Safety of Imported and
Domestic Fruits and Vegetables. We are actively coordinating with
economists from CDC and FDA to ensure that our research efforts
represent true inter-agency collaboration and to ensure that we are not
duplicating efforts. The National Food Safety Initiative established
the Risk Assessment Consortium, as part of the Joint Institute for Food
Safety and Applied Nutrition, a collaborative activity of the FDA's
Center for Food Safety and Applied Nutrition and Center for Veterinary
Medicine and the University of Maryland. ERS is a member of this
Consortium, which includes scientists from many Federal agencies, as
well as from the academic community and the private sector. ERS will
work collaboratively with consortium members to provide economic
assessment of food safety risk management and risk reduction
strategies, with an emphasis on food safety risks from microbial
pathogens.
small farmers
Question. ERS is requesting an increase of $350,000 to organize and
lead an interagency research activity to assess whether or not USDA is
meeting the information needs of small farmers, niche marketers, and
other casualties of an industrializing agricultural sector. Will this
project be completed in fiscal year 1999, or do you anticipate funding
requests in future fiscal years? Please provide the Committee with an
account of how the $350,000 will be spent. How will ERS' involvement in
this initiative relate, for example, to the CSREES $4 million request
to support integrated research and education activities to address the
resource constraints on small farmers?
Answer. The request is for a one-year, one-time budget increase.
The full funding will be obligated in fiscal year 1999, although the
project may not be completed until sometime in fiscal year 2000. We do
not anticipate the need for funding beyond fiscal year 1999.
The vast majority of the funding will spent on focus group and
survey methodology, the development of survey instruments, and the
implementation, editing, and analysis of a broad scale survey
questionnaire. We expect that most of that work will be obtained
through cooperative research agreements and/or contracts. The only in-
house expenditure foreseen is to hire a full-time but temporary
research assistant to act as project officer and liaison between ERS
project managers and the Agency's cooperators in carrying out the
project.
The proposed ERS project is unique in that it investigates the
commodity market, marketing, financial, and other economic information
needs of small and socially disadvantaged farmers. Its findings should
serve as a guide to public data collection and economic reporting
programs, as distinct from extension information programs focused on
dissemination and customization of related data and information.
Certainly, though, this project's findings should be complementary to
CSREES efforts.
Question. Regarding the research project to assess the information
needs of small farmers, you state in your prepared testimony that
subsequent plans would be designed to reform and modify USDA programs
in the manner suggested by the assessment. What role will ERS play in
monitoring the implementation of any recommended changes?
Answer. The implementation of recommended changes in the ERS market
analysis and information program will be monitored in-house in order to
provide documented input into the Agency's GPRA assessments.
county-based study
Question. The Secretary indicated when he testified before this
Committee that USDA now has an outside consulting firm conducting a
workload study of the farm and rural program delivery system of
country-based agencies. Did the ERS contract out for this study? If so,
what is the cost of this study and from where were those funds taken?
What has the consulting firm been told to look at specifically?
Answer. The Department has contracted with Coopers and Lybrand, the
accounting and consulting firm, for a study concerning the operation of
the USDA county-based agency operations. The goal of the study is the
identification of alternative approaches to organizing and staffing
these offices in delivering services that are: (1) clearly linked to
Federal policy and program priorities and (2) transparently managed to
meet Federal budget targets. Although the ERS Administrator has
responsibility for the project's management, no ERS appropriations were
used to support the $800,000 contract, which is funded by CCC, FSA,
NRCS, and RD. ERS participates only to the extent that it responds to
requests for data or analyses in accordance with its usual
responsibilities. A detailed statement of work for the county study has
been prepared, and if requested, could be provided to the Committee.
ers reimbursement policy
Question. In the fiscal year 1998 Appropriations Act, the committee
encouraged the Department to consider the relationship between the core
analytical program of the ERS and the short-term and longer-term needs
of other USDA program agencies, including the circumstances under which
reimbursement to the ERS would be appropriate. Has the Department
carried out this Committee directive? How has ERS' core analytical
program been defined and under what circumstances will ERS be able to
charge USDA agencies for research more specific to their short and
longer-term needs?
Answer. ERS has adopted a reimbursement policy which broadly
defines the agency's core analytical program and the circumstances
under which full or partial reimbursement will be sought as a condition
for providing services to other agencies. When reimbursement is
determined to be appropriate, the level of reimbursement is negotiated
between ERS and the requesting agency. Since most program agencies have
a staff of economists, ERS seeks to design its assistance so as to
emphasize development of the program agency's capacity to perform its
own short-term, program-oriented analyses.
The ERS reimbursement policy is as follows: The ERS core program of
research and analysis is aimed at understanding key relationships and
causal factors underlying economic behavior, trends and resource
management decisions in the food, agricultural, and rural sectors. This
body of work is informed by the longer run analytical needs of USDA
program agencies, as identified in a collaborative process with ERS,
and changes to accommodate shifts in their research requirements. When
program agencies seek assistance that is not a component of this core
research program (for example, risk assessments, cost-benefit analyses,
or program evaluations), such work should be performed by ERS only on a
reimbursable basis. Recognizing that the program agencies employ half
of the Department's economists, ERS assistance should emphasize
development of the program agency's capability to perform its own short
term, program-oriented analyses.
Question. How much ERS research is conducted in-house and how much
is contracted out?
Answer. In fiscal year 1997, 4 percent of ERS research was
contracted out.
Question. Please explain the increased funding for the following
object classifications from the fiscal year 1997 to the fiscal year
1998 level: (1) travel, (2) printing and reproduction, and (3) research
and development contracts and agreements.
Answer. All of these projected increases are due to the fiscal year
1998 appropriation increase to evaluate food stamp, child nutrition,
and WIC programs.
prioritizing research projects
Question. How does ERS prioritize the research projects it conducts
for other USDA agencies and other organizations with the agency's
normal workload? Please provide the Committee with a prioritized list
of projects planned for fiscal year 1998.
Answer. ERS develops and maintains an integrated set of division
plans of work (a part of the GPRA process). Each division conducts an
intensive review and planning process annually, but the work plans are
considered living documents that are continually reviewed and revised
as problems, issues and conditions change. The work plans are developed
taking into account the analytical needs of the Department and its
program agencies. These needs are communicated to ERS in a number of
ways. Some come in the form of specific requests for short-or long-term
assistance and studies but, more frequently, needs are jointly
identified though continuing exchange of information and discussion.
For example, FAS and ERS have formed a Senior Coordination Task Force,
co-chaired by the agencies' Associate Administrators which has a
standing monthly meeting scheduled for exchange of information on
program status and communication of needs and requests. Also, ERS
participates regularly in the weekly staff meeting held by the Chief
Economist. Similar but usually less formal exchange takes place with
other agencies. The ERS Administrator has also initiated a series of
briefings for senior managers of the Department's Mission Areas. The
purpose of these briefings is to discuss analytical work ERS has done
and is doing in support of that Mission Area and to elicit comments on
the degree to which this work is meeting needs. Thus, many of the
projects ERS does for other agencies are totally integrated into and
are considered a part of the core program of the agency. Projects that
are less closely related to our core program and for which
reimbursement is received are considered of lower priority but, since
reimbursement is received, additional resources are available so that
these projects do not substitute for higher priority projects. Normally
work plans do not rank order projects other than to identify those that
are congressionally mandated and a selected few, usually inter-
divisional projects, that have been identified as especially time or
policy sensitive.
As an indication of the extent and variety of analytical work done
in support of other agencies the latest compilation of such projects is
attached. If the Committee would also like copies of current division
work plans, these can be provided.
[The information follows:]
ERS Research Supporting USDA Agencies
agricultural marketing service (ams)
Analysis of the Effectiveness of the Dairy Promotion Programs.--
USDA is required to submit an annual report on the producer and
processor dairy promotion programs to the Congress by July 1 of each
year. ERS prepares an independent evaluation of both programs to ensure
program funds are properly accounted for and that the programs are
administered in accordance with the respective acts and orders.
Regulatory Flexibility Act (RFA) Analysis.--The RFA requires that
AMS make initial and final regulatory analyses available to the public
whenever a proposed rule or rule change under a federal marketing order
would have an economic effect on small handlers of products under the
marketing order. ERS has developed a spreadsheet-based modeling
structure for AMS use in analyzing the effect of marketing rule changes
on small handlers.
agricultural research service (ars)
Evaluation of Agricultural New Uses Research.--The ERS Office of
Energy is working with ARS and the University of California-Davis to
develop technical information on soyink and wheat starch as a concrete
substitute. ERS will help develop a specific set of economic procedures
for setting priorities for new uses research.
center for nutrition policy and promotion (cnpp)
Technical Assistance on the USDA Thrifty Food Plan.--ERS provided
technical assistance and price data to assist CNPP in making revisions
to the thrifty food plan. The project is completed.
cooperative state research, education, and extension service (csrees)
Sustainable Agriculture Economic Impact Study.--The objective of
this study led by CSREES and the Environmental Protection Agency is to
determine the implications of widespread adoption of more sustainable
production systems in the United States. ERS is coordinating six
cooperative agreements with the Universities of Maryland, Montana
State, Nebraska, Ohio State, Tennessee, and Washington State. ERS will
submit cooperator reports with an overview and summary to CSREES.
National Environmental Monitoring.--ERS helps CSREES by being a
reviewer of environmental monitoring research efforts.
farm service agency (fsa)
Implementation of the Conservation Reserve Program.--ERS provides
economic analysis of alternative program levels, analyzes environmental
impacts of the Conservation Reserve program, and evaluates long-run
scenarios for establishment of minimum environmental benefit index
levels for sign up acceptance. ERS has assembled data and developed air
and water quality scoring look-up tables for use by local FSA and NRCS
offices for EBI scoring of offers.
Evaluation of Commodity Procurement Procedures.--ERS conducted a
case study for peanuts and flour to identify any commodity procurement
practices that could prevent FSA from making efficient use of funds and
to examine the cost effectiveness of alternative procurement practices.
Annual Cotton Transportation Cost Study.--ERS estimates the cost of
marketing U.S. cotton in northern Europe which is determined in part by
transportation costs. This cost estimate is need by FSA to calculate
the adjusted world price (AWP).
food and nutrition services (fns)
Household Food Insecurity and Hunger Validation Studies.--ERS is
analyzing the extent to which household's reporting food insufficiency
have lower nutrient intakes. Data from the 1989-91 Continuing Survey of
Food Intake by Individuals (CSFII) will be used to assess the
relationship between the ``USDA food sufficiency'' question and
nutrient intake of all household members.
Determinants of Food Behaviors.--ERS is developing a concept paper
to identify issues, problems, data, and alternative modeling approaches
for developing comprehensive food and agriculture policy models.
Emphasis is being directed to linkages and relationships among low
income populations, food and nutrition programs, farm programs and
policies, and the food production, processing, and marketing system.
The concept paper will be the basis for future program developments.
Impacts of Household Resource Constraints on Food Sufficiency.--ERS
will analyze the determinants of food insufficiency using data from the
Survey of Income and Program Participation (SIPP). The survey provides
information on proximal causes of food insufficiency including a lack
of money or food stamps to buy food, a lack of working kitchen
facilities, a lack of transportation, and nonparticipation in available
food programs.
food safety and inspection service (fsis)
User Fees for Meat and Poultry Inspection.--ERS is conducting a
broad-based evaluation of the issue of charging user fees for meat and
poultry inspection. The study includes reviewing economic literature
dealing with user fees and other charges levied against the private
sector in support of public health and safety. Use of fees elsewhere in
Government and in other countries will also be included.
Economic Support for Food Safety Regulations.--ERS is responding to
a FSIS request in three areas. The research includes providing
methodology for estimating the costs of illness from bacterial
foodborne diseases, developing a common methodology for valuing loss of
life, and developing a shared data system to facilitate analysis of
entry and exit and efficient plant scale in the meat industry. The
effort includes helping FSIS in doing cost/benefit analyses of proposed
FSIS regulations. Foreign Agricultural Service (FAS)
Analysis of Trade Agreement Snapback Provisions.--The tariff
snapback provision of the Canada-U.S. Trade Agreement requires
monitoring acreage and market prices for fresh market fruits and
vegetables. ERS maintains a spreadsheet acreage database with the
acreage data and formulas required to determine acreage-based snapback
eligibility. This information is regularly provided to FAS.
Analysis of Chile's Policies and NAFTA Accession.--ERS has an
ongoing project to assess economic implications of an expansion of
NAFTA to include Chile in support of a Free Trade Area of the Americas
(FTAA).
Analysis of Trade Promotion Programs.--ERS is working with FAS and
the Trade Promotion Coordinating Council (TPCC). The TPCC is
coordinated by OMB. The ERS role is to provide government agencies
participating in the TPCC with technical assistance to analyze the
costs and benefits of trade promotion ERS was specifically asked to
assist in the process by using Computable General Equilibrium modeling
capabilities.
Federal Interagency World Food Summit Working Group.--ERS is
inventorying existing research and determining the need for additional
research in support of USDA World Food Summit follow-up Activities.
Ukrainian Emerging Democracies Project.--ERS is working with
Ukrainian analysts to establish an on-going Ukrainian capability of
producing a series of commodity reports and to develop the capability
to analyze policy issues. The project includes help in establishing
dissemination procedures and training of analysts in preparing and
delivering briefings for agricultural decisionmakers.
China Technical Assistance Project.--ERS is providing technical
assistance to Chinese analysts for the purpose of establishing
commodity supply and demand balance sheets with short-term forecasts
for major commodities.
Bulgarian Policy Analysis.--ERS initially provided a resident
advisor to the Bulgarian Ministry of Agriculture in addition to
training Bulgarian analysts to conduct analysis of agricultural and
trade policy issues. Additional training of new analysts will be
conducted in cooperation with analysts from the Polish Institute of
Agriculture and Food Economics.
Agricultural Information in Transition Economies.--Transition
economies face difficulties in establishing agricultural information
systems. A conference was arranged for countries implementing
agricultural information systems. Follow up work has involved
establishment of Internet procedures and facilitating country to
country information exchanges.
Mexican Emerging Market Project.--ERS is collaborating with Mexico
to strengthen its market information and analysis system. This project
will significantly improve USDA's ability to serve the information
needs of the wide range of U.S. producer groups affected by
developments in Mexican agriculture.
Romania Emerging Democracies Project.--ERS is working with Romanian
analysts to establish an on-going series of commodity and policy issue
reports and to establish regular dissemination mechanisms to make the
information available to agricultural decisionmakers.
Taiwan Technical Assistance Project.--ERS provided assistance
through the American Institute in Taiwan to help develop a production
and marketing information system in Taiwan. This involved developing
commodity situation and outlook reports, quantitative models, and
database and survey methods. ERS provided training to help Taiwanese
analysts conduct policy alternative analyses. The project has been
completed.
Slovakia Policy Analysis ERS analysts helped the Slovaks to prepare
short analytical pieces on current policy issues.--The ERS role was to
help identify the problem, provided training in the methodological
tools needed to conduct analysis and review the final product. The
project has been completed.
forest service (fs)
Noxious Weeds.--The USDA Forest Service and the Bureau of Land
Management in the Department of Interior head up a Federal Interagency
Committee for Management of Noxious and Exotic Weeds. ERS is assisting
this committee by providing economic input to assess noxious weeds
issues. One of the ERS tasks is to manage a cooperative agreement with
the University of Maryland to develop methodology to assess the cost
effectiveness of management strategies to control noxious weeds.
grain inspection, packers and stockyards administration (gipsa)
Regional Hog Procurement Study.--ERS and NASS are analyzing hog
transaction data from four hog packers. The study is aimed at
developing better information regarding hog pricing and procurement in
the western cornbelt.
Assessment of Western Organization of Resource Council Petition.--
The Western Organization of Resource Councils has petitioned GIPSA to
make rules prohibiting certain procurement practices by meat packers. A
GIPSA team is tasked with making recommendation regarding GIPSA's
response to the petition. ERS is assisting the team to evaluate
economic arguments made in public comments.
natural resources conservation service (nrcs)
Florida Everglades.--ERS is assisting in developing the USDA action
plan for Federal-State Florida Everglades restoration efforts.
office of risk assessment and cost-benefit analysis (oracba)
Economic Support for HACCP Benefit/Cost Analysis.--ERS participated
in the Food Safety Working Group chaired by ORACBA and collaborated on
the development of a fault tree model for E. Coli 0157:h7 in hamburger.
ERS also provided assistance in the review of benefit/cost analyses
associated with Hazard Analysis at Critical Control Point (HACCP)
systems and other Departmental proposals for reducing pathogens in
meat, eggs, and poultry. This project has been completed.
office of the secretary, usda
Economic Impact of the Methyl Bromide Scheduled Phaseout.--USDA
policymakers need information about the economic impacts of the
scheduled phaseout of methyl bromide (MB) and the economic viability of
alternatives to MB. ERS is estimating economic impacts of the phaseout
of the use MB on important crops; including impacts on producers,
consumers, production, prices, and international trade. As part of this
effort, ERS is organizing workshops involving agricultural scientists,
grower groups, and the pesticide industry in an effort to assess and
share information.
office of the usda chief economist (oce)
NAFTA Monitoring Task Force.--ERS has a continuing effort to
monitor the impacts of the North American Free Trade Agreement (NAFTA).
ERS prepares periodic reports that cover agricultural commodity trade,
employment, environmental effects, and policy actions in the United
States, Mexico, and Canada.
Climate Change and Agriculture.--ERS took the lead in writing white
papers on the impact of climate change on agriculture and possible
impacts of climate change mitigation policies. The assignment included
preparing briefings in response to questions from the Senate on the
above issues. ERS provided ongoing support and analysis for the
Framework Convention on Climate Change.
office of the usda general counsel (ogc)
Assessment of IBP Trade Practices Case.--ERS assisted OGC critique
an industry analysis of IBP marketing practices and reviewed hearing
exhibits for economic relevance and analytic soundness.
risk management agency (rma)
An Examination of How Farm-Level Decisionmaking Affects Insurance
Decisions.--ERS is using time series farm business records from
Illinois and Kansas to examine how crop yield and revenue risk affect
the whole farm risk portfolio.
Development of a Dynamic Multi-Year Aggregate Risk Model to Assess
Policy Decisions.--ERS is developing a model to determine the
relationship between farm-level yield impacts and aggregate effects at
the national level. The assessment includes focusing on risk within the
year and also year-to-year interrelationships.
Yield Forecasting for Crop Insurance Premium Rate Setting.--ERS is
analyzing whether the estimates of means and variabilities of
individual farm yields can be improved by taking account of additional
county or nearby farm yield data
Analysis of Actuarial and Economic Issues Underlying Crop Insurance
Rate Setting.--ERS is examining whether premium rate discounts should
vary by unit size and if so, how the magnitudes of the discount would
vary by crop and region. Another area of work deals with factors used
to adjust the base county rate to farms with yields above and below the
base county yield. A third area focuses on premium rate variation
relating to length of continuous participation and crop and region.
Evaluation of Existing Crop Insurance Programs.--ERS is examining
the actuarial aspects of underwriting and other issues associated with
crop insurance for peanuts, potatoes, and peaches.
Feasibility Studies on Insuring Various Commodities.--ERS has
undertaken feasibility studies on insuring approximately 51
agricultural commodities.
Review of Alternative Revenue Insurance Products.--ERS has analyzed
various revenue insurance and market value protection products. Work is
now underway to assess the potential for producers to adversely select
among insurance products.
Risk Management Strategies Under the 1996 Farm Act.--Risk
management options being analyzed in this area of work include various
risk management tools such as crop insurance, revenue insurance, price
futures and options, and yield futures.
rural business-cooperative services (rbcs)
EZ/EC Background Assistance.--ERS is preparing economic information
packages for the use of local leaders to help them understand aspects
of community development and economic growth. The resource books are
based in part on community interviews. The resource book for the
Mississippi Delta is complete, the book for the Texas Rio Grande Valley
is nearly complete, and the interviewing stage in the Kentucky
Highlands has been completed.
rural housing service (rhs)
Rural Housing Service Research Initiative.--ERS is exploring the
feasibility of conducting surveys on the characteristics of
participants in the RHS single family and multifamily housing programs.
The surveys would provide a data base and analysis to help RHS assess
the match between RHS assisted housing and the demographic needs of
rural areas, develop performance indicators to measure program
effectiveness, and explore the effects of changing Federal policies on
RHS housing programs and their participants.
rural utilities service (rus)
Rural Electric Utility Deregulation.--The ERS Office of Energy is
exploring the issues involved in deregulating the electric utility
industry. The objective is to analyze the potential impact on
agriculture, rural areas, and rural development.
usda working group on water quality
Water Quality Program.--The USDA Working Group on Water Quality is
a multi-agency group. ERS meets regularly with representatives of this
group to discuss issues and progress of the USDA Water Quality Program
and develop plans of work and to identify economic issues.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. ERS's annual performance goals of enhanced understanding of
economic issues by policy makers, regulators, program managers, and
those shaping the public debates directly flow from ERS's mission to
provide economic analysis on efficiency, efficacy, and equity issues
related to agriculture, food, natural resources, and rural development
to improve public and private decision making. The annual performance
goals parallel ERS's strategic goals. ERS program activities--research,
development of economic indicators, and dissemination of research
results and economic information--directly support the strategic and
annual performance plan goals.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. ERS research, development of economic indicators, and
information dissemination activities are focused on topics that ensure
ERS can meet its performance goals of enhanced understanding of
economic issues by policy makers, regulators, program managers, and
those concerned with agricultural competitiveness, food safety, good
nutrition, environmental quality, and rural prosperity. The link
between the goals and the activities needed to attain them was an easy
one for ERS to make.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. ERS's budget has one appropriation item, economic analysis
and research. The Performance Plan's five goals are linked and
dependent on funding levels allocated within the agency.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. ERS performance planning structure does not differ from its
account and activity structure.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. ERS does not propose any changes to its account structure
for fiscal year 2000.
Question. How were performance measures chosen?
Answer. ERS has always been concerned with its performance and
maintained information on its analytical outputs, their use, and their
impacts on decisions about U.S. agriculture, food, natural resources,
and rural development. ERS began a review of its planning and
performance measurement systems in fiscal year 1995 when it provided
all managers training on the Government Performance and Results Act
(GPRA) and results oriented management approaches. At that time, a
group of middle managers reviewed and redrafted ERS performance
measures. Subsequent mission area-wide activities in 1996-97 provided
senior and middle ERS managers additional opportunities to test and
refine ERS's performance measures including exchanges with staff at
other government research agencies that were engaged in pilot GPRA
projects and staff at private research oriented companies. The
performance plans external reviews included meetings convened by the
National Agricultural Research, Extension, Education, and Economics
Advisory Board and included individuals from agri-business, public
interest groups, and universities. The measures have also been
critiqued extensively within USDA. Lessons reinforced were: do not make
performance measurement so difficult that no one has time to work on
achieving goals; good planning is an ongoing process and assessments
will lead to further refinements; staff will perform to indicators--
make sure measures lead to correct outcomes; and research agencies face
special difficulties in tying research results to broader outcomes.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance
measures?
Answer. ERS will be able to produce and verify the data needed to
underpin measures specified in its performance plan. ERS would like to
get more feedback from users outside the federal government, but is
carefully considering the costs of doing so, not just to ERS, but
government wide and to society. The present requirements that must be
completed before contacting non federal users (including the 60 day
advertisement of intention in the Federal Register and the lengthy time
involved in clearing any questionnaire/focus group/survey instruments)
involve considerable costs to the government. Furthermore, this
extensive clearance process regarding such contacts reflects
legislative and executive concern about respondent burden--even for
voluntary responses.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. ERS will have sufficient and reliable data to complete its
March 2000 performance report.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. The performance goals for each major goal specify
quantitative goals for research outputs and qualitative goals with
regard to enhancing understanding of important economic issues.
Simplistic reliance on quantitative output measurements, however, can
inhibit rather than contribute to successful outcomes. Care must be
taken in setting and measuring against quantity output goals to ensure
that quality is not sacrificed for quantity. Quantitatively and
definitively establishing the link that decision makers make particular
decisions because of the provision of analyses is widely acknowledged
as extremely difficult. ERS narratives will be essential to demonstrate
that ERS ensured policy makers, regulators, program managers, and
organizations shaping public debate had high quality, objective,
relevant, timely, and accessible analyses. The narratives will cover
ERS anticipation of issues and the timeliness of output, review prior
to release, customer views on relevance and accessibility of ERS
analyses, and how ERS analyses contributed to informed decision making
on economic issues related to agriculture, food safety and nutrition,
natural resources, and rural development. The narratives will provide
perspective on ERS success in bridging customer satisfaction
measurement--e.g., responsiveness and courtesy shown to customers--with
basic outcomes goals--e.g., improving the efficiency and effectiveness
of policies and programs that meet societal equity standards.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure the goals in the plan include a
significant number of outcome measures?
Answer. Interpreting outcome measurements is not a straightforward
process for research organizations. The cause and effect relationship
between research outputs and eventual outcomes is complex. The
challenges facing those interpreting performance measures for a public
information and analytical organization such as ERS are even greater.
Public information can be freely used without attribution. Its
widespread use and effects may be difficult to fully measure. Delays
between when research results are presented and when their effects are
fully assimilated are variable and can be long. Specific outcomes are
influenced by quality research results, as well as other factors. If
ERS analysis is objective, analysis on the efficacy, efficiency, and
equity impacts of specific policies, programs, and regulations will at
any one time support some customers' proposals but not others. Analysis
may show that an export promotion program helps corn exporters at the
expense of beef exporters. Research may show that a water allocation
proposal costs farmers but benefits recreation interests. Corn
exporters and farmers in such cases may not fully appreciate the
relevancy, accessibility, and objectivity of ERS analysis. Rigorous
adherence to standards of disciplinary excellence contributes greatly
to the quality and objectivity of ERS analyses and their defensibility
in the face of politically-motivated criticism. The narratives that ERS
will include in its performance reports will be key to showing how ERS
analysis enhanced understanding by policy makers, regulators, program
managers, and others of key economic issues relating to
competitiveness, food safety, good nutrition, environmental quality,
and rural prosperity.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. ERS has a head start in making sure that program managers
understand the difference between workload and effectiveness measures.
Most ERS employees are economists with substantial interest, training,
and experience in understanding efficacy, efficiency, and equity
concepts. In addition, ERS has augmented program managers training
specific to GPRA requirements beginning in fiscal year 1995 and
provided all managers training on GPRA and results oriented management
approaches.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers?
Answer. ERS will include a variety of qualitative indicators to
help measure the relevance, productivity, and quality of its program
and outputs, and to understand how ERS research results are used by
decision makers and thus affect outcomes. Indicators will include: (1)
call backs for follow up information/analysis from policy makers; (2)
requests for ERS staff as primary speakers at important meetings and
conferences; (3) articles in major public media that correctly and
effectively use ERS analysis and data; and (4) changes in legislation,
regulation, and designs of social science programs related to
agriculture, food, natural resources, and rural areas. To ensure that
the outputs present data and analyses that are high quality,
comprehensive, objective, relevant and accessible, ERS routinely
provides its customers many opportunities for feedback, conducts
rigorous peer reviews before analysis is released, and uses a wide
variety of proven and innovative dissemination systems.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The interaction between goals and budget developed is not
unidirectional. The allocation of resources across goals reflects
efforts to balance economic information needs among competitiveness,
food safety, nutrition, environmental, and rural development issues.
The level of funding affects ERS ability to produce and disseminate
research results and economic indicators and thus the particular
targets that can be set and met.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and
achievement of various goals?
Answer. ERS will be able to indicate the likely impact on the level
of program performance and achievement of various goals due to
increases or decreases in its funding.
Question. Do you have technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so the agency can be properly managed to achieve the desired results?
Answer. ERS could prepare program performance reports at anytime
during the year. However, the nature of research outcomes, including
the often long evolution between provision of economic analysis and any
particular public and private decisions, means that more frequent
detailed measurement and reporting may not be cost-effective.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear meaningful way. Have you faced that difficulty?
Would the linkages be clearer if your budget account structure were
modified? If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure? How would such
modification strengthen accountability for program performance in the
use of budgeted dollars?
Answer. Because ERS's budget has one appropriation item, economic
analysis and research, ERS does not face difficulties in linking
performance across various accounting and reporting structures and
presenting its budget by performance goals.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement? If so, what steps have you identified
to prepare, anticipate and plan for such influences? What impact might
external factors have on resource estimates?
Answer. ERS's fiscal year 1999 performance plan discusses external
factors that influence goal setting and achievement. ERS's future
depends on its ability to achieve national prominence as a center of
excellence for economic analysis on agriculture, food, environmental,
and rural issues. Policy makers and program managers in program
implementation agencies increasingly will be called to defend the
efficiency and equity consequences of public policies, regulations, and
programs. Tighter budgets in other USDA mission areas will decrease
their already limited internal ability to anticipate the economic
effects of policies and programs. ERS must clearly identify its role as
the intramural social science research agency at USDA, with a focus on
maintaining its core analytical activities while remaining responsive
to short-term information demands.
ERS will continue to be asked to do more with declining real
resources as demand for information grows in a knowledge-based and
increasingly complex society. The agency will continue to pursue and
integrate useful new information technologies into agency operations to
help improve staff productivity and meet ERS performance goals despite
fewer staff resources.
ERS will adjust its research program to the changes in the larger
policy context. Changing perceptions about the role of government
regulation is accelerating the search for more voluntary and market-
based measures to promote public good. The agricultural policies and
programs in the 1996 Farm Bill raised new issues regarding the
structure and geographic location of agricultural production, as well
as the volatility of prices in response to international shocks and
weather. Increasing scale and concentration of agricultural activities
raise environmental and economic issues pertaining to waste management.
Rapidly changing economic, social, and medical environments raise
challenging questions about the nutritional quality and costs of good
diets and their implications for individuals, society, and the food
industry. International trade agreements are shifting the focus of
trade barriers away from tariffs toward issues relating to food safety
and environmental quality. Continued evolution of the social, economic,
and industrial structure of rural areas will change policy debates
regarding the well-being of rural people and communities.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so
does the Performance Plan identify the overlap or duplication?
Answer. Because ERS's economic analyses cover all aspects of USDA's
mission, the crosscuts between ERS research and the missions and goals
of other USDA agencies is extensive and complicated. ERS, even before
new GPRA requirements, was cognizant that its unique contribution is
provision of external economic analysis and took care not to duplicate
or overlap with program functions in other agencies.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that: To what extent are your performance measures sufficiently mature
to allow for these kinds of uses? Are there any factors, such as
inexperience in making estimates for certain activities or lack of
data, that might affect the accuracy of resource estimates?
Answer. ERS performance measures are sufficiently mature to allow
funding decisions to consider actual performance compared to target
with the caveats about the complexity of measuring performance for a
public research organization given in answers to prior questions.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997.
Answer. ERS will not need to revise it strategic plan based on its
fiscal year 1999 performance plan.
______
Question Submitted by Senator Craig
Question. I am troubled by a recent ERS decision to cutback in its
work on short-term commodity supply-demand analysis. It is my
understanding that ERS has reduced its situation and outlook reporting
by 50 percent. Yet ERS officials have told us that American producers
will not pay the price for these cutbacks--that all previously
available date will continue to be readily accessible through other
means. Can you elaborate on this and show where this information will
be published and in what form?
Answer. Much of the data provided in ERS outlook reports will
continue to be available from the originating agency--the National
Agricultural Statistical Service, the Foreign Agricultural Service, and
the Bureau of the Census, for example. Our Situation and Outlook
reports will continue to contain the data they have always contained.
In months when they are not published, critical data and data that are
unique ERS products will be available, in most cases, through a
combination of commodity briefing rooms on the ERS Web site, through
monthly E-mail distributions of critical commodity data, and through
some increase in the content of tabular material in Agricultural
Outlook magazine.
______
National Agricultural Statistics Service
Questions Submitted by Senator Cochran
aquaculture census data collection
Question. NASS has requested a one-year increase of $500,000 and 2
staff-years to conduct an aquaculture census, which would provide for
the first time detailed State and national data about aquaculture
production. Please explain the importance of the census, what data will
be collected, and who will use this data. Is this a one-time cost or
will it be necessary to conduct this census every so many years? What
future year funds will be required for this census?
Answer. The NASS request of $500,000 would fund a census of all
farms participating in the 1997 Census of Agriculture that produced and
sold $1,000 or more of aquaculture or aquaculture products. Under this
proposal, NASS would conduct an extensive aquaculture census every 5
years following the census of agriculture. The $500,000 funding would
be for fiscal year 1999 only and would be dropped from the NASS budget
base in fiscal year 2000.
The aquaculture census would provide, for the first time, national
and State level detailed data about aquaculture production, and would
be the only source of nationally consistent data for all types of
aquaculture. The current NASS aquaculture program is limited to
providing statistics for catfish and trout production in major States.
This census would provide periodic statistics related to the production
of finfish, shellfish, and animal aquaculture, which is one of the most
rapidly changing segments of agriculture.
Aquaculture is an emerging industry and therefore does not have the
infrastructure to collect, compile, and publish industry statistics.
The aquaculture census would provide improved information on the
present and possible future supply of aquaculture and aquaculture
products for a broad range of data users, including industry
representatives, producers, marketing and trade groups, Federal and
State organizations, policy makers, and colleges and universities.
Accurate and timely data are needed in order for aquaculture to be
recognized as a significant sector of the agricultural industry. The
aquaculture industry needs data to competitively compete for research
and development funds, to efficiently plan and market aquaculture
products, and to develop new products. Aquaculture data are necessary
in order for the industry to receive higher priority in the
certification and re-certification process for obtaining
pharmaceuticals for use in aquaculture production. Aquaculture
production is expanding in response to the problem of declining
fisheries worldwide. Marine aquaculture can provide new employment
opportunities through jobs that are near towns formerly dependent on
fishing.
census of agriculture--new research
Question. In your prepared statement, you mention that the growing
diversity and specialization of the Nation's farm operations have
greatly complicated procedures for producing accurate agricultural
statistics. You further state that considerable new research will be
directed at improving the census of agriculture to be conducted in
2003. Has funding for the new research been included in the fiscal year
1999 budget? If so, where is it included? If not, do you anticipate a
need for additional funding in future fiscal years?
Answer. Yes, funding for on-going research related to new sampling
and survey methodology, improved data collection techniques, and
increased use of enhanced computer technology is included in the NASS
budget under each budget activity. This research is integrated with
NASS's on-going programs and is therefore not identified as a separate
item. Requests for additional research funds are not anticipated in
future fiscal years.
agricultural economics and land ownership survey
Question. NASS has requested an increase of $100,000 and 1 staff-
year to begin preparatory work needed to conduct the Agricultural
Economics and Land Ownership Survey. Why is the Agricultural Economics
and Land Ownership data collection done through a separate survey and
not included in the census of agriculture?
Answer. The Agricultural Economics and Land Ownership Survey
(AELOS), historically conducted every 10 years following the census of
agriculture, is a survey of farm and ranch operators that participated
in the census of agriculture, and the landlords of those operators.
AELOS provides the only comprehensive source of data on agricultural
land ownership, financing, and inputs by farm operators and landlords
for each State. Separate questionnaires are used to collect data on
farm operating expenditures, capital improvements, assets, and debts
for agricultural production from operators and their landlords. AELOS
is conducted as an independent survey from the census of agriculture
for two major reasons. First, a separate survey is required because
AELOS is based on a sample of farmers and ranchers who participated in
the census who meet certain criteria for size and type of operation,
along with their corresponding landlords. Second, because the AELOS
questionnaire is quite detailed it would not be feasible to include
those questions on the census form.
pesticide use data collection
Question. The NASS budget includes funds to collect data on
pesticide use in nursery and greenhouse crops where farm worker
exposure is potentially high. Will this effort in any way relate to
that carried out under the Agriculture Marketing Service (AMS)
Pesticide Data Program (PDP)? If not, why?
Answer. AMS's responsibility in the Pesticide Data Program is to
collect pesticide residue data on fruits and vegetables. AMS does not
collect pesticide use data.
research projects
Question. How does NASS prioritize the research projects it
conducts for other USDA agencies and international organizations with
the agency's normal workload? Please provide the Committee with a
prioritized list of projects for fiscal year 1998.
Answer. NASS places a high priority on providing statistical
services to all USDA agencies and international organizations. Because
each year the total requested projects has remained fairly constant,
NASS has been able to maintain the staff and infrastructure to complete
all requested projects without significantly impacting the agency's
core program.
The following is a list of all the surveys done on a reimbursable
basis in fiscal year 1997.
[The information follows:]
NATIONAL AGRICULTURAL STATISTICS SERVICE REIMBURSABLE SURVEYS, FISCAL YEAR 1997
----------------------------------------------------------------------------------------------------------------
Source Project
----------------------------------------------------------------------------------------------------------------
Agricultural Marketing Service................ Cheese Price Data.
Milk Price Data.
Pesticide Data Program.
Pesticide Recordkeeping.
Agricultural Research Service................. Assistance on Food Consumption Survey Data.
Cotton Model Survey.
Employee Climate Survey.
Animal Plant Health Inspection Service........ National Animal Health Monitoring System.
Animal Damage Control.
Agricultural Quarantine Inspection.
Economic Research Service..................... Agricultural Resource Management Survey.
Farm Service Agency........................... Employee Climate Survey.
County Estimates.
Farm Operating Loan Program.
Feed Grain County Estimates.
Forest Service................................ Grazing Fees.
Rural Development............................. Cash Flow Models.
Department of Interior........................ Grazing Fees.
State Departments of Agriculture.............. Crop Reporting Services.
----------------------------------------------------------------------------------------------------------------
nass reimbursements
Question. Do other USDA agencies requesting work from NASS
reimburse NASS for the work requested? If not, when is reimbursement
required?
Answer. If the requested work can be accomplished in two days or
less, reimbursement is not requested. Otherwise, NASS negotiates a
reimbursable agreement with the requesting agency to provide funding
that covers NASS's costs for the project.
nass research
Question. How much NASS research (both in dollars and in number of
studies) is conducted in-house and how much is contracted out?
Answer. The majority of NASS research dollars are for intramural
activities. Only a small amount is expended for extramural research.
RESEARCH DOLLARS AND NUMBER OF STUDIES BY FISCAL YEAR
----------------------------------------------------------------------------------------------------------------
Fiscal year No. of Fiscal year No. of Fiscal year No. of
Item 1997 actual studies 1998 estimate studies 1999 estimate studies
----------------------------------------------------------------------------------------------------------------
Intramural..................... $3,182,000 37 $3,276,000 40 $3,220,000 40
Extramural..................... 190,000 7 205,000 6 229,000 6
--------------------------------------------------------------------------------
Total.................... 3,372,000 44 3,481,000 46 3,449,000 46
----------------------------------------------------------------------------------------------------------------
object classifications
Question. Please explain the increased funding for the following
object classifications from the fiscal year 1997 to the fiscal year
1998 level: communications, utilities, and miscellaneous charges;
printing and reproduction; advisory and assistance services; other
services; and purchases of goods and services from Government Accounts.
Answer. Most of the increase from fiscal year 1997 to fiscal year
1998 in the cited object classes is attributable to data collection and
processing activities associated with the 1997 Census of Agriculture,
which peaks in fiscal year 1998.
[The information follows:]
NATIONAL AGRICULTURAL STATISTICS SERVICE
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Selected object classes ---------------------- Increase Explanation of increase
1997 1998
----------------------------------------------------------------------------------------------------------------
Communications, utilities, and $3,467 $6,210 $2,743 Postage for census questionnaires
miscellaneous charges (23.3).
Printing and reproduction (24.0)...... 345 625 280 Printing of questionnaires for
irrigation and horticulture surveys
Advisory and assistance services 132 339 207 Consultants for the Agricultural
(25.1). Statistics Board archives
Other services (25.2)................. 19,762 24,206 4,444 Data collection activities for the
census
Purchases of goods and services from 11,066 14,868 3,802 Contract with the Census Bureau for the
Government Accounts (25.3). census mail-out and ADP
----------------------------------------------------------------------------------------------------------------
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. The NASS annual performance plan parallels the NASS
strategic plan. Both plans are framed by the NASS mission statement,
the five REE general outcomes which are the NASS general goals in both
plans, and the NASS objectives under each of the five general goals. In
addition, the strategies for achievement of the objectives are
contained in both plans, and the performance measures outlined in the
strategic plan are part of the Performance Goals and Indicators table
in the performance plan for each of the general goals. The applicable
budget program activities are indicated for each general goal in the
performance plan, and for the fiscal year 1999 budget request, the
dollars and FTE's for each of the three NASS budget activities are
cross-walked to the five general goals. The corresponding funding
levels and FTE's for fiscal years 1997-99 are also shown under each of
the general goals of the performance plan.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. NASS maintains cost data for all major program activities
under each of NASS's budget categories: agricultural estimates,
statistical research and service, and the census of agriculture. These
cost data include Agency administrative and infrastructure costs. These
major activities and associated costs were then categorized into the
five general goals which frame both the strategic plan and the annual
performance plan. Sometimes it is difficult to determine where a given
statistics program best fits under the five broad general goals. In
this case, categorization is determined by which goal is most supported
by the statistical data generated by that program.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. The NASS performance plan is linked to the budget. The
three program budget accounts have been aggregated as they apply to the
performance measures. Each goal and corresponding objectives list the
applicable budget activities and the funding and FTE levels. Also, the
resource table at the end of the annual performance plan provides an
even more detailed breakdown by individual budget program activity for
each of the five general goals.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The annual performance plan is framed by the five general
goals, but each goal is cross-walked to the applicable budget
activities; funding and FTE levels are shown by general goal as well as
by individual budget activity. NASS's program activities are
agricultural estimates, statistical research and service, and census of
agriculture.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. Not at this time.
Question. How were performance measures chosen?
Answer. The measures in NASS's annual performance plan were chosen
because they are indicators of performance for key core NASS
activities, representing each budget category, under each of the five
REE general goals. NASS also wanted a mix of measures based on external
customer input and internal evaluations. NASS held several meetings to
obtain input from both field and Headquarters employees on the measures
that would best gauge NASS's performance.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. NASS carefully examined each performance goal to determine
which would benefit most from measures based on customer input, in
order to limit costs and the respondent burden on NASS customers and
data users.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. No. NASS anticipates having performance data available for
each measure in time for the first performance report.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. NASS recommends tracking the performance goal listed under
general goal 1, since this represents the largest part of NASS's
agricultural statistics program. The other key performance goal for
NASS is listed under goal 5, which contains the measures for the census
of agriculture.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. Developing meaningful outcome measures for an agency which
doesn't deliver a program, but instead supplies information such as
agricultural statistics is extremely difficult. NASS took the approach
of formulating meaningful outcome measures which assess NASS's ability
to provide accurate, unbiased, meaningful, useful data on time with no
errors. Assessing these attributes requires a mix of internal measures
and surveys of NASS customers and data users.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. NASS program managers are knowledgeable about the
distinction between output and outcome measures. NASS first began
strategic planning efforts in 1994, and all levels of NASS employees
have been involved in the development of internal agency performance
measures down to the Branch level since 1996.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. Each of the NASS customer satisfaction measures included
under the five general goals require surveys of both internal and
external customers, since there is a mix of both for every statistical
product and data series produced by NASS. Some of the measures included
under the three management initiatives in the fiscal year 1999 Annual
Performance Plan are obtained from periodic surveys of NASS employees.
Examples of customer satisfaction measures included the performance
plan are: percent of data users who rate NASS data as important or
essential to the orderly marketing of agricultural products; percent of
agricultural leaders surveyed who rate NASS chemical use data as
important or essential to analysis and risk assessment; and percent of
stakeholders who rate NASS census and economic data as important to
their work.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. NASS did consider the level of support for each of the five
REE general goals and corresponding performance goals and measures in
decisions related to the development of the fiscal year 1999 budget,
particularly the new initiatives.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Yes, particularly since adjustments would most likely be
made to new budget initiatives, each of which have a unique performance
indicator in the annual performance plan. Significant downward
adjustments to NASS's core programs could have significant effects on
program coverage, accuracy, and timeliness measures as well as
customers' evaluation of the agricultural statistics program.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. Some of the internal performance measures related to
accuracy and timeliness can be monitored throughout the year. Others,
especially those reliant on external customer surveys, are more
conducive to annual reporting. However, customer surveys could be
staggered during the year if the customer and data users for a
particular data series or product were unique.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Would the linkages be clearer if your budget account structure were
modified? If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure? How would such
modification strengthen accountability for program performance in the
use of budgeted dollars?
Answer. NASS's present budget accounting structure cross-walked
with the REE general goals allows for the development of meaningful
performance indicators and resource allocations. The only weakness in
this design may be that the REE general goals which each agency in the
REE Mission Area adhere to, are quite general, which makes it difficult
to make specific budget decisions about NASS program activities.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement? If so, what steps have you identified
to prepare, anticipate and plan for such influences? What impact might
external factors have on your resource estimates?
Answer. The NASS performance plan alludes to key external factors
which are explicitly listed in the strategic plan. For example, one key
external factor influencing NASS is the increasing demand among data
users for new kinds of information provided in different forms. These
pressing needs always require an assessment of NASS resources and
priorities. The demand for increased coverage in the 1997 Census of
Agriculture for minority farm operators, including American Indians,
prompted NASS to initiate additional steps in the census mail list
building process and to introduce new procedures to collect census
information on American Indian reservations. Rapid changes and
continued concentration in the agricultural industry has required NASS
to modify procedures for collecting and publishing information for
certain sectors. The need to sustain, and even increase, NASS standards
for accuracy, timeliness, and relevancy in order to meet rising public
expectations requires constant technology upgrades, training, and
improved survey technology. Changes in priority can result in shifts in
resource allocations.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. The development of the NASS performance plan has not
identified any overlapping functions or program duplication. However,
duplication related to NASS merging responsibility for the census of
agriculture with the current agricultural statistics program have been
identified and are being eliminated.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that, to what extent are your performance measures sufficiently mature
to allow for these kinds of uses? Are there any factors, such as
inexperience in making estimates for certain activities or lack of
data, that might affect the accuracy of resource estimates?
Answer. Available resources could heavily influence the attainment
of performance measures. In addition, the customer service performance
measures for fiscal year 1998 are targets which were set without the
use of baseline data, so actual survey data acquired starting this
fiscal year could potentially be much different than these targets.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No substantive revisions are necessary at this time.
______
Question Submitted by Senator Bumpers
census of agriculture improvements
Question. Explain why you think USDA will do a better job
conducting the Census of Agriculture than previously done by the U.S.
Census Bureau. When will the current Census be available?
Answer. The consolidation of the agricultural census and the
existing NASS agricultural estimates program benefits the government,
census respondents, and data users. The government realizes improved
efficiencies in both census programs and NASS current surveys. In
fiscal year 1998, NASS realized a budget decrease of $1 million in list
frame development and costs due to efficiencies gained from NASS
conducting the census of agriculture. Additional decreases are proposed
in the fiscal year 1999 budget. Census respondents incur less burden
because they are no longer reporting information to two different
Federal agencies. Data users will enjoy a ``one-stop shop'' for
agricultural data, with earlier release of census data and improved
coverage and accuracy. Many of these efficiencies and improvements in
timeliness and accuracy are directly attributable to the involvement of
NASS's 45 field offices in the conduct of the census.
Results of the 1997 Census of Agriculture will be available
starting in February 1999.
______
Question Submitted by Senator Craig
census transfer
Question. What effect would current Congressional proposals to move
the annual Agricultural Census from the Department of Commerce to the
Department of Agriculture have on this important survey? Does NASS
support these changes?
Answer. NASS was appropriated funding to conduct the census of
agriculture starting with the fiscal year 1997 budget. Legislation to
transfer the authority to conduct the census of agriculture from the
Department of Commerce to the Department of Agriculture, Public Law
105-113, the Census of Agriculture Act of 1997, was signed by the
President on November 21, 1997. NASS supported the change and is
committed to conducting a census of agriculture that will equal or
exceed the quality formerly produced by the Bureau of the Census,
Department of Commerce.
Subcommittee Recess
Senator Cochran. We are going to continue our hearings. Our
next hearing is going to be on Thursday of this week in this
room. We will review the Department's budget request for
natural resources and environment programs at that time.
I again want to thank Dr. Gonzalez and all of our witnesses
who have been here today for your assistance in understanding
the budget request and the implications of it.
Until then, the subcommittee stands in recess.
[Whereupon, at 11:05 a.m., Tuesday, February 24, the
subcommittee was recessed, to reconvene at 10:06 a.m.,
Thursday, February 26.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
THURSDAY, FEBRUARY 26, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:06 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Burns, Bumpers, and Kohl.
DEPARTMENT OF AGRICULTURE
STATEMENT OF JAMES R. LYONS, UNDER SECRETARY, NATURAL
RESOURCES AND ENVIRONMENT
Natural Resources Conservation Service
STATEMENT OF THOMAS A. WEBER, ACTING CHIEF
Opening Remarks
Senator Cochran. The subcommittee will please come to
order. Today we continue our hearings reviewing the budget
request submitted by the President for Agriculture, Rural
Development, and related agencies. This morning we are
specifically reviewing the budget requests of the Natural
Resources Conservation Service.
We are pleased to have with us Under Secretary for Natural
Resources and Environment James Lyons. He is accompanied by a
number of individuals from the Natural Resources Conservation
Service, including the Acting Chief Thomas Weber.
We appreciate the presence of all of you this morning to
help us understand the proposals of the administration with
respect to the accounts funded under this agency.
We are a little concerned about the proposal submitted by
the administration insofar as it contains assumptions that the
Congress is going to authorize user fees to be imposed on
landowners and others who have the benefit of some of the
services provided by this agency.
It is unlikely that Congress is going to approve this
request. And so the assumption, insofar as it takes into
account additional funding from these sources, is probably
flawed and unrealistic.
We are also concerned about the proposal to consolidate
watershed and some of the other programs in the operations
accounts and wonder what the practical consequences would be
for watershed and flood prevention efforts. This is an area
that has been very important, particularly in the part of the
country that I represent. We worry that the watershed activity
might very well disappear and not be available to landowners
and local areas if this request is approved as it is submitted
by the administration.
So these are some concerns that I hope the witnesses can
address, and explain, as you see it, what the practical
consequences of the proposals will be.
In all other respects though, we hope that we can continue
to support the important work to protect our land and water
resources. This is a very important area. Conservation is
essential if we are to maintain a capacity to produce
agriculture commodities that are important for our Nation's
well-being and our economic well-being as well.
We are also interested in some of the initiatives that the
Congress has passed in recent years establishing new ways to
encourage conservation activity on private lands. There is just
no way for the Government to obtain fee title to enough land to
provide wildlife habitat and resource conservation to do the
job.
We have to have the cooperation of private landowners. We
have to respect their property rights. We have to respect their
goal to use their land to make a living. And this all has to be
worked out in a compatible way.
We think there are some important new initiatives that we
should fund to try to encourage and do a better job of soil and
water conservation in this process.
So having said that, I am prepared now to yield to other
members of the committee for any opening comments that they
would care to make. And then we will hear the testimony of our
witnesses.
Senator Bumpers.
STATEMENT OF SENATOR BUMPERS
Senator Bumpers. Thank you, Mr. Chairman. Mr. Chairman, I
will submit my prepared remarks for the record and just simply
echo some of the things you said; and that is that user fees--
this subcommittee has never been very friendly toward the
proposals for user fees, not likely to be this year either.
Second, in visiting with the Secretary the other day, I was
very pleased to know that they have a goal of 2 million miles
of buffer zones along streams in this country. And I think that
is of critical importance.
Third, there is in my State a critical problem, which the
President is helping us address. And it deals with the rapidly
depleting underground aquifers in east Arkansas, the
Mississippi River alluvial aquifer.
And the President, in the Energy and Water Subcommittee,
has asked for $11.5 million to start helping us divert water
from service streams to the rice fields. Rice is of critical
importance to us. We raise 43 percent of it. And it is fairly
critical to Mississippi, too. They raise a lot of rice.
And incidently, Mr. Chairman, Mississippi is also a part of
that Mississippi River alluvial aquifer. You have heard me say
these things before, I know, but it is of such critical
importance I have to keep talking about it until we really know
that we are on our way.
We are talking about probably $1 billion overall to divert
enough water on the Mississippi and the Arkansas and the White
and the other rivers of east Arkansas to make up for the loss
of the aquifer.
It is estimated that by the year 2015 the 200-foot aquifer
will be virtually depleted. We use such tremendous amounts of
it for rice growing. So we don't have an awful lot of time to
deal with that.
But while that is energy and water and the Corps of
Engineers will be called upon to start that project, I wanted
to just say that ties in with this subcommittee's
responsibilities and this particular agency's responsibilities.
I think that pretty well summarizes. I am pretty well
pleased with this budget. We will obviously have to make some
changes in it, probably have to make some cuts in it. But
generally, I think it is a pretty good budget, Mr. Chairman.
Prepared Statement
Senator Cochran. Thank you, Senator. Your complete
statement will be made part of the record.
[The statement follows:]
Prepared Statement of Senator Bumpers
I would like to welcome Secretary Lyons, Mr. Weber, and
other officials from USDA to our hearing this morning. The work
of the Natural Resources Conservation Service (NRCS) has long
been important to my state. Arkansas is known as the Natural
State and I see the role of NRCS, in a large measure, as an
agency friendly to the purpose of keeping Arkansas a ``Natural
State''.
That is not to say that my state, and the entire country,
do not face serious conservation challenges. Water and wind
erosion still cause problems and water pollution in spite of
the dramatic improvements since the 1970's remain serious
threats to the health and safety of the American people. We
made great progress since the Dust Bowl days of the Depression
largely due to the predecessor agency of NRCS. But we still
have a long way to go.
Water pollution problems from point sources have been
greatly reduced since the first Clean Water Act. As a result,
more and more attention is given to non-point source pollution,
which means farms. The American farmer is a world leader in
conservation. His livelihood is tied to protection of his land
and water resources. Any farmer who is willing to watch his
farm wash into gullies and downstream will not be a farmer for
long. It is the role of NRCS to assist the American farmer in
doing what he does naturally.
In my own state of Arkansas, we face some serious
conservation problems. The ground water supplies in East
Arkansas are being depleted at an alarming rate and we have no
choice but to start making use of our abundant surface water
supplies. In the western part of my state, the incredible
growth in the livestock industry poses serious challenges to
watersheds in the form of waste management. Similar challenges
are heard from coast to coast and NRCS remains the single
agency at USDA, and perhaps in government, best suited to rise
to the call.
The budget submission for NRCS appears as an improvement
from the previous year. Increases are found in important
accounts and would go far in helping the cause of conservation.
I hope we can accommodate them. Unfortunately, the NRCS budget
is only a part of the larger budget submission which does
present major challenges for this subcommittee. I notice,
however, that even the NRCS budget contains proposed user fees
which have never been popular with this subcommittee and are a
dangerous foundation on which to build a budget.
I note that the prepared statements of Mr. Lyons and Mr.
Weber provide a good overview and I look forward to their
comments. Let me simply end my remarks by restating my
commitment to conservation and I will work with Senator Cochran
to develop a bill for the coming fiscal year that will do all
we can to give USDA, and America's farmers, the tools they
need.
STATEMENT OF SENATOR BURNS
Senator Cochran. Senator Burns.
Senator Burns. Thank you, Mr. Chairman, and thank you for
holding this hearing this morning. Of course, I would imagine
the Secretary down here understands what our problems are with
this.
I am glad to hear that Arkansas would like to divert some
water. We would, too. And we will----
Senator Bumpers. We will sell it to you.
Senator Burns. We will take all that in consideration
whenever that time comes. I think the Senator from Arkansas
understands what I am talking about. We have not had a lot of
luck in storing water way upstream from where he is for use
later. And I am still a big proponent of that, and I will
probably be a proponent of what he is trying to do down in
Arkansas.
But that great river system is in the center of our
country, and it supplies a lifeline to a lot of things. We
continually have this administration usurping the process of
getting some things done. And I think the moratorium on the
roads in the West and the roadless areas of this country is one
of those.
We have talked with Secretary Glickman, and we want to
resolve that problem as soon as we can. One wonders about this
whole business of providing food and fiber for this Nation and
then put all the restrictions on the people who are responsible
for those provisions to get it done. And I am very concerned
about that.
I am concerned about user fees. I am concerned about this
business of counties that depend on public lands for economic
livelihood, the receipts that are derived from those lands of
harvesting and providing for America from a renewable resource,
not a finite resource. And I am concerned about public safety
that money provides.
I am concerned about schools and roads that are provided by
those dollars, that renewable crop that we have there, and will
continue to be concerned about that and the approach this
administration has taken to deal with some of those problems.
I need not go into this business, that Mr. Lyons and I
disagree on many things, although we agree on some. I still say
I made my greatest mistake 2 years ago. I capitulated, and I
should not have done that. But nonetheless, that is water under
the bridge, and that is my mistake, and I will live with it
forever, I think.
But I am concerned about their approach to public lands and
how they are managed, especially from a renewable resource
standpoint, and denying, absolutely denying, the people that
live in those neighborhoods any kind of an opportunity to do
what they do best. And that is they manage those lands and move
this decision process out of this 17 square miles of logic-free
environment where we get our eyes glazed over and our brain
completely becomes dead.
So with that, I appreciate this hearing. And as we move
through this process, I am satisfied there is going to be a lot
of changes in the budget, as it has been presented to this
Appropriations Committee.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
Senator Kohl.
Senator Kohl. Thank you, Mr. Chairman.
Mr. Under Secretary----
Prepared Statement
Senator Burns. I would like to submit my--I am sorry.
Senator, if I might, I would submit my full statement for the
record.
Senator Cochran. Without objection, it is so ordered.
Senator Burns. I am sorry. Thank you.
[The statement follows:]
Prepared Statement of Senator Burns
Thank you, Mr. Chairman. I appreciate you calling this
hearing this morning so we learn more about what the
Administration plans for the budget for the Department of
Agriculture for fiscal year 1999. I appreciate seeing this
particular portion of the Agriculture budget come before the
subcommittee this early in the year. With our expedited
appropriations process this year I thank you having some of the
more controversial agencies come before the committee early.
As we are all well aware one of the primary agencies in
this Subcabinet level position is that of the Forest Service.
We are all also very aware of the fact that this subcommittee
does not fund that portion of the Department, instead that
funding comes from the Interior Appropriations Subcommittee.
With this in mind, I know and understand that this is not the
place to bring up decisions regarding the Forest Service.
However, Mr. Chairman I would be totally negligent to my duty
to my constituency if I did not bring up my utter
disappointment in the Forest Service, this level of management
and the Department if I did not take a moment to discuss the
recent decision on the construction of roads in our national
forest system.
In early January it came to our attention that the Forest
Service was preparing some sort of plan to deal with the
construction of roads in national forests. Soon there after,
myself and several members of the Energy and Natural Resources
Committee sent a letter to Secretary Glickman outlining our
desire to work with the Department and the Forest Service to
come up with a plan to address this issue. Approximately a week
after that letter we were informed by the Forest Service that
they were developing a plan and would be informing us of it as
soon as it was prepared and signed off on by the higher ranking
officials in the Administration.
So any thought of working in a cooperative manner had
slipped out the door without so much as even an official reply
to our letter. Another opportunity to work out a plan in due
process to benefit all the people had escaped. Instead the
Administration took this opportunity to once again issue an
executive proposal to implement what they know will be a
controversial plan. I am so disgusted by this Administration
taking every opportunity to circumvent process when they do not
see it going the way that they like to see. Instead of a
process which we could all participate in, this Administration
forces upon people the will of the special interest groups
which support them.
Then just a little over two weeks ago, prior to the hearing
with Secretary Glickman, we found out that there were plans to
circumvent the process even further. The Forest Service was
prepared to cancel the public meetings they had previously
announced and just move forward with their plan. Thankfully
this week, the Forest Service announced that they were
extending the comment period on this very issue, and would host
a series of public forums throughout the west. This due only to
fact that Senator Craig and I caught the Secretary and voiced
our complaints in person.
I never realized it would be so very difficult to defend
the interests and rights of my constituents in this town. I
never dreamed that the Forest Service and the Department of
Agriculture were so prepared to totally disregard the voices
and concerns of the citizens of rural forested America. As I
stated to Secretary Glickman, I am severely disappointed and
alarmed by this action taken by himself, the Chief of the
Forest Service, Under Secretary Lyons.
I have said my piece on this issue now, and I thank the
Chairman for his indulgence on this matter, since as I stated
this is not an agency issue funded by this committee but it is
one of vital importance to the people of rural Montana. I will
go into this further this year during hearings before the
Interior Appropriations Subcommittee and the Energy and Natural
Resources Committee.
I have stated in the previous hearings before this
committee I am displeased, shocked and somewhat stunned to see
the budget that the Administration has proposed for the
Department of Agriculture. Times are difficult enough on the
farm and ranch in rural America at this today, and the federal
government is doing nothing to ease the pressure on these hard
working people. Additional rules and regulations are
continually being proposed forcing these people research and
respond in order to deal with the Federal government.
This past year, for an example, people applying to place
land in the Conservation Reserve Program (CRP) were forced to
rewrite and reapply every time an additional sign up was
announced for additional acreage to be included in the program.
It is not the issue that they should have to reapply, but
instead the concern arises from the rules governing each sign
up period. Rules which changed not only prior to the sign up,
but after the sign up had begun, and even again after the sign
up had closed. Basically, Mr. Chairman, the rules were changing
daily if not hourly on the ground.
The results of this confusion led to some of the best
producing land in the state of Montana being placed in CRP.
Excluding those marginal lands which the program was originally
designed to protect. It was my understanding that the
Conservation Reserve Program was a program developed to take
marginal, environmentally sensitive lands out of production and
allow them to be reseeded in grasses. This then would serve to
protect those lands, the environment and enhance wildlife
opportunities in areas of a sensitive nature.
Instead in Montana what has occurred, by the development of
the indexes used to judge the fields was the exact opposite of
what the program was intended to do. We have large sections of
good solid producing land coming out of production, and those
areas with highly sensitive land will continue to see the
plowshare breaking the soil. This just does not make sense to
me or to the people trying to protect the lands on which they
plant.
Furthermore, during the sign up periods, people were
provided with certain sets of rules and standards by which
their land was judged for suitability for inclusion in the
program. Only to find out afterwards, that during the process
the rules and standards had changed. Ultimately these people
found that what they thought they were applying to put into CRP
was not eligible for the program under the rules which were
finally implemented.
In a large operation it might be possible to overcome this
type of realignment of seed purchase for cover forage, but on
many of the smaller operations who count on this land for
stable income, well it completely wipes out their cash reserve
for the coming planting season. Making nearly impossible to
either continue their enrollment in the program or plan for
planting costs for the upcoming year. Much of this confusion
was due to a lack of communication between the officials from
the Natural Resource Conservation Service (NRCS) and the Farm
Services Agency.
For the past several years I have supported funding for the
Grazing Lands Conservation Initiative, the grassroots
organization working on behalf of private landowners. This
organization combines the efforts of conservation based
organizations and the private land owner to work with NRCS for
technical assistance on the private property owners pasture and
grazing land. However, it appears that NRCS is not willing to
provide an accounting of where the funding is being used to the
people directly involved.
If the agency is not willing to provide this information to
the participants, I will seek assistance from this committee to
have them provide it. This is again another indication of the
unwillingness of this agency to work with the public in the
role of technical assistance instead they exert pressure in the
role of a regulator.
I have read with interest your side of the story as it
relates to the funding and actions during the recent
implementation of the Environmental Quality Incentives Program
(EQIP). Unfortunately what you detailed did not occur in my
state of Montana. Instead of local districts selecting the
priority areas of concern, it was the state Director doing so
on his own initiative. I appreciate the work of your staff here
in Washington in working with my state staff to make sure this
was straightened out before the program became a catastrophe in
Montana.
However it is my concern that we are taking funding to
assist our producer on the world market to pay for this
program. At a time when we are being out marketed and out
traded on the world market forcing our domestic grain supply to
continue to build to the detriment of the market price.
The farmers and ranchers are having a difficult enough time
this year, with grain and livestock prices being so low.
Brought on, in part at least, by the unwillingness of this
Administration and the Secretary to use all the marketing tools
at their disposal to make gains on the world market stage.
American agriculture is always one of the first issues taken
off the table at trade negotiations, in favor of the hi-tech
industry, of which I am very supportive, for which the United
States is famous. Forsaking our ability to continue to produce
our own supply of safe, reliable and cost effective food and
fiber.
As we move into the next century, I am afraid for the
future of American Agriculture. As due to over regulation,
misguided approaches to land management and the lack of a solid
and effective trade policy that our American farmer and rancher
will become an endangered species in their own rights. Forcing
us to import our food supply and pay additional costs
associated with the lack of our own production. The land as we
once knew it will revert to what many believe the pioneers
first saw as they crossed this country. However, this will not
be the case as the land will continue to feed upon itself and
so make itself unsuitable for the wildlife that now flourishes
with sound and meaningful management practices.
I ask you to work with these great people to allow them to
compete with the rest of the world in trade for our
agricultural commodities. Do not overburden them with
regulations which the rest of the world does not impose for
production purposes. Give them the opportunity to make a decent
living off the land, and they will provide you with excellence
in land management and protection.
Mr. Chairman, the Secretary, in his position has the
opportunity and the tools available to secure and assure the
future of the American farmer and rancher on the land. All he
needs is to use those tools to assist and not over regulate the
producer, instead provide them guidance and technical
assistance. Instead the Department and the agencies use those
same tools to overburden the producer with rules and
regulations, making it difficult, if not in many cases
impossible, for the producer to work with you and your
agencies.
The time has come for the leadership in this Department to
come out swinging for the future of American agriculture. Take
on the fight for the producer and not for those groups which do
not either understand or care about the farmer and rancher. The
producer has placed their faith in you as sworn officials of
their government to work with them and for them be it in
Washington or in any other capitol in the world.
Don't turn your back on them, work for them and they will
provide you with a healthy, clean, and reusable food and fiber
supply. One which will provide not only for the health and well
being of the consumer but also for the land and the environment
in which they live. Remember they are the ones living on the
land. They are the people who must work the land to make a
living. It is the producer who must face the land on a daily
basis, knowing that it is only from the land that their future
is secure.
Thank you, Mr. Chairman.
STATEMENT OF SENATOR KOHL
Senator Kohl. Mr. Under Secretary, we appreciate your
willingness to testify before the subcommittee today regarding
the Natural Resource Conservation Service's proposed budget.
These conservation programs were created to protect water
quality and improve wildlife habitat.
In Wisconsin we have many farmers who take advantage of
these programs and support them. However, we have heard serious
concerns about your agency's ability to administer these
programs, especially when you have full participation, as we do
in Wisconsin.
For example, the Wisconsin NRCS office was so short of help
that the Wisconsin Department of Natural Resources had to
donate 100 staffers to help with the most recent conservation
reserve program signup.
Because in Wisconsin we probably have as many miles of lake
shore and river property as we do dairy cows, we are most
interested in your agency's programs that protect and promote
water quality, the Wetland Reserve Program and the
Environmental Quality Incentives Program.
In fact, Wisconsin has one of the largest WRP programs
success stories, Duffy's Marsh. Twelve local landowners worked
with the county, State, and Federal agencies to restore a
1,700-acre wetland to its natural state.
Both the tourism and the dairy industries can and have
coexisted in the past. But both are undergoing tremendous
change and stress. We are counting on the NRCS to help us meet
these challenges, and we hope to hear from you today how your
agency will operate the environmental programs upon which many
States depend.
Senator Cochran. Thank you, Senator.
Secretary Lyons, we appreciate very much your being here
and submitting your statement for the record. We will print it
in the record in full and the other statements that we receive
from the witnesses.
You may proceed with any comments that you think would be
helpful to the committee.
Statement of James R. Lyons
Mr. Lyons. Thank you very much, Mr. Chairman. And I, too,
appreciate the opportunity to be able to appear before the
subcommittee today to discuss our proposed fiscal year 1999
budget for the Natural Resources Conservation Service.
If you had a chance to review the testimony, I think you
can see it is an excellent discussion of all the programs that
we administer and the rationale for the 1999 budget. I will
spare you the details of that and ask that it be submitted as a
part of the record.
Before I begin, Mr. Chairman, I want to commend you for
your outstanding conservation leadership over the years, both
in your role on the authorizing committee in effecting the
creation of many of the conservation tools that we have to work
with today, as well as obviously your outstanding leadership in
the creation of the WHIP Program. And I hope you are going to
join us, Friday to make an announcement related to that
program.
Senator Cochran. I have submitted a statement with some
quotes for you. I do not think I will personally be able to be
at the news conference. I regret that I cannot----
Mr. Lyons. Well, that is unfortunate.
Senator Cochran. But I will be there in spirit anyway.
Mr. Lyons. You will be well recognized for the leadership
role you have played. We appreciate it, as well as the role
that Senator Bumpers has played over the years as a strong
supporter of conservation, helping to put together the
framework that now constitutes the conservation programs that
we have here in the United States, which I think represent
really the most outstanding set of tools for achieving the
conservation goals of this Nation, as well as the leadership of
your colleagues, Senator Burns and Senator Kohl, for their
efforts in helping to promote good land stewardship across the
United States.
With me today are a number of people who really play the
key leadership roles in NRCS and in my office. If I could, I
would just briefly introduce them for the record.
Tom Weber is our Acting Chief for the Natural Resources
Conservation Service to my immediate left. Tom has served in an
outstanding capacity since Paul Johnson elected to go back to
his farm in Iowa.
He sends his regards. I saw him just last week, and he is
having a wonderful time. And he does not miss the beltway at
all, I can assure you, Senator Burns.
Senator Burns. He probably does not like the hog market
either, does he?
Mr. Lyons. Well, I think he is growing Christmas trees
these days.
Senator Burns. That figures. [Laughter.]
Mr. Lyons. But Tom has done an outstanding job, and I am
sure that the committee is aware that the Secretary has
announced the appointment of Pearlie Reed to become the next
Chief of NRCS effective March 1.
Pearlie did an outstanding job as the Acting Assistant
Secretary for Administration and helped us tremendously in
working both on an administrative convergence and in addressing
the civil rights concerns that have been raised in the
Department. And we look forward to Pearlie's outstanding
leadership as the next Chief of NRCS.
Also with me are Dr. Gary Margheim, Acting Associate Chief;
Larry Clark, Deputy Chief for Programs; Carole Jett, who is
Acting Deputy Chief for Soil Survey and Resource Assessment;
Fee Busby, who is Deputy Chief for Science and Technology;
Dwight Holman, Acting Deputy Chief for Management; and Ann
Dubey, who is the Director of the Budget, Planning, and
Analysis Division, who put our budget together for us.
If I could, I also want to introduce a new member of my
staff. His name is Craig Cox. He is sitting behind me. You may
be aware that Tom Hebert, formerly of the Senate Agriculture
Committee staff and then my Deputy for Conservation Programs,
elected to retire. All I can tell you is that he is taking 6
weeks off and collecting his breath before he engages in a new
career in conservation.
We certainly miss Tom's assistance, but Craig, who also
served on the Senate Agriculture Committee staff at one time
will do an outstanding job as Tom's successor.
What I would like to do very briefly, Mr. Chairman, is talk
a bit about the successes we have realized over the past decade
in conservation, obviously focusing on the 1999 initiatives and
what that budget does for us in furthering our efforts to
achieve good land stewardship and promote sound conservation
and talk a little bit about the opportunities that lie ahead.
I know, Mr. Chairman, that you and the members of the
committee have seen over the past year this document,
``Geography of Hope,'' which was constructed by NRCS under
Paul's leadership to help to document some of the successful
accomplishments in conservation we have realized, the
tremendous achievements in reducing soil loss across the United
States and improving water quality, in repairing damage to
riparian habitat and promoting wildlife habitat across the
Nation.
The legacy, particularly of the last 10 years in
conservation, is an outstanding one in improving, as I said,
wildlife habitat, in restoring wetlands, and in promoting a
sound land stewardship based on the principle of voluntary
commitment to conservation.
America's farmers and ranchers have shown their dedication
to conservation, and through the assistance provided by NRCS
over the last 60 years, as well as the assistance provided in
partnership with the conservation districts, America's farmers
and ranchers have done an outstanding job in achieving much of
the conservation achievements we recognize today and are
documented in ``Geography of Hope.''
This budget is built upon that foundation of conservation
achievements in a number of ways. You will see in our proposed
budget that probably the largest proposed increase in funding
is in the conservation operations area. In essence, Mr.
Chairman, these are the funds that provide the support for the
people who go out on the ground and provide conservation
technical assistance and administer the programs that have been
authorized by the farm bill.
The bottom line for us in conservation is people. People
are conservation. And the work that is done one-on-one between
landowners, conservation districts, and our conservationists is
really critical to achieving what we have achieved in the past
and critical to a successful continuation of those achievements
in the future.
It is critical that we have the people and the resources,
the financial resources, to continue with our conservation
efforts. This budget places an emphasis on trying to achieve
additional funding for that element of the program.
You will see, however, in the budget that we do call for a
reduction in FTE's in personnel, as a result of some
difficulties we have had in providing additional support for
funding programs, for funding the technical assistance that is
a part of the programs that are funded out of CCC.
And I know the committee is aware of some of the concerns
we have there and the need to address these issues. And I
welcome a dialog on the internal debate we have or how to
provide support for those people and those programs.
I would also highlight that the budget, as we have
submitted it, includes a number of increases in funding for
programs that were authorized by the 1996 farm bill and are
funded out of the CCC program.
For example, we proposed an increase of $100 million for
the Environmental Quality Incentives Program [EQIP]. This
additional funding for EQIP is critical to continuing our
achievements in conservation and is an integral part of the
President's clean water action plan, which the President
announced just last week at a meeting up in Baltimore.
What is exciting about the opportunities associated with
this clean water action plan--and we will be sure to get a copy
of the document to you, Mr. Chairman, and the members of the
committee--is the focus it places on natural resource
stewardship and land conservation as the key to accomplishing
future gains in clean water.
Much of the success in clean water that we have realized
over the last 25 years has really focused on what I would call
the easy tasks. I am sure the industries that are impacted do
not consider it easy.
The larger challenge is dealing with the pollution that
comes from nonpoint sources, which includes both urban and
suburban runoff, as well as the runoff that occurs across rural
landscapes from agricultural activities and forestry activities
and the like.
This plan calls for a continuation of the voluntary
approaches to dealing with those challenges through increased
technical assistance and cost-share assistance, through using
tools like EQIP to get the job done, and calls for a continued
partnership between America's private landowners, primarily
farmers and ranchers, and the conservation agents and agencies
at the State and Federal level to achieve these goals.
I think it is a remarkable accomplishment. And I think in
many respects, Mr. Chairman, it exemplifies what we have been
achieving in conservation over the last 10 years. The
recognition on the part of our partner in this report, the
Environmental Protection Agency, that voluntary stewardship and
technical assistance and conservation services is a key
ingredient to achieving our long-term clean water goals, is, I
think, a significant milestone in where we are headed.
This program does not call for any new regulatory
strategies to continue our progress in dealing with clean
water. But it does recognize the important contribution that
private and public land stewardship can make to achieving those
goals. And that is significant.
As a part of our conservation operations budget and related
to the clean water action plan is $20 million for grants to
local interests and communities to help them in achieving their
clean water goals in the context of watershed planning.
There is a great deal of enthusiasm and initiative and
creative solutions that have been devised out on the ground by
conservation districts, by RC&D's, by community groups and
organizations that are working together with private landowners
in partnership to improve water quality and address
conservation needs. And we seek to provide some additional
support for their efforts.
You will also find in the conservation operations budget
additional funds to leverage additional contributions from
State entities and State interests to further our efforts to
improve conservation. This is an attempt to try and further the
use of those Federal dollars and achieve those ends.
I would also mention that you will see in our budget a
slight reduction in proposed funding for the Wetland Reserve
Program. The reason for that is we are well on track to
achieving the goals that were laid out in the 1996 farm bill.
In fact, we believe we will achieve the enrollment of 975
million acres--975,000 acres.
Yes; that would be a lot of acres--975,000 acres by the
year 2000, which is 2 years ahead of schedule. So I encourage
you not to misread our commitment to conservation of wetlands
by that reduced funding level.
You will also see, Mr. Chairman, that we ask for $20
million, basically the remainder of the funds that were
authorized for the Wildlife Habitat Improvement Program. I
would dare say we could always use more money for that program.
We have seen tremendous interest and success with that program.
And I think that is a program that benefits not only
landowners but all of us who fish and hunt and enjoy the
outdoors. And it helps to demonstrate the contribution that
agriculture is making to improving wildlife habitat.
You will also see an increase in funding for the
Conservation Farm Option Program, which is the remainder of the
installment of funds for that program, an attempt to try and
come up with an innovative way to put 10-year conservation
plans in place that provide a little more flexibility in that
regard.
Let me close, Mr. Chairman, by emphasizing two things which
you pointed out in your opening statement. I think the future
challenges in conservation and land stewardship in the United
States are on private lands. Seventy percent of the American
landscape is privately owned.
And while we spend a tremendous amount of time debating
what occurs on those lands that are in public ownership--and I
know, Senator Burns, you and I will have many opportunities to
discuss this issue--the real challenges that lie ahead, and I
think the real accomplishments we are going to realize in the
long term, have got to come from a working partnership with
landowners and conservation agents who can provide the
technical skills and the cost-share assistance to help them
manage their lands, not only for long-term productivity, but
from the standpoint of improving conservation overall.
This budget seeks to make investments that will further the
progress that we already realize. And let me just say that with
regard to the public land issues, Senator Burns, of course we
will have another opportunity to address these issues next week
in the Energy and Natural Resources Committee oversight
hearing.
I know that there are many areas in which we disagree with
regard to public land policy, but on the other hand I think
there are many on which we do agree. And I hope we will have an
opportunity to discuss some of those today.
And, Senator Kohl, I would point out that NRCS is stretched
in many regards with the conservation challenges and
opportunities that we face. I would characterize what is going
on in conservation in Wisconsin as a tremendous opportunity,
given the commitment of the residents of that State to leaving
a legacy of conservation that they will all be proud of.
The State conservationist in Wisconsin is a former
classmate of mine and a good friend, Pat Leavenworth. So I can
assure you that the State is in good hands under Pat's
leadership.
The role that Wisconsin DNR is playing right in programs
like CRP is part of any effort really to develop a long-term
partnership.
There is no doubt we can use the help, but we hope in a
closer working relationship with State agencies like DNR, as
well as the State department of agriculture, we can further our
efforts to work together, to use our resources more efficiently
and make sure that through collaboration we get better land
stewardship and hopefully even a better legacy to leave behind.
With that, Mr. Chairman, I think Chief Weber has a few
comments that he would like to offer.
Prepared Statements
Senator Cochran. Thank you, Mr. Lyons. We will insert your
prepared statement and the statement of Mr. Weber in the
record.
[The statements follow:]
Prepared Statement of James R. Lyons
Mr. Chairman, Members of the Committee. It is my pleasure to
outline for you the fiscal year 1999 budget request for the Department
of Agriculture's Natural Resources Conservation Service (NRCS).
The budget plan that the President recently presented to Congress
is an historic proposal. Founded upon the notion that the commitment
and contributions of individuals will ensure a better tomorrow, the
fiscal year 1999 budget proposal gives Congress and the Administration
the opportunity to reverse three decades of budget deficits and
burdening debt. In a sense, this Budget proposes to build a legacy for
the American people of fiscal integrity and responsibility. It ensures
our children the promising future of a productive and prosperous
economy. Under this proposal, everyone has a part to play. And more
than ever before, local people will be challenged to take the lead and
ownership for that which they value the most.
I would like to speak today of another legacy which our 1999 Budget
Proposal challenges us to begin. That is the legacy of conservation and
land stewardship in America. We speak frequently about the programs and
activities that we provide and attempt to quantify them in terms of
dollars of financial assistance provided, and tons of topsoil that we
preserve. However, we rarely take a step back and look not only at a
bigger picture of the landscape, but to gaze beyond the horizon into
the future of our resources. I believe we would all like to ensure that
citizens who want to help themselves will have the resources and
knowledge available to meet their future needs.
As we consider the fiscal year 1999 Budget and the personal
commitment that we are asking of citizens, we find no better historic
and present example of local leadership and ownership, than in
America's conservation movement. In response to the alarming
realization that the future viability and productivity of domestic
agriculture was at stake, conservation activities on private lands were
solidified and organized with a strength from which we continue to
benefit. There are many parallels between the nation's response to the
Dust Bowl and the current effort to balance the Federal budget. But
more importantly, what I would like to talk about today, is how we
proceed to the next level--how we foster a conservation ethic in
America well beyond a balanced budget, the duration of current program
authorizations, or even our own tenure as public servants.
What we have learned from witnessing the success of the
Conservation Partnership over sixty years is that folks want to help
themselves. They only need some guidance and a helping hand from time
to time. This helping and guiding hand is the foundation upon which the
conservation legacy must be built. We are all familiar with the story
of how a house built upon sand was swept away by the rains, while the
house built upon the rocks endured. So too, conservation must be
founded upon a rock-solid base that will not erode with time.
This foundation is the conservation partnership which should be
bolstered and strengthened so that it may serve us for generations to
come. We sometimes refer to our farm programs as tools that are used to
assist the landowner build conservation practices and structures.
Furthermore, we might think of our conservation field staff as the
carpenters with the knowledge and skills to put those tools to work.
But we all know that we cannot build a lasting structure without a firm
foundation. This groundwork is the legacy that we must preserve and
strengthen for future generations.
Clean Water Initiative.--Perhaps no better example provides a
picture of the legacy that NRCS strives to build than the Clean Water
Action Plan. On October 18, 1997, the 25th anniversary of the Clean
Water Act, the Vice President challenged Federal agencies to develop a
clean water plan that would address three goals--protecting public
health, preventing polluted runoff, and promoting community-based
watershed management. More specifically, the plan calls for specific
actions including identifying sources of nitrogen and phosphorus in
water; achieving a net gain of 100,000 acres of wetlands per year by
2005; and promoting ``smart growth'' that is compatible with clean
water.
The Clean Water Action Plan, contains common sense goals that are
highly valued by the public. It also reveals a clear consensus that
watershed-based assistance, and the kinds of voluntary conservation
work NRCS supports are a preferred approach to ensuring lasting
conservation measures in communities. As a result, NRCS will have a
leading role in helping achieve the goals that are part of the
President's Clean Water Initiative. On many accounts, the challenge
that has been presented to Federal agencies involved in this initiative
are far reaching and present a formidable task in the time frame that
has been established. However, the resource of NRCS technical
assistance and the program tools that are presented in this budget
proposal, represent the foremost resource that is available to the
public to accomplish the goal of improving water quality across the
nation.
The Clean Water Action Plan will help landowners. It will encourage
Federal, State and local governments to develop agreements that clarify
their roles and responsibilities, enhance coordination and efficiency,
and reduce duplication effort. Citizens and landowners will realize a
more streamlined process to government programs and assistance, with
fewer office visits and program application forms required.
Without doubt, the environmental challenges facing agriculture with
respect to water quality and availability are daunting. Every day we
read or hear about concerns from across the country about the quality
of drinking water supplies, conflicts over the availability of water
for agricultural and urban uses, and about wildlife needing water and
habitat in order to survive. For these and all the other similar
issues, USDA does not accept the premise of many that places sole
responsibility on agriculture. But USDA also believes that it is
agriculture's primary responsibility to address these challenges
aggressively and effectively.
The proposed fiscal year 1999 budget request strives for a balance
in spending that will provide farmers and ranchers with sufficient
financial incentives for conservation work, including targeted land
retirement, while continuing to focus on technical assistance as the
basis for these activities. The budget 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, including CCC funded programs, and contrasts them with the
comparable figures from the two prior fiscal years.
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal years--
-----------------------------------------------
1997 1998 1999
----------------------------------------------------------------------------------------------------------------
Appropriation:
Conservation operations..................................... 620,219 633,231 742,231
Watershed and flood prevention operations................... 226,660 101,036 \1\ 49,000
Resource conservation and development....................... 29,377 34,377 34,377
Watershed surveys and planning.............................. 12,381 11,190 ( \1\ )
CCC funding:
Wetlands Reserve Program [WRP] \2\.......................... 99,308 218,597 123,741
Wildlife habitat incentives [WHIP].......................... .............. 30,000 20,000
Environmental Quality Incentives Program [EQIP]............. 200,000 200,000 300,000
Conservation farm option [CFO].............................. .............. 15,000 25,000
Farmland Protection Program [FPP]........................... 2,000 18,000 ..............
----------------------------------------------------------------------------------------------------------------
\1\ Technical Assistance for Watershed and Flood Prevention Operations and Watershed Surveys and Planning is
included under the Conservation Operations Account.
\2\ Does not include technical assistance costs funded from unobligated WRP appropriation balances; fiscal year
1997--$12 million; fiscal year 1998--$18 million; fiscal year 1999--$4 million.
Now, let me describe how NRCS differs from other federal agencies
and summarize the unique characteristics and assets that make it the
foundation for a conservation legacy on private lands.
building upon the 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.
Technical Assistance
The foremost tool that we use to meet our goal and the most
fundamental building block of the conservation legacy is the technical
assistance that our field staff and partners provide to our customers.
We try hard to define what technical assistance is on many accounts.
There are tables and graphs that show the number of hours that a
technician spends on a number of different functions on a day to day
basis, and the many types of educational, engineering, and scientific
functions that they serve. In addition, NRCS will continue to work
toward quantifying assistance to fulfill provisions of the Government
Performance and Results Act. But really, the definition of technical
assistance is quite simple. It consists of all the things that our
staff do to advance our mission of conserving, improving, and
sustaining natural resources.
It has been said in athletics that the great teams are the ones
that do all of the ``little things''. I believe that the success of
NRCS and its partners are a testament to this theory. The tasks may not
always be glamorous, and to a casual spectator they may very well
remain overlooked. But still, all of the things NRCS staff do on a
daily basis contribute greatly toward the common goal of moving the
conservation effort forward. This might mean preparing a soil probe
truck long before twilight to visit a rancher at the far end of the
county. It might mean taking extra time to assist low-income producers
to ensure that their program applications are clear and complete. Or it
may entail transferring duty stations to another part of the region to
assist fellow workers with Emergency Flood engineering work that could
save a community. Conservation technical assistance takes many shapes
and forms. However, our support of this work is fundamental to the
conservation legacy we seek and ensuring the stewardship in the
communities of tomorrow.
Civil Rights.--As we speak of building a legacy of land stewardship
in America, I would like to underscore the contributions that NRCS is
making toward ensuring equitable service and opportunity for all
customers and employees of USDA. NRCS has had a good record of ensuring
diversity and opportunity in the past, however I believe we can do
better. Throughout various program and technical assistance activities,
NRCS will work hard to provide the necessary outreach and assistance to
ensure that our customers have easy access to services. In response to
the Civil Rights Action Team report, the Secretary has undertaken many
steps to improve the Department's activities and policies in this area.
I am confident that NRCS will continue to seek proactive ways to better
serve minority and low income customers. One of the hallmarks of the
conservation assistance is that it is available to anyone, anywhere.
That includes areas that are not typically designated as high workload
areas based upon farm program participation, population, or other
demographic factors. By offering basic and universal conservation
assistance on a national basis, NRCS offers minority and limited
resource farmers a needed helping hand. Clearly, a legacy of
conservation on private lands must be built with the participation of
everyone.
NRCS is the only Federal agency whose major purpose is to provide
conservation 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. A few of its many
assets include the following:
Delivery system.--NRCS has a nationwide network of professional
staff at the local level 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 and state
conservation agencies 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. The local field staff 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. Through our regional
framework, NRCS technical staff are 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 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 at the local level.
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 1997, some 15,518 NRCS Earth Team volunteers
donated 534,668 hours to conservation efforts. As calculated by the
Points of Light Foundation, this equates to an additional $8,300,000 in
direct assistance to private landowners for natural resource
protection, an increase of nearly 30 percent from fiscal year 1996.
Local people as decision-makers.--When NRCS provides conservation
and program assistance, the agency works under mutual 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.
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.
Now I will describe our programs and plans for fiscal year 1999.
program effects and the fiscal year 1999 budget request
The activities of the Natural Resources Conservation Service serve
the Nation in numerous ways and provide many indirect benefits. The
programs and services provided by NRCS involve direct assistance to
landowners on an individualized basis. However, this assistance results
in even greater benefits for the public at large that encompass
ensuring potable drinking water, cleaner air, and a sustainable supply
of productive land. In many instances, NRCS involvement spurs local
investment and as a result, enhances local economic activities as well.
In other cases, NRCS is simply present to help landowners help
themselves. By supporting voluntary conservation and fostering
stewardship, the agency ensures support that is not available or
provided by other government or private entities. In addition, NRCS
serves as a vital link between the science of resource conservation and
the practice of land stewardship on the ground. The data and expertise
which the agency offers, are truly a treasure for the communities
around the country that turn to NRCS everyday for help. These services
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. Conservation Operations represents a long-standing and
historical partnership of interests all working in a concerted effort
toward a sustainable and productive nation. The following programs and
initiatives are funded through conservation operations and represent
the legacy of conservation on private lands:
America's private lands conservation is the cornerstone for most
agency activities. This account (formerly Conservation Technical
Assistance) has been renamed to more accurately represent its
uniqueness as the sole federal conservation technical assistance
program on private lands. The fiscal year 1997 appropriations were
$529,150,000; and the fiscal year 1998 comparable appropriations are
$541,739,000. The fiscal year 1999 budget request is $589,110,000.
The proposed funding levels represent support to the functions and
activities that are vital to meeting the mission of conserving,
improving, and sustaining our natural resources for the future.
Conservationists on the ground are under increasing demand for their
services, as they tackle new programmatic responsibilities while
retaining a commitment to the community for providing basic assistance
to landowners in need. It is our goal to ensure NRCS staff support to
grassroots watershed partnerships and the development of conservation
plans for communities. Throughout the nation, NRCS conservationists
facilitate and enable local action. Technical assistance funding
ensures the presence of these individuals and promotes voluntary
conservation.
During fiscal year 1997, NRCS assisted approximately 800,000
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.
While the Federal Agriculture Improvement and Reform Act (1996 Act) has
provided valuable new tools to assist landowners with their needs, the
workload associated with support for the Conservation Reserve Program
(CRP), the Agriculture Market Transition Act (AMTA) and several others
will place further demands on our field staff. Also, because both
agriculture and the environment are constantly changing, the agency and
programs are constantly evolving. NRCS is regularly required to provide
new plans and conservation systems as land use and the needs of the
landowner change. Our proposed increase in funding for America's
Private lands Conservation is reflective of the increased need.
The proposed funding level for Conservation Operations also
represents a continued cooperative effort between NRCS and its
conservation partners including Conservation Districts, Resource
Conservation and Development Councils, and other non-profit and
community action groups. The relationship between NRCS and its partners
represents a catalyst that empowers local people to become involved in
conservation activity. In addition, the funds that are appropriated by
Congress are leveraged and matched by the hard work and resources of
the thousands of partners and volunteers in virtually every aspect of
NRCS operations. The budget request calls for $20 million to be set
aside for Partnership Grants in support of the President's Clean Water
Initiative. The grants will be used to strengthen the leadership of
locally-based institutions through the hiring of non-federal watershed
coordinators. The goal of this activity will be to improve water
quality in watersheds that show particular signs of degradation.
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. We are proud of the gains that have been made. While the
combined value of education, technical and financial assistance is well
illustrated, more remains to be done. The proposed level of technical
assistance funding will accelerate building the legacy of land
stewardship that will benefit the Nation for generations to come.
Year 2000.--One of the necessary steps toward a legacy for
conservation is to ensure that our technical tools and information
infrastructure will be available for years to come. Many concerns have
been raised with respect to information technology of NRCS and other
USDA agencies. I am happy to report that all NRCS systems will meet the
Office of Management and Budget target compliance date of March 1999.
NRCS has 15 critical information technology systems. Renovation has
been completed for eleven of these systems and are currently undergoing
validation testing to ensure that they are compliant. The remaining
four systems are being reengineered and will be completed by March,
1999.
Highly Erodible Land Conservation (HELC).--Since 1985, NRCS 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 nearly one 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 Federal
Agriculture Improvement and Reform Act of 1996 provided amendments that
have made HELC compliance requirements more farmer friendly and have
provided USDA with additional options in assisting producers with
compliance status, 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 fully
apply a conservation plan or use an approved conservation system on
highly erodible land. Therefore, NRCS continually assists producers in
developing plans for land that they acquire and in making changes in
their current plans so that their practices 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).
Wetland determinations and certifications.--The 1996 Farm Bill
changed Swampbuster to give farmers greater flexibility in complying
with wetland conservation requirements and in making wetlands more
valuable and functional. As a result, NRCS now determines areas subject
to Swampbuster and responds to requests from farmers who plan
activities that may adversely impact wetlands. NRCS certifies wetland
determinations only upon request when clients propose a project to
alter the hydrology or bring new land into production. Responding only
to ``need'' ensures that requests from clients are serviced in a timely
manner and that certifications are conducted where absolutely
necessary. Certified determinations stay in effect as long as the land
is used for agricultural purposes (unless a violation occurs) or until
the owner or operator requests a review after natural events change the
topography or hydrology of an area. Under the terms of the 1994
Wetlands Memorandum of Agreement (MOA), certified wetland
determinations will be valid for both Swampbuster and 404 of the Clean
Water Act (CWA). 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.
Also, the enrollment in AMTA generated requests to NRCS for over 25,000
new wetland determinations.
Aside from determinations, changes initiated by the 1996 Act have
increased the activities of NRCS in wetland mitigation. NRCS provides
assistance to landowners who wish to enhance existing wetlands, restore
former wetlands, and create new wetlands to offset loss from planned
conversions or alterations. These options, while creating increased
opportunity and flexibility for landowners, require a great deal of
attention by NRCS field staff, who assess the function and values of
individual wetlands and provide the customer with technical assistance
in every phase of the mitigation process. Other changes by the 1996 Act
include policies in determining if a planned activity will have a
minimal or inconsequential effect on wetland functions, and also
revises the concept of abandonment. When done under an approved
conservation plan, landowners with farmed wetlands and farmed wetland
pastures may allow an area to revert to wetland status and convert it
back at a future date without violating Swampbuster. Thus far, interest
and participation in these wetland activities has been widespread among
landowners. While NRCS welcomes the opportunity to provide landowners
with additional services and flexibility, marked workload increases are
seen throughout the Nation.
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.
Natural Resources Inventory (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. For fiscal year 1999, an
additional $3 million is requested for NRI needs associated with Land
Health Monitoring and assessment work in support of the President's
Clean Water Initiative. This effort will enable NRCS to develop
baseline assessments, integrate compatible inventories, and evaluate
program impacts.
In addition, livestock management means better management of waste
nutrients as well. No doubt, over the course of 1997, there was a
heightened awareness on the part of the public about issues of animal
agriculture and waste management. 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 1998, NRCS was able to
continue support for a Grazing Land Conservation Coordinator position
in each of the fifty states. This position helps 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.
Urban Conservation
Another area of attention has been the work of NRCS in urban and
suburban conservation. Natural resources do not recognize the boundary
between urban and rural areas and to ignore their interaction within a
watershed would not do justice to either. The watershed approach to
resource conservation has been widely acclaimed and highly successful.
However, when we begin to examine and work to rehabilitate the health
of a watershed we must include all contributing factors that may be
present, including community and residential elements. The efforts of
NRCS are aimed to improve water quality and protect our natural
resources while maintaining and enhancing production. The demand for
assistance with issues such as water quality and soil erosion
prevention are matters that effect everyone, and workable solutions
must include the participation of everyone. NRCS has had great success
in utilizing the science and technology that it has gained in its 60
year history to all types of resources in many settings. Likewise, the
expertise in soil and water quality that the agency has gained is well
suited and easily applied to help communities realize their goals for
ecosystem health. We will continue to work together as neighbors to
achieve actual goals.
Snow survey and water supply forecasts provide western states and
Alaska with vital information on summer water supplies. The fiscal year
1997 appropriation was $5,835,000; the fiscal year 1998 appropriation
is $5,835,000; and the fiscal year 1999 request is $5,990,000. 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 1997
appropriation was $76,409,000; the fiscal year 1998 appropriation is
$76,409,000; and the fiscal year 1999 request is $78,323,000. 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.
Funding opportunities are constrained for all agencies; therefore,
NRCS is aiming to expand the resources available for all. The budget
includes $20 million for bonus payments rewarded to those States that
increase their conservation spending and/or maintain spending above a
specified threshold. By leveraging these incentive payments,
conservation funds from State and private sources can be increased.
Also, to further increase contributions, the budget proposes that NRCS
collect user fees for certain products and services.
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 Plant Materials Centers also focus on the important role of native
species in ecosystem functions. The fiscal year 1997 appropriation was
$8,825,000; the fiscal year 1998 appropriation remained at $8,825,000;
and the fiscal year 1999 budget request is $7,825,000. This reduced
level requested for Plant materials Centers reflects the conclusion of
an extensive renovation and modernization efforts that were started in
1994. 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.
Water Resources Assistance is a new account under Conservation
Operations for fiscal year 1999. Water Resources Assistance contains
the technical assistance dollars that have been previously included in
the Watershed and Flood Prevention account. The fiscal year 1999
requested funding level for Water Resources Assistance is $70,983,000.
This is a $9.8 million increase from fiscal year 1998. This requested
funding level would enable approximately 92 Federal watershed
coordinators to develop project work plans; coordinate volunteers,
projects, and watershed council activities in 40 priority watersheds.
The funding request for fiscal year 1999 also includes an increase
of $1 million to evaluate the condition of the aging infrastructure
created by previous works of improvement installed under our watershed
programs and to help sponsors implement environmentally acceptable and
economically justified watershed projects in a timely manner. NRCS has
assisted project sponsors to install over 15,000 individual measures
since 1944. An integral part of many of these projects was structures
for flood and water control, municipal and industrial water supply, and
recreation. Since their installation, conditions surrounding the
structures have changed due to an increase in population, residences
built below the structures, upstream land use changes, and changed
Federal and State dam safety regulations. By fiscal year 2000,
approximately 2,000 of the aging structures could require significant
restoration. The safety and stability of these installations are in
question with serious threats posed to life and property. Clearly,
there are major public health, safety, and environmental risks that
must be addressed so that a legacy of sound watershed projects can be
ensured.
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. Fiscal year 1997 funding for Public Law 534 and Public Law
566 was $101,036,000; the fiscal year 1998 financial assistance funding
was $51,036,000; and the fiscal year 1999 request is $49,000,000. The
difference from fiscal year 1998 levels is due to a shift of technical
costs to the Conservation Operations account and the presentation of
financial assistance activities under Watershed and Flood Prevention
Operations. The authorized purposes of watershed projects include
watershed protection, flood prevention, water quality improvements,
soil erosion reduction, 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.
We aim to focus resources to address the backlog of approved
watershed infrastructure projects. NRCS recognizes the need to meet
currently unfunded commitments to stakeholders and sponsors. Currently,
there are over $1.5 billion in need for Public Law 566 and Public Law
534 projects combined. Local sponsors have demonstrated their support
and await action by their Federal partner to do the same. The process
of allocating funding to approved projects will be based on a
competitive process that funds those projects with the highest
environmental and commercial benefits, which will enhance NRCS's
ability to succeed in its strategic plan.
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 calendar year, 1997, EWP was employed in 26 states providing
disaster assistance including hurricane, flood, and fire
rehabilitation.
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 1997
appropriation was $29,377,000; the fiscal year 1998 appropriation is
$34,377,000; and the fiscal year 1999 budget request remains at
$34,377,000.
Each RC&D area encompasses multiple communities, various units of
government, municipalities, and grassroots organizations. The RC&D's
represent a creative 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 for this program and applied directly to local projects, has
been matched by about $13 from other sources. By fostering local
ownership and self sustenance for conservation and rural development
projects, we believe that RC&D will contribute greatly to the legacy of
locally-led action. The 1999 request will support the 290 RC&D areas
currently authorized as well as any new area authorizations made in
1998.
Commodity Credit Corporation Programs.--NRCS also administers, on
behalf of the Commodity Credit Corporation (CCC), several cost-share
programs, including those 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
conservation programs provided by the 1996 Act, which NRCS administers
on behalf of CCC, include the Environmental Quality Incentives Program
(EQIP), Wildlife Habitat Protection 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, forest land, and
wildlife habitat. Assistance is provided in a manner that maximizes
environmental benefits per dollar expended, while assisting producers
with issues such as local environmental laws or community identified
environmental needs.
Funds of the CCC are used to fund the assistance provided under
EQIP. For fiscal year 1998, $200 million was available to implement the
EQIP. The program is primarily available in priority conservation areas
throughout the Nation. The priority areas consist of watersheds,
regions, or areas of special environmental sensitivity or having
significant soil, water, or related natural resource concerns. For
fiscal year 1997, nearly 71 percent of the EQIP financial assistance
funding was provided within priority areas. The process for selecting
these priority areas begins with the local conservation district(s)
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 sets priorities for the
program, including approval of priority areas. Over 600 priority areas
were approved by the State Conservationists and about 550 of these were
funded. Funds are made available to the States based upon the quality
of the priority area proposal, local initiatives, and the environmental
needs of the affected areas.
The program has been very successful. We received nearly 60,000
applications in fiscal year 1997. NRCS estimates that it would require
over $550 million to fully fund all of the applications received last
year, alone, which is three times the available financial assistance
funds. After NRCS ranked the applications based on criteria developed
at the local and state level, FSA county committees approved over
22,000 long-term contracts with farmers and ranchers. The EQIP
financial assistance on these contracts will exceed $174 million.
Based on the fact that requests for assistance far exceed available
funding, there is a need to continue to prioritize and focus our
efforts so that we meet our Congressional mandate to maximize
environmental benefits per dollar expended. We expect that in fiscal
year 1999, continued interest in animal nutrient management will spur
an increase in EQIP participation in this area. The nutrient management
focus of the program will help meet national objectives of water
quality, while involving farmers and ranchers in voluntary and
cooperative solutions. Utilizing inventory and assessment tools, NRCS
will continue to build the capacity of local communities to inventory
and assess their watersheds to identify needs for nutrient management
and priorities for conservation treatment. In addition, EQIP outreach,
education, and information efforts will include working with
conservation partners to launch efforts within priority watersheds to
inform landowners and communities of the opportunities to improve water
quality and agriculture production through soil conservation and
nutrient management. The 1999 budget proposal seeks by proposed
legislation to increase funding for EQIP by a total of $350 million
through fiscal year 2003. NRCS would receive an additional $100 million
in fiscal year 1999 and fiscal year 2000, and $50 million in each
subsequent fiscal year through 2003. The increased funding would be
directed toward technical, financial, and educational assistance to
farmers in addressing problems associated with agricultural runoff and
would support the President's Clean Water Initiative. The request will
also help with increased assistance to minority and limited resource
farmers to ensure participation in the program. The technical
assistance component would be funded initially at the 10 percent level.
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.
WHIP is a solely voluntary program, whose projects encompass a wide
array of wildlife practices. Projects performed under the program
include advancing the following measures: upland wildlife habitat,
wetland wildlife habitat, threatened and endangered species habitat,
fishery habitat and other approved activities. The budget proposal
assumes 171,400 acres enrolled in fiscal year 1998 and an additional
114,300 acres enrolled in fiscal year 1999.
State NRCS offices have made an enormous effort to develop
partnerships and outreach methods with government and private
organizations to develop a program that targets specific state
concerns. We propose to continue to facilitate development of the
program in a fashion to ensure the greatest amount of success for
wildlife for the funds appropriated. Based upon proposals currently on
hand, NRCS anticipates that program funding needs continue to mount as
the public becomes more aware of its successes and the multiple
benefits that it offers. The fiscal year 1999 budget request assumes
continued funding of WHIP at $20 million. This level would conclude the
authority granted under the 1996 Act.
The Farmland Protection Program (FPP) protects prime or unique
farmland, lands of State or local importance, and other productive
soils from conversion to nonagricultural uses. It provides matching
funds to leverage funds from States, Tribes, or local government
entities that have farmland protection programs. The FPP establishes
partnerships with States, Tribes, and local government entities to
acquire conservation easements or other interests in land. It protects
strategic farmland from urbanization. It ensures that the valuable
farmlands are preserved for future generations and also helps maintain
a healthy environment and sustainable rural economy.
The easement acquisition is on a voluntary basis. Qualifying
farmland must: (1) have a pending offer from a State, Tribe, or local
farmland protection program; (2) be large enough to sustain
agricultural production; (3) be accessible to markets for what the land
produces; (4) have adequate infrastructure and agricultural support
services; (5) have surrounding parcels of land that can support long-
term agricultural production; and (6) experience urban development
pressure. When selected, a conservation plan consistent with other
conservation programs is required for each farm.
The FPP was authorized in the 1996 Farm Bill. During fiscal year
1996, 53 entities from 20 States submitted proposals requesting Federal
matching funds of $130 million for 628 farms with 176,000 acres of
valuable farmland at an estimated easement value of $330 million. $14.5
million of CCC funds were provided to match 37 government entity
programs. That allocation will lead to the protection of approximately
76,000 acres of valuable farmland on 203 farms with an estimated
easement value of $116 million in 17 States once all easement
acquisitions have been completed. Experience in the first request for
proposals for the FPP indicates that demands are almost 10 times
greater than the available Federal matching funds.
For fiscal year 1997, $2 million was approved by Congress for use
from CCC funds to purchase development rights from farmers and
ranchers. In fiscal year 1998, the $18 million approved by Congress
exhausted the original authorized funds for the program.
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 1998,
pilots will be determined through a Request For Proposal in the Federal
Register. Funding for the CFO is provided through the Commodity Credit
Corporation. The fiscal year 1998 funding for CFO is $15,000,000. For
fiscal year 1999, we are requesting authority for $25,000,000 in CCC
program funds, as authorized by the 1996 Act.
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 Federal Agriculture Improvement
and Reform Act of 1996 (the 1996 Act), re-authorized the WRP to be
funded under the Commodity Credit Corporation (CCC) beginning 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.
Beginning in fiscal year 1997, the program was funded under the
Commodity Credit Corporation (CCC). The fiscal year 1997 program
provided $99,000,000 in CCC financial assistance funds to enroll
approximately 125,000 acres involving more than 700 individual
projects. The fiscal year 1998 program will provide $218,597,000 in
financial assistance to enroll approximately 212,000 acres. In fiscal
year 1999, we propose enrolling an additional 164,000 acres at a cost
of $123,741,000. Technical assistance funding for 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.
Technical assistance funding for fiscal year 1999 will include both
unobligated appropriated funds ($4,000,000) and CCC funds
($11,059,000).
From inception of the program in 1992 through 1997, interest in the
program has been exceptional, providing approximately 449,250 acres
enrolled in the program through the end of fiscal year 1997, and
coupled with the fiscal year 1998 and fiscal year 1999 program sign-
ups, approximately 825,450 are expected to be enrolled by the end of
fiscal year 1999 through use of fiscal year 1997 and fiscal year 1998
CCC funding. We expect to reach the 975,000 acre enrollment goal
mandated by the 1996 Act in fiscal year 2000, two years ahead of
deadline. Historically, there have been more than five fold as many
acres offered than the program could enroll. The fiscal year 1998 sign-
up was the fifth that has occurred under WRP since fiscal year 1992.
The fiscal year 1998 effort provided 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, the fiscal year 1997 sign-up is
separated into three components (i.e., 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 1998 is 212,000 acres with a
requirement that the initial 32,000 acres of easements be limited to
30-year duration. Thus far, approximately 48,596 acres of 30-year
easements have been enrolled. This enrollment was completed before the
enrollment of permanent easements was initiated. The 48,596 acres
represents approximately 60 percent of the 30-year easement offers that
have been received. We would expect during fiscal year 1998 to easily
fulfill the 75,000 acre enrollment that is called for in statute.
Approximately 50,980 acres of permanent easements have been enrolled.
This represents approximately 32 percent of the permanent easement
offers. Approximately 4,154 acres of restoration cost-share agreements
have been enrolled. This represents approximately 100 percent of cost-
share agreement offers.
Under the continuous sign-up process the backlog lists for each of
the program components will continue to be updated. Once the fiscal
year 1998 enrollment process is completed, these lists will be
available for immediate use in selection of the 1998 enrollment.
conclusion
It is clear that as we consider the appropriations for the private
lands conservation as part of the 1999 budget, that we stand at a
crossroads. We have been granted a wealth of tools and resources, and
have willing partners and customers to put them to work. We have the
opportunity to establish a foundation for the future of conservation--
fulfilling our commitment to the resources, while ensuring healthy and
productive land is within our reach. Even more, we can instill a
conservation ethic that will endure for generations.
However, 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 and to look beyond. Given the needed resources in
this appropriation request, together we can ensure a conservation
legacy for future generations.
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.
______
Prepared Statement of Thomas A. Weber
Mr. Chairman, it gives me great pride to represent the Natural
Resources Conservation Service--NRCS--before the Committee, today. For
over two decades I have had the pleasure of serving among what I would
consider to be the most committed and invaluable group of public
servants and conservation professionals in this nation. It has been
said so many times that the whole is greater than the sum of its parts.
I feel this is especially true of NRCS. It has value far beyond the
conservation programs, cost share dollars, or even the staff that
comprise it. It is the unique combination of technical skills,
partnerships, dedication to public service and commitment to working
with people on the land that are the keys to its value. Therefore,
rather than focusing on talk about numbers and budgets, I want to
highlight leadership, partnerships, the accomplishments of our
employees, and the challenges ahead.
NRCS has had the fortune of being led by a tremendous cadre of
leaders who had a vision of natural resources for the future and the
creativity and courage to see them through. Primary among them was Hugh
Hammond Bennett who asserted that the solution to soil erosion was to
tailor conservation practices to fit the individual situation and needs
of the landowner. In recent history, the leadership of Paul Johnson
crystallized in our minds the importance of conservation on private
lands and how the success of voluntary conservation is the key to
ensuring the productivity and health of the land for future
generations.
But meeting the enormous task of performing conservation work on
the nation's private lands takes far more than the work of a single
individual or even a federal agency. It is instead through a
partnership of a federal agency, local conservation districts, state
conservation agencies and others, and the hard work of local people
that we are able to accomplish all we do. We refer to it as the
Conservation Partnership. It is a unique and effective delivery system,
it is geared to meeting the needs of local people, and it has literally
changed the landscape of the nation.
Last year brought about many new responsibilities, many challenges,
and of course, many changes. I am proud to say that the dedicated
employees of NRCS and our conservation partners collectively applied
their knowledge and abilities to start putting Farm Bill programs to
work for our nation's land and people. But more than simply
implementing these program, NRCS staff have strived to utilize these
tools in creative ways to meet the resource needs of our customers.
Just as Hugh Hammond Bennett originally asserted, we are using the
programs to meet the greater needs of the land and landowner. Likewise,
more than ever, we have strengthened the locally led approach to
conservation.
Last year, our employees shared responsibility for the largest
Conservation Reserve Program sign-up in the Department's history. They
also helped to officially launch the National Conservation Buffer
Initiative, which will protect water quality, wildlife habitat, and
provide many more environmental benefits and implemented the
Environmental Quality Incentives Program (EQIP) which has become one of
the most popular conservation programs that is available. And more than
its popularity among our customers, our field conservationists are
finding it to be the useful tool to help landowners meet their
conservation needs.
Thanks to your support and our employees efforts, landowners will
share with people in their watersheds a future that has healthier land
and cleaner water and air. We've seen tremendous progress where the
conservation partnership have engaged communities in resource concerns
and priority setting. Our employees and partners have also worked to
improve outreach to underserved customers. That work is an example of
what can happen when good people set out to achieve a common goal.
We've made progress, but we need to accelerate our work with
underserved individuals, communities, and groups and ensure that our
legacy of conservation and stewardship includes everyone.
Nineteen ninety-eight is shaping up to be an exciting year in
natural resource conservation. There are several programs being
implemented--Wildlife Habitat Incentives Program (WHIP) and
Conservation Farm Option (CFO). There are a lot of issues of concern to
be addressed, including animal agriculture and the environment, water
quality, wetlands, natural disasters, air quality, and farmland
protection--to name just a few. We in NRCS are also putting a strong
emphasis on continuing to enhance our technical capability. Our
employees need to have the best technical skills available to provide
quality service. As a result, we're providing additional training to
employees and exploring new technology. It is important that as we
focus upon new program activities and adapt to changes in producers
needs, that we continue to address the needs of our employees. The goal
is to make sure on all accounts that our staff have the best training
and resources they need to serve our customers.
One of the goals of our agency-wide reorganization was to place a
higher share of staff resources in the field to maintain and enhance
service to our customers. This goal continues to be a high priority.
We've recently given direction to agency leaders at all levels to
maintain or, if possible, increase the number of field employees as
positions become vacant elsewhere in the agency. We're also making
every effort to reduce the administrative workload of our field
employees to increase the time they devote to getting conservation on
the land working directly with landowners.
Throughout the agency, our focus is to maximize conservation
benefits with the funds that are available. Therefore, the fiscal year
1999 budget proposes to increase support for the vital technical
assistance that our field staff provide. You will note that the budget
contains a renamed account entitled America's Private Lands
Conservation. The funds for this program represent the support that is
needed to get conservation activities on the ground. And while we have
strived to give our field staff the tools they need to assist
landowners, we also anticipate increased returns through cooperative
efforts with federal and non-federal partners as well. Our
participation in the President's Clean Water Initiative will help to
improve the health of watersheds, restore wetlands, and help
communities meet water quality goals.
The fiscal year 1999 budget proposal for NRCS will help to ensure
protection and improvement of our natural resources for future
generations. As the Under Secretary outlined, we have made much
progress and the success of our many conservation programs is a
testament to the commitment of so many landowners across the nation who
want to help themselves. It is also proof that the heritage left behind
by our predecessors can become a legacy of land stewardship if we are
willing to take on the task. I believe that we can take on this task,
and I am confident that the employees of NRCS and its conservation
partners can meet the challenges for 1998 and beyond.
STATEMENT OF THOMAS A. WEBER
Senator Cochran. Chief, you are recognized. Welcome.
Mr. Weber. Thank you, Mr. Chairman. It gives me a great
deal of pride to be here today to represent the Natural
Resources Conservation Service. It has been said so many times
that the whole is greater than the sum of its parts. I feel
this is especially true of the Natural Resources Conservation
Service. It has value far beyond the conservation programs,
cost-share dollars, or even the staff that comprise it.
It is a unique combination of technical skills,
partnerships, dedication to public service, and commitment to
working with people on the land that are the key to its values.
Therefore, rather than focusing on numbers and budgets, I want
to highlight partnerships, the accomplishments of our
employees, and the challenges ahead in the few minutes I have
here.
Meeting the enormous challenges and tasks of performing
conservation work on the Nation's private lands entails far
more work than an individual agency or person can accomplish.
It is instead, through a partnership of a Federal agency, local
conservation districts, State conservation agencies and others,
and the hard work of local people that we are able to
accomplish what we do.
We refer to this as the conservation partnership. It is a
unique and effective delivery system that has been in place for
over 60 years and is geared to meeting the needs of local
people on the land. And it has literally changed the landscape
of this Nation.
Last year brought many new responsibilities, challenges,
and of course many changes. I am proud to say that our
dedicated employees and our partners have collectively applied
their knowledge and their abilities to put the farm bill
programs on the land and to put them to work for the Nation's
land and people.
We are using these programs as tools to meet the greater
needs of the land and the landowners. And likewise, more than
ever, we have strengthened what we call the locally led
approach to conservation.
Last year our employees shared responsibility for the
largest Conservation Reserve Program signup in the Department's
history. They also helped to officially launch the national
conservation buffer initiative, which will help to protect
water quality, enhance wildlife habitat, and provide many of
the environmental benefits.
In addition to that, the Environmental Quality Incentives
Program was brought on board, which has become one of the most
popular conservation programs in this Nation. Our employees and
partners have also worked to improve outreach to underserved
customers. We have made much progress there, but we need to
accelerate our work with underserved individuals, communities,
and groups and ensure that our legacy of conservation and
stewardship includes everyone.
This is an exciting year in natural resource conservation.
There are several programs that we are implementing this year,
one mentioned earlier, the Wildlife Habitat Incentives Program.
In addition to that, we have the conservation farm option
that will be soon coming out. There are also a lot of issues of
concern to be addressed, including animal agriculture and the
environment, water quality, wetlands, natural disasters, of
which we have certainly had several here recently, air quality,
and farmland protection to name just a few.
We have made much progress, and the success of our
conservation programs is a testament to the commitment of so
many of our landowners across the Nation who want to help
themselves. A few examples of our progress: Total erosion on
highly erodible cropland has been reduced 47 percent since the
1985 farm bill.
The rate of wetland loss has declined between 1982 and 1992
to approximately 79,000 acres per year.
Senator Bumpers. Would you repeat that, please?
Mr. Weber. The annual rate of wetland loss has declined
between the periods of 1982 and 1992, based on our current
statistical information, to about 79,000 acres per year.
Senator Bumpers. Thank you.
Mr. Weber. The number of waterways safe for swimming and
fishing has doubled over the last 25 years. This is proof that
the heritage left behind by our predecessors can become a
legacy of land stewardship, if we are willing to take on the
challenge. And the challenge is daunting.
Soil erosion on agricultural land still exceeds 2 billion
tons annually. Nineteen percent of the Nation's streams do not
meet water quality standards due to the environmental impacts
of animal waste alone. There is some evidence that the rate of
loss of rural land to urban development has actually begun to
increase during the 1990's.
However, with your help I am confident that the employees
of the Natural Resources Conservation Service and our
conservation partners can meet these challenges in 1998 and
beyond.
In closing, I want to share a story with you that portrays
the real value of the Natural Resources Conservation Service,
its employees. A few weeks ago I had the pleasure of hearing
Mr. Jerry Clower, storyteller and entertainer from the State of
Mississippi, speak of his land and the special relationship
with what he called his conservationist over many years.
Now Mr. Clower spoke eloquently and proudly about
conservation on his land and also helped--he was helped by his
conservationist. And he talked about the enjoyment his
grandchildren had on that land.
He spoke of the land as being America's conservation
legacy. Later on Mr. Clower noted that he did not realize his
conservationist was a Federal employee because that really
never mattered to him.
The story points out the real value of NRCS. It is not the
programs, it is not the authorities, and it is not the cost-
share funds that are the most critical of America's private
land conservation effort.
It is the cadre of highly trained, motivated and skilled
individuals and technical people working directly with
landowners that truly result in the conservation benefits we
all enjoy today.
We must preserve and nurture this national treasure in
order to pass on our conservation legacy to future generations.
Thank you, Mr. Chairman.
EQIP
Senator Cochran. Thank you, Mr. Weber, for your comments
and your testimony.
In connection with the EQIP Program that was mentioned and
is also discussed at length in the prepared testimony, you talk
about selecting priority areas for attention and the fact that
emphasis will be given in providing funds and technical
assistance to these priority areas.
Has there been any designation or a map drawn to illustrate
where these priority areas are? I am curious to know where the
money is really going, where it has gone so far under this
program, how much has been spent, and what you intend to do
with the money you are asking us to appropriate for this next
fiscal year.
Senator Bumpers. Mr. Chairman, before he answers that
question, are you alluding to the Water Resources Assistance
Program, where he says they have 40 priority watersheds?
Senator Cochran. No; the Environmental Quality Incentives
Program [EQIP] that he talks about.
Senator Bumpers. OK.
Senator Cochran. It talks about priority areas recommended
to NRCS by local work groups and State conservationists, but
then they talk about a national program for selecting priority
areas. I am just curious to know, have they selected the
priority areas? And if so, where are they?
Mr. Lyons. Mr. Chairman, we could provide for the record a
map of the priority areas that have been designated in each
State. They are identified. They are identified through a
process that really begins from the ground up where local
conservation districts and others help to identify these areas.
Then those nominations, if you will, are presented to the
State technical committees, who then work to refine and
identify those areas of priority. And it is on that basis that
we set those priorities for allocations.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T01FE26.001
Senator Cochran. Well, I notice, to follow up on that, that
you say in fiscal year 1997 nearly 71 percent of the EQIP
financial assistance funding was provided within priority
areas. The total amount, as I understand it, that you had to
work with was less than $200 million.
And I am just curious to know, are some areas of the
country being left out of this priority program? Can you tell
us more about where the money is going?
I do not think you have--you have a map. Do we have copies
of the maps that we can look at or a table showing where the
money has been spent or where you intend to spend it?
Mr. Lyons. Yes; I do not think we have a map with us, Mr.
Chairman. We will certainly provide you the EQIP allocations.
Basically the way the process works is, the State technical
committees provide oversight in each State. And they include a
number of interest in entities chaired by the State
conservationist. But this is a locally led effort to identify
priority areas.
The additional funds, though, that are allocated beyond the
71 percent address statewide concerns and are not necessarily
tiered toward any specific priority area. So it is really an
attempt to have those on the ground to understand water quality
and conservation concern needs, identify priorities, allocate
funds primarily through that process, but then reserving some
funds to address other statewide needs, again guided by what
individual State technical committees advise.
EQIP Priority Areas
Senator Cochran. Do you leave up to the State technical
committees and the State conservationist the authority to
decide what areas are priority areas, or do you have
regulations that you have promulgated that guide them?
Mr. Lyons. I am going to ask the Chief to offer those
details.
Mr. Weber. Thank you.
As part of the process the State conservationist working
with the State technical committee gets the advice from the
State technical committee, which is represented by a number of
Federal agencies and organizations in the State, including
State government.
This committee makes recommendations to the State
conservationist in terms of which priority areas in the State
should be funded and at what levels. It also makes
recommendations in terms of what we are calling statewide
concerns, which are issues that may cover a total portion of
the remaining part of the State outside of priority areas, such
as water quality, where you have perhaps some animal
concentration issues you are dealing with. And they recommend
the amounts of the allocation that should go toward those
efforts.
The total allocation is given to the State based on the
State resource needs, but the State conservationist with the
input of the State technical committee makes the decisions. And
with Farm Service Agency [FSA] concurrence in this process,
they make the decisions on where the dollars will go in terms
of how much to each priority area and to statewide concerns.
Senator Cochran. In the administration of this program,
have you found that some States end up having to use all the
money under the program for the priority areas? Does everybody
have 29 percent left over to use for local concerns that may be
outside this classification scheme?
Tell me how that works as a practical matter.
Mr. Weber. OK. Thank you.
We allow that discretion to each State. They receive x
dollars for their allocation. Then, working with the State
technical committee, they decide what are the best and highest
priority uses for those dollars.
In some cases we may have States that are allocating 50
percent to the priority areas, and 50 percent to the areas of
statewide concern. So it is going to vary from State to State
what that percentage is. But they do have discretion within the
dollars they have.
EQIP Allocations
Senator Cochran. Well, I am a little bit confused in trying
to figure out where the money is going. I guess you are going
to show us a table where the money is going.
Mr. Weber. Yes.
Senator Cochran. Can you tell us anything about that, or
are you just going to furnish that for the record, referring to
the earlier question that I asked?
Mr. Lyons. We will furnish that for the record, Mr.
Chairman.
[The information follows:]
ENVIRONMENTAL QUALITY INCENTIVES PROGRAM (1998)
----------------------------------------------------------------------------------------------------------------
Technical Education Financial
State assistance assistance assistance Totals
----------------------------------------------------------------------------------------------------------------
Alabama......................................... $620,000 .............. $2,580,000 $3,200,000
Alaska.......................................... 82,000 $8,000 342,000 432,000
Arizona......................................... 981,000 197,200 3,890,800 5,069,000
Arkansas........................................ 1,092,000 120,000 5,278,000 6,490,000
California...................................... 1,448,000 611,000 5,499,000 7,558,000
Colorado........................................ 1,348,000 135,162 4,902,838 6,386,000
Connecticut..................................... 117,000 473,150 24,850 615,000
Delaware........................................ 212,000 9,000 892,000 1,113,000
Florida......................................... 925,000 5,400 3,843,600 4,774,000
Georgia......................................... 811,000 57,450 3,398,550 4,267,000
Hawaii.......................................... 224,000 40,000 787,000 1,051,000
Idaho........................................... 787,000 50,000 3,306,000 4,143,000
Illinois........................................ 798,000 52,379 3,347,621 4,198,000
Indiana......................................... 655,000 .............. 2,525,000 3,180,000
Iowa............................................ 1,106,000 211,000 4,173,000 5,490,000
Kansas.......................................... 1,053,000 25,000 4,110,000 5,188,000
Kentucky........................................ 549,000 35,130 2,306,870 2,891,000
Louisiana....................................... 832,000 144,700 4,334,300 5,311,000
Maine........................................... 544,000 104,450 1,896,550 2,545,000
Maryland........................................ 451,000 24,000 1,774,000 2,249,000
Massachusetts................................... 175,000 20,000 665,000 860,000
Michigan........................................ 790,000 .............. 3,367,000 4,157,000
Minnesota....................................... 1,082,000 224,000 4,263,000 5,569,000
Mississippi..................................... 865,000 99,550 4,426,450 5,391,000
Missouri........................................ 957,000 121,000 3,897,000 4,975,000
Montana......................................... 1,208,000 .............. 5,056,000 6,264,000
Nebraska........................................ 954,000 64,100 4,004,900 5,023,000
Nevada.......................................... 286,000 8,000 1,213,000 1,507,000
New Hampshire................................... 71,000 15,050 285,950 372,000
New Jersey...................................... 203,000 35,000 832,000 1,070,000
New Mexico...................................... 734,000 42,575 3,088,425 3,865,000
New York........................................ 929,000 37,728 3,593,272 4,560,000
North Carolina.................................. 1,123,000 .............. 4,597,000 5,720,000
North Dakota.................................... 851,000 164,676 3,463,324 4,479,000
Ohio............................................ 660,000 50,000 2,574,000 3,284,000
Oklahoma........................................ 1,060,000 126,471 4,204,529 5,391,000
Oregon.......................................... 802,000 244,000 3,173,000 4,219,000
Pacific Basin................................... 110,000 82,000 324,000 516,000
Pennsylvania.................................... 845,000 33,800 3,301,200 4,180,000
Puerto Rico..................................... 232,O00 11,000 916,000 1,159,000
Rhode Island.................................... 48,000 9,000 190,000 247,000
South Carolina.................................. 395,000 .............. 1,685,000 2,080,000
South Dakota.................................... 826,000 84,400 3,437,600 4,348,000
Tennessee....................................... 581,000 23,513 2,451,487 3,056,000
Texas........................................... 3,122,000 264,260 12,948,740 16,335,000
Utah............................................ 783,000 80,000 2,975,000 3,838,000
Vermont......................................... 276,000 .............. 942,000 1,218,000
Virginia........................................ 500,000 15,000 2,116,000 2,631,000
Washington...................................... 950,000 172,612 3,876,388 4,999,000
West Virginia................................... 344,000 10,000 1,455,000 1,809,000
Wisconsin....................................... 840,000 .............. 3,517,000 4,357,000
Wyoming......................................... 763,000 21,500 3,090,500 3,875,000
---------------------------------------------------------------
Total..................................... 38,000,000 4,362,256 155,141,744 197,504,000
===============================================================
Undistributed................................... .............. .............. 2,496,000 ..............
----------------------------------------------------------------------------------------------------------------
Senator Cochran. Well, let us just pick out a few States.
Tell us about Wisconsin, Arkansas, Mississippi, and Montana.
[Laughter.]
Mr. Lyons. Just to pick four States.
Senator Cochran. Just to pick four States at random.
Senator Burns. And if you are having any trouble
remembering the details in Montana, I will enlighten you.
Mr. Lyons. OK. Which States? [Laughter.]
Senator Cochran. Wisconsin, Arkansas, Mississippi, and
Montana.
Mr. Weber. Mississippi. OK.
Mr. Lyons. While Tom is looking at the allocations overall,
I guess what I should explain, Mr. Chairman, is of course one
of the problems we have with EQIP is it is oversubscribed. We
estimate there is $600 million in demand out there.
So not all producers are able to get the assistance and the
financial support they seek. We only have $200 million to
allocate. And of course this year we are seeking an additional
$100 million to give us $300 million overall.
So we have established this system to try and come up with
an orderly way to make allocations based on what people on the
group perceive to be priority conservation concerns. It puts
the State technical committees in a tough position. They have
to make tough calls.
But candidly, our view was it is better for them to make
the calls there than for us inside the beltway to be making
those calls.
Senator Cochran. Well, there are some decisions that are
made in Washington though about the national priorities. And
you talked about how this money was going to be used to support
the President's clean water initiative and all these other new
initiatives, which we think are important.
But what worries me is, you have made decisions as to how
to spend this money nationally, and when you get right down to
it, the State conservationists and the State committees are
being given what is left over. And it is very, very little to
do the conventional and the traditional things, to protect
watersheds and protect farmland.
Mr. Lyons. I guess I would need to understand that more
clearly, Mr. Chairman. But I see it differently. And of
course----
Senator Cochran. Well, tell us what the facts are then.
Mr. Lyons. Well, the facts are----
Senator Cochran. What are the facts? Where does the money
go? Where is the decision made as to the allocation of the
funds. Can we find that out?
Mr. Lyons. Sure.
Senator Cochran. I have asked it about three or four times,
and I have not heard a word about it yet. I have not heard a
responsive answer to that question.
Mr. Lyons. Well, I will let Tom give you the details. And
if that does not do it, we will go at it again.
Senator Cochran. OK.
Mr. Weber. For fiscal year 1998, allocations for EQIP in
Arkansas is $6.49 million; the State of Mississippi is $5.391
million; Wisconsin is $4.357 million; and Montana is $6.264
million.
Senator Burns. What was Montana again?
Mr. Weber. $6.264 million. And those are based on----
Senator Burns. Where did it go?
Senator Cochran. Let me finish my question, if I could,
Senator.
Senator Burns. OK.
Senator Cochran. Are these funds allocated to the States to
spend in the national priority areas, or are these funds
allocated for the States to spend based on decisions made by
the State conservationist and the State committee?
Mr. Lyons. The allocations are made to the State for the
State conservationist with the concurrence of the Farm Service
Agency and the involvement of the State technical committee to
decide where those dollars are spent.
Senator Cochran. And this is out of a total amount of $200
million, these States got that much? Is that what you are
telling me?
Mr. Weber. Correct.
Clean Water Initiative
Mr. Lyons. The role of Washington is the initial allocation
to the States. But once the States have those funds that Tom
has described, then it is the State's role to determine where
those moneys should go and how those allocations should be
made.
And let me just clarify, Mr. Chairman. For an initiative,
like this clean water initiative that I referenced, as we are
attempting to formulate that, our intent is not to create a new
allocation formula or the like. We really are trying to
determine ways in which we can mirror the most efficient
delivery system out there.
And we may, in fact, simply elect to use something akin to
what we are doing now with the EQIP allocation formula, because
we certainly want those decisions to be made at a State and
local level.
Wildlife Habitat Incentives Program
Senator Cochran. I am glad that you are going to be
implementing the Wildlife Habitat Incentives Program. We think
that it is a new initiative, as you pointed out, that may very
well lead to the protection of habitat for wildlife, endangered
species, migratory waterfowl, and other game animals and fowl
as well.
We hope that you will continue to monitor that carefully
and give us a report on participation and how it is going. If
there are any changes that need to be made legislatively, we
hope you will communicate those to us.
We also appreciate the fact that you have established
conservation centers where farmers and landowners can come and
find out how they can take advantage of the Federal programs.
We know that you have established one which we attended
together, the ribbon cutting in Mississippi.
Tell me how that is working out. Do you think that is going
to be a wise investment of Federal funds? Will farmers and
landowners be better able to take advantage of the Federal
programs, like Jerry Clower talked about in your testimony,
Chief?
Mr. Lyons. Let me offer my perspective on that, Mr.
Chairman. I think the value of those institutes--and we have
established several across the country. Of course the one you
refer to is the Wildlife Habitat Institute that Pete Heard is
heading up--is that is a mechanism to translate current
research information and current technology into ways that can
be rapidly used by State conservationists in applying that
knowledge on the ground.
For example, with the Wildlife Habitat Institute, although
housed in Mississippi, we have individuals in the Pacific
Northwest, in Colorado, in New England, in several places
across the country, who are in a position to work directly with
the State conservationists or with conservation districts to
help in accelerating and facilitating the use of that
information to make sure that it is applied in a rapid way.
And we think it is going to pay off tremendously. It is a
small investment, but I think it is, using modern
communications technology, an opportunity to facilitate a
national dialog by getting information to the ground very
quickly.
Small Watershed Program
Senator Cochran. Let me conclude my questioning in this
round with an observation and ask you to give me your reaction.
The suspicion is out in the farmland area of my State, the
Mississippi Delta specifically and some other areas too, that
the Soil Conservation Service approaches of the past by the new
NRCS is to let low-lying areas flood, that this is good for the
environment, good for the country, and that traditional
watershed flood control protection measures are out of date,
out of favor, and are not being funded by this administration.
Is that true? And if that is true, why is that?
Mr. Weber. OK. As you know, in the budget proposal the
funding for the Public Law 566, Small Watershed Program, for
the financial assistance side, which is to invest in contracts
with landowners or build structures, is $49 million. This is
comparable approximately to what it was last year.
I would say the answer to the question is that we are
supporting good conservation. And we have tools at our disposal
to enhance conservation. The Wetlands Reserve Program certainly
is applicable where there are needs and interested landowners
in preserving wetlands and restoring wetlands.
The watershed program has been--we have gone through a
review of the backlog on that program trying to ensure we have
those projects that are really--that people are interested in
continuing to work with us to put into place. We have done
that. We are taking a look at the program to broaden it, to
allow people to participate on land treatment aspects versus
structural aspects.
But I would not say the agency prefers one over the other.
We are simply trying to provide all the tools we can within the
means that we have to deal with the natural resource issues.
And I would just share with you, we are also taking a look
at the infrastructure issue on our old watershed projects, and
we will share this with you as well, so you get a concept of
that.
Senator Cochran. Thank you very much.
Senator Bumpers.
Wetlands
Senator Bumpers. Thank you, Mr. Chairman.
Chief, what role do you have in the 404 permitting process?
Do you make the determinations of what are wetlands in this
country?
Mr. Weber. Part of our responsibility under the memorandum
of agreement with Fish and Wildlife and the Corps of Engineers,
is that we do wetland determinations on agricultural lands.
We are continuing to work with the Corps on revising the
memorandum of agreement to allow greater flexibility on
wetlands and the acceptance of wetland determinations that we
make for those purposes.
Senator Bumpers. You do not have to sign off on the plan.
Let us assume that I am a farmer and I apply for 404 permitting
process on 40 acres of my farm. You have previously determined
that 40 acres to be wetlands, right?
Mr. Weber. We may have, yes.
Senator Bumpers. And it goes to the Corps for permission to
do something with that.
Mr. Weber. Yes.
Senator Bumpers. Which it will also include some
alternative plan to make up for the loss of that 40 acres, is
that correct?
Mr. Weber. A mitigation plan.
Senator Bumpers. Yes; mitigation plan. So once that is
submitted to the Corps, we are talking about this 40-acre plan,
he says, Well, I will convert another 40 acres on my farm to
wetlands, or whatever plan he submits. Do you have any further
signoff responsibility on that?
Mr. Weber. I do not believe so.
Senator Bumpers. That is solely with the Corps' discretion.
Mr. Weber. That is solely the discretion of the Corps.
Senator Bumpers. How are we doing on our preservation of
wetlands in this country through the 404 permitting process?
Mr. Weber. I am not familiar with what their
accomplishments are. But overall----
Senator Bumpers. I admit--I know that is not really your
responsibility. Do you add anything to this from time to time?
Do you add any wetlands to the national plan?
Mr. Weber. Oh, absolutely. Well, the Wetlands Reserve
Program is a wonderful example of----
Senator Bumpers. I am not talking about the Wetlands
Reserve Program. I am talking about coastal areas and so on. Do
you find that you have overlooked lands or did you decide that
lands should be added to the wetlands determination, or do you
just do it one time and that is the end of it?
Mr. Weber. We continue to work with landowners on their
requests to do redeterminations or new determinations of
wetlands on their lands. We are not doing----
Senator Bumpers. But you are talking about working with
owners to determine whether or not you made a mistake in the
first place.
Mr. Weber. Sometimes, yes.
Senator Bumpers. He said you have declared this wetlands
and it should not be. I can see how you work with them on
something like that. But I am talking about any additional
acreage that has not been determined to be wetlands.
Do you review the areas constantly, or does the State
agency review and recommend to you that a certain area be
declared a wetlands, even until this day?
Mr. Weber. No; let me----
Senator Bumpers. You said, I think you said this, Chief,
that we have reduced the loss of wetlands by 79,000 acres a
year in the period 1982 to 1992, is that correct?
Mr. Weber. That is correct, based on our national resource
inventory data.
Senator Bumpers. How are we losing that 79,000 acres? I
mean, how are we--let me rephrase the question. That is not a
correct question.
You say we have reduced the loss by 79,000, right?
Mr. Weber. We are----
Senator Bumpers. How much are we still losing? That is the
question.
Mr. Weber. We are losing a net of 79,000 acres per year.
Senator Bumpers. I think we are talking about two separate
things. You said we have reduced the loss on an annual basis.
So if we were losing 179,000 acres in 1982 and we are losing
100,000 acres now, we have reduced the loss by 79,000 acres,
right?
Mr. Weber. You could look at it that way, Senator Bumpers.
Senator Bumpers. Over the 10-year period, we have cut
179,000 acres to 100,000. No.
Mr. Weber. Yes.
Senator Bumpers. Let me see, am I saying that right? You
are saying we have reduced the loss. My question is: How much
are we still losing?
Mr. Weber. The answer to that is, we are still losing about
79,000 acres a year. If you set as a goal--of course, this was
a Bush administration goal, no net loss, originally stated--
then in relation to that goal, we are still 79,000 acres a year
short. That is what we are losing every year.
Senator Bumpers. How are we losing it?
Mr. Weber. Various forms of conversion and development.
Senator Bumpers. If a developer comes in and says, I want
to use this 80-acre tract to build a subdivision, I understood
that he had to come up with some mitigation plan. Does the
mitigation plan have to be on an acre-per-acre basis?
Mr. Weber. I think you are going to go well beyond my area
of expertise, Senator.
Senator Bumpers. Well, maybe----
Mr. Weber. The Corps would play that role.
Soil Lost
Senator Bumpers. I ought to wait until the Energy and Water
Committee meets, and we will ask the Corps of Engineers those
questions. But you said that we were still losing 2 billion
tons of topsoil a year.
Mr. Weber. Yes.
Senator Bumpers. What were we losing 10 years ago?
Mr. Weber. About 3 billion.
Senator Bumpers. Three billion?
Mr. Weber. Yes.
Senator Bumpers. How are you stemming the loss of topsoil?
Well, I know that Iowa used to lose 16 tons of topsoil an acre
per year. Now I understand they have done, through State laws
out there, some fairly dramatic things to stem that kind of
erosion. But how do you plan to stop the 2 billion tons that we
are still losing?
Mr. Weber. The Congress needs to take credit for the
outstanding progress we have made, based on the 1985 farm bill.
A lot of that reduction has come about because of the
conservation lands provisions of that bill.
We continue to work with landowners on a voluntary basis to
adopt different tillage practices that reduce erosion. We are
working with them on the conservation buffers that were
mentioned here.
We continue to work with them on the traditional practices
of terraces and tillage and wind strips and those kinds of
things. We are basically focusing on working with them on a
one-on-one basis and trying to encourage additional
conservation practices to go the next step versus any other
option that we may have available to us right now.
Buffer Zones
Senator Bumpers. You stated that you have identified 2
million miles of buffer zones along streams that you want to
acquire, either by easement or some other way, is that correct?
Mr. Lyons. That is actually part of the CRP program, so it
would be 10-year contracts.
Senator Bumpers. Have you identified the 2 million miles?
Mr. Lyons. No; the way we have administered the program,
Senator, is each State is in the process of promoting those
enrollments. And again----
Senator Bumpers. So that is just a ballpark figure.
Mr. Lyons. No; that is our goal. Two million miles is our
goal.
Senator Bumpers. Is that just a goal?
Mr. Lyons. Yes.
Senator Bumpers. So you have not identified the areas.
Mr. Lyons. No; we are letting--again, we are having that
determination made at the local level and working with
landowners, because, again, it is a voluntary program.
Watersheds
Senator Bumpers. On page 20 at the bottom on water
resources assistance, you state that the funding level would
enable approximately 92 Federal watershed coordinators to
develop project work plans, coordinate volunteers, projects
from watershed council activities, and 40 priority watersheds.
Do you have a list of those 40 priority watersheds?
Mr. Lyons. Not at this point.
Senator Bumpers. You do not?
Mr. Lyons. Not at this point, Senator.
Senator Bumpers. How do you know there are 40?
Mr. Lyons. Well, that is what we will have funding for.
Senator Bumpers. You do not know what they are, but you
will have funding for 40.
Mr. Lyons. Yes.
Senator Bumpers. When do you expect to have that?
Mr. Lyons. Well, part of what we have proposed in this
clean water action plan is to go through a process where the
States would lead us in identifying critical watersheds.
We have national information and on a gross basis have a
rough assessment of watersheds that are relatively healthy,
those that are at risk, and those that are maybe beyond our
ability to restore.
As we develop that process, we would work with the States
to identify priority watersheds. And then this funding would
help us address at least 40 of those priority watersheds. But
we still have to go through the process to actually identify
what those watersheds would be.
Plant Material Centers
Senator Bumpers. We have a plant material center in
Booneville, AR. You have 26 plant material centers in the
country.
Mr. Lyons. That is correct.
Senator Bumpers. The one in Arkansas, Senator Bond got very
interested in the Booneville facility and came down and spent a
day with me at their plant a couple of years ago. And he was
interested in it for a reason that I did not realize they were
working on. It was called agro-forestry, where they plant trees
on pasture lands, and you cannot even plant trees on row
cropping lands.
And I did not know I had the program going over there, but,
I mean, they were planting pecan trees. A walnut tree full
grown is worth something like $20,000 or $30,000. They were
planting those kinds of trees.
Are you familiar with that program, anybody on this panel?
Agro-forestry
Mr. Lyons. I guess I am, Senator. There is actually an
agro-forestry research center in Lincoln that helps develop
that technology. I think the Forest Service has been a key
player in that.
Senator Bumpers. But does Senator Bond not have a facility?
Are they not doing some work at the University of Missouri on
that?
Mr. Lyons. The University of Missouri has been one of the
universities that has provided some leadership in developing
that technology.
Senator Bumpers. Can you give me any idea as to how
successful that has all been so far?
Mr. Lyons. I would have to provide that for the record,
Senator.
Senator Bumpers. I would like for you to do that, if you
would.
Mr. Chairman, I have maybe three or four questions that I
will submit in writing.
Senator Cochran. Thank you, Senator.
We have a vote on the floor. I am going to stay here as
long as Senators want to ask questions, and then we will come
back. I think there are two votes back to back. I would like
both Senators here who have questions to ask them, if they
would like.
Senator Burns.
Watersheds
Senator Burns. I really do not have that many questions. I
just--the last answer really bothers me on these 40 areas. It
has not been identified, and you want money for a program that
you do not know what it is going to do. That bothers me.
And I want to tell private landowners and agriculture today
that this is--we see a movement here of managing their farms to
the point where it is going to be almost unbearable, if it is
anything like living in a State where you have public lands.
I just want to tell American agriculture that today this is
going way beyond what our responsibilities should be in the
Department of Agriculture.
In the CRP this last time, I want to--in the signup--well,
you wrinkle up your head, but the farmers out there--I was
raised on a little old bitty 160 acres with 2 rocks and 1 dirt,
and I can see that right now as the man that farms that will
have no more rights to what he wants to do with that farm than
he can fly to the Moon in a bucket. And I mean that, because of
what happened in EQIP in Montana. And we worked with you and
got that straightened out.
Where people were not--and every time you talk about we are
going to make this decision on watersheds, it is a matter of
decision made among agencies and maybe not among landowners.
And I just see a creep here that is unbelievable.
I have some questions that I want to submit for the record.
I would like an answer on them. But I am going to go through
this budget very, very closely, very closely. Here we are
cutting back on ARS and then flying out of here on programs
that we do not even know what they are going to do than we can
fly to the Moon in a bucket.
And that is--in other words, we are making our investment
of hard-earned dollars in what I believe is in some wrong
areas. And I am going to work with the chairman very closely on
this.
I have some questions. We will go vote, and then I have
some other things that I have to do. And I thank the chairman
for his indulgence.
Senator Cochran. Thank you, Senator.
Senator Kohl.
Wetlands Reserve Program
Senator Kohl. Thank you. I have several questions for the
record. I will just hit on one that is of particular interest
to me. I understand that the Wetland Reserve Program has
enrolled 9,800 acres since 1994 in my own State of Wisconsin.
The State NRCS expects to spend $6 million to enroll another
6,000 acres in 1998.
The last farm bill changed the WRP and created three
programs: 30-year easements, permanent easements, and cost-
share agreements. The permanent easements are very popular in
Wisconsin.
My question is: Can the State NRCS supply all of its money
to permanent easements?
They are concerned because they understand, or they have
heard, that they must divide the money equally among the three
options that I have just described. Can they spent all their
money on permanent easements?
Mr. Lyons. We can work with the State of Wisconsin NRCS to
allow that to happen. We are limited nationwide to the one-
third, one-third, one-third. But we can work with them to make
that work.
Senator Kohl. You can.
Mr. Lyons. Yes.
Senator Kohl. I appreciate that very much.
Thank you very much, Mr. Chairman.
Senator Cochran. Thank you, Senator Kohl.
I have other questions, too. I was going to come back and
ask some of them, but I think in view of the fact that we have
two votes, it is going to require a lot of time away from the
committee.
Submitted Questions
I am going to close this hearing simply thanking you all
again for your cooperation with our committee. We appreciate
your being here. And we appreciate your responding to the
questions that will be submitted 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
environmental quality incentives program designation of national
priority areas
Question. Authority exists under the Environmental Quality
Incentives Program (EQIP) for the designation of national priority
areas. Have regulations been promulgated to designate these priority
areas? If yes, then have priority areas been designated?
Answer. Yes. On May 22, 1997, the final rule for the Environmental
Quality Incentives Program (EQIP) was promulgated (7 CFR Part 1466).
Included in the final rule are regulations relating to the designation
of national conservation priority areas. No national conservation
priority areas have been designated as of February 26, 1998.
Question. Has the agency evaluated any applications and provided
funding for one or more national priority areas? If not, why?
Answer. The Natural Resources Conservation Service (NRCS) has
received several requests for designation of national conservation
priority areas. Requests have been received for areas such as the
Mississippi Delta, Colorado River Basin, Great Lakes Basin, Illinois
River (Illinois), and the Chesapeake Bay Basin.
At this time, we are not planning to designate national
conservation priority areas because we feel it is important to continue
our focus on addressing State priority areas and State natural resource
concerns that have been identified through the locally led conservation
process. NRCS will be evaluating the progress of locally led efforts,
including later this year, to determine the desirability of designating
national conservation priority areas in the future.
Question. What is the difference in a state priority area and a
national priority area? How many state and national priority areas does
the agency have the authority to designate?
Answer. A priority area, whether designated at a state level or at
a national level, could be a watershed, a subwatershed, an area, or a
region that can be geographically described and has specific
environmental sensitivities or significant soil, water, or related
natural resource concerns. The purposes and criteria for designating a
priority area at the national level are not much different than those
used at the state level. The general differences between a state-
designated and a national-designated priority area would be the scope
and the significance of the impacted natural resource. National
conservation priority areas may be designated because the contributing
or impacted area is multi-state or international in scope, and the
impacted natural resource is determined to be of national or
international importance. Currently, State level priority areas are
appropriately addressing these identified priority needs. As mentioned
above, we are continually evaluating this process to ensure this new
program remains focused.
There is no statutory or regulatory limit to the number of state
and national priority areas which may be designated. The major
limitation is monetary. Focusing the program funds to areas with the
most significant natural resource needs will assure that significant
improvement can be made in the environmental conditions in those areas
thereby maximizing environmental benefits per dollar expended.
Question. How much money is estimated for Mississippi's
participation in EQIP in the fiscal year 1999 budget request?
Answer. NRCS has just begun the deliberation process for making
EQIP funding decisions for fiscal year 1999. Local work groups and
stakeholders at the local level are beginning to consider the natural
resource and program needs in their local area. These recommendations
will be forwarded to NRCS State Conservationist later this spring, who
will involve State Technical Committees in the review and
recommendation process. Designation of priority areas and natural
resource concerns at the state level are not expected until August,
1998, after which national funding decisions recommendations will be
made to the Regional Conservationists. Mississippi received $5.3
million for EQIP in fiscal year 1998, and we do not anticipate at this
time that the fiscal year 1999 funding level will significantly change
if EQIP remains at $200 million.
Question. Should the Mississippi Delta be designated as a national
priority area, how much funding would be required to carry out this
EQIP program?
Answer. A proposal submitted by the Delta Council, Stoneville,
Mississippi, based on information developed by NRCS and other
conservation partners in June, 1997, indicated a combined need of $129
million (estimated) for water quality and water quantity measures in
the Mississippi portion of the Delta alone. No such proposal or
estimates have been submitted for the Louisiana and Arkansas portions
of the Mississippi Delta. The Mississippi proposal requests an EQIP
funding level of $4 million per year for 7 years, for a total $28
million. This would be matched with $9.3 million local cost-share for a
total of $37.3 million. This would provide sufficient funding to
implement conservation practices to reach an estimated 30 percent of
the water quality and quantity goals for the Mississippi portion of the
Delta.
eqip technical assistance
Question. Does the agency have adequate technical assistance to
carry out the activities that would be funded if the fiscal year 1999
budget request to increase EQIP by $100 million is adopted?
Answer. While NRCS currently has sufficient staff and expertise to
perform the technical requirements associated with a $300 million EQIP
in fiscal year 1999, the budget proposal assumes that technical
assistance will be supported with Conservation Operations funds. In
fiscal year 1997, NRCS implemented a direct time charge work
measurement system for EQIP which helped document NRCS EQIP technical
assistance costs of $44.3 million or 22 percent of a $200 million
program. For fiscal year 1998, a 19 percent technical assistance level
was approved by OMB. The fiscal year 1999 budget assumes a 10 percent
technical assistance level or $30 million from EQIP program funding,
while the remaining estimated $36 million costs would be absorbed
within the Conservation Operations appropriations.
Question. How much money for EQIP technical assistance is assumed
in the fiscal year 1999 request and how does this compare to the fiscal
year 1998 level?
Answer. Technical assistance for fiscal year 1999 is assumed at a
10 percent level based on the proposed $300 million request. Technical
assistance for fiscal year 1998 was apportioned at a 19 percent level
based on the $200 million spending authority.
Question. What amount of this technical assistance, if any, will
come from carryover balances from previous fiscal years?
Answer. None. No carry-over may occur with Commodity Credit
Corporation funds.
Question. Will any of the fiscal year 1999 budget request of $100
million be used for technical assistance? If so, how much?
Answer. Yes. The budget assumes that technical assistance for
fiscal year 1999 will be apportioned at a 10 percent level.
eqip assistance to minority and limited resource farmers
Question. What type of assistance to minority and limited resource
farmers will the agency provide to increase their participation in the
EQIP program? How will this differ from that provided in previous
years?
Answer. There are several ideas being considered as we develop
strategies for providing enhanced education, technical, and financial
assistance to minority, limited resource, and socially disadvantaged
farmers and ranchers. Under consideration are items such as:
a. Information and Outreach--Special efforts have been made to
incorporate specific outreach actions and measurable goals into agency
strategic plans at the national, state, and local level. Actions and
measurable goals may be made for:
--informational meetings with members of the targeted audiences;
--news releases and fact sheets, including those through media
sources which focus on the targeted audiences;
--involvement of other agencies and groups, including Cooperative
Extension Service, 1890 and 1994 institutions, Hispanic
servicing institutions, Research Education Access Program
institutions, other agricultural and land grant institutions;
--involvement of churches and other community based organizations
which represent or assist the target audiences;
--news releases to targeted media;
--assuring that local work groups will involve and obtain input from
target audiences; and
--use of NRCS field guidance which includes reference materials,
techniques, and methods for providing outreach, overcoming
barriers, and assisting limited-resource producers, minorities,
and Indian nations.
b. Education Assistance--Special efforts have been made to provide
training and education assistance to target producers. Education may
include:
--program requirements;
--how to apply;
--how to make assignment of payments to contractors and vendors;
--how to recognize natural resource conditions and environmental
problems;
--understanding which conservation practices address natural resource
and environmental concerns;
--how to install, establish, operate, and maintain conservation
practices;
--how to use own equipment and labor to establish conservation
practices;
--how to account for use of own labor and equipment when establishing
practices; and
--how to submit expenses for establishing practices to receive
payment.
c. Technical and Financial Assistance--Emphasizing the use of low-
cost conservation practices that are effective and affordable to the
target audiences. This will also help to meet the overall program
objective of maximizing environmental benefits per dollar expended.
NRCS, working with other agencies and private industry, should develop
conservation practice standards and specifications for low-cost
conservation practices. If the funding level is increased to $300
million, there will be increased assistance in these activities as
well.
d. Farmer Mentoring--Assist with the establishment and sponsoring a
farmer mentoring network. The initiative could be a coalition of
farmers, farmer and commodity organizations, natural resource and
environmental organizations, private industry, and government, whose
purpose is to provide voluntary mentoring and help limited resource and
socially disadvantaged farmers and ranchers who need special assistance
to overcome their limitations and disadvantages.
Most of the ideas under consideration are not new or different than
types of assistance provided in previous years. The primary difference
is that many of these types of assistance were not widely or
comprehensively used in conservation cost-share programs. The
activities will be used in a concentrated manner and accountability
will be vigorously upheld to assure the activities are implemented.
conservation planning for eqip
Question. Please explain what the conservation planning
requirements will be for those who receive contracts, and how you
intend to assure those requirements are not more comprehensive than the
statute requires.
Answer. The conservation planning requirements for all EQIP
participants will be the same. A conservation plan must be submitted by
a participant that emphasizes sustainability of natural resources, is
based on ecological, economic, and social considerations, and includes
the producer's decisions and objectives for the farm or ranch. The plan
must allow the participant to achieve a cost-effective resource
management system, or some appropriate portion of that system,
identified in the applicable NRCS field office technical guide, for the
priority natural resource condition in the priority area or the
significant statewide natural resource concern outside a funded
priority area. To comply with the statutory provisions that a
participant may implement only one conservation practice using EQIP, we
believe that a whole farm or ranch conservation plan is not required.
The program is flexible and although it encourages participants to
voluntarily develop a conservation plan that is comprehensive and
addresses multiple natural resource concerns, it is not a requirement.
The likelihood of being assigned a higher priority for selection as a
program participant depends on whether the conservation plan will
result in significant environmental benefits to justify its priority.
NRCS intends to regularly monitor and evaluate the manner in which the
program is implemented to assure the statutory, regulatory, and program
guidance requirements are carried-out and not involuntarily exceeded.
flood plain easements
Question. In July 1997, the NRCS notified District Conservationists
of the Department of Agriculture's new position on the purchase of
flood plain easements rather than providing conventional measures for
emergency conservation and watershed protection. The Mississippi Delta
has survived because of the aggressive flood prevention and watershed
practices carried on throughout the area. Should NRCS allow nature to
take its course, the Mississippi Delta would be characterized by
impassable roads, washed out bridges, sediment-laden streams, non-
productive crop lands, and dead bottomland hardwoods all due to long-
standing floods. What spurred this ``new'' policy change?
Answer. Section 382, Title III, of the 1996 Farm Bill Public Law
104-127 authorized the Secretary of Agriculture to purchase flood plain
easements as another technique of assisting local communities
devastated by a watershed impairment through the Public Law 566, the
Small Watersheds Program. Some sites have been repaired several times
with traditional techniques and easements offer a more permanent
solution to flood devastation in some situations. This change did not
eliminate traditional watershed activities, it only provided the
opportunity for the use of easements when and where desired.
Question. Please provide more definitive explanations of incidences
where flood easements would be preferred over repair.
Answer. The most obvious example is where the cost of the easement
is less than the cost of the repair. Another would be where the damage
happens too often for the landowner and he/she decides they want a more
permanent solution. Participation is entirely voluntary so that no one
is forced to sell an easement.
wetlands reserve program
Question. People who own land adjacent to tracts of land under
easement restrictions in the Wetlands Reserve Program (WRP) have
experienced adverse impacts from the water management plans. Has the
agency given any consideration to the terms of Wetlands Reserve Program
contracts which affect the adjacent landowners?
Answer. The current easement provides the Secretary with the
authority to determine the future vegetative and hydrology conditions
of the easement. Before any wetland practice is implemented by NRCS or
by the landowner, NRCS has the opportunity to evaluate if there will be
an impact on the rights of adjacent landowners. This present authority
in the easement, coupled with the NRCS engineering capability, makes it
possible for NRCS to preclude activities on the easement that would
impact the rights of adjacent landowners. Although we are not aware
that this problem currently exists, if we learn of specific instances
where it is occurring appropriate corrective action can be initiated.
Question. Does the agency have the ability to give high priority on
the adjacent landowner's considerations when structuring the terms of
the participant's contract regarding the maintenance of watershed
protection?
Answer. The agency has the ability and does place a high priority
to ensuring that the rights of adjacent landowners are not adversely
impacted by restoration activities on the Wetlands Reserve Program
easement. The NRCS does not implement or approve the implementation by
others of wetland practices on Wetlands Reserve Program easements that
would exceed the legal rights inherent in the easement. If a situation
arises where an adjacent landowner's rights have the potential to be
impacted as a result of actions taken on easement lands, NRCS will work
with the impacted adjacent landowner and the fee owner of the easement
area to assure that no adverse impact occurs. If an impact does
inadvertently occur as a result of activities on the easement, (e.g., a
man induced development or a less controllable event such as a beaver
dam encroachment) NRCS will work with the adjacent landowner and fee
landowner to resolve the problem.
Question. Why is the fiscal year 1999 budget request proposing a
decrease in mandatory funding for the Wetlands Reserve Program from
$219 million in fiscal year 1998 to $124 million in fiscal year 1999?
Answer. The Wetlands Reserve Program has a maximum acreage cap of
975,000 acres. At the end of fiscal year 1998, we will have
approximately 320,000 acres yet to be enrolled under this cap. We are
proposing to enroll essentially one-half of the remaining acres in
fiscal year 1999 and fiscal year 2000 respectively. The fiscal year
1998 sign-up is estimated to enroll approximately 212,000 additional
acres. The funding request for fiscal year 1999 will provide for the
enrollment of 164,214 acres.
Question. What amount of money is needed in fiscal year 1999 to
fund the technical assistance required to carry out this program? Is
this amount included in the fiscal year 1999 request?
Answer. The projected amount of technical assistance funding needed
to carry out the program in fiscal year 1999 is $15,089,000. This
amount is included in the request. This includes $11.089 million
through CCC under CCC Charter Act Section 11 and $4 million will be
provided from unobligated balances from prior year WRP appropriated
funds.
Question. What amount of money from carryover balances in previous
fiscal years is going to be used for technical assistance for WRP in
each of fiscal years 1998 and 1999? What are the available carryover
balances in each of these years?
Answer. We plan to spend $18.2 million of carryover funds for
technical assistance in fiscal year 1998 and $4 million of carryover
funds for technical assistance in fiscal year 1999.
Question. Mr. Undersecretary, you state that technical assistance
funding for fiscal year 1999 will include unobligated appropriated
funds ($4 million) and CCC funds ($11,089,000). Please explain.
Answer. The projected amount of technical assistance funding needed
to carry out the program in fiscal year 1999 is $15,089,000. We project
that we will have approximately $4,000,000 of appropriated funds that
will not be obligated at the beginning of fiscal year 1999. We propose
to utilize these funds along with $11,059,000 of funds from the CCC to
meet the total technical assistance funding need for the Wetlands
Reserve Program in fiscal year 1999.
use of other agency research
Question. Mr. Weber, in your statement you indicated that erosion
still occurs by two billion tons per year. Does the agency use the
research that CSREES, ARS, and land grant universities do on soil
erosion to improve conservation practices by farmers?
Answer. NRCS works closely with CSREES, ARS, and other agencies at
the national level in identifying research and extension needs and in
setting priorities. We also work with ARS and land grant university
scientists in conducting field research on erosion and other natural
resource issues, and with Extension Specialists in training programs
for staff and in extension educational programs for clients. Research
results are used by NRCS in developing guidelines for conservation
practices at the national and state levels. Extension programs help
NRCS deliver technology to clients and to inform the public about
resource issues. Examples of current cooperative efforts that are
paying significant dividends to address soil erosion problems include
work on erosion prediction models, conservation buffers, conservation
tillage, and grazing land management.
urban resources partnership
Question. The administration initiated Urban Resources Partnership
(URP) as an interagency, cooperative Federal partnership in 13 major
cities and metropolitan areas. NRCS projects that $2.5 million will be
expended for URP in fiscal year 1998. This includes $2 million for
project activity and $500,000 for staff costs. What does the agency
project to spend in fiscal year 1999?
Answer. It is estimated that NRCS will allocate $2 million for
project activity for URP in fiscal year 1999. Staff cost are estimated
at $500,000 for URP in fiscal year 1999.
Question. How many matching non-federal dollars is NRCS expecting
to receive in fiscal year 1998?
Answer. NRCS is estimating that the non-federal match for URP in
fiscal year 1998 will be $500,000.
american heritage rivers
Question. The Administration established the American Heritage
Rivers (AHR) in 1997 to help communities restore and protect their
communities. Ten rivers will be designated by the President. NRCS
participated in the design of the AHR initiative. NRCS provided $94,000
in fiscal year 1997 for staff time in designing the initiative. During
fiscal year 1998, NRCS projects $225,000 will be provided for staff
time until the ten rivers are designated. When will the ten rivers be
designated?
Answer. It is expected that the ten rivers will be designated by
the President in April 1998.
Question. How much more money does the NRCS anticipate needing for
fiscal year 1998? In fiscal year 1999?
Answer. Future support for this initiative will not be known until
the ten rivers are designated. It is expected that the level of support
in fiscal year 1999 will be comparable to fiscal year 1998.
Question. In fiscal year 1997, 60 percent of the funds came from
the NRCS Conservation Operations account, and forty percent from the
Watershed Surveys and Planning Account. What is the breakdown in
percentages from these accounts in each of fiscal years 1998 and 1999?
Answer. Until the rivers are designated and the specific work that
must be undertaken is known, an estimate of the breakdown is not
possible.
northwest salmon recovery
Question. In fiscal year 1998 no funds will be allocated
specifically for the Northwest Salmon Initiative from the Conservation
Operations Account. However, there are 10 small watershed projects that
included salmon as an integral part of their natural resource concerns.
The fiscal year 1998 funding for the salmon recovery effort will be
funded primarily through these projects. Where are these 10 small
watershed projects located? How much money in fiscal year 1998 are each
of these 10 small watershed projects receiving?
Answer. The fiscal year 1998 funds for the Public Law 566 program
could only support nine Small Watershed Projects that included salmon
as an integral part of their natural resource concerns.
The list is as follows:
Northwest salmon initiative projects
Fiscal year 1998
State/project name/county(s) allowance
California: Hayfork Creek: Trinity............................ $65,000
Oregon: Buck Hollow: Wasco and Sherman........................ 180,000
Idaho:
Mission-Lapwai: Nez Perce and Lewis....................... 200,000
Tammany: Nez Perce..................................................
Bedrock: Clearwater and Nez Perce...................................
Washington:
Omak Creek: Okanagan...................................... 50,000
Tucannon Creek: Columbia/Garfield......................... 60,000
Moxee Creek: Yakima....................................... 210,000
Tenmile Creek: Whatcom.................................... 100,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 1,115,000
These projects consist largely of land treatment measures that
indirectly benefit salmon habitat as well as directly improve water
quality through reduced erosion and sediment, improved animal waste
management, and increase the efficient of irrigation water.
Question. In the fiscal year 1999 budget request, how much money is
designated for the Northwest Salmon Recovery program? From which
accounts will the funds come and how much from each account?
Answer. Funds have not been designated at this time for the
Northwest Salmon Recovery Program for fiscal year 1999. It is expected
that funds spent for this purpose will come from the Watershed Surveys
and Planning Program in the Conservation Operations account.
urban environmental resources initiative
Question. The Urban Environmental Resources Initiative is an
environmental protection strategy for the citizens of the District of
Columbia to help make the urban forests and related natural resources
healthier. How much did NRCS contribute in fiscal year 1998 to this
challenge cost-share initiative program?
Answer. NRCS contributed $50,000 to the challenge cost-share
initiative.
Question. From which account did this money come?
Answer. Conservation Technical Assistance under the Conservation
Operations program funded this activity.
Question. How much does the NRCS plan to contribute in fiscal year
1999 and from which account?
Answer. NRCS plans to contribute $50,000 in fiscal year 1999 to the
challenge cost-share initiative; funds will come from the Conservation
Operations Technical Assistance account under the Conservation
Operations program.
Question. Does NRCS contribute to this program in other ways
besides the challenge cost-share initiative program? Please explain and
provide all moneys used and the accounts from which they come.
Answer. NRCS also provides technical assistance to the Initiative.
In fiscal year 1998 a Resource Conservationist and a part time
Administrative Assistant were brought in to provide the day-to-day
management for the Initiative. In fiscal year 1998 $200,000 was set
aside for technical assistance to cover the cost of salaries and
associated administrative expenses such as office space rental and
equipment.
conservation operations
Question. In the fiscal year 1999 President's Budget request,
language is proposed to provide the authority to expand the use of
Conservation Operations funds to support the technical assistance
activities of other programs administered by NRCS such as EQIP, WRP,
and CRP. Why has the Administration proposed this new language?
Answer. The Administration has proposed this new language to
clarify the authority for NRCS to use funds appropriated under the
Conservation Operations account for technical assistance and
administrative activities in support of natural resource conservation
programs, in addition to the conservation assistance authorized by the
Soil Conservation and Domestic Allotment Act of April 27, 1935 (16
U.S.C. 590a-590f), for which responsibility has been delegated to NRCS.
These would include the conservation of highly erodible land and
wetlands under the Food Security Act of 1985, technical assistance
under the Watershed Protection and Flood Prevention Act (16 U.S.C.
1001-1009) and the Flood Control Act (33 U.S.C. 701), and technical
assistance for some of the conservation programs funded by the
Commodity Credit Corporation.
Question. Isn't this current practice?
Answer. NRCS is currently providing technical assistance through
the Conservation Operations program for conservation of highly erodible
land and wetlands (conservation compliance, sodbuster, and swampbuster)
under the Food Security Act of 1985 and for some conservation programs
funded by the CCC (Conservation Reserve Program and Environmental
Quality Incentives Program). Congress noted this technical assistance
support in the legislative reports accompanying the appropriations for
fiscal year 1998. We have not used Conservation Operations account
funds for technical assistance for the Watershed Protection Program or
for the Flood Control Program.
Question. The fiscal year 1999 budget proposes to establish the
America's Private Land Conservation Legacy (APLC) program by
redirecting the appropriated resources formerly used for Conservation
Technical Assistance (CTA). Please explain the need for the America's
Private Land Conservation Legacy (APLC) program and how this program
will differ from the Conservation Technical Assistance (CTA) program?
Answer. Nearly 70 percent of the United States, excluding Alaska,
is private land--the single largest portion of our country's landscape.
We believe that by renaming the CTA program, we are able to more
properly identify the focus of our work. America's Private Lands
Conservation Legacy program will increase the significance of
conservation on private lands for environmental and economic benefits.
The program will continue the 60 year conservation technical assistance
support activities that have provided individuals, groups and
communities with assistance in solving their conservation problems and
achieving local and national conservation objectives. In addition,
America's Private Lands Conservation Legacy program focuses
conservation technical assistance on enhancing Locally Led Conservation
efforts, expanding partnerships, achieving leveraging objectives,
enhancing natural resource assessments for decision-makers, developing
appropriate technologies and maintaining a readiness to respond to
natural disasters.
The America's Private Lands Conservation Legacy program being
refocused and rearticulated delivers to our conservation partners an
integrated conservation process consisting of five basic products:
technological innovation, information, conservation partnerships,
conservation planning, and implementation of the conservation plans.
The former traditional framework for delivering conservation are
components of this approach.
Question. Does this proposed program require authorization?
Answer. Conservation technical assistance activities were
authorized under the 1935 Soil Conservation and Domestic Allotment Act.
Changing the name of these activities to America's Private Lands
Conservation Legacy program does not require authorization.
Question. The fiscal year 1999 budget also proposes an increase of
$20,000,000 to encourage the States to increase their share of
contributions to ``designated programs'' in support of the President's
Clean Water Initiative. Which programs are designated for this increase
in cost-share funds?
Answer. This funding can support the President's Clean Water
Initiative and other efforts to strengthen locally led conservation and
voluntary conservation efforts by encouraging more leveraging of
limited Federal resources. This funding is part of the America's
Private Land Conservation allocation, and will be used to support
NRCS's efforts to help state and local entities who increase their
contributions to the conservation effort. Programs supported by
increased state and local contributions will be the ones to benefit
from this funding.
Question. When would the ``to be determined threshold level of
contributions'' from the States be announced? How will these levels be
determined?
Answer. It has not been determined when these levels of
contributions will be announced. They will be determined as the amount
of state and local funding dollars are identified. Based on the total
number of dollars identified per state, a percentage for each state
will be decided by the NRCS America's Private Land Conservation program
manager. The threshold levels of contributions will be determined at
this same time.
Question. Currently in fiscal year 1998, what total amount of funds
is given to the States for these activities? How are these funds
determined?
Answer. Currently America's Private Land Conservation base funding
is provided to NRCS managers to carry out various programs. This
program would provide increased levels of support for NRCS in providing
assistance under the programs receiving additional state and local
contributions.
Question. Is this proposed $20 million an increase to the fiscal
year 1998 Conservation Operations budget?
Answer. Yes. The $20 million is a component of the net $47.371
million increase in America's Private Land Conservation Legacy Program.
Question. Please explain the proposed competitive partnership
grants in the fiscal year 1999 budget request.
Answer. Federal, state, and tribal programs can help produce clean
water and healthy watersheds, but the commitment and resources of local
communities, private landowners, and citizens are essential to
improving and maintaining lake, river, coastal, and wetland resources.
Effective and strong partnerships are the foundation for both restoring
impaired watersheds and sustaining watersheds that are currently
healthy. The benefits of watershed partnerships, which typically
involve those who live and work in the watershed, are multiple. They
build grassroot constituencies with a commitment to long-term
improvements. The watershed partnerships can generate new ideas and
information and lead to a common understanding of individual roles,
priorities, and responsibilities. They can promote a more efficient use
of limited financial and human resources.
The competitive partnership grants are intended to be used to hire
non-Federal, local watershed coordinators to identify and engage local
watershed partners in the process of identifying natural resource
problems, setting goals, and developing watershed restoration plans.
These grants would be offered on a competitive basis to such groups as
conservation districts, watershed districts, Resource Conservation and
Development councils, land trusts and other non-profit and community
action groups.
Question. If these grants are used to hire non-Federal, locally-
based watershed coordinators, how many full-time equivalents (FTE) will
be displaced? Are these displaced FTE's in the field?
Answer. The primary objective of the grants will be to hire non-
Federal watershed coordinators. No full-time equivalents will be
displaced. These non-Federal staff will complement any NRCS staff who
are performing watershed coordination-type duties and functions.
national resources inventory costs
Question. An increase of $3 million is proposed for additional land
health monitoring and assessment and to enhance the National Resources
Inventory (NRI). In fiscal year 1998, how much money is allocated for
the NRI?
Answer. NRCS has allocated approximately $30 million to support the
1997 baseline National Resources Inventory (NRI) and related activities
in fiscal year 1998. This includes approximately $26 million being used
for field data collection.
Question. Does this come out of the Conservation Operations account
currently?
Answer. These funds come out of the Conservation Operations
account.
Question. How much money is estimated for fiscal year 1999?
Answer. The total estimated cost for the NRI for fiscal year 1999
is approximately $33 million. The additional $3 million is needed to
evaluate soil quality and resource health, assess nutrient load, and
integrate NRCS NRI data on private lands with Forest Service data on
public lands. Inventory, monitoring and assessments will include the
initiation of a continuous foundation NRI, the special NRI, and land
health monitoring studies. Partnerships efforts include the integration
of the NRI with the Forest Service's Forest Inventory Assessment and
the National Agricultural Statistics Service's Agricultural Resource
Management Study and the Mid-Atlantic Pilot of the Committee on
Environment and Natural Resources Environmental Monitoring Initiative.
transfer of outreach program to departmental administration
Question. At the Administration's request, in the fiscal year 1998
budget the Committee moved $193,000 from the Farm Services Agency for
the Outreach Program for Socially Disadvantaged Farmers and Ranchers to
NRCS Conservation Operations account. Now I note that the Secretary has
moved this program account to the Departmental Administration account,
and further, has transferred $566,000, a difference of $373,000,
associated with administration of that Outreach program from
Conservation Operations to the Departmental Administration account.
Under what authority did you move this account and funding?
Answer. This account and funding were transferred under the
Secretary's delegation of authority as provided in the Department of
Agriculture Reorganization Act of 1994, Public Law 103-354, Section 212
(d)(1)(B).
Question. Why was this funding transferred from Conservation
Operations to Departmental Administration?
Answer. The USDA Civil Rights Action Team report recommended the
establishment of an Office of Outreach . . . ``Assign responsibility
for the Outreach and Technical Assistance to Socially Disadvantaged
Farmers (2501) program to this new office to assure Department-wide
implementation.'' The funds were transferred to Departmental
Administration to cover the costs of salaries and related expenses of
the eight FTE's operating the program in response to this
recommendation.
grazing lands
Question. In each of fiscal year 1997 and fiscal year 1998, $15
million was earmarked for the continuation of the grazing lands
conservation initiative. Please update the Committee on this initiative
and include any money in the fiscal year 1999 President's budget
request for this project.
Answer. The Grazing Land Conservation Initiative (GLCI) has
produced significant accomplishments over the past 2 years as a result
of directing funds specifically to this activity. Technical assistance
available to private grazing lands has increased by 160 staff years.
Over 2,000 Natural Resources Conservation Service staff have received
formal training in various aspects of grazing lands management. More
than 11,000 individuals received technical assistance on 40 million
acres of private grazing lands in 1997. Over 100 special grazing lands
projects were established in partnership with State GLCI Coalition. An
active marketing and outreach plan was implemented in each region of
the Country.
In fiscal year 1997, $10 million was earmarked for this effort. In
fiscal year 1998, $15 million is being directed to this activity. The
fiscal year 1999 President's budget contains $15 million this activity
which is included in the base program.
status of specific earmarks
Question. Please provide the Subcommittee with a status report on
the activities and funding for fiscal year 1998 and the level of
funding in the fiscal year 1999 budget request, if any, for the
following projects and programs:
--agricultural development and resource conservation in native
Hawaiian communities serviced by the Molokai Agriculture
Community Committee,
--Great Lakes Basin Program for soil and erosion sediment control,
--ground water activities in eastern Arkansas, including Boeuf-
Tensas, and Bayou Meto, and Kuhn Bayou,
--Great Lakes watershed initiative,
--Chesapeake Bay,
--GIS Center for Advanced Spatial Technology and the National Digital
Orthophotography Program,
--Multi-year Rural Recycling and Water Resources Initiative in AR,
LA, and MS,
--Indian Creek Watershed, MS,
--loess hills erosion problem, IA,
--Poinsett Channel main ditch no. 1, AR,
--alien weed pests in Hawaii,
--grazing lands initiative, WV,
--water treatment practices for wastewater from aquaculture in WV,
--poultry litter composting project in WV,
--feasibility study for watershed in Waianae, HI, and
--poultry-related pollution of the South Branch of the Potomac,
including the poultry waste energy recovery project in
Moorefield, and resource recovery at Franklin, WV.
Answer. The status of each follows.
molokai agriculture community committee
The $250,000 earmarked in fiscal year 1998 are targeted to
addressing conservation and agricultural development needs of the
Island of Molokai and its Hawaiian population. NRCS oversees the
earmarked funds through an agreement with the Molokai-Lanai Soil and
Water Conservation District. Most of the funds to date have been used
for on-farm/ranch projects for irrigation and fencing. NRCS technical
assistance provided through the ongoing Conservation Operations program
is over and above the earmark. A decrease of $250,000 is proposed for
this item in fiscal year 1999.
great lakes basin program for soil and erosion sediment control
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 1998. 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. $750,000 is
included in the fiscal year 1999 budget request for this project. A
decrease of $350,000 is proposed for this item in fiscal year 1999.
eastern arkansas ground water activities
Boeuf/Tensas.--To date the local sponsors continue to inform the
public of water decline and water quality status as well as promoting
solutions to the problems. The Arkansas NRCS irrigation team is
developing critical aspects of the project which include digitized
soils and data layers through the University of Arkansas for use in the
NRCS Geographic Information System (GIS), inventories of streams,
canals, reservoirs, utilities, farms, cultural resources, wildlife, and
other important land use features and resource concerns are being
identified. Approximately 50 percent of the inventory has been
completed. A 3-party memorandum of understanding between NRCS, Arkansas
Soil and Water Conservation Council (ASWCC), and the local irrigation
district is being jointly developed.
It is anticipated NRCS will spend $400,000 of Conservation
Technical Assistance funds in fiscal year 1998 to provide assistance in
support of the Boeuf Tensas project.
Goals for fiscal year 1998 include publishing maps of soils
information for the 1.2 million acres within the project area,
completion of data inventory for on-farm portions of the project area,
completion of a water budget calculation for each tract of the 1.2
million acres with the project area, completion of the preliminary
irrigation canal and/or pipeline delivery system for the entire 1.2
million acre project area, development of public information maps and
fact sheets for project sponsor local information/education efforts,
and coordination with the Corps of Engineers (COE) to proceed with
planning efforts. No specific funding was included in the fiscal year
1999 budget for this project.
Bayou Meto.--To date the Natural Resources Inventory has been
completed that includes GIS soils data layers, water quality and water
quantity analysis, irrigation water needs analysis for more than 3000
tracts, wildlife, cultural resources, and a completed environmental
assessment for the on-farm portion of the project plan. NRCS has
completed a final areawide Natural Resource Conservation Plan for on-
farm conservation practices and delivered the plan to the project
sponsors. The COE has received authorization to proceed with planning
for flood control and irrigation water supply and other purposes in
this watershed. An initial coordination meeting was held in February
between the COE, NRCS, and local sponsors and the details were agreed
to as to the roles and responsibilities in the 1998 planning activities
of each agency.
It is anticipated NRCS will spend $200,000 of Conservation
Technical Assistance funds in fiscal year 1998 to provide assistance in
support of the Basin Wide Resource Assessment for the Bayou Meto
project.
This project has been identified as a priority area for the
Environmental Quality Incentives Program (EQIP). Financial assistance
funding has been made available through EQIP to begin the land
treatment phase for this project.
Goals for fiscal year 1998 include coordination and transfer of
data and information from the completed on-farm portion of the areawide
Natural Resources Conservation Plan to the COE to assist them with
their efforts in moving into the planning phase of the delivery portion
of this project and development of a cooperative agreement and work
plan in cooperation with COE, Memphis District, to refine and complete
the total Resource Conservation Plan for this project. No specific
funding was included in the fiscal year 1999 budget for this project.
Kuhn Bayou.--To date the local sponsors continue to inform the
public of water decline and water quality status as well as promoting
solutions to the problems. The Natural Resources Conservation Plan has
been completed. NRCS is currently performing some of the surveying and
design functions for this project. A public meeting was held on August
19, 1997, and a decision was made by the local sponsors to complete the
design phase of this project. Local sponsors and NRCS have entered into
a Cooperative Agreement to complete the design with some funding
provided by the local sponsors. Design completion is scheduled for
August 1998.
It is anticipated NRCS will spend $100,000 of Conservation
Technical Assistance funds in fiscal year 1998 to provide design,
surveying, and inventory work in the Kuhn Bayou project.
Goals for fiscal year 1998 include completion of the structural
design for one large water control structure, completion of the design
of the irrigation delivery canals and relift stations, incorporation of
the irrigation pipeline design to assure water delivery to each tract,
completion of 100 percent of the land rights work maps and provide to
the local sponsors for land rights/easements acquisition, and
preparation of final cost and information/education package for local
sponsor efforts in providing information to their clients. No specific
funding was included in the fiscal year 1999 budget for this project.
great lakes watershed initiative
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 is
continuing. 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. $75,000 is included in the
fiscal year 1999 budget request
chesapeake bay
NRCS has been providing assistance to the Chesapeake Bay Program
for over ten years. In fiscal year 1998, $4.750 million has been
allocated to the six States in the Chesapeake Bay area. We actively
support and participate in the program by providing training to
Conservation District employees, including Bay Technicians and
Engineers; developing conservation plans as a basis for bay contracts;
technical approval of engineering plans and designs; on-site technical
evaluations of complex problem areas and inspections of works in
progress. Staff contribute to the overall program of reducing erosion
and sedimentation, nutrients, and improving water quality. Chesapeake
Bay contracts for Best Management Practices treating thousands of acres
and providing nutrient reductions of nitrogen, phosphorus, and potash.
During the past year, over 900 systems were planned with waste
management components, over 3,200 conservation systems were planned,
over 117 thousand acres benefited from the application of conservation
practices, and riparian area protection and use of conservation buffers
were actively planned and installed. No specific funding was included
in the fiscal year 1999 budget for this project.
gis center for advanced spatial technology
Work at the Center for Advanced Spatial Technology continues.
Currently support is being given to an initiative to place completed
Arkansas soil surveys on the Internet including the one for Woodruff
County. Activities also include supporting the implementation of Field
Office Computer Systems (FOCS) Geographic Information (FGI) at high
priority NRCS Field Service Centers. The goal is to have FGI
implemented in four Field Service Centers by the end of fiscal year
1998. In fiscal year 1998, $48,000 has been provided to support the
activities of the Center for Advanced Spatial Technology. No specific
funding was included in the fiscal year 1999 budget for this project.
national digital orthophotography program
The NRCS contributed $6,225,000 to the National Digital Orthophoto
Program in fiscal year 1998, and anticipates use of $6,250,000 in
fiscal year 1999. Approximately 30 percent (about 760 counties) of the
conterminous US is now complete with high resolution digital
orthoimagery. Another 40 percent of the country is in production. By
the end of fiscal year 1998, orthoimagery for an additional 10 percent
of the country is planned for production.
The success of this program is directly related to Federal, State
and local agencies need for an up-to-date digital picture of the
landscape to be used in a geographic information system. Good progress
is also being made as a result of agencies willingness to cost-share
and cooperate in the development and sharing of the data. The
orthoimage provides a rich source of information for business
activities like natural resource planning, transportation management,
pipeline routing, urban planning, parcel mapping and delineation of
wetlands and soils. The National Digital Orthophoto Program goal is to
have orthoimagery in production over all private lands by the year
2000, and all Federal lands by 2002.
multi-year rural recycling and water resources initiative
The data collection phase for the Mississippi Delta Water Resources
Study has been completed with the final draft being compiled and
completion of the draft anticipated by June 1, 1998.
Plans are being made to implement practices for the Mississippi
Delta Recycling and Water Project within the Environmental Quality
Incentives Program (EQIP) priority area during fiscal year 1998. No
specific funding was included in the fiscal year 1999 budget for this
project.
indian creek watershed
The Indian Creek Watershed Project is in the design stage and
scheduled to be contracted for construction during fiscal year 1998. No
specific funding was included in the fiscal year 1999 budget for this
project.
loess hills erosion problem, iowa
Project sponsors plan to install thirty-eight erosion control
structures during fiscal year 1998. These are in addition to the fifty-
seven structures in fifteen counties in western Iowa that have been
installed since the inception of this project in 1992.
This is a cooperative project involving support from all levels of
government. In fiscal year 1998, the Federal government, through NRCS,
contributed $400,000 to this project. The State of Iowa contributed $1
million (compared with $400,000 in 1997), while county contributions
were approximately $575,000 (up from $460,000 in 1997). NRCS has
contributed $400,000 annually since the project began.
In fiscal year 1997, a total of $1.29 million was spent on this
project. As a result, an estimated $4,966,785 of local infrastructure
and land was protected. Thus every dollar spent on the project during
1997 resulted in the prevention of almost $4 in damages. Throughout the
life of the project, $4.3 million has been spent to prevent $21 million
in damages.
Project sponsors are seeking $1 million from the Federal government
in fiscal year 1999 for this project. It is estimated that a total of
$30.3 million is needed to complete this effort. At present levels of
funding, it is estimated that it will require 18 years to complete this
project. If the Federal government provided $1 million annually, this
figure would drop to 12 years.
During fiscal year 1997, $400,000 of Federal funds were combined
with $400,000 in State funds and $460,000 in local funds to build 13
stream stabilization (channel degradation) projects in 12 western Iowa
counties. These projects will keep these streams from cutting deeper
into the landscape and prevent an estimated $5 million in damages to
farmland, roads, bridges, and other infrastructure.
For fiscal year 1998, $400,000 of Federal funds will be combined
with $1 million in state funds and $740,000 in local funds to build 24
projects in 14 western Iowa counties. These projects will provide
benefits roughly proportional to those listed above, preventing
approximately $8.5 million in damages to farmland and rural
infrastructure. A decrease of $400,000 is proposed for this item in
fiscal year 1999.
poinsett channel main ditch no. 1, arkansas
Technical assistance funding continues to be provided for channel
improvement in the Poinsett Watershed Project located in Craighead and
Poinsett Counties. To date, 31 of 36 floodwater retarding structures
have been constructed. The five remaining structures have an estimated
construction cost of $1.5 million in financial assistance. Two channel
improvement contracts for a water control structure and 1.3 miles of
channel improvement have been constructed at a cost of $954,511. The
remaining approximate 17.7 miles of channel improvements have an
estimated construction cost of $4.1 million in financial assistance.
Work is planned to be completed over several years. No specific funding
was included in the fiscal year 1999 budget for this project.
alien weed pests in hawaii
NRCS has allocated $20,000 in fiscal year 1998 to begin to address
the alien weed pests in Hawaii. To date, NRCS has met and is working
with the Big Island RC&D Council, Soil and Water Conservation
Districts, and the Gorse Committee to formulate a plan to address the
gorse problem on the Big Island. No specific funding was included in
the fiscal year 1999 budget for this project.
grazing lands initiative in west virginia
In fiscal year 1998 $300,000 of appropriated funds are being used
to support technical staff, the collection of forage and fecal samples
and to provide education assistance to grassland farmers. Two
grazingland specialists and field office staffs are providing direct
on-farm assistance to farmers to improve their pasture management
systems using both forage and economic analysis. Along with on-going
assistance the goal is to improve over 65,000 acres of pasture for 125
farmers. In addition, 30 farmers will attend a 3-day forage and
livestock school to improve their management and marketing skills. Over
500 forage and livestock fecal samplings indicate low quality forages
due to mis-management resulting in lost income. Estimated economic
benefits is $15/ac/year once an improved grazing system is fully
implemented by the farmer. This will result in an annual increased
return of $990,000 at existing funding levels. A decrease of $300,000
is proposed for this item in fiscal year 1999.
water treatment practices for wastewater from aquaculture in wv
In fiscal year 1998 no funding was provided for this activity,
however, two weeks of engineering time was spent developing Field
Office Tech Guide standards for the treatment of waste-water from
aquacultural activities. The development of these standards is an
interagency effort and the participants comprise a part of the State
Technical Committee. No specific funding was included in the fiscal
year 1999 budget for this project.
poultry litter composting in west virginia
Investigations and contacts have been made on five sites outside
the Potomac River Watershed. Currently this project is in the planning
stage with application to start in early summer of fiscal year 1998.
NRCS has allocated $120,000 to fund the technical assistance needed for
this project. A decrease of $120,000 is proposed for this item in
fiscal year 1999.
feasibility study of watershed in waianae, hawaii
This study was directed as a result of damage caused by heavy rains
to this and other watersheds in November of 1996. An assessment of the
feasibility of flood control projects or mitigative measures which
would reduce the reoccurrence of damages was necessary. Through an
agreement with the Corps of Engineers, Honolulu District, the Corps
will carry out the assessment under the direction and coordination of
NRCS. NRCS is spending $200,000 for this item in fiscal year 1998. A
decrease of $200,000 is proposed for this item in fiscal year 1999.
poultry related pollution on the south branch of the potomac
NRCS has entered into a cooperative agreement with the West
Virginia Department of Agriculture (WVDA) and Franklin, WV, to do the
second phase of a feasibility study for a poultry waste digester. In
fiscal year 1998, NRCS will provide $90,000. NRCS has also entered into
an agreement between WVDA and Moorefield, WV, for the operational
expenses of the digester located in Moorefield. NRCS will provide
$50,000 in fiscal year 1998 for this effort. No specific funding was
included in the fiscal year 1999 budget for this project.
poultry waste problem in west virginia
Question. Several projects in West Virginia address the poultry
waste problem in West Virginia. Are any of these projects repetitive in
nature?
Answer. No, the various projects underway in West Virginia are not
repetitive, though several are commonly directed toward meeting our
goals relative to the Chesapeake Bay. For instance, five sites within
the Potomac River Basin are receiving additional technical assistance
to develop composting as an alternative utilization of poultry litter.
In a separate cooperative agreement with the West Virginia Department
of Agriculture, we are also supporting feasibility and operational
assistance of separate projects in Franklin and Moorefield, West
Virginia, the latter of which is focused on the utilization of poultry
litter as an alternative energy source. We believe that the work
associated with these activities will contribute to our overall efforts
to address animal waste problems across the country.
Question. Are all of these projects related? If yes, does NRCS have
a plan for these activities so that a common goal is reached to
minimize the poultry waste problem in West Virginia? Which account
under NRCS would this work be done?
Answer. These projects are related in the sense they are all
focused on alternative uses of poultry litter. We expect that as we
learn more about these technologies, and as they are better understood
at the local level, our current progress relative to conservation
programs and technical assistance will be enhanced. All of these
activities are currently funded from our Conservation Operations and
Technical Assistance funds.
colorado river salinity control program
Question. Are all current balances expended for the Colorado River
Basin Salinity Control Program? If not, how much is available and in
which fiscal year will it all be expended?
Answer. The Colorado River Basin Salinity Control Program has
approximately $5,661,000 left in obligated funds for contracts to be
expended on installation of salinity control practices. It is expected
that these funds will be expended by the year 2004.
Question. How many projects that once received funding through the
Colorado River Basin Salinity Control Program are continued with
funding through EQIP? Which projects are these?
Answer. There are 5 projects that once received CRBSCP funding that
are currently receiving EQIP funding. These projects are Grand Valley,
Colorado; Lower Gunnison Basin, Colorado; McElmo Creek, Colorado; Uinta
Basin, Utah and Big Sandy River, Wyoming.
plant materials centers
Question. The fiscal year 1999 budget request indicates a decrease
of $1 million for Plant Materials Centers because of the completion of
renovation and modification work. Please list the renovations and
modifications work which will be completed by fiscal year 1999,
yielding this $1 million in savings, and specify the completion date of
each project.
Answer. A partial list of projects scheduled for completion in
fiscal year 1998 can be found in the table provided. Their cost is
about $1 million.
Fiscal year 1998 plant materials renovation completions
Plant center Project: Maintenance, renovation, equipment
Lockeford, CA................................ Heating-AC system.
Hoolehoa, HI and Pacific Basin............... Re-roof equipment building.
Aberdeen, ID................................. Combine 10-ft header.
Irrigation system at PMC office/greenhouse.
Swather.
Corvallis, OR................................ Safety upgrade and expand existing storage shed.
Booneville, AR............................... Plot harvester.
Golden Meadow, LA............................ Machinery storage bldg. canopy.
Grass drill.
Nacodoches, TX............................... No-till seeder.
Kingsville, TX............................... 100 HP tractor.
Knox City, TX................................ \3/4\-ton truck stakebed.
Manhattan, KS................................ Upgrade flood irrigation well number 3.
Bridger, MT.................................. Dust collection system (safety need).
Forage dryer.
Bismarck, ND................................. Tractor.
Ellsberry, MO................................ Renovation of electrical system.
Brooksville, FL.............................. New roof two pump houses, paint all buildings.
Americus, GA................................. Irrigation pump and motor.
Coffeeville, MS.............................. Plot combine.
Laboratory operations.
Beltsville, MD............................... Irrigation hydrant for remote field.
Greenhouse--Reskin and new heat system to improve efficiency.
Cape May, NJ................................. Office modification for handicap.
Upgrade degraded facilities (paint, siding, gutters).
Alderson, WV................................. PMC development (in part) of physical facilities.
plant materials centers
Question. Is any renovation and modification work scheduled for
fiscal year 1999 or future fiscal years? Please provide for the record,
by center and project, the work needed, when the renovation/
modification is scheduled to be done, and the amount of funding
required.
Answer. Renovation and modification work is scheduled for fiscal
year 1999 through fiscal year 2002 according to plant center needs that
are now identified. In order to identify needs effectively, the program
has a 5-year plan (1998-2002) that is updated annually. For the period
fiscal year 1999-2002, a total of $4.8 million, or about $1.2 million/
year, is needed. As with any farm operation, regular maintenance,
facility renovation, and equipment replacement are important and key
elements to avoid larger cumulative expenses in the future. In
addition, the program is able to operate more productively and have
safe and healthy working conditions with continued regular maintenance.
With 26 centers in the Plant Materials Program, needs vary from one
location to another, by year, and according to the condition of
buildings, roads, property, and equipment. A list of specific project
needs is presented in the table below. The diversity of needs
identified in the table illustrates the scope of operations in the
program.
PROJECTED PLANT CENTER NEEDS: MAINTENANCE, RENOVATION, NEW CONSTRUCTION, AND EQUIPMENT ACQUISITION
----------------------------------------------------------------------------------------------------------------
Fiscal year when planned with costs
Plant center/item project description ---------------------------------------------------
1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Booneville, AR:
New office building..................................... ........... ........... $200,000 ...........
Items (3) less than $10,000 each........................ $12,500 ........... ........... ...........
Tucson, AZ:
Phase 3-PMC rehabilitation.............................. 56,700 ........... ........... ...........
Brush machine (commercial size)......................... 11,500 ........... ........... ...........
Seed drill (Truax no-till drill)........................ ........... ........... 12,000 ...........
3/4-ton pickup.......................................... ........... ........... ........... $20,000
Items (2) less than $10,000 each........................ ........... $3,000 ........... 8,000
Lockeford, CA:
Panel van............................................... 20,000 ........... ........... ...........
4-row bed shaper with rototiller........................ 15,000 ........... ........... ...........
Soil mixer.............................................. ........... 12,000 ........... ...........
Administration building roof............................ ........... ........... 20,000 ...........
Paint buildings......................................... ........... ........... ........... 20,000
Seal asphalt............................................ ........... ........... ........... 15,000
Bldg. area water pump................................... ........... ........... ........... 10,000
Seed bldg. dust system.................................. ........... ........... ........... 10,000
Fire alarm.............................................. ........... ........... ........... 10,000
Item (3) less than $10,000 each......................... ........... ........... ........... 14,000
Meeker, CO: No long-range update submitted in 1997.......... ........... ........... ........... ...........
Brooksville, FL:
4-wheel ATV............................................. 12,000 ........... ........... ...........
Plot vacuum harvester................................... 35,000 ........... ........... ...........
Upgrade office elect., heat/AC.......................... ........... 18,000 ........... ...........
Expand conference and educational building.............. ........... 48,000 ........... ...........
Re-pave parking lots and driveway....................... ........... 65,000 ........... ...........
\1/2\-ton pickup truck.................................. ........... ........... 14,000 ...........
Hydro seeder............................................ ........... ........... ........... 15,000
Up-grade irrigation system.............................. ........... ........... ........... 52,000
Items (7) less than $10,000 each........................ 7,000 22,000 4,000 ...........
Americus, GA:
Large scale (digital)................................... 1,000 ........... ........... ...........
Grass drill............................................. 10,000 ........... ........... ...........
One row tractor......................................... 15,000 ........... ........... ...........
Pave driveway........................................... 25,000 ........... ........... ...........
Tractor 50-60 hp........................................ ........... 25,000 ........... ...........
Hy-cycle sprayer........................................ ........... 25,000 ........... ...........
Tractor 80-90 hp........................................ ........... ........... 35,000 ...........
Greenhouse.............................................. ........... ........... 30,000 ...........
Seed germinator......................................... ........... ........... 10,000 ...........
Van..................................................... ........... ........... ........... 18,000
Walk-in seed storage unit............................... ........... ........... ........... 30,000
Items (6) less than $10,000 each........................ 4,000 12,500 5,000 ...........
Houehua, HI:
Tractor, 42 HP.......................................... 35,000 ........... ........... ...........
Front end loader attachment for 595 tractor............. 10,000 ........... ........... ...........
Paint/repair bldgs. (shop /seed)........................ 30,000 ........... ........... ...........
Parking lot/driveway paving............................. 75,000 ........... ........... ...........
Potable water hook-up................................... 45,000 ........... ........... ...........
Seed storage walk-in unit............................... ........... 27,000 ........... ...........
Paint PMC seed/equipment building....................... ........... 30,000 ........... ...........
Seed dryer/dust ventilation............................. ........... ........... 25,000 ...........
Paint office............................................ ........... ........... 10,000 ...........
Items (2) less than $10,000 each........................ 9,000 ........... ........... ...........
Aberdeen, ID: No long-range update submitted in 1997........ ........... ........... ........... ...........
Manhattan, KS:
Pickup truck \1/2\-ton.................................. 14,000 ........... ........... ...........
Tractor with loader (65 HP and 4 WD).................... 27,000 ........... ........... ...........
Flail vac seed stripper................................. ........... 18,000 ........... ...........
Binocular microscope with camera attachment............. ........... 10,000 ........... ...........
Pickup truck \1/2\-ton (4 WD)........................... ........... ........... 18,000 ...........
Tractor (40 HP and 2 WD)................................ ........... ........... 25,000 ...........
Weed badger tree cultivator............................. ........... ........... ........... 20,000
Gated irrigation pipe for flood irrigation.............. ........... ........... ........... 17,000
Replace oil storage building............................ ........... ........... ........... 10,000
Items (2) less than $10,000 each........................ ........... 9,000 9,000 ...........
Galliano, LA:
Pond cell construction (field D)........................ 25,000 ........... ........... ...........
Pickup truck \3/4\-ton.................................. ........... ........... ........... 15,000
Air boat................................................ 20,000 ........... ........... ...........
Items (3) less than $10,000 each........................ 12,900 ........... ........... ...........
Beltsville, MD:
Small row crop tractor plus implements.................. 26,000 ........... ........... ...........
Replace 1976 Dodge \1/2\-ton pickup..................... 16,000 ........... ........... ...........
Replace pavement around PMC............................. 20,000 ........... ........... ...........
Removal of nonfunctional solar panels................... 10,000 ........... ........... ...........
New office building..................................... ........... ........... ........... 200,000
Rose Lake, MI:
Pickup truck............................................ ........... 20,000 ........... ...........
Single row planter...................................... ........... ........... 15,000 ...........
Items (9) less than $10,000 each........................ 9,500 ........... ........... 5,000
Ellsberry, MO:
Pickup \3/4\-ton offset................................. 12,600 ........... ........... ...........
Combine (partial support)............................... 50,000 ........... ........... ...........
Pickup \1/2\-ton offset................................. ........... 12,600 ........... ...........
Tractor, 65 HP.......................................... ........... 30,000 ........... ...........
Tractor, 18 HP.......................................... ........... 13,000 ........... ...........
Vehicle offset.......................................... ........... ........... 12,600 ...........
Computer update......................................... ........... ........... 20,000 ...........
Items (12) less than $10,000 each....................... 30,700 6,500 12,000 ...........
Coffeeville, MS:
Tractor 75 hp w/cab and loader.......................... ........... 50,000 ........... ...........
Seed cleaner (gravity table)............................ ........... ........... 12,000 ...........
Van (Suburban type)..................................... ........... ........... ........... 28,000
Items (2) less than $10,000 each........................ 12,000 ........... ........... ...........
Bridger, MT:
Combine................................................. 100,000 ........... ........... ...........
Wheel row sprinkler system.............................. 75,000 ........... ........... ...........
Windrower............................................... ........... 25,000 ........... ...........
4 x 4 \3/4\-ton pickup.................................. ........... ........... 18,000 ...........
Metal storage shed...................................... ........... ........... 20,000 ...........
Baler................................................... ........... ........... 12,000 ...........
Fork lift............................................... ........... ........... 20,000 ...........
Land plane.............................................. ........... ........... 10,000 ...........
Greenhouse glass replacement............................ ........... ........... 22,000 ...........
Items (11) less than $10,000 each....................... 9,000 32,000 16,000 ...........
Bismarck, ND:
Van (4 WD suburban type)................................ 35,000 ........... ........... ...........
Greenhouse/lathhouse.................................... ........... 75,000 ........... ...........
Computer equipment...................................... ........... ........... 20,000 ...........
Tractor................................................. ........... ........... ........... 45,000
Las Cruces, NM (fiscal year 1999 list only):
Complete headhouse/lab interior......................... 15,000 ........... ........... ...........
Well for greenhouse area (6" x 200)................... 10,000 ........... ........... ...........
20-ft. gooseneck trailer................................ 15,000 ........... ........... ...........
Renovate well #2........................................ 30,000 ........... ........... ...........
Renovate seed storage bldg.............................. 30,000 ........... ........... ...........
Hay swather............................................. 35,000 ........... ........... ...........
Big Flats, NY:
Re-roof seed barn and shop.............................. 14,000 ........... ........... ...........
New pole barn........................................... 60,000 ........... ........... ...........
Test plot planter....................................... 12,000 ........... ........... ...........
Ford mower.............................................. ........... 11,000 ........... ...........
Tractor (50-60 hp)...................................... ........... 38,000 ........... ...........
Pickup truck............................................ ........... 16,000 ........... ...........
Computer equipment...................................... ........... 15,000 ........... ...........
New office building..................................... ........... ........... 150,000 ...........
Items (2) less than $10,000 each........................ 9,000 ........... 9,000 ...........
Corvallis, OR:
Expand existing storage shed............................ 38,000 ........... ........... ...........
Lab brush machine w/12 cages............................ 15,000 ........... ........... ...........
Flail-vac seed stripper................................. 18,000 ........... ........... ...........
Pond fencing and retrofit inlets........................ 15,000 ........... ........... ...........
Precision drill w/carbon banding........................ 14,000 ........... ........... ...........
Expand headhouse........................................ ........... 75,000 ........... ...........
Van..................................................... ........... 19,500 ........... ...........
1\1/2\-ton truck........................................ ........... 32,000 ........... ...........
Tractor 60 hp diesel.................................... ........... ........... 22,000 ...........
Roof and paint office complex........................... ........... ........... 11,600 ...........
Items (16) less than $10,000 each....................... 7,700 26,700 7,600 19,000
Kingsville, TX:
Mezzanine............................................... ........... 30,000 ........... ...........
Road renovation......................................... ........... 10,000 ........... ...........
Combine................................................. ........... 100,000 ........... ...........
1-ton pickup............................................ ........... ........... 20,000 ...........
20 HP tractor........................................... ........... ........... 15,000 ...........
Irrigation pond renovation.............................. ........... ........... ........... 10,000
Seed cleaner............................................ ........... ........... ........... 20,000
Items (4) less than $10,000 each........................ 8,000 7,000 5,000 5,000
Knox City, TX
Round hay baler......................................... 24,000 ........... ........... ...........
Lawn tractor w/tiller................................... ........... 15,000 ........... ...........
Phone system............................................ ........... ........... 12,000 ...........
Office/conference complex............................... ........... ........... ........... 160,000
Nacogdoches, TX:
\3/4\-ton heavy duty pickup............................. ........... ........... ........... 20,000
Small tractor........................................... ........... ........... 15,400 ...........
Items (8) less than $10,000 each........................ 16,500 11,500 12,500 1,800
Pullman, WA (fiscal year 1999 list only):
1-ton 4 WD extended cab pickup.......................... 30,000 ........... ........... ...........
80-85 hp tractor w/cab and 4 WD......................... 65,000 ........... ........... ...........
Items (2) less than $10,000 each........................ 9,000 ........... ........... ...........
Alderson, WV:
Combine................................................. ........... ........... ........... 110,000
Farm tractor--85 horsepower............................. 60,000 ........... ........... ...........
Hay baler............................................... 10,000 ........... ........... ...........
Seed cleaner............................................ 15,000 ........... ........... ...........
Irrigation pump......................................... ........... 10,000 ........... ...........
Fork lift............................................... ........... 20,000 ........... ...........
4 x 4 pickup............................................ ........... 22,000 ........... ...........
Facility development (bldg. construction)............... 155,000 250,000 ........... ...........
Items (9) less than $10,000 each........................ 35,500 ........... ........... ...........
---------------------------------------------------
Totals by year........................................ 1,699,100 1,297,300 906,700 907,800
===================================================
Grand total: Fiscal years 1999-2002................... 4,810,900
----------------------------------------------------------------------------------------------------------------
water resources assistance
Question. The fiscal year 1999 budget request proposes $6.9 million
to provide technical assistance to watershed and rangeland
coordinators. Currently in fiscal year 1998, how much technical
assistance is provided to the 40 high-priority watersheds?
Answer. This is a new initiative in fiscal year 1999 and was
therefore not funded in fiscal year 1998. These 40 high priority
watersheds will be identified as those areas with the greatest water
quality problems in line with the President's Clean Water Action
Initiative and will, upon approval of this initiative, be selected
through a locally driven, competitive process. The $6.998 million under
the Watershed Surveys and Planning Program would fund 92 federal
watershed and rangeland coordinators in these watersheds. These
coordinators would assist local people to identify problems, develop
alternatives, write plans, coordinate volunteers, and implement
projects in watersheds and grazing lands assistance at risk.
In addition, they would facilitate access to all USDA conservation
financial assistance programs that can be used to support watershed
restoration and clean water goals and to target the most critical
sources of pollution in the watershed. Finally, these coordinators
would enhance the technical capability of locally led watershed
partnerships, particularly for problem identification, development of
watershed restoration and pollution prevention plans, and monitoring
progress.
Question. How many dollars are being spent on technical assistance
for grazing lands assistance in 1998? How many FTE's are supported by
this funding?
Answer. The agency earmark for grazing lands technical assistance
increased to $15 million for fiscal year 1998. Grazing lands
specialists positions have been increased in the last two years by more
than 160 FTE's, including the establishment of grazing lands
specialists positions in 14 states previously with no qualified grazing
lands specialists. All states are now receiving allocations in support
of their workload associated with the Conservation of Private Grazing
Lands Program. These increases were achieved through a combination of
new hires, reassignments, and changes in job responsibilities. NRCS now
has 360 staff assigned to provide grazing lands technical assistance.
Question. NRCS has installed over 15,000 individual watershed
systems since 1944. Many of these aging structures are nearing their
life span and possibly could require environmental restoration. The
fiscal year 1999 budget request proposes $1 million to provide
educational assistance to watershed sponsors to inform them of repairs
needed to old systems. Is there any educational assistance being
provided to watershed sponsors in fiscal year 1998?
Answer. Through the Small Watershed Program, Public Law 534 and
Public Law 566, NRCS has assisted local communities as well as
individual farmers and ranchers install conservation systems in
approximately 1,700 authorized watershed projects, in every state. Of
most serious concern to this aging infrastructure is the 10,400
federally assisted project dams that are owned by the local communities
(legal project sponsors). More than half of the project dams are more
than 30 years old and in the next 10 years, almost 1000 of them will
reach the end of their evaluated life. While most of the sponsor's dams
are in acceptable condition we are aware of some that present hazards
which could result to loss of life and property due to collapse or
failure. Currently, there are no dedicated funds being provided for
educational assistance to watershed sponsors in fiscal year 1998.
Question. How many individual watershed systems in need of
environmental restoration have been identified to date?
Answer. Since the structures are considered to be ``federally
assisted'' and are owned by the sponsors, who are bound by the
Operations and Maintenance Agreement to keep the structures in good
condition, we must rely on the sponsors to provide the data on the
number or location of structures that are in need of rehabilitation or
modification.
Question. Will the proposed $1 million support educational
assistance to watershed sponsors for all of these old systems?
Answer. Since this is a serious problem, we feel at a minimum, an
educational effort with all sponsors should take place in order to
increase awareness and affect sponsor action. We envision fact sheets,
training workshops, and videos provided through a cadre of experts in
the field. As part this budget item NRCS would utilize the ``Training
Aids for Dam Safety'' package of workbooks and videotapes prepared by
the Interagency Committee on Dam Safety. The package was professionally
prepared and translated into several languages. It includes modules
ranging from technical aspects of site inspections to safety program
development.
user fees
Question. The fiscal year 1999 President's budget request proposes
the implementation and collection of $10 million in user fees for
certain types or areas of technical services and products. How will
these user fees be implemented? Please list the type of services and
products that are proposed to be financed by user fees collections.
Answer. Although we have not fully developed the appropriate fee
schedules or implementation details, we anticipate the following types
of services may be included under the proposed user fee program:
--Conservation Plans exceeding 16 hours of work;
--Foundation seeds--initial supply;
--Foundation plants;
--Testing for animal waste storage lagoons;
--Inspection and testing of dams;
--Water supply forecasts;
--Climate data;
--SNOTEL data;
--Soil survey publications;
--Wetland delineations; and
--Irrigation systems.
Question. Which constituent groups will be impacted by this
proposal?
Answer. We expect all constituent groups to be affected, although
some more directly than others.
Question. What is the estimated cost of these services currently?
Answer. We do not know the exact cost of the services affected,
however, the President's budget estimates the cost to be $10 million.
This amount currently supports about 133 FTE's.
Question. What legislative authority is required and has the
Administration submitted its legislative proposal to the Congress for
consideration?
Answer. We have requested authority under the USDA Omnibus User Fee
legislative package (AG 228, Title IV, Sec. 401) to prescribe and
collect fees to cover the costs of providing information, technical
assistance, and other services for all NRCS programs where the
Secretary determines they are feasible. This package is under review at
OMB and should be sent to the Congress shortly.
Question. How will NRCS assure that technical assistance maximizes
the amount landowners actually have available to spend on conservation
practices?
Answer. NRCS will do everything possible to assure this including
reducing costs wherever possible.
congressional earmarks
Question. The fiscal year 1999 President's budget proposes a
decrease of $6.9 million for earmarked projects funded in the fiscal
year 1998 Appropriations Act. Please list the projects and funding
levels for each project affected by the proposed decrease of $6.9
million for Conservation Operations.
Answer. The list of earmarks follows.
Hawaii:
Feasibility Study--Waianae Watershed...................... $200,000
Molokai Agriculture Community Committee................... 250,000
Iowa:
Loess Hills Erosion/Western Iowa.......................... 400,000
Trees Forever Program..................................... 100,000
Louisiana: Crowley Rice Research Station...................... 125,000
Mississippi:
Franklin County........................................... 3,000,000
Mississippi Delta Water Resources Study................... 350,000
New York:
Westchester County SWCD................................... 300,000
Pastureland Management/Rotational Grazing................. 300,000
Skaneateles and Owasco Watersheds......................... 250,000
Oklahoma: Deer Creek Watershed................................ 750,000
West Virginia:
Poultry Litter Composting................................. 120,000
Long-Range Grazing Land Initiative........................ 300,000
Not Specified:
Great Lakes Basin Program for Soil and Erosion Sediment
Control................................................. 350,000
Community Leadership Alliance for Sustainable Development
Program................................................. 100,000
--------------------------------------------------------------
____________________________________________________
Total, Selected Earmarks.............................. 6,895,000
Question. What is the justification for not continuing funding for
each of these projects in fiscal year 1999?
Answer. Earmarks for specific local projects are actions that go
outside the ordinary allocation process. Most of them focus on issues
which are local in nature and do not provide benefits to regional or
national priorities.
forestry incentives program
Question. The Forestry Incentives Program is very popular among my
landowners in Mississippi. Why does the President's budget request
propose to terminate funding for this program for fiscal year 1999?
Answer. The President's budget does not propose funding for the
Forestry Incentives Program (FIP) for fiscal year 1999. We recognize
the important goals of the program and the many indirect benefits that
reforestation provides including water quality and wildlife habitat.
However, in the interim, NRCS will continue to support landowners with
FIP contracts as well as provide technical assistance with respect to
vegetative cover, including trees on private lands. The agency also
notes that programs such as the Wildlife Habitat Incentives Program
(WHIP) and the Conservation Reserve Program (CRP) also encourage
practices that include planting trees.
Question. How many participants receive funding from this program?
Please list the number of participants, by state.
Answer. Totals on the number of participants who received funding
for FIP in fiscal year 1997 will be provided for the record.
[The list follows:]
Fiscal year 1997 FIP participants
No. of participants
State who installed practices
Alabama........................................................... 62
Alaska............................................................ 1
Arizona.................................................................
Arkansas.......................................................... 100
California........................................................ 18
Colorado.......................................................... 6
Connecticut....................................................... 2
Delaware.......................................................... 11
Florida........................................................... 120
Georgia........................................................... 635
Guam....................................................................
Hawaii..................................................................
Idaho............................................................. 7
Illinois.......................................................... 23
Indiana........................................................... 55
Iowa.............................................................. 21
Kansas..................................................................
Kentucky.......................................................... 34
Louisiana......................................................... 164
Maine............................................................. 36
Maryland.......................................................... 29
Massachusetts..................................................... 8
Michigan.......................................................... 46
Minnesota......................................................... 36
Mississippi....................................................... 754
Missouri.......................................................... 14
Montana........................................................... 6
Nebraska.......................................................... 2
New Hampshire..................................................... 21
New Jersey..............................................................
New Mexico..............................................................
New York.......................................................... 32
North Carolina.................................................... 166
North Dakota............................................................
Ohio.............................................................. 36
Oklahoma.......................................................... 16
Oregon............................................................ 100
Pennsylvania...................................................... 14
Puerto Rico....................................................... 3
Rhode Island............................................................
South Carolina.................................................... 489
South Dakota...................................................... 6
Tennessee......................................................... 16
Texas............................................................. 334
Utah....................................................................
Vermont........................................................... 8
Virginia.......................................................... 375
Washington........................................................ 57
West Virginia..................................................... 27
Wisconsin......................................................... 34
Wyoming........................................................... 29
-----------------------------------------------------------------
________________________________________________
Total....................................................... 3,953
wildlife habitat incentives program
Question. The Wildlife Habitat Incentives Program (WHIP) is a
voluntary program that will provide a wide array of wildlife practices
to address wildlife habitat issues throughout the nation. The budget
assumes 3,400 contracts in fiscal year 1998 and 2,300 in fiscal year
1999. Have all of the assumed fiscal year 1998 3,400 contracts been
awarded?
Answer. No. WHIP applications are accepted on a continuous sign-up
basis. Most States initiated the program sign-up after February 1, with
many waiting until the Secretary officially announced the release of
funds on February 27. We anticipate the majority of the selections
being made in late spring/early summer.
Question. Is the demand greater than the number of contracts which
can be awarded with the funds available for this program in each of
fiscal years 1998 and 1999?
Answer. Yes. When NRCS State Conservationists submitted their
projected funding needs in 1997 in the State WHIP plan, instructions
from the National office requested they submit estimated funding needs
for a six month period. Requests were received from all 50 States,
Puerto Rico and the Pacific Basin. The total amount of these requests
was in excess of $35 million. As news about the program has spread to
many persons who would be eligible for WHIP but who have not
historically participated in USDA programs, many of the NRCS State
Conservationists have recognized that the original estimates were too
conservative.
Question. How much funding is needed to provide adequate technical
assistance to the WHIP program in each of fiscal years 1998 and 1999?
What level of funding is currently available to provide needed
technical assistance for this program and what level is included in the
fiscal year 1999 request?
Answer. The budget assumes $5 million for technical assistance in
both 1998 and 1999. It is our belief that 25 percent of the total
program level is needed for technical assistance for WHIP.
Question. Are any carryover balances from previous fiscal years
proposed to be used for technical assistance for WHIP? What level is
assumed, by fiscal year?
Answer. There are no carryover balances from previous fiscal years.
1998 is the first year of the program.
watershed and flood prevention operations
Question. The fiscal year 1999 budget request proposes to fund high
priority flood prevention projects under small watershed authority.
Should this proposal be implemented, how many small watershed projects
would not be eligible for funding under the flood prevention authority?
Answer. The total number of projects has not been estimated at this
time. The high priority watersheds will be based on their ranking on a
regional basis, since the ranking for 1999 will not be carried out
until later summer based upon the funding received, the size and
complexity will determine how far the dollars will stretch.
Question. Why has the Administration proposed to allow funds to be
used to offer subsidized loans through the Rural Utility Service or
Rural Business Cooperative Service to new and existing approved small
watershed projects? How many loans does the agency assume to administer
under this proposed provision?
Answer. There is an unfunded commitment of approximately $1.5
billion for Public Law 78-534 and Public Law 83-566 projects. With an
annual allocation of approximately $50 million for construction, this
unfunded commitment will not decline, since local communities request a
greater dollar amount in new projects each year. Therefore, the
subsidized loan program was developed to allow local sponsors to bear a
greater part of the burden through loans. NRCS would not administer the
loan program; it would be the responsibility of the Rural Utility
Service. It is extremely difficult to estimate usage of these loans
since this is a new concept. The budget request could fund
approximately $300,000,000 in loans.
Question. The fiscal year 1999 budget explanatory notes indicate
that in 1954 the Watershed and Flood Prevention Act amended the flood
prevention program, making it possible to administer the flood
prevention program along the same lines as the Small Watershed Program.
If the authority has existed since 1954 why is the Administration
proposing a change in the funding accounts of Watershed and Flood
Prevention and Conservation Operations now?
Answer. The Public Law 566 and Public Law 534 flood prevention
programs are very similar in nature with the major exception of how
they are authorized. NRCS has very little control over the selection of
the broad Public Law 534 river basin in which is authorized by
Congress, as opposed to Public Law 566 where planning starts are
granted by NRCS under Public Law 566 at the request of local
communities. There are many minor differences between the two as shown
on the attached table. Over the years both programs have been managed
using the National Watersheds Manual for policy guidance. It is prudent
to operate these programs as similarly as possible to make government
easier to understand by our clients.
COMPARISON OF DIFFERENCES BETWEEN PUBLIC LAW 566 AND PUBLIC LAW 534
----------------------------------------------------------------------------------------------------------------
Attribute Public Law 566 Public Law 534
----------------------------------------------------------------------------------------------------------------
Scope.......................... Nation-wide............................ Specific geographic areas approved by
Congress.
Application.................... Specific request for federal assistance None once authorized by Congress.
Initiation of Planning......... Authorized by Chief.................... Authorized by Federal Legislation.
Plan Approval.................. <$5 million--Chief/STC................. Flood Prevention proj.--STC.
>$5 Million--Congress.................. Other than Flood Prevention--OMB.
Benefits and Costs............. Analysis required by legislation....... Not required by law, but by NRCS
policy.
Financial Assist............... Constr, Admin, Eng, LR for Rec and F&W. Same but also for any LR for single
purpose FP structures and LT on
National Forest Land.
Installation................... Project Agreement Required............. PA not req if NRCS does work.
Project Size................... 250,000 acre limit..................... May go above 250,000 if Congress deems
it prudent.
Operation and Maintenance...... Sponsor must have taxing authority..... No special requirements.
----------------------------------------------------------------------------------------------------------------
Question. 414 watershed structures built in Mississippi over the
last 50 years are greatly in need of repair and renovation. The
Mississippi Conservation Partnership worked with the Mississippi
Legislature in acquiring authorization for the Mississippi Soil and
Water Conservation Commission to administer a program which addresses
rehabilitation of these structures. The Commission is also lobbying the
Mississippi Legislature to provide funding for this program. These
State funds may be provided only if matching Federal funds are
appropriated. Does the NRCS have the authority to provide matching
Federal funds for this type of rehabilitative work?
Answer. Our Office of General Council advises us that NRCS has no
statutory authority to provide federal funds for rehabilitation of
federally assisted dams.
Question. Does the fiscal year 1999 budget request contain funding
specifically for this maintenance work? If yes, which account is it in?
Answer. The fiscal year 1999 proposed budget has no funds for
rehabilitation or modification of watershed dams since NRCS does not
have statutory authority to conduct such work. One hundred percent of
the maintenance of the dams was assumed by the legal sponsors through
an Operations and Maintenance Agreement executed with the federal
government.
Question. Does the fiscal year 1999 budget request include funding
for the following projects: Little Sioux and Mosquito Creek, IA; Little
Auglaize Watershed, OH; Bush River, VA; and Potomac Headwaters, WV? If
so, what amount of funding is included?
Answer. The budget is not built on named watersheds or projects,
because of an unfunded commitment of approximately $1.5 billion. Funds
are allocated to NRCS regions who then use a formula to fund the
highest priority projects. Therefore, funding for the Little Sioux and
Potomac Headwaters (Public Law 78-534), and Little Auglaize, Bush
River, and Mosquito Creek (Public Law 83-566) ranking will depend upon
the other projects they are competing against. Construction on the
Little Auglaize will be completed this fiscal year (1998). Funding
needed for 1999 for the remaining three projects is $3.0 million.
Question. Please list any small watershed projects and their
proposed amount of funding in the fiscal year 1999 President's budget
request.
Answer. There are no Small Watershed Projects specifically proposed
for funding in the fiscal year 1999 budget. Beginning in fiscal year
1999, the $1.5 billion backlog in authorized projects will be ranked in
priority based on their net economic, environmental, and social
benefits.
Question. Has the agency completed work on the following projects:
Lower Otter and Dead Creak, VT; Lower Winooski River, VT; Barton and
Clyde River projects, VT; Park River Dam, ND; and South Delta watershed
project, MS? If not, please explain.
Answer. Work is continuing on all the watersheds this fiscal year
1998. However, there are no Small Watershed Projects specifically
proposed for funding in the fiscal year 1999 budget. Beginning in
fiscal year 1999, the $1.5 billion backlog in authorized projects will
be ranked by each Regional Conservationist in priority of their net
economic, environmental, and social benefits.
Question. Please discuss the agency's role in assisting the Devils
Lake Basin, ND, in locally coordinated flood response and water
management activities.
Answer. The agency considers the impacted part of the Devil's Lake
Basin to be a high priority area for implementation of wetlands
easements through the Wetlands Reserve Program and floodplain easements
under the Emergency Watershed Protection Program. The goal is to
provide landowners an opportunity to place impacted lands that qualify
for these two programs under an easement. We hope to be able to
establish additional water retention capacity in the upper basin areas
through the restoration of wetland basins. Although, this is unlikely
to make a substantial contribution to lake levels, it is a step in the
right direction.
Question. Does the NRCS continue to utilize conservation programs
in providing water holding and storage areas on private land as
necessary intermediate measures in watershed management? If not, please
explain.
Answer. Land treatment practices continue to be an integral part of
all watershed projects. In fact, approximately 50 percent of all new
projects are for watershed management and composed entirely of land
treatment rather than a combination of structural and land treatment
practices.
Question. Please discuss the repercussions of and the Agency's
position on the following limitations: (1) $15 million on Public Law
534 projects, and (2) $50 million on technical assistance.
Answer. The limitation on Public Law 78-534 projects has had no
repercussions on the agency in 1998. That is about the amount of money
that can be spent during the year. As for the Public Law 83-566
program, the reduction of $10 million has seriously effected the
capability that the agency has to provide technical assistance needed
by sponsors to carry out the mission of the watershed program. There
will be 125 fewer FTE's available to assist the sponsors, but on the
plus side an additional $10 million is now available for financial
assistance against the $1.5 billion unfunded commitment.
Question. Please explain how the Department has raised the priority
of developing a storage capacity and improving the efficiency of
delivery systems as the Senate Committee Report accompanying the fiscal
year 1998 Appropriations Act directed.
Answer. Work to address limited water storage and inefficient
delivery systems in Hawaii, noted in the Senate Committee report
accompanying the fiscal year 1998 Appropriations Act, has progressed on
three projects. Planning and the Environmental Impact Statement (EIS)
has been completed on the Upcountry Maui project. The project was
authorized for operations in August of 1997 by the Chief of the Natural
Resources Conservation Service. NRCS is currently working on the
designs and coordinating with the Hawaii Department of Agriculture and
the Maui County Department of Water Supply on the land rights
requirements for installation. NRCS anticipates that the project will
be ready for construction in fiscal year 1999.
The Waimea-Paauilo watershed project has been replanned and a new
reservoir site has been selected. The watershed plan and EIS work has
been completed and NRCS is now preparing to begin the design phase and
coordinating land rights and funding with the Department of Hawaiian
Homelands and the Hawaii Department of Agriculture. The first phase of
this project is expected to be ready for construction in two years.
NRCS is working closely with the Hawaii Department of Agriculture,
the Hamakua Soil and Water Conservation District and local landowners
in completing planning on the Hamakua Ditch Project. This is the top
watershed planning priority for the NRCS staff in Hawaii, and they
expect the planning to be completed by the end of this year.
Question. Please update the Subcommittee on the work to complete
innovative community-based comprehensive resource management plans for
West Virginia communities devastated by floods.
Answer. NRCS has focused community based assistance efforts to
three areas heavily impacted by the flood of 1996. These are the North
Fork of the South Branch River, Grant and Pendleton Counties; Upper
Tygarts Valley River, Randolph County; and Knapps Creek, Pocahontas
County. These efforts are led by local watershed groups consisting of
landowners, interest groups, local governments, and other stakeholders.
A holistic planning effort is underway with the North Fork Watershed
Association assessing alternatives for flood protection; water supply;
streambank erosion; forest land use and protection; wetland development
and protection and soil erosion on upland areas. The plan should be
completed by July 1998. The NRCS is pursuing cooperative efforts with
the State of WV to develop a holistic plan for the South Branch Potomac
Watershed (Grant/Hardy/Pendleton Counties). The Knapps Creek Watershed
Association with NRCS assistance is assessing similar alternatives for
flood protection and severe streambank erosion. They are currently
seeking funding to carry out a geomorphology study for the watershed. A
water resource plan has been developed for the Upper Tygarts Watershed
which focused primarily on water supply needs. The Upper Tygart
Watershed Partnership is currently preparing a Public Law 566 watershed
application seeking assistance to develop a holistic watershed plan
which would incorporate the results of the water supply study. Similar
efforts are underway with the Inwood Watershed Association, Berkeley
County; and the Dunlop Creek Watershed Association in Fayette County.
NRCS is working with these groups to assist them in assessing
alternatives and taking actions to address their land and water
resource needs.
Question. Please update the Subcommittee on the need and plans made
for a cost-share pilot flood plain project for the Tygart River basin
in West Virginia.
Answer. The fiscal year 1998 Senate Appropriation Bill contained
language that NRCS would pursue a pilot flood plain relocation program
for the Tygarts River Basin, West Virginia. This pilot project would
assess the effectiveness of a relocation project where home and
business owners could elect to relocate from the floodplain over a five
to ten year period. As owners move or relocate from the area, estate
sales, or others as they desire could sell their homes or businesses to
the government at their convenience. The project would assess the
participation rate over the long term. Limited planning will continue
in fiscal year 1998. No other activity is planned.
Question. The Secretary stated in his testimony before this
Committee that the Department ``will also continue to examine approved
watershed plans to eliminate those projects that are now infeasible in
order to reduce the backlog of unfunded work.'' What did the Secretary
mean when he used the word ``infeasible?''
Answer. Infeasible projects are those where there is little hope of
ever getting the project installed due to a lack of sponsor interest,
insurmountable environmental concerns, low benefit to cost ratio,
changes in land use which precludes constructing a key component, lack
of ability to obtain land rights, long term litigation, or other
significant barriers.
Question. How does the agency plan to eliminate these projects?
Answer. In those projects where the sponsors agree that nothing
further can be done, a supplement to the watershed plan will be
prepared to eliminate the remaining works of improvement and the
project closed. In cases where the sponsors are not willing to sign a
supplement, the project will be put on the inactive list. A project on
the inactive list cannot be reactivated until all the problems which
caused it to be declared inactive are overcome by the sponsors. NRCS is
constantly reviewing projects to reaffirm feasibility before proceeding
further.
Question. Which projects have been determined to be ``infeasible''
by the Department to date? Please provide list by state.
Answer. The following projects have been determined to be
unfeasible to date:
List of infeasible projects
South Fork Watershed................... Arkansas.
Middle Fork Anderson River............. Indiana.
Upper Big Blue Watershed............... Do.
West Carroll Watershed................. Louisiana.
Big Creek Watershed.................... Mississippi.
Brown's Creek.......................... Do.
Dry Creek.............................. Do.
Sowashee Creek......................... Do.
Town Fork Creek........................ North Carolina.
Starkweather Watershed................. North Dakota.
Sebastion Martin-Black Mesa Watershed.. New Mexico.
McKinney-Buzzard Watershed............. Oklahoma.
Waterford-Guilford Creek Watershed..... Do.
Cross Creek Watershed.................. Pennsylvania.
Little Shenango Watershed.............. Do.
Buffalo River Watershed................ Virginia.
staff reductions
Question. In your statement, Mr. Weber, you indicate that one of
the goals of the agency-wide reorganization ``was to place a higher
share of staff resources in the field to maintain and enhance service
to our customers.'' Was this goal achieved after the reorganization? If
so, what was the increase in number of employees that were placed in
the field?
Answer. At the end of fiscal year 1993, approximately 70 percent of
the NRCS work force was located in offices below the State office.
Currently, approximately 75 percent of the work force is located in
offices below the State office.
Question. Mr. Undersecretary, you state in your testimony that
currently 9,000 staff are at the local level. Is this number based on
the fiscal year 1998 Conservation Operations appropriations?
Answer. This number is based on funding for all accounts
administered by NRCS.
Question. Will this number be reduced under the fiscal year 1999
President's budget request?
Answer. If staff reductions occur in total, inevitably some loss
will occur at the field level. However, we are trying to maintain the
level of staff at the field level at 75 percent or better of the total
NRCS work force.
Question. During the Department's streamlining initiative, how many
NRCS full-time equivalents (FTE) have been reduced in the field and at
headquarters? Please give the number of FTE's by fiscal year.
Answer. Since fiscal year 1993, NRCS has reduced FTE's for the
agency by 1,896 FTE's. Of this amount, NRCS has reduced 159 FTE's from
National Headquarters (NHQ) and 1,173 FTE's from the field staff. A
more detailed breakdown follows:
------------------------------------------------------------------------
All other
Fiscal year Total FTE NHQ \1\
------------------------------------------------------------------------
1993 (Baseline).................... 13,790 537 13,253
1994............................... 13,317 527 12,790
1995............................... 12,163 502 11,661
1996............................... 11,839 392 11,447
1997............................... 11,894 378 11,516
------------------------------------------------------------------------
\1\ Includes State, regional, area, and all other offices except
headquarters.
Question. How will the proposed administrative convergence affect
the field staff in each States' county offices?
Answer. Convergence will produce a modern information technology
infrastructure that the NRCS, Farm Service Agency and Rural Development
Agency can share, thereby, making the field office staff more
productive. In conjunction with convergence, various efforts are
underway to re-engineer administrative and program delivery systems to
lessen the administrative workload on field staffs.
Question. Will the field employees' administrative workload be
lessened so that they can spend more time with the landowners?
Answer. The convergence of administrative and information
technology functions in the Service Center agencies, when fully
implemented, will reduce the time spent on administrative overhead and
will free time up for program delivery.
Question. How will proposed administrative convergence affect
service center staffing?
Answer. Administrative and information technology convergence will
not directly affect offices below the State level. Overall, the State
level administrative staffing will be reduced when the plan is fully
implemented in fiscal year 2002. This reduction in administrative
staffing would make more time available to program related activities
at the State and field office level.
Question. How many FTE's are supported by the fiscal year 1999
budget request?
Answer. The fiscal year 1999 President's budget request will
support approximately 11,412 FTE's.
Question. What is the fiscal year 1998 funded FTE level?
Answer. NRCS can support an estimated 11,944 FTE's with
appropriated and carryover balances available in fiscal year 1998.
Question. What is the total staff reduction expected in fiscal year
1999?
Answer. The total anticipated staff reduction for fiscal year 1999
is 532 FTE's. However, this assumed there would be no additional
funding for emergency watershed programs.
Question. How much funding is needed in fiscal year 1999 to prevent
staff reductions at the Headquarters level and in the field?
Answer. $40.6 million would be required to prevent the reduction of
532 FTE's.
Question. Does the agency expect to cut any more FTE's in the
coming fiscal years?
Answer. NRCS anticipates no additional cuts in staffing if the
requested funding level for fiscal year 1999 is received and
maintained.
county based workload study
Question. USDA has an outside consulting firm conducting a workload
study of the farm and rural program delivery system of county-based
agencies (FSA, NRCS, and RD) to be completed on September 18, 1998.
What has the consulting firm been told to look at specifically
regarding NRCS?
Answer. Since the USDA County based study is an independent study,
the consulting firm is directed by the USDA Contract (based on the
original Request for Proposals as printed in the Federal Register) to
examine the following: existing legislative authorities, regulations to
actual activities; evaluation of the workload implied by the program
responsibilities to be carried out under the charge; developing a
business process map(s) for each NRCS program; and, developing a
profile report of the USDA customer base.
The goal of the study is the articulation of alternative approaches
to organizing and staffing USDA's county-based operations in delivering
services that are clearly linked to Federal policy and program
priorities and that can be managed to meet Federal budget targets. The
key objectives in meeting the goal of identifying alternative field
service delivery systems include: the articulation of the charge to
agencies as mandated by legislation and regulation; evaluation of the
workload implied by the program responsibilities to be carried out
under the charge; identification of options for organizing agency
resources to meet customer needs and preferences; and,
conceptualization of organizational structures that can effectively and
efficiently match USDA resources with its customer base.
Question. Are streamlining and collocation of NRCS offices
postponed until the study is completed?
Answer. NRCS continues to implement the Secretary's Streamlining
initiative, started in 1994, with co-locating field offices into
approximately 2,556 USDA Service Centers.
Question. As a result of this study, do you anticipate more office
closings, centralization, or consolidation with the Farm Service
Agency?
Answer. The study is just beginning and approximately 20 percent
complete. Upon completion, appropriate policy makers will review the
effort to identify any possible findings that may improve the Agency's
service to farmers, ranchers, and other customers.
supplemental appropriations
Question. Do you expect that you will submit a request for
supplemental funds for emergency watershed projects, particularly in
view of the flooding and the other problems that have arisen as a
result of El Nino?
Answer. Preliminary estimates for disasters to date reflect a $40
million need. However, an average for disaster activities in a typical
year would be closer to $150 million based upon an average annual
expenditure over the past four years.
Question. What specific needs have been identified?
Answer. Immediate anticipated needs are estimated at $25 million
for California, although until the weather breaks, it is difficult to
determine the exact need; $10 million for Florida tornadoes; and $5
million for the Northeast states hit by the January ice storm.
Question. Previous emergency projects identified in earlier years
were repaired because of the lack of funds, or there were insufficient
funds to cover all of the projects that were identified. Will fiscal
year 1998 Emergency Supplemental funds be available for requests to
meet these unfounded non-exigency needs?
Answer. All previously reported needs that are eligible for the
Emergency Watershed Protection Program have been met and we have no
projects awaiting funding at this time.
Question. What unfunded needs have been identified by the state
conservationists around the country? Please provide a breakdown of the
unfunded needs by State, and how you plan to distribute any
supplemental funds that might be requested to the States for emergency
watershed protection activities.
Answer. Anticipated needs are estimated at $25 million for
California, although until the weather breaks, it is difficult to
determine the exact need; $10 million for Florida; and $5 million for
the Northeast states hit by the January ice storm and an amount yet to
be identified by the March 7-8, 1998, storm in the Southeast states.
Other needs are anticipated, but cannot be identified until an
emergency occurs.
Question. What unfunded Mississippi needs are outstanding from past
fiscal years and what funding is estimated to be needed to meet these
needs?
Answer. Mississippi requested no additional funds for unfunded
needs at this time.
resource conservation and development
Question. The fiscal year 1999 budget request for the Resource
Conservation and Development (RC&D) is the same as the fiscal year 1998
funding level, $34.4 million. According to the RC&D operation plan
submitted to the Committees on Appropriations, the base funding of
$29.4 million would be used to provide technical assistance to the
existing 290 RC&D Councils, and administrative and overhead support
costs of the program. The additional $5 million would be to authorize
up to 25 new areas and increase base-level funding and provide
financial assistance for the RC&D Councils. Does the agency again plan
to implement this in fiscal year 1999 if the fund is provided? If not,
how will the agency use this funding?
Answer. The President's Budget for fiscal year 1999 calls for an
appropriation of $34,377,000, the same as the fiscal year 1998 funding
level. The RC&D operating plan submitted to the Subcommittees on
Agriculture Appropriations covers fiscal year 1998. In fiscal year
1999, the Agency will use the funding to provide technical assistance
through coordinators to 315 RC&D Councils, along with administrative
and overhead costs of the program. This will allow the agency to
maintain a level of funding for direct support and core technical
assistance to authorized areas.
Question. The goal of the RC&D coordinator is to assist the Council
in its activities and to become an empowered, self-sufficient Council
that has the capacity to build effective public private partnerships.
How many Councils have reached this goal since the inception of the
program?
Answer. The coordinator provides technical assistance to the
Council and in many cases functions as its only full-time staff. The
coordinator provides access to USDA and other Federal programs. He or
she aids the Council in the complexity of dealing with access to
knowledge, information and resources, and a frequently changing council
organizational structure. The structure change is due to Council
sponsor members changing frequently, since many are local elected
officials. Such changes often affect a Council's dynamics and
effectiveness. The RC&D Councils are non-profit entities made up of
volunteer boards. The coordinator plays a pivotal role in bridging the
transitions in Council membership, focus, and priorities.
Although many Councils have become very efficient at obtaining
funding for specific projects, we have not assessed how many are
``self-sufficient'' without the assistance of a coordinator.
Question. Does the agency have an operating plan ``to wean the
Council off'' of the use of a RC&D coordinator once it has reached this
goal? If not, does the agency plan to implement one?
Answer. There is no proposal or plan to de-authorize or de-fund
RC&D councils.
okatoma river project
Question. I have been told that the Okatoma River needs the
completion of work referred to as ``desnagging''. Could you explain the
nature of this work?
Answer. Clearing and snagging is a process where fallen and badly
leaning trees are removed from a water course. Much of the work is done
by hand to minimize damage to the environment.
Question. Does the fiscal year 1999 budget request include any
funding for the Okatoma River project in Covington County, Mississippi?
Answer. The budget is not built on named watersheds or projects,
because of an unfunded commitment of approximately $1.5 billion. Funds
are allocated to NRCS regional conservationists who then use a formula
to determine the highest priority projects to fund. Okatoma River's
scoring will depend upon it's ranking with other projects in the
region.
Question. How much funding is needed to complete the ``desnagging''
of the Okatoma River? Can the agency finish this project within one
fiscal year given that the needed amount of funding is provided by the
Committee?
Answer. Approximately $1.0 to $1.5 million is needed. The project
is presently in the final design phase and it is anticipated that the
work could be completed in less than a year.
Question. How much money, by fiscal year, has the NRCS made
available for this project?
Answer. Approximately $50,000 of technical assistance funds for the
survey and design has been expended during the last year. However, no
financial assistance has been needed thus far.
section 11 cap
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 (CCC)
Charter Act, section 11, to limit the total amount of CCC funds made
available for reimbursement to the 1995 spending level, affecting
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 rate charged for the WRP is
approximately $80.00 per acre. The technical assistance activities
under the WRP includes such items as eligibility determinations,
wetlands restoration planning, development of detailed engineering
designs, working with appraisers, surveyors, closing agents, attorneys,
and construction contractors, and monitoring of prior, current and
future WRP acres. The technical assistance rate was developed over time
for the WRP. This charge is sufficient to fund the WRP technical
assistance needs.
The FAIR Act of 1996 imposed restrictions on the uses of CCC funds,
beginning in fiscal year 1997 with respect to certain activities.
Funding for the WRP was made available through the Commodity Credit
Corporation (CCC). Funding for NRCS technical assistance costs is
authorized under the CCC Charter Act section 11 funds transfers.
Unobligated appropriated funds of approximately $31.5 million were
used to fund the technical assistance needs for the WRP for fiscal year
1997 and fiscal year 1998. For fiscal year 1999 approximately $15.089
million is needed for WRP technical assistance activities. Of the total
amount, $4.0 million is anticipated from unobligated carry-over
appropriated funds. The remainder, approximately $11.089 million is
expected to be transferred from CCC through the CCC Charter Act section
11 authorities.
Question. What available CCC funds and prior-year balances will be
used and in what amounts by program?
Answer. For fiscal year 1999 approximately $15.089 million is
requested for WRP technical assistance activities. Of the total request
approximately $4.0 million are unobligated carry-over funds from the
old appropriated WRP program. The remainder approximately $11.089
million, of the total technical assistance funds needed for fiscal year
1999 are requested through CCC. For fiscal year 1999 the $11.089
million in CCC funds are expected to be used to deliver the WRP
program.
Question. Will appropriated funds be necessary to supplement
available CCC funding? If so, how much, by program? What appropriated
funds are included in the fiscal year 1999 request, by program?
Answer. The CCC Charter Act Section 11, as amended, does not
guarantee that funds will be available for transfer or allotment to
other government entities to assist it in the conduct of its business.
Rather, the section 11 transfer is limited to an amount established on
pre-1996 Farm Bill work activities. Technical assistance costs
associated with CRP, WRP, FPP and CFO all fall within the Section 11
limitations. In order to deliver the WRP in fiscal year 1999, $4
million in unobligated carryover appropriations will be used to fund
technical assistance. For CRP, $22 million in unobligated carryover
appropriations will be used for NRCS technical assistance costs. In
addition, approximately $36 million in appropriated Conservation
Operations account funding will be used to support technical assistance
costs associated with the proposed EQIP level.
Question. Have agency lawyers revisited the section 11 cap and made
a reinterpretation?
Answer. The Office of General Council (OGC) has not altered its
initial position on its interpretation of the section 11 of the
Commodity Credit Charter Act with respect to the provision of technical
assistance under any CCC program including conservation programs.
research studies
Question. Does NRCS have research studies budgeted in the NRCS
account? If so, how much funding has been used in past fiscal years for
these studies?
Answer. NRCS does not have research studies built into the budget.
We do, however, have cooperative agreements with other agencies and
land grant institutions who conduct research from which NRCS customers
benefit.
Question. Does the fiscal year 1999 budget request contain any
funding for NRCS research studies, and if so, how much? Under what
account can this request be found?
Answer. The fiscal year 1999 budget request does not contain any
funding requests for NRCS research studies.
Question. How many FTE's that work on research studies are
supported by the fiscal year 1999 budget request?
Answer. There are no FTE's in NRCS that work on research studies.
franklin county lake
Question. This Committee appropriated approximately $3 million in
fiscal year 1998 for technical assistance for Franklin County Lake.
What is being done currently with the $3 million appropriated for
fiscal year 1998 to NRCS for Franklin County Lake?
Answer. A portion of the funds are presently being used to provide
technical assistance to complete the necessary survey and design work
for the Franklin County dam. Funds remaining at the end of this fiscal
year will be carried over to provide technical assistance related to
the construction of the dam, when construction funds become available.
Question. What authority under Conservation Operations, Watershed
and Flood Prevention Operations, and Resource Conservation and
Development does NRCS have to provide technical and financial
assistance for the construction of the dam?
Answer. NRCS does have authority under the Watershed and Flood
Prevention Operations and Resource Conservation and Development program
to provide both technical and financial assistance for dams such as the
one proposed in Franklin County. However, the fiscal year 1999 budget
does not include a request for financial assistance in the RC&D
program. Under Conservation Operations, we have the authority to
provide technical assistance related to soil erosion and sediment
control both functional elements of most dam construction.
Question. Is Franklin County designated as a watershed area? Would
Franklin County be eligible for such designation?
Answer. Franklin County is not a designed watershed under the Small
Watershed Protection and Flood Prevention Program. It could be eligible
for such designation.
Question. Does the fiscal year 1999 budget request have any funds
designated for Franklin County?
Answer. The fiscal year 1999 budget for Conservation Operations
reflects a decrease of $3 million for Franklin County.
Question. Should the Forest Service have available funds to provide
financial assistance to the construction of the dam in fiscal year
1999, will the technical assistance appropriated in fiscal year 1998 be
available?
Answer. If financial assistance is available for construction of
the dam in fiscal year 1999, NRCS will use the funds appropriated in
fiscal year 1998 to provide the necessary technical assistance.
mississippi delta water resources study
Question. In the fiscal year 1998 Appropriations Act, the Committee
provided $800,000 in Conservation Operations for the Mississippi Delta
Water Resources Study. Is the total amount in the fiscal year 1998
Appropriations Act used by the State Conservationist of Mississippi on
the Mississippi Delta Water Resources Study?
Answer. The fiscal year 1998 Appropriations directed $350,000 to be
used in the Mississippi Delta Water Resources Study and the total
amount will be used to complete the Study.
Question. What activities were funded with the money provided for
this study in each of fiscal years 1996, 1997, and 1998?
Answer. In fiscal year 1996 and fiscal year 1997, the activities
funded included data collection and assimilation. These included water
quality sampling collection, and testing; fish tissue collection and
testing, and landowner interviews for crop budget generation as well as
other economic data collection. In fiscal year 1998, activities
included competing the design of conveyance systems, completing
economic evaluations, and completing the final study reports.
Question. Does the fiscal year 1999 budget request propose any
funds for this study, and if so, how much? In which account is this
proposed request?
Answer. The Natural Resources Conservation Service plans to have
this study completed during fiscal year 1998, and no funds will be
needed to carry on this study beyond this fiscal year. The fiscal year
1999 budget for Conservation Operations reflects a decrease of $350,000
for this item.
Question. Does NRCS have the authority under Conservation
Operations to carry out the next phase of this project or would that
funding have to come under the Watershed and Flood Prevention
Operations account?
Answer. It was the intention of the Natural Resources Conservation
Service to conduct the water supply study and report the finding back
to the sponsors. The sponsors would have the responsibility of
concurring with and implementing the findings. If the Natural Resources
Conservation Service would have the responsibility of providing
assistance in this endeavor, the sponsors would have to request
assistance from the NRCS to plan the desired activity. Then we would
have to request the authority to expend funds to the project. This
should be an activity of the Watershed and Flood Prevention Operations
Division and planned and implemented as an organized watershed.
farmland protection program
Question. The Farmland Protection Program's (FPP) authorization has
expired. No funding for this program is requested for fiscal year 1999.
Is all work completed in the Farmland Protection Program?
Answer. No. Work for the Farmland Protection Program (FPP) just
started. The 1996 Farm Bill authorized $35 million to establish a
farmland protection program. A total of $16.2 million was obligated to
States and local government entities in fiscal years 1996 and 1997. As
of January 31, 1998, more than 10,000 acres on 47 farms with a total
easement value of $18 million were acquired. Federal FPP funds
contributed $4.5 million (25 percent) and State and local government
funds accounted for $13.5 million (75 percent). Thus, only about 13
percent of the funds have been expended so far. This is due to the lag
time the State and local entities have in order to process easement
appraisals, surveys, and other procedures needed to record the easement
deed. $17.3 million will be obligated in fiscal year 1998. At the end
of fiscal year 1998, the $35 million will be exhausted, including
technical assistance funds earned.
Question. Do carry over balances exist so that the technical
assistance work can be completed? If yes, how much exists, by fiscal
year?
Answer. The Farmland Protection Program implementation operates
with few technical assistance funds, especially when we consider the
cost of preparing conservation plans that are required for each farm
for which an easement is acquired. A maximum of 4 percent of the
appropriated funds is allocated for technical assistance. Technical
assistance funds earned for fiscal years 1996 and 1997 were $575,000
and $80,000, respectively. $720,000, four percent of the $18 million
appropriated, is reserved for technical assistance for fiscal year
1998. Since the funding for this program is provided through CCC, any
unobligated funds do not carry over.
civil rights activities
Question. Mr. Lyons, in your statement you say that the ``NRCS will
continue to seek proactive ways to better serve minority and low income
customers.'' What proactive ways will the agency seek to better serve
these customers?
Answer. Some of the proactive ways NRCS is using to better serve
minority customers are: designation of a staff position in each state
to serve as the program outreach manager; establishing a data base on
minority customer groups and their location; development in each state
of a program outreach plan targeted to minority and low-income
customers; and, finalization of a multi-year strategic plan to address
the conservation needs of minority and low-income producers.
grazing lands
Question. In fiscal year 1998, NRCS is able to continue support for
a Grazing Lands Conservation Coordinator in each of the 50 States. Will
the fiscal year 1999 budget request continue to support these
coordinators in all 50 states?
Answer. The agency earmark increased to $15 million for fiscal year
1998. All states are now receiving allocations in support of their
workload associated with the Grazing Lands Conservation Initiative. The
fiscal year 1999 budget does not request specific funding for grazing
lands conservation coordinators, however, they would be supported in
the Conservation Operations base funding.
sharkey soils
In response to the Sharkey Soils Study requested by the Committee
in fiscal year 1998, our specialists in this area have raised pertinent
and very important questions which I feel should be addressed. Please
provide your response to these promptly.
sharkey soils committee operations
Question. Given the importance and complexity of the issues, would
it not have been scientifically prudent to meet and discuss the
technical issues in open debate?
Answer. In retrospect, it might have been prudent to physically
meet, however, the co-chairs debated this and considering the short
time line and the committee members individual circumstances, decided
the electronic resource was best. Through the electronic venue, issues
were discussed in open debate via e-mail. Every committee member had
ample opportunity to express his opinion to any or all other committee
members. Some members took advantage of this, while others did not.
Informal face-to-face meetings were held at the Soil Science Society of
America's (SSSA) Annual Meeting in Anaheim, CA. These were used
informally because the entire committee could not come to the SSSA
Annual Meeting. The committee chairmen both agreed that the scientific
issues were addressed completely, scientifically, and critically by the
procedures used. There is no apparent reason why more progress would
have been made in a formal, debate-oriented meeting. The procedures
used for the Sharkey Committee had precedence in that they were similar
to those used to originally develop and to continue to develop the soil
classification system--Soil Taxonomy. The system of e-mail exchanges
used here followed a question, answer, debate format that has proven
effective in dealing with complex scientific issues.
Question. Are e-mail and faxes the best method to address the
complex issues in a scientific manner?
Answer. The committee co-chairs decided that for this committees
deliberations e-mail and faxes were the best methods to use to address
the complex issues involved. Issues could be stated in writing so that
all committee members knew exactly what issues were ``on the table'' at
a given time. In addition, committee members could evaluate the issues
by examining their own data, consulting reference materials in their
libraries, examining scientific literature, or personally seeking
clarification. The committee chairmen feel there would have been no
apparent advantage to additional direct, face-to-face formal meetings.
Finally, e-mail and faxes allowed the committee to keep a written
record of all correspondence, questions, and debate. The record has
been supplied to committee members who have requested it.
Question. Would it have been appropriate for members to have access
to materials provided by others and have the opportunity to vote on
issues?
Answer. Yes. The co-chairs made a diligent effort to keep all
members fully informed of information supplied by others. In addition,
key issues were voted on by the members. Unfortunately, not all members
chose to vote on all issues. It should be noted that the full Sharkey
Committee, which consisted of 22 individuals, was broken into
subcommittees to address specific charges. Subcommittees were assembled
by the co-chairs who selected members with particular expertise to
address specific charges on a subcommittee. This was the only practical
way to address all of the charges in the time allotted to the
committee. Thus, subcommittees were sent correspondence related to
their charges. If a member wanted to see correspondence related to
another subcommittee it was sent to him whenever possible.
Question. Were conclusions based on opinions of various members or
objective data relevant to Sharkey soils?
Answer. Both opinions and data relevant to Sharkey soils were used
to make conclusions. Whether opinions or data were used depended on the
specific charge. For example, charge 1 was to agree on the ``concept
and classification of the Sharkey series''. The conclusions for this
charge were based on data. Charges 4, 6, and 7 asked for definitions,
and these were based largely on collective opinion or historical
precedence. Charges 2, 3, and 5 were fulfilled by considering data and
personal opinions of subcommittee members who had examined their data
or who had extensive expertise in the subject.
Question. Would it have been appropriate for committee members to
have had an opportunity to see and review the report before it was
released?
Answer. It would have been desirable for committee members to have
had an opportunity to see and review the report before it was released.
This was not done because there was not time. Oral presentations on the
report were presented in Washington, DC on December 8, 1997 to the
Natural Resources Conservation Service's (NRCS) top staff. Reports were
sent to the full committee on December 9, 1997. It is stated in the
report (page 3) that ``. . . individual committee members may not agree
with all recommendations made here''. Because the co-chairs made a
diligent effort to keep the subcommittees focused on key issues via e-
mail, subcommittee members should not have been surprised by the final
recommendations made in the report. To the best of our knowledge, no
committee member was surprised by the final recommendations.
major concerns
Question. Why was the Sharkey series not correctly classified in
the Vertisol Order since the adoption of Soil Taxonomy in 1965? It is
one of the most extensively occurring soil series in the nation. What
was the scientific basis for incorrect classification as Inceptisols?
Answer. When Soil Taxonomy was adopted in 1965, the Sharkey series,
like other soil series, was classified based on existing data and the
best collective judgment of soil correlators and other experts of the
National Cooperative Soil Survey (NCSS). At that time, it was felt that
Inceptisols was the best classification for the Sharkey series. As
extensive research data have become available in recent years for soils
of the Sharkey series, it has become apparent, and agreed to by experts
of the NCSS, that the best classification for this series is Vertisols.
Question. Recommendations B, page 6. Recommendations 1 and 2 seem
to conflict with each other. Recommendation 1 states two
classifications must be given for the series and 2 states if one
classification must be used, then it should be taken from the micro-
low. What is the justification for this statement?
Answer. Vertisols within a single landscape can consist of two
different, but paired soils--one occurring on a small ridge, and the
second in an adjacent bowl-shaped depression. This pattern is regular,
frequently occurring, and is produced by shrinking and swelling
processes that occur in the soil. The most accurate way to describe
this natural variability is with two soil classifications, because the
committee agreed that a single classification does not fully describe
the soil. It may not be practical to use two classifications for a
single series in all cases. Therefore, if only one classification is
used, the committee suggested the depression or micro-low be used to
represent the soil's properties. The micro-low will tend to be wetter
and its properties probably will have the greatest impact on how the
soil is used.
Question. Was the Committee charged to redefine saturation? Does
the attempt to redefine saturation mean Sharkey soils are not saturated
according to the scientific definition of saturation? What effect would
the proposed redefinition have on these soils; and would it apply to
other soils as Mollisols, Inceptisols, Entisols? How will land owners
react when told they are now going to redefine saturation?
Answer. The committee's charge was to: ``Agree on a method of
monitoring saturation''. In order to monitor saturation, the term must
be clearly defined to show exactly what is being monitored. The term
``saturation'' was not redefined in the report. Rather, the report
recommends a method to monitor soil water using equipment that is
commonly used to assess soil-water potentials in Vertisols. The report
also recommends a new way to interpret soil-water data that can be used
to determine natural saturation. This is not a new concept, and
citations for its use in the scientific literature were included in the
report (page 11). The method recommended for interpreting natural
saturation applies only to Vertisols like the Sharkey series. It could
be adapted to other soils but that was not the intent of the committee.
The committee does not know how land owners will react to the
recommendations of this report. The report describes a workable method
to collect and interpret soil-water data.
Question. There appears to be no scientific basis for the 14 day
wetting period suggested in Charge 2. Is this science or arbitrary
choices between some who want 7 days and others 21 days despite data
indicating months might be required? If data indicates 4 months why 14
days?
Answer. The 14-day wetting period was a suggested compromise based
on best professional judgment. We state in the report that members of
the committee who have made measurements of soil-water potentials in
Vertisols were split on the duration of the recommended wetting
periods, and estimates ranged from 7 to 21 days. It is pointed out in
bold type (see page 18) in the report that further research may show
the duration of the wetting period will have to be adjusted for
different regions. We encourage more research on this topic.
Question. Define anaerobic--Does it mean zero oxygen?
Answer. The Glossary of Soil Science Terms (1996) defines anaerobic
as ``The absence of molecular oxygen''.
Question. Does what happened in the past matter for modern usage,
should it take precedence over the present?
Answer. Interpreting what has happened in the past is important
``for modern usage'' if it is the only way we can predict what will
happen in the future. For example, a soil is considered to be a hydric
soil if it contains one or more of the ``Field Indicators of Hydric
Soils''. The Field Indicators are signs that the soil was anaerobic at
some point in the past, and it is assumed that the soil will again
become anaerobic.
Question. Can uniform, scientifically correct assumptions be made
on conditions in the past; how far in the past?
Answer. Interpretations regarding whether the soil was anaerobic in
the past can be made uniformly and scientifically if a uniform set of
criteria are applied to the soil. Such a uniform set of criteria are
the ``Field Indicators of Hydric Soils'' which were published by the
NRCS in 1996. We do not know how far into the past, in terms of years,
that interpretations can be made using the Field Indicators.
Question. Can one assume ancient soils were frequently flooded and
saturated?
Answer. Relative to ``ancient soil'', if there are indicators in
the soil that the soil was flooded or saturated, then presumably it
was. Geomorphic processes occurring today such as flooding and
saturation leave indicators in soils. When those same indicators are
seen in ancient or relic soils then the processes that left those
indicators are inferred to be the same processes that are occurring
today.
Question. Should soil classification be useful in the present or
the past?
Answer. Soils are classified, in our opinion, to help make
assessments as to how well soils are suited for a given use and to
communicate concepts about characteristics of soils. Classification
should be useful for the present in order for us to predict how soils
will function, and this includes a prediction as to whether the soil is
a hydric soil.
Question. What is the water table depth in Sharkey soils?
Answer. The concept of a water table cannot be easily applied to
Vertisols such as the Sharkey. The report recommends that water tables
not be measured and that wells not be used to assess the soil-water
conditions in Vertisols. Instead, measurements of natural saturation
should be made using piezometers.
Question. Is the proposed ``natural saturation'' scientifically
defined and justified?
Answer. Natural saturation is defined in the Soil Science Society
of America's monograph ``Methods of Soil Analysis. Part 1. Physical and
Mineralogical Methods, Second Ed., 1986''. This is the standard
reference work that describes accepted ways of measuring soil
properties. The complete reference citation is given for Klute (1986)
on page 43 of the report. The concept of natural saturation is
justified not only for use in Vertisols, but for all soils as is
discussed in the above reference.
Question. Would criterion for classification of Vertisols in a
wetland be the same as in upland landscapes?
Answer. In general, yes, the same criteria are applied to Vertisols
for classification purposes, regardless of whether the soil is in an
upland or wetland. We classify soils on the basis of properties that
occur in the soil. We do not make an interpretation as to whether the
soil is in a wetland or upland before the soil is classified.
Question. If only the ped surface is used to determine reduction,
would this not leave most of the soil volume unused?
Answer. A portion of the matrix in Vertisols is considered
``unused'' if roots have not penetrated into it. Without roots the soil
volume will probably not contain enough dissolved organic materials or
microorganisms to produce the biochemical reactions (e.g., reducing
chemical reactions) that must occur in hydric soils. The volume of
space that is ``unused'' probably increases with depth. Within 30 cm of
the surface, the volume of ``unused space'' is expected to be small
because roots should be spaced closely, but the actual volume is not
known at this time.
Question. Item 3, page 18 states, ``the scientists who contributed
to this report suggest that a wetting period of 14 days be adopted . .
. .'' Are there not scientists who contributed to the report who
strongly felt otherwise?
Answer. One of the 22 scientists who contributed to this report
openly stated that the wetting period concept was not appropriate. The
objections of this individual were debated within the subcommittee, and
the best procedure that could be proposed is the one described in the
report. As noted in our response to a previous question, the 14-day
duration for the wetting period may have to be modified for some
regions. This will only be determined after the concept is tested
against data.
Question. Page 28, C3. If no positive reaction with a, a1-dipyridyl
occurs why can't a simple statement be made that it is not reduced?
Does any research or literature indicate any Vertisols have no Iron?
You can't have it both ways.
Answer. The a, a'-dipyridyl dye only reacts with reduced forms of
iron. Some soils do not contain enough iron for them to produce a
reaction to the dye. It is not known that every single Vertisol
contains sufficient iron to produce a reaction to the dye. From a
practical standpoint, most Vertisols will probably contain sufficient
iron for them to react to the dye when reduced. Nevertheless, the
scientists who contributed to the report felt the possibility of a soil
not having sufficient iron must be recognized.
Question. Can you have gray, clayey parent material that is not
anaerobic?
Answer. Yes, this condition can exist.
Question. How do you interpret gray, clayey alluvial parent
material that was previously eroded from soils that may have been
located hundreds or thousands of miles away. What is the basis for
inference of anaerobic conditions? Do all alluvial and coastal plain
soils form under anaerobic conditions at some stage of their
evolvement?
Answer. We look for hydric soil Field Indicators that are composed
of organic soil materials. Field Indicators made of iron are not
reliable indicators to use to identify hydric soils in materials that
do not contain iron. On the other hand, organic material accumulates in
such anaerobic soils and a number of indicators have been identified
for use. These have been published in the NRCS's publication: ``Field
Indicators of Hydric Soils in the United States'', published in 1996.
Alternatively, an odor of hydrogen sulfide gas may also be used as an
indicator that the soil is anaerobic and reduced. We cannot say
categorically that all alluvial and coastal plain soils formed under
anaerobic conditions; however, we will assume that many did. These
soils will be considered hydric soil today only if they contain Field
Indicators of Hydric Soils. The coastal plain sediments can be very
old, on the order of hundreds of thousands of years. Those coastal
plain soils that are not hydric have changed color since they were
deposited and do not contain the hydric soil Field Indicators.
Question. What are relic soil colors? Do they have meaning in
current land use?
Answer. Relic or relict soil colors are colors that formed in the
past and which persist in places where they could not form today. Such
colors might have a use in determining whether the soil hydrology has
been altered, if the colors could be accurately identified as relict.
In our opinion, there is no simple, reliable way to identify relict
colors. Making an interpretation that colors in a given soil are relict
is no more than guesswork at the present time.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. In our strategic plan, we established two overall General
Goals that state the outcomes that would fulfill our mission. These
outcomes are:
--Individuals and their neighbors working together as effective and
willing stewards of the natural resources on their property and
in their communities.
--A healthy and productive land that sustains food and fiber
production, sustains functioning watersheds and natural
systems, enhances the environment, and improves urban and rural
landscapes.
We then established a series of strategic objectives that identify
the components of each goal that are of highest priority for the
immediate future. For each objective, we identified long-term
performance goals that set measurable targets for accomplishment. Goals
and objectives and most performance goals are stated in outcome-related
terms. That is, they refer to the condition of the land or to improved
management practiced by non-federal individuals or entities. These
performance goals are the basis for the performance goals in our annual
performance plan. The objectives correspond to authorized purposes of
one or more of the program activities in our budget.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. The process drew on the technical and program experience of
a team of headquarters and regional staff. This team drew on a wider
circle of state and field level employees and national program
managers. The team studied each of the performance goals for 2002 that
are established in the strategic plan and identified program activities
that contribute to meeting the long-term goal. The team determined
which activities were most clearly outcome related and recommended
those be used as performance measures for fiscal year 1999. The main
problems that we encountered were in the area of data availability. For
some natural resources objectives, such as water quality, there are not
currently reliable annual data sources to support an annual performance
goal.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. The agency's Performance Plan includes several tables that
map the linkage between the performance measures and the budget. Tables
3a and 3b in the plan show the relationships between the objectives in
the strategic plan and the long-term and annual performance measures.
Tables 4a and 4b in the plan then show the relationship between
programs and strategic objectives. Table 5 in the plan presents
information on the amount of funds from each budget activity that
support each objective.
The performance plan includes measures that can be used as measures
for each program. The measures, however, are designed to fit our larger
programs. Some but not all activities of smaller programs are covered
by the current set of measures. For example, activities of the RC&D
Program that directly relate to resource conservation are covered by
performance measures in the plan. RC&D activities that relate to
community development are not.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. Our budget provides funds through a structure of 13
accounts and activities. These programs are delivered through a single
work force to customers who may participate in several programs. We are
using the performance planning process as a means to integrate
management of our program activities. Our performance planning
structure, therefore, is natural-resource driven and very closely
follows the structure of the outcome-related objectives in our
strategic plan. We have very few single-program performance measures in
our performance plan.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. At present we do not anticipate proposing changes to our
account structure for fiscal year 2000.
Question. How were performance measures chosen?
Answer. The annual performance measures that support our strategic
goal for a healthy land are measures of conservation on the land
achieved with direct technical assistance provided by NRCS employees at
the field level. A team that included representation of all regions
identified possible measures and recommended those that most closely
related to the long-term goals established in the strategic plan. We
selected predominantly measures that we can now collect data on, or for
which we expect to be able to collect data by the beginning of fiscal
year 1999.
Performance measures for the goal for stewardship are primarily
internal measures, such as training levels, that measure our capacity
to provide quality assistance and customer satisfaction measures.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. We have implemented a reporting system that draws on the
data stored in automated case files in the Service Centers. The intent
of this Field Office Computing System is that detailed information can
be transmitted from the Service Centers to managers in state and
regional offices and NHQ without employees at the field level doing
anything other than that required to keep the records that they need to
do their job in the field. Initially populating the data fields in the
system is labor intensive, however. Not all field offices are fully
utilizing the system at present. We have developed the concept that we
call Future Directions that will utilize newer, more user-friendly
information management technology to streamline the essential record-
keeping at the field level.
We are also planning to use the National Resources Inventory to
collect annual information on several key outcomes. We are evaluating
use of a series of annual inventories on specific resource issues, with
the intensity of sampling and therefore the cost, determined by the
performance issue.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. We expect to have data for the current performance measures
by March 2000. Work is underway to finalize definitions and determine
data sources for those few measures for which we are not currently
collecting data. We do, however, intend to continue refining measures
over the next several years. This means that there likely will be some
measures in the plan for any given year for which we may not have
reliable baseline data or consistent current-year data.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. The annual performance measures that support our strategic
goal for a healthy land are key outcome-related measures that the
committee can use to track the effectiveness of our combined programs.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. We tied our annual performance goals directly to the two
outcome goals of our strategic plan. The annual performance measures
for resource condition are all at least intermediate outcomes that
measure improvements in natural resource management implemented by
resources managers with NRCS assistance. We have included relatively
few measures of internal processes in our performance plan.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcomes)?
Answer. Yes, most NRCS managers at all levels have a general
understanding of the difference between outputs and outcomes. Because
we are a field agency in which most of our employees are front line
staff providing services directly to the public, most managers have
first-hand knowledge of the results our customers want and can
distinguish between the activities that employees perform and the
changes on the land that result from that assistance to land users.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. The performance plan includes a goal for external customer
satisfaction. We will ask customers not only overall satisfaction with
our service, but also their judgment as to how well we met the USDA
Service Center customer standards, which relate to courtesy, prompt
service, reliable service, clarity and readability of information
provided, and ease of use of forms . We will collect adequate
demographic data to compare the satisfaction of various customer
segments. The performance plan also includes a program-specific
customer satisfaction goal for ``Percent of water users fully satisfied
with usefulness of Snow Survey And Water Supply Forecasting Program
information.''
The performance plan does not include performance measures
specifically related to internal customer satisfaction nor do we
presently plan to add such measures. We do intend to collect data on
internal customer satisfaction relating to satisfaction with the
appropriateness and timeliness of training in new technology, including
both conservation technology and information management technology, and
satisfaction with our efforts to ensure that all employees are treated
fairly.
Question. How were the measurable goals of your fiscal year 1999
annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. In early 1997 we identified a tentative set of annual
performance measures and made the necessary changes in the reporting
system to automatically report the data entered in the field level case
files. Most of these measures are items that were not reported
nationally prior to implementation of the automated case file system.
Adequate data for the new measures were not available in early 1997 to
support the initial phases of the budget formulation process for fiscal
year 1999. Therefore, the fiscal year 1999 budget was developed with
reference primarily to the program-specific performance measures that
we have traditionally used. The targets for performance for each of the
measures were developed later in the year, on the basis of available
data and state-level managers' best judgment.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. If the committee changes a proposed number, we will be able
to tell you the impact on the level of program performance in terms of
program-specific outputs and the outcome goal most closely related to
the program purpose. We could, for example, tell you the change in
extent of acreage contracted for the Wetlands Reserve Program
corresponding to a change in the WRP budget. This would relate directly
to our performance goal for wetlands created or restored. We could not,
however, trace with accuracy the impact of that change through all of
the other goals that might be affected. To continue the example, a
change in the assistance available for protecting wetlands could affect
the acreage of cropland and grazing land where conservation systems
were fully implemented, the miles of riparian area restored, or the
number of watersheds restored to healthy functioning.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. Performance information from the field is routinely
reported quarterly. We have the capability to report more frequently
should it be necessary.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Answer. The difficulty we face in linking dollars to results in a
meaningful way stems more from the nature of the results we seek to
achieve than from our budget structure. Because natural resources are
parts of an interrelated system, program activities that are undertaken
primarily to achieve a specific goal will have effects on other
components of the system. In our performance plan, we have attempted to
show the linkage between programs and the primary performance goal(s)
the funds support. However, the goal for any resource objective is
based on the assumption that the funds requested to meet other
objectives will also be available.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. We have not identified changes in our budget structure that
would make the linkages clearer. We have, however, introduced
modifications of the reporting system that will enable field staff to
record the program that is the funding source for milestones recorded
in the case files. When these data are consistently recorded, we will
be able to tie activities to dollars more precisely.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. Our strategic plan briefly describes key external factors
that might influence the ability of the agency to achieve the goals in
the plan. Our performance plan, therefore, refers only to the means and
strategies by which the agency will achieve the goals.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. We are strengthening our capability to analyze resource and
other data to identify emerging trends in production patterns and
resource use to help anticipate changes that might intensify pressures
on the resource base. We are also moving to a system of more annual
resource inventories for key indicators so that we can identify where
change is occurring and revise strategies before severe problems can
develop. In addition we are strengthening our working relationships
with other natural resources agencies in order to draw on their data
and expertise.
Question. What impact might external forces have on your resource
estimates?
Answer. The transition to market-driven agriculture could result in
changes in land use and cropping patterns that affect the conservation
needs on agricultural land, impacting the level of assistance producers
need from USDA. Enactment of new requirements for resource protection,
at either the national level or by a significant number of states,
could greatly affect the level and kind of resources NRCS would need to
help landusers meet their responsibilities. Changes in domestic or
international economic conditions could substantially alter
agricultural commodity prices, farm incomes, and the ability of private
individuals to maintain or enhance their investments in conservation of
natural resources. Such changes could also affect the ability of state
and local members of the conservation partnership to increase their
contributions to joint conservation initiatives. Also, dramatic changes
in weather patterns, such as those experienced with El Nino, could have
significant impacts on resources needed for protecting natural
resources and the environment.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. There is some overlap in the sense that several of our
programs are authorized to address a wide range of resource goals.
Rather than causing duplication, this overlap creates flexibility that
permits us to tailor assistance to meet the wide range of conditions
and needs in local areas across the country. In the performance plan,
the programs that can be used to address goals are shown in the tables
that map programs to resource objectives.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that:
--To what extent are your performance measures sufficiently mature to
allow for these kinds of uses?
--Are there any factors, such as inexperience in making estimates for
certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Fiscal year 1997 was the first year for which national data
were reported for most of our performance measures, and the 1997 data
were not available until mid-December. Therefore, we have had little
opportunity to thoroughly analyze the new data. In addition, not all
field offices are fully using the automated case file system. We expect
to correct these weaknesses before early fiscal year 2000, when we
begin to develop the first performance report required by the Results
Act.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. We do not see any immediate need for substantive revisions.
We are continuing to strengthen our reporting systems and to improve
information on baseline resource conditions. We may make minor changes
to the strategic plan through the fiscal year 2000 performance plan, as
the Results Act permits, but we do not anticipate any need to consider
substantive changes until the scheduled update that is required by the
end of fiscal year 2000.
______
Questions Submitted by Senator Bumpers
arkansas water resource projects
Question. For the past several years, this subcommittee has
directed funds through NRCS to work toward solutions of serious ground
water depletion problems in Eastern Arkansas. These areas have included
Grand Prairie, Bayou Meto, and Boeuf Tensas. I have also worked through
the Energy and Water Subcommittee to engage the U.S. Army Corps of
Engineers in these efforts as well. In short, if we don't make better
use of our available surface water resources, we will soon deplete the
aquifers to the point they will not longer recharge. If there is no
solution to this problem, the rice industry in the Mid South will be
dead and along with it the economy of the entire region.
Answer. The status of these projects will be provided for the
record.
eastern arkansas ground water projects
Background:
(1) NRCS has been cooperating with the Corps of Engineers (Memphis
District and Vicksburg District), State of Arkansas and local sponsors
on Eastern Arkansas Ground Water Projects on a routine basis since
1986.
(2) 1986 to 1990: Eastern Arkansas Region Comprehensive Study that
included all of eastern Arkansas North of the Arkansas River. Result:
Five (5) identified critical ground water decline areas with solutions.
NRCS was a partner with COE, ASWCC, and local sponsors.
(3) 1990-1991: Corps of Engineers was directed by Congress to
choose one of the identified ground water decline areas as a pilot for
further study with planning and implementation anticipated. This was
the Grand Prairie area.
(4) 1991-1997: COE, ASWCC, NRCS, local sponsors plan Grand Prairie.
NRCS was a partner with the COE, ASWCC and local sponsors in completing
this detailed resource plan. NRCS performs the on-farm portion of the
planning efforts and the COE performs the major irrigation canal and
pumping plant portion of the planning. Planning has been completed and
local sponsors are awaiting funding.
(5) 1990-1991: Corps of Engineers Vicksburg district was directed
by Congress to complete a Reconnaissance study for the Boeuf-Tensas
Basin. This includes the eastern Arkansas Delta area south of the
Arkansas River. This study was completed jointly by COE and NRCS.
Result: An identified project but no authorities within the Corps of
Engineers to continue planning assistance.
(6) 1992-1993: NRCS was directed by Congress through earmarked
funds to begin efforts in planning the eastern Arkansas Water
Conservation Projects. Specifically named were Bayou Meto, Boeuf-Tensas
and Kuhn Bayou (Kuhn Bayou name has been changed to Point Remove by the
local sponsors). NRCS has honored those commitments.
(7) Current situation: Efforts continued for planning on Grand
Prairie, Bayou Meto, Boeuf-Tensas and Kuhn Bayou. Detailed
accomplishments and goals are provided in the following questions.
grand prairie
Question. The fiscal year 1999 request before the Energy and Water
Subcommittee includes $14 million to initiate construction on two of
these projects and I will also work to continue the feasibility study
on the third. Continued involvement by USDA is also vital: Will you
provide an update on NRCS activities related to Grand Prairie?
Answer. NRCS continues to cooperate as a partner with the Corps of
Engineers, State of Arkansas and the local sponsors. The Planning
document for this project was completed jointly by the Corps of
Engineers and NRCS in March of 1997, as scheduled. NRCS completed the
on-farm planning portion of this project. NRCS has been working closely
during the past year in completing the plan review phase of this
project and making additions and corrections as questions and/or issues
have arisen.
NRCS provided about $550,000 in financial assistance to landowners
within the Grand Prairie and Bayou Meto critical ground water decline
area to aid in on-farm water conservation measure installation during
1997 through the Environmental Quality Incentives Program. This program
has worked well but available funding through NRCS will meet less than
3 percent of the area's needs. NRCS is looking forward to a continued
strong relationship with the Corps of Engineers, State of Arkansas and
the local irrigation district as this project moves toward
implementation.
bayou meto
Question. Will you provide an update on NRCS activities related to
Bayou Meto?
Answer. NRCS continues to work with the State of Arkansas and the
local Irrigation District to move this project toward implementation.
NRCS has completed planning for the on-farm portion of this project.
The natural resource inventory has been completed that includes soils
data layers, water quality and water quantity analysis, irrigation
water needs analysis for more than 3,000 tracts, wildlife inventories,
water quality analysis, cultural resources inventory using Geographic
Information Systems and a completed environmental assessment for the
on-farm portion of the project plan.
This on-farm portion of the plan identified the conservation
practice treatment needs for the area as well as additional water
diversion needs to support the water needs within the entire basin.
NRCS provided about $550,000 in financial assistance to landowners
within the Grand Prairie and Bayou Meto critical ground water decline
area to aide in on-farm water conservation measure installation during
1997 through the Environmental Quality Incentives Program. This program
has worked well but available funding through NRCS will meet less than
3 percent of the area's needs.
Currently, NRCS is establishing a Global Positioning Surveying
network across the entire Bayou Meto basin to facilitate future
hydrology and hydraulic needs for evaluating irrigation delivery and
flood control within the basin. NRCS is looking forward to
participating with the Corps of Engineers as they become more actively
involved in the Bayou Meto project. Our Arkansas staff is currently
transferring data collected by NRCS to the Corps of Engineers to
facilitate their work. NRCS and the Corps of Engineers continue to meet
for scheduling work and sharing data to help in completing the overall
basin plan.
Goals for 1998:
1. Coordination and transfer of data and information from the
completed on-farm portion of the area-wide Natural Resource
Conservation Plan to the Corps of Engineers to assist the COE with
their efforts in moving into the planning phase of the delivery portion
of this project.
2. A cooperative agreement and work plan is being developed in
cooperation with the Corps of Engineers, Memphis District, to refine
and complete the total Resource Conservation Plan for this project.
Additional goals for surveying, planning, environmental evaluation, and
other data collection and analysis has not been completed at this time.
Continued cooperation and teamwork between the COE and NRCS is a
certainty.
Anticipated 1998 staffing: 3 staff years and $200,000
Anticipated 1998 EQIP funding: $500,000 for the Grand Prairie/Bayou
Meto Basin
boeuf tensas
Question. Will you provide an update on NRCS activities related to
Boeuf Tensas?
Answer. To date the local sponsors continue to inform the public of
water decline and water quality status as well as promoting solutions
to the problems. The Arkansas NRCS irrigation team is developing
critical aspects of the project which include digitized soils data
layers through the University of Arkansas for use in the NRCS
Geographic Information System (GIS), inventories of streams, canals,
reservoirs, utilities, farms, cultural resources, wildlife and other
important land use features and resource concerns are being identified.
A three-party memo of understanding between NRCS, Arkansas Soil and
Water Conservation Commission, and the local irrigation district is
being jointly developed.
Current Status.--Approximately 50 percent of the inventory has been
completed.
Funds spent/obligated and staff time.--A team has been established
composed of soil conservationist, GIS specialists, soil scientists,
economists and engineers working on various aspects of the project.
Approximately 6 staff years will be devoted to this project during the
fiscal year. Approximately $400,000 of funding was expended during
fiscal year 1997.
1997 Accomplishments
1. Completed compilation of all soils information for 1.2 million
acres within the project area.
2. Completed 60 percent of the data inventory for on-farm portions
of the project.
3. Completed 30 percent of a preliminary irrigation canal and/or
pipeline delivery system for the entire 2 million acre project area.
4. Completed the initial cultural resources inventory.
5. Obtained digital quadrangle sheet map data.
6. Completed draft base map of entire project area.
Goals for 1998
(1) Publish maps of soils information for the 1.2 million acres
within the project area.
(2) Complete data inventory for on-farm portions of the project
area (60 percent complete now, goal of 100 percent for 1998).
(3) Complete a Water Budget calculation for each tract for the 1.2
million acres within the project area (partially completed, 100 percent
goal for 1998).
(4) Complete preliminary Irrigation Canal and/or Pipeline Delivery
System for the entire 2 million acre project area (40 percent complete,
100 percent goal for 1998).
(5) Develop public information maps and fact sheets for project
sponsor local information/education efforts.
Coordination efforts are underway with the Corps of Engineers for
planning activities. Vicksburg District of COE has received
authorization to proceed with planning efforts.
Anticipated staffing: 6 staff years and $400,000
cooperation with other entities
Question. Will you provide an overview of your ability and
willingness to work with the U.S. Army Corps of Engineers, the State of
Arkansas, and local sponsors of these projects?
Answer. The partnership formed between the Corps of Engineers and
NRCS illustrates how federal agencies should work together, utilizing
the strengths of both agencies, to serve the needs of the State of
Arkansas, local project sponsors and the citizens within the project
area. NRCS will continue to support this strong partnership effort
within available resources and funding levels.
NRCS in Arkansas continues to struggle with staffing and funding
levels to meet the needs of these critical resource areas. Our current
budget projections indicate a reduction in staffing levels as demand
for technical assistance increases statewide. This demand for technical
assistance is expected to increase.
kuhn bayou
Question. On a related matter, will provide an update of NRCS
activities related to Kuhn Bayou?
Answer. NRCS has completed the project plan, 100 percent of the
field survey needs, identified the land rights and easement acquisition
requirements for sponsors to acquire the necessary land rights and
easements, reevaluated the cost data and updated information for the
local sponsors as they search for funding and completed approximately
30 percent of the project design. The local sponsors and NRCS have
entered into a Cooperative Agreement to complete the final design by
October of 1998. Coordination continues to occur with the Arkansas Game
and Fish Commission.
Design Completion is scheduled for October of 1998.
Funds spent/obligated and staff time: Approximately 1.5 staff year
($100,000) have been expended for technical assistance to the
irrigation district during fiscal year 1997. All design activities will
be completed prior to the local sponsors acquiring funding for project
implementation.
Goals for 1998
1. Complete the structural design for one large water control
structure (currently 30 percent, 100 percent fiscal year 1998).
2. Complete the design of the irrigation delivery canals and relift
stations (currently 30 percent, 100 percent fiscal year 1998).
3. Incorporate the irrigation pipeline design to assure water
delivery to each tract (100 percent completed).
4. Complete 100 percent of the land rights work maps and provide to
local sponsors for land rights/easement acquisition (currently 80
percent).
5. Prepare final cost and information/education package for local
sponsor efforts in providing information to their clients (20 percent).
Anticipated staffing for 1998: 2 staff years and $100,000.
aging infrastructure
Question. Your budget includes an increase of $1 million to
evaluate the condition of aging infrastructure and you suggest that by
fiscal year 2000 you may have identified 2,000 structures in need of
significant restoration. In Arkansas, I understand you have identified
structures on the Muddy Fork of the Illinois River as part of this
aging infrastructure. What other projects in Arkansas have you
identified?
Answer. The $1 million in the budget request is not to evaluate the
condition of the infrastructure but to provide educational assistance
to watershed sponsors concerning their need to examine and repair their
older watershed structures. As these dams and structures age, the need
for repair or replacement of existing structures becomes critical. The
increased funding would enable NRCS to provide important educational
assistance to communities and sponsors regarding the safety and status
of conditions of existing structures. As part of this budget item, NRCS
would utilize the ``Training Aids for Dam Safety'' package of workbooks
and videotapes prepared by the Interagency Committee on Dam Safety. The
package was professionally prepared and translated into several
languages. It includes modules ranging from technical aspects of site
inspections to safety program development. The Interagency Committee
has also developed ``Federal Guidelines for Hazard Potential
Classification of Dams'' which could provide the base criteria to
classify the most threatening structures. This base criteria is very
similar to current NRCS classification criteria and to the Corps of
Engineers criteria that was used to inspect the nation's dams in the
1970's.
Regarding the Muddy Fork of the Illinois River Watershed, we
recently assisted the sponsors/partners (Washington County Conservation
District, City of Lincoln, Arkansas, Arkansas Game and Fish Commission,
City of Prairie Grove, Arkansas and the Arkansas Soil and Water
Commission) to develop a case study, which takes a snap-shot of the
project. The case study examines the benefits planned, benefits
realized and future opportunity benefits to encourage the community to
take the necessary steps to protect this valuable investment of the
infrastructure of which originally utilized a 50/50 local/federal cost-
share. Currently, this project provides over $542,000 of annual
benefits which include flood prevention, recreation, two municipal and
industrial water supplies for the cities of Prairie Grove and Lincoln.
Other benefits include fish and wildlife habitat, habitat for
endangered species, improved water quality, erosion control, increased
employment and fire protection.
This case study conducted on the Muddy Fork did not provide an
engineering study/evaluation on the integrity, soundness or remaining
life-span of structures in the watershed. Depending on the engineering
complexities of the specific structure, we estimate that it will cost
sponsors $30,000 to $50,000 per structure, to conduct a detailed
engineering evaluation. This estimate would not include engineering
costs for designing the rehabilitation or repair work. We are not aware
of any other Small Watershed project sponsors in Arkansas who are
considering a similar type of case study.
Question. Could you provide a list of projects in all states
already identified?
Answer. Other states where sponsors have developed a similar, snap-
shot, case study of which we are aware include California, Georgia,
Iowa, Kansas, Mississippi, New Mexico, New York, Ohio, Oklahoma,
Tennessee, Texas, Wisconsin and West Virginia. Other sponsors have very
likely developed similar fact sheets on their projects to showcase the
societal and environmental benefits of other Small Watershed Projects
of which we are not aware.
Question. How much of a threat to public health and safety are
posed by the structures?
Answer. Dams are classified under the national dam safety hazard
criteria and in most states are regulated by state dam safety laws. Not
all dams have been classified and some have an increased safety hazard
due to development both upstream and downstream of the dams. Dams that
do fail, pose a great threat to life and property.
Question. What criteria are you using to classify the most
threatened structures?
Answer. There is no classification system which will yield a
ranking of which are the most threatened structures. This is very
subjective engineering work usually involving risk analysis studies.
Question. Have you initiated actions to correct identified problems
and if so, what are they? If not, when do you plan to take corrective
action?
Answer. In cases where dam safety problems have been discovered by
our field staff, it is our policy to notify the sponsors (owners of the
dam) and the state dam safety agency. We have provided technical
assistance to the sponsors (owners of the dams) and recommended
corrective measures to remove the immediate to life and property.
However, beginning October 1, 1998 NRCS will charge sponsors for
technical and consultative services for dam rehabilitation or
modifications.
Question. When do you plan to initiate action on the Muddy Fork
structures?
Answer. We have no plans to initiate any action on the Muddy Fork
structures since we have no statutory authority nor funding to take
action. The complete responsibility for operations, maintenance,
rehabilitation, decommissioning, and modifications is the legal
responsibility of the sponsors, owners of the dams. This case study
conducted on the Muddy Fork did not provide an engineering study/
evaluation on the integrity, soundness or remaining life-span of
structures in the watershed. Depending on the engineering complexities
of the specific structure, we estimate that it will cost sponsors
$30,000 to $50,000 per structure, to conduct a detailed engineering
evaluation. This estimate would not include engineering costs for
designing the rehabilitation or repair work.
Question. What do you project the ultimate cost may be in bringing
these structures up to standard?
Answer. No total cost has been estimated. The first step for the
sponsors is to conduct a detailed engineering evaluation on the Muddy
Fork structures in order to ascertain an engineer's estimate of the
total cost to perform needed remedial work. NRCS has no statutory
authority nor funding available for this task.
backlog of approved watershed infrastructure projects
Question. You mention there are over $1.5 billion in need for
Public Law 566 and Public Law 534 projects. Please provide the number,
location, and costs associated with projects in Arkansas on the
backlog.
Answer. We will provide that information for the record.
[The information follows:]
ACTIVE PROJECTS IN ARKANSAS WITH THEIR COSTS
------------------------------------------------------------------------
Obligations to Obligation
Project/name date needs
------------------------------------------------------------------------
2027, Big Slough........................ $958,120 ..............
2065, Buffalo River Tributaries......... 698,983 $3,767,700
2052, Flat Rock Creek................... 10,408,737 1,673,520
2036, Forche Creek...................... 15,711,680 1,121,760
2064, Gould Portion of Grady-Gould...... 197,422 1,095,540
2063, Little Red River.................. 4,005,653 1,254,000
2034, North Fork of Ozan Creek.......... 3,913,758 1,271,100
2053, Ozan Creeks....................... 6,476,273 7,397,460
2042, Poinsett.......................... 14,031,395 8,839,560
2054, South Fork........................ 4,386,669 ..............
2038, South Fourche..................... 13,858,666 5,823,120
2050, Upper Petit Jean.................. 5,637,321 11,037,480
-------------------------------
Total............................. 43,281,240 43,281,240
------------------------------------------------------------------------
Question. Could you provide a list of the number of projects by
state on the backlog?
Answer. We will provide that list for the record.
[The information follows:]
Number of active Public Law 566 projects by State
Alabama........................................................... 17
Alaska............................................................ 1
Arizona........................................................... 8
Arkansas.......................................................... 12
California........................................................ 15
Colorado.......................................................... 3
Connecticut....................................................... 4
Delaware.......................................................... 4
Florida........................................................... 7
Georgia........................................................... 20
Hawaii............................................................ 7
Idaho............................................................. 14
Illinois.......................................................... 14
Indiana........................................................... 6
Iowa.............................................................. 20
Kansas............................................................ 24
Kentucky.......................................................... 21
Louisiana......................................................... 15
Maine............................................................. 5
Maryland.......................................................... 4
Massachusetts..................................................... 3
Michigan.......................................................... 6
Minnesota......................................................... 4
Mississippi....................................................... 16
Missouri.......................................................... 17
Montana........................................................... 4
Nebraska.......................................................... 16
Nevada............................................................ 1
New Hampshire..................................................... 1
New Jersey........................................................ 3
New Mexico........................................................ 8
New York.......................................................... 7
North Carolina.................................................... 16
North Dakota...................................................... 7
Ohio.............................................................. 14
Oklahoma.......................................................... 34
Oregon............................................................ 5
Pennsylvania...................................................... 14
PB................................................................ 3
Puerto Rico....................................................... 3
Rhode Island...................................................... 1
South Carolina.................................................... 20
South Dakota...................................................... 3
Tennessee......................................................... 19
Texas............................................................. 28
Utah.............................................................. 6
Vermont........................................................... 8
Virginia.......................................................... 14
Washington........................................................ 12
West Virginia..................................................... 12
Wisconsin......................................................... 2
Wyoming........................................................... 2
-----------------------------------------------------------------
________________________________________________
Total....................................................... 530
water districts backlog
Question. Could you provide information relating to the number of
water districts or associations on this backlog who have initiated
local tax measures or some similar action in anticipation of the
federal share being forthcoming?
Answer. We do not collect information on the number of water
districts or associations who have initiated local tax measures or some
similar action in anticipation of the federal share being forthcoming.
digitized soil maps
Question. You mentioned the need to proceed with categorizing soil
types and inputting that information in a digitized format using GIS
technologies. Would you please provide an update on the work of the GIS
Center for Advanced Spacial Technology in Arkansas in developing soil
digitized maps?
Answer. NRCS continues to maintain a strong relationship with the
Center for Applied Spatial Technology (CAST) for the development and
delivery of digital soil databases and other digital GIS databases for
counties in Arkansas. Cooperative efforts between NRCS, CAST,
University of Arkansas at Fayetteville, Agronomy Department, and the
Arkansas Soil and Water Conservation Commission have resulted in
digitizing of sixteen counties in the state. Five additional counties
are planned to be completed by the end of calendar year 1998.
NRCS has also developed a cooperative agreement with CAST for
placing the Woodruff County, Arkansas Soil Survey on the Internet. This
is to be completed by the end of calendar year 1998 and will be the
first county in the nation with comprehensive soil information on the
Internet.
NRCS is also working with CAST to assist soil and water
conservation districts and county governments to implement GIS
technology. An example is the Union County Soil and Water Conservation
District. GIS specialists from NRCS and CAST are jointly providing
assistance to this conservation district to develop a plan to acquire
hardware, software, and digital data layers needed to implement a GIS
in their office. This GIS will be used by the district to collect and
manage water well data for the Sparta/South Arkansas Critical Ground
Water Area. NRCS and CAST will work together to provide the district
with digital soils data, digital orthophotography, and digital USGS
Rastergraphic data for this project.
supplemental disaster assistance
Question. El Nino and other storm events in recent months have
caused major destruction in many parts of the nation. Does NRCS intend
to submit an emergency budget request for disaster assistance?
Answer. The President submitted a budget request of $40 million.
NRCS is continuing to gather information on damages.
Question. What, if any, disaster estimates have you received from
the affected states?
Answer. At this time we have not received any requests that we have
not been able to fund. It is too early to tell in California since the
weather has not cleared enough to be able to make any significant
estimates. Our people in Florida are just beginning to gain access to
various sites struck by tornadoes.
plant materials centers
Question. Could you provide an update on the activities of the
Plant Materials Center at Booneville, Arkansas?
Answer. The Booneville plant center has 15 studies that investigate
various aspects of using plants for conservation purposes. They
include:
1. Evaluation of selected grasses as filter strip cover with
applied poultry litter.
2. Improving vegetative cover on reclaimed mined land in Arkansas.
3. Assembly and evaluation of big bluestem Andropogon gerardi
Vitman.
4. Eastern Gamagrass (Tripisacum dactyloides) intercenter
evaluation study.
5. Evaluation of 115 plant species for adaptation in West Central
Arkansas.
6. Establishment of native warm-season grass species into existing
tall fescue sod.
7. Determination of the variation in biomass, yield, and stand
persistence among switchgrass breeding lines and standard commercial
varieties.
8. Determining biomass dry-matter yields for selected switchgrass
breeding lines and standard commercial varieties to be utilized as a
bioenergy fuel source. (cooperative with 5 other states and 4 different
agencies)
9. Indian grass (Sorghastrum nutans) variety evaluation.
10. Native grass establishment and seed increase for the Arkansas
Heritage Commission and the White River Irrigation District.
11. Evaluation and selection of a cold hardy Bahiagrass cultivar.
12. Development of a crop residue resource quality database for
predicting decomposition in soil erosion models.
13. Roadside establishment of native species for the Arkansas
Highway and Transportation Department.
14. Bioengineering stream bank erosion control using plant
materials.
15. Hackberry ecotype evaluation for windbreaks and wildlife
habitats.
Results and progress in work has been presented at various meetings
and conferences. It has also been summarized in technical reports,
annual reports, and quarterly newsletters. A big bluestem cultivar
release is planned in 2001, and an eastern gamagrass cultivar is
planned for 2000.
Question. What is the funding level for the Booneville Center in
fiscal year 1998 and what is projected for fiscal year 1999?
Answer. The Booneville Center operates on a budget of $302,000 in
fiscal year 1998. $277,000 are from the Plant Materials program and
$25,000 are from other sources. A need for $295,000 is projected for
fiscal year 1999.
clean water action plan
Question. USDA and EPA recently announced the Clean Water Action
Plan which is designed to carry forward the goals first outlined in the
1972 Clean Water Act. Since more and more attention is given to non-
point source pollution, what assurances can you give that this program
will not ultimately lead to more federal regulation of farmland?
Answer. The Clean Water Action Plan itself does not propose any new
regulations for agriculture beyond what was laid out specifically in
the Vice President's directive last October, and those were already
underway by EPA before the Action Plan was developed. Further, the
Action Plan is limited to what is currently authorized under law. We
believe that the Action Plan can help agricultural producers address
non-point source pollution through a voluntary, incentive based
approach if the necessary funding is made available so USDA can provide
the necessary assistance. For example, we believe that technical and
financial assistance through EQIP and other farm bill programs can help
prevent non-point source pollution at the source, and conservation
buffers can help capture sediments and suspended nutrients before they
reach surface water bodies.
Question. Similarly, how does your work in the area of Urban
Conservation, where there is a tradition of EPA regulation, fit with
the more traditional ``voluntary'' efforts in rural areas?
Answer. NRCS provides technical assistance to clientele in urban
areas to address local natural resource concerns. These services are
provided on a voluntary basis. While this technical assistance may help
our customers address requirements from state, local, or other federal
regulations, NRCS is not a regulatory agency and we do not envision any
change to this status.
user fees
Question. Your budget includes collection of user fees for certain
products and services. Please identify the type of fee and amount
expected to be collected from each.
Answer. Although we have not fully developed the appropriate fee
schedule type details, we anticipate the following types of services
may be included under the proposed user fee program:
--Conservation Plans exceeding 16 hours of work;
--Foundation seeds--initial supply;
--Foundation plants;
--Testing for animal waste storage lagoons;
--Inspection and testing of dams;
--Water supply forecasts;
--Climate data;
--SNOTEL data;
--Soil survey publications;
--Wetland delineations; and
--Irrigation systems.
We do not know the exact cost of the services affected, however,
the President's budget estimates the cost to be $10 million. This
amount currently supports about 133 FTE's.
Question. Which ``users'' are more likely to be affected?
Answer. Our first priority would be to focus on those customers who
profit directly from the services we provide, such as private
contracting firms which use our technical interpretations and soil
surveys for consultive services. The extent of the customer impact will
depend upon the number of fee items that are ultimately implemented.
Question. How do you expect these fees to be received by the
conservation community and the farm community?
Answer. Since the majority of our clients have historically
received most technical services free of charge from NRCS, we
anticipate the new program to be received with some disfavor from
constituents. Every effort will be made to collaborate with effected
individuals and groups to explain and minimize any adverse impact of
the fee for service program.
farmland protection program
Question. I have long been concerned about the loss of farmland to
urban conversion and other uses that in time, will greatly reduce the
ability to maintain adequate food supplies. You mention that no funds
are budgeted for the Farmland Protection Program in fiscal year 1999
due to the fact that the $18 million approved by Congress exhausted the
original authorized funds for the program. To what extent has this
program been successful in stopping urban conversion of farmland?
Answer. $16.2 million were obligated to 41 programs in 18 States in
fiscal years 1996 and 1997. When conservation easement acquisitions are
completed, approximately 80,000 acres on 230 farms with an estimated
easement value of $134 million will be protected from conversion to
nonagricultural uses in part with Federal funds. On an average, Federal
matching funds account for about 25 percent of the recorded easement
value, and State and local government entities contribute the rest of
the 75 percent. State and local government entities also pay for all
administrative costs incurred, such as easement acquisition,
management, monitoring, and enforcement. As of January 31, 1998, more
than 10,000 acres on 47 farms with a total easement value of $18
million were acquired, among which Federal FPP funds contributed $4.5
million (25 percent) and State and local government funds accounted for
$13.5 million (75 percent).
Question. If continued, what effect would it have in protecting our
long-term ability to produce adequate food supplies?
Answer. One of the most significant features of the Federal
Farmland Protection Program is to establish partnerships with State and
local government entities. By doing so, the program provides the
opportunity to leverage State and local farmland protection efforts.
The program has generated lots of discussions as to what the local or
State governments can do to better protect their resource base. As of
June 1, 1997, about 491,000 acres on 3,321 farms with an easement value
of $901 million are permanently protected under various State and local
farmland protection programs. If funding for the Farmland Protection
Program continued, the benefits would outweigh the costs, not only to
ensure long-term food supplies, but also to achieve other goals such as
ground water recharge, wildlife benefits, better management of the
natural resources, or just for open space and aesthetic values.
Question. What would you project the cost of such a goal might be?
Answer. The Farmland Protection Program (FPP) takes the approach
that this is a grass-root effort. It is a locally-led process and FPP
funds are used to supplement emerging and existing State, Tribal, and
local programs. To continue the same process and at the same rate as in
the past few years, we estimate that a minimum of $50 million annually
is needed. However, with new State and local programs emerging each
year, this program has the potential of being 3 or more times that
amount to match State and local funds.
______
Questions Submitted by Senator Kohl
conservation reserve program
Question. Has the Conservation Reserve Program's wetland
restoration option deterred interest in the WRP's 10-year cost share
arrangements in Wisconsin and the Nation?
Answer. Specific information on which to base the answer to this
question from a Nationwide perspective does not exists. However, in
Wisconsin we do have information to show that NRCS personnel and
others, while working with landowners, generally find that more
landowners turn to the CRP wetlands option than accept the WRP 10-year
cost share agreement option. This situation probably occurs throughout
the Nation where the landowner has lands that meet the eligibility
requirements of both programs. The Wisconsin experience also shows that
a landowner may initially seek to enroll in the cost-share agreement
option, but when presented with the 30-year and permanent easement
option frequently picks one of the easements. In most instances the
permanent easement option is the choice.
wetlands reserve program partnerships
Question. Congress has encouraged NRCS to work in partnerships with
other conservation entities to implement the WRP. What are the results
of your efforts with this directive? Have you identified any program
constraints that prevent partnerships?
Answer. The partnership effort continues to be a great success.
Private and governmental conservation entities have become a critical
factor in successful program delivery. For instance, in Wisconsin the
Wisconsin Waterfowl Association is actively assisting with the
identification of projects and with planning and completion of
restoration activities. The National Fish and Wildlife Foundation has
assisted with project identification and funding. The Department of
Natural Resources is partnering in the acquisition and implementation
of several important restoration projects. The Fish and Wildlife
Service is assisting with project identification, design and
construction. The Forest Service is providing help in completion of
surveys and boundary marking. Throughout the nation a host of other
entities are providing assistance (e.g., Ducks Unlimited, The Nature
Conservancy, Delta Wildlife Foundation, Pheasants Forever, California
Waterfowl Association, Minnesota Waterfowl Association, and a number of
state agencies).
The lack of authority under the WRP to provide CCC funds to Federal
or State agencies for salaries and expenses is a major program
constraint. If we could reimburse these entities with CCC funds the
added valuable expertise that we could enlist would greatly increase
program effectiveness. The WRP statute does not specifically address
the use of cooperative agreements as an aspect of program
implementation. This continues to be cause for concern for some who
would be more comfortable with specific authority in the statute and
not so much reliance on appropriations act report language.
conservation reserve program in wisconsin
Question. As I mentioned in my opening statement, the State
Department of Natural Resources lent staff to the NRCS offices to help
complete the Conservation Reserve Program sign up in Wisconsin. What
are you going to do to make sure it doesn't happen again?
Answer. NRCS views the willingness of federal and State wildlife
and forestry agencies, and local wildlife organizations to cooperate
and work along side with USDA agencies during the 15th CRP sign up, as
a good sign that USDA is sincere in its efforts to forge a partnership
in improving the environment. It's a true testimony to the locally led
process, whereby local people provide input into a USDA program(s). The
Federal Agriculture Improvement and Reform Act of 1996 provided a
provision for a locally led initiative. The 15th CRP signup proved that
other federal and State agencies and organizations stands ready to
assist USDA in implementing Farm Bill programs.
Many people, besides staff from the Natural Resources Conservation
Service and the Farm Service Agency, assisted during the sign up period
for both the 15th and 16th Conservation Reserve Program during 1997.
This was a collaborative effort with many State agencies and
conservation organizations. We strongly encourage, partnership efforts
such as this in the delivery of these programs.
______
Questions Submitted by Senator Byrd
status of potomac headwaters project
Question. Please provide a status report on the Potomac Headwaters
Land Treatment Watershed Project, complete with pertinent timetables
and participation rates.
[The information follows:]
Contracts signed 1997............................................. 116
Contracts signed 1998............................................. 21
Carryover applications 1997....................................... 121
New applications 1998............................................. 46
-----------------------------------------------------------------
________________________________________________
Total contracts and applications............................ 304
Federal funds expended in fiscal year 1997 was $2,116,241. Federal
funds available for contracts in fiscal year 1998 are $2,230,000.
Recently updated projected funding costs are as follows:
----------------------------------------------------------------------------------------------------------------
Federal Federal
Fiscal year financial technical Total State Operator Total
assistance assistance Federal project
----------------------------------------------------------------------------------------------------------------
1997........................ $2,116,300 $300,000 $2,416,300 $423,260 $1,693,040 $4,532,600
1998........................ 2,230,000 900,000 3,130,000 446,000 1,784,000 5,360,000
1999........................ 300,000 700,000 1,000,000 60,000 240,000 1,300,000
2000........................ ............ 700,000 700,000 ............ ............ 700,000
2001........................ ............ 300,000 300,000 ............ ............ 300,000
2002........................ ............ 200,000 200,000 ............ ............ 200,000
2003........................ ............ 200,000 200,000 ............ ............ 200,000
2004........................ ............ 60,000 60,000 ............ ............ 60,000
2005........................ ............ 60,000 60,000 ............ ............ 60,000
2006........................ ............ 60,000 60,000 ............ ............ 60,000
2007........................ ............ 30,000 30,000 ............ ............ 30,000
-----------------------------------------------------------------------------------
Totals................ 4,646,300 3,510,000 8,156,300 929,260 3,717,040 12,802,600
----------------------------------------------------------------------------------------------------------------
The participation rate based on the need for agriculture waste
storage facilities is 108 percent. The plan identified a need for 162
facilities. At this time requests have been received for 337.
A supplemental watershed agreement is being prepared between NRCS
and sponsors to accommodate this increase in participation.
Question. How does participation in this project compare with
similar projects in other watersheds?
Answer. Participation rates in similar projects include Opequon
Creek Watershed West Virginia, with 70 percent of planned agriculture
waste facilities.
Question. Please provide a full list of all flood control projects
in West Virginia that are currently under construction, the cost
associated with that construction, and a timetable for the completion
of each project.
Answer. The following is a list of flood control projects under
construction in West Virginia, including the federal construction cost
and the time table for completion:
1. Cranberry Creek Channel Improvement Project, Raleigh County
--Federal Cost: $16,355,289
--Completion Date: May 1998
2. Little Whitestick Channel Improvement Project, Raleigh County
--Federal Cost: 5.0 million
--Construction bids received on March 3, 1998
--Completion Date: August 2000
3. Lost River Dam No. 27, Hardy County
--Cost $4,446,435
--Completion Date: August 1998
4. Upper Mud Recreation Facilities, Lincoln County
--Cost $1,219,142
--Completion Date: June 1998.
Question. Please provide a full list of flood control projects in
West Virginia for which feasibility studies have been completed.
Answer. A list of all Public Law 566 and Public Law 534 projects in
West Virginia that are currently being installed will be provided.
Public Law 566 projects currently being installed
Brush Creek
Elk Twomile Creek
Headwaters of Indian Creek
Howard Creek
Little Whitestick-Cranberry Creeks
Mill Creek
Opequon
Piney Creek-Soak Creek
Teter Creek
Upper Buffalo Creek
Upper Mud River
Wheeling Creek
Public Law 534 projects currently being installed
Potomac:
Cacapon River
Potomac headwaters
Lost River
Lunice Creek
New Creek-Whites Run
North and South Mill Creek
North River
Patterson Creek
South Branch Upstream of U.Tract
South Fork River
eqip in west virginia
Question. Please provide a status report of the Environmental
Quality Incentives Program in West Virginia.
Answer. In fiscal year 1997, West Virginia received $2.0 million to
carry out the EQIP program. Over 990 applications were received for the
program, requesting about $6.7 million in financial assistance. Just
over $1.8 million financial assistance was obligated in 362 EQIP
contracts with eligible producers. These contracts will treat natural
resource concerns and environmental problems on over 24,000 acres. The
average contract was for $5,000 and will treat 68 acres. The program
was primarily delivered in four priority areas: Mid Ohio River Basin;
Central West Virginia Hills; Potomac Headwaters; and the Little Kanawha
River Basin.
In fiscal year 1998, $1.8 million has been allocated to West
Virginia. Of this amount, nearly $1.4 million will be used for
financial assistance to eligible West Virginia producers. The program
will be focused in the same priority areas as in fiscal year 1997.
alderson, west virginia plant materials center
Question. Please provide a status report on construction of the
Plant Materials Center in Alderson, West Virginia.
Answer. Construction activities are underway in Alderson, WV.
Development of the building site was completed in September, 1997.
Plans and construction drawings for the seed barn are complete, and the
construction contract was been awarded to an 8A construction firm.
Anticipated date of issuance of the Notice to Proceed with construction
is April 1, 1998, but the notice could be issued earlier if weather
conditions permit.
Subcommittee Recess
Senator Cochran. This concludes today's hearing. We will
have another hearing on Tuesday, March 3, at 10 a.m., in this
room, SD-138 of the Dirksen Senate Office Building, to hear
from Department of Agriculture witnesses regarding the budget
request for the Rural Economic and Community Development
Programs.
Until then, the subcommittee stands in recess.
[Whereupon, at 11:10 a.m., Thursday, February 26, the
subcommittee was recessed, to reconvene at 10 a.m., Tuesday,
March 3.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, MARCH 3, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Bumpers, and Harkin.
DEPARTMENT OF AGRICULTURE
STATEMENT OF JILL LONG THOMPSON, UNDER SECRETARY, RURAL
DEVELOPMENT
ACCOMPANIED BY DENNIS KAPLAN, BUDGET OFFICE
Rural Utilities Service
STATEMENT OF WALLY 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 ROBERT ARMSTRONG, EXECUTIVE DIRECTOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order. We are pleased to continue our review of the President's
budget request for the next fiscal year. This morning, we are
specifically reviewing that portion of the budget which funds
the Department of Agriculture's rural development programs.
We are pleased to have with us the Under Secretary for
Rural Development, Jill Long Thompson, and other witnesses who
have responsibilities in related areas. I will invite the
Secretary to make whatever comments she would like to make and
introduce the panel. First of all, I am going to call on my
good friend the distinguished Senator from Iowa, Mr. Harkin,
for any opening statement he might have.
Senator Harkin.
STATEMENT OF SENATOR HARKIN
Senator Harkin. Mr. Chairman, thank you very much.
I want to welcome this distinguished panel here again this
morning because what you all deal with really is just
absolutely critical to the quality of life in all of rural
America, kind of small towns that dot my State of Iowa and,
indeed, the State of Mississippi too. What you do really is the
lifeblood of how people live and whether they have good jobs,
and places to live, and electricity, and telecommunications,
clean water, wastewater facilities. These are all the things
you deal in.
Coming from a small town myself where only just a few years
ago they tested all of the wells in my town including the well
that I drank from all my life, and none of the wells tested fit
to drink, which a lot of my political opponents always pointed
out that is probably what was wrong with me, drinking that
water all my life.
We finally got good water through the help of your agency.
This predated your time being there. I am just saying that it
meant a lot to people there to have that and now we have
wastewater facilities there also. The rural business
cooperatives that we have seen spring up have just been a
dramatic engine for economic growth in our country.
I just want to take my few minutes, Mr. Chairman, and just
again return to a topic that you are very familiar with I know,
and I know Senator Bumpers always hits me a little bit about
this because I always bring it up all the time, that is: the
need to increase our support for getting new nonfood, nonfeed
agricultural products into the market. I think this is one of
the best ways to increase not only farm income, but rural
income, to create jobs and foster economic growth in rural
America.
To that end, Mr. Chairman, it has been a bipartisan effort.
I am speaking specifically here of AARCC. I first started
working on it with Ed Madigan when he was in the House. I
greatly appreciate, Mr. Chairman, especially the support that
you have given as chairman of this subcommittee to AARCC and
also that Senator Bumpers has also provided over the years.
I just want to emphasize once again the importance of the
Alternative Agricultural Research and Commercialization
Corporation and the success it has had with its limited
funding. It leverages. It has leveraged private capital. From
$3 to $4 of private money has been invested for every $1 of
Federal money. That is pretty darned good leveraging. That
means that AARCC has spurred some $120 million of private
investment in new agricultural products.
Again, these are always open for interpretations and
whether it is good or not, but I think it can be safely said
that AARCC has created over 5,000 new jobs, it has generated a
new demand for over 250,000 acres' worth of farm commodities.
Again, AARCC is set up so it gets repaid as those new markets
grow. It is supporting a wide range of new products from
relatively low technology to high technology, but all based on
farm materials. Of course, I brought my crop with me here. Mr.
Chairman, this is a tabletop. It is really nice with my name on
it. [Laughter.]
It really looks like granite. They are making those now.
That was one of the investments made by AARCC.
You are just in time to hear my thing on AARCC. How lucky
can you be? [Laughter.]
Your timing is perfect.
Senator Bumpers. Can you start over again?
Senator Harkin. I just wanted you to see. You can have one
of these tables too. If you are a nice guy, you can have one of
these tables too. Find out how much they cost.
These are some of the new products. I know in looking at
your testimony, Secretary Thompson, we are now importing wall
panels made of wheat straw from England. Can you imagine that?
We are importing wall panels made of straw from England. We are
the wheat producers in the world, not England, so I am thinking
this ought to be an American product. If they can do it there
and we can ship it all the way here and it can be competitive,
it makes no sense to me why we cannot be spurring this here, a
lot of things: industrial oils and greases, cleaning products,
packaging materials.
Senator Daschle told me last week about using millet. Now,
you know these little plastic peanuts that you get in boxes,
you know, that packages things up and stuff? It takes I do not
know how many thousands of years for that to decompose and all
of that kind of stuff. They now have a millet that they use.
Senator Cochran. Biodegradable?
Senator Harkin. Biodegradable totally. The good thing about
it is you can ship a small box of this. You can put it through
a microwave or something like a corn popper, and it pops it up
so you do not have to have big boxes to ship this stuff in.
Senator Cochran. Then you can eat it?
Senator Harkin. Then you can eat it. Put it on your cereal
after you are through emptying the box out. These are the good
things that we can work with, biomaterials, all of that.
Anyway, we are moving forward. It is a snail's pace because of
the shortage of funds. I have argued for years that AARCC
should not be funded at the $10 million level. It could
effectively use at least twice that much next year and more
thereafter.
Really, again I know I sound like a broken record on this,
but just the history of it has been great and we are moving
ahead in it. I think that there is just a lot of promise out
there, especially with the leveraging of the private money that
we get. I just want to thank Secretary Thompson, I want to
thank Mr. Armstrong and all of the people at AARCC who have
worked so diligently. I think you are doing a great job, and I
just hope that we can provide the resources.
I know we are under a bind with the budget and the money
that we have. Mr. Chairman, I am very respectful of that, and I
know you have a heck of a time trying to balance all of those
things. I just hope that we can come up with some more funding
for AARCC to spur more of these kinds of product developments.
Thank you very much, Mr. Chairman, for letting me do my
annual thing here on AARCC.
Senator Cochran. Thank you. Well, you have done it very
well this time. We appreciate the props.
We are also delighted Senator Bumpers is here, the
distinguished ranking member of the subcommittee.
Senator, I have already introduced Ms. Thompson and
welcomed her to the hearing, but we would be delighted to hear
any comments or opening statement that you might have.
STATEMENT OF SENATOR BUMPERS
Senator Bumpers. Mr. Chairman, I will insert my opening
statement into the record.
I do want to acknowledge that Secretary Thompson came down
to Arkansas last year to College Station for an announcement.
College Station is an ultrapoor section. It is an
unincorporated village outside Little Rock that was devastated
by a tornado--400 poor black citizens. Secretary Thompson's
appearance there on behalf of the Department of Agriculture and
the U.S. Government was a real shot in the arm to those people.
I want to personally thank her again, and also Mr. Shadburn
and Mr. Beyer and Mr. Romano, who is here this morning, thank
all of them for the attention they gave us. This is a
particularly appropriate time to thank them for that because
that tornado was, I believe, a year ago the day before
yesterday or Saturday, I forget which. I just wanted to
publicly acknowledge your compassion and your attention to an
area not just there, but Arkadelphia which is going to be a
brand new city.
Incidentally, Harry Thomason, you know, who is Linda
Bloodworth Thomason's husband and producer of some note,
``Coach'' and a host of other shows, has taken it on himself to
try to restore--he wants to restore Arkadelphia, which I think
was his home, to make it just like it was around the turn of
the century, particularly the courthouse and a few other
buildings there.
I have seen tornadoes devastate towns in my State. When I
was Governor, I used to go out. At first I would not go because
I thought it sort of looked like I was trying to take a
political advantage of other people's misery. I found out they
not only want you there, but it is a great comfort for somebody
in authority, an authoritative position, to show up when
tornadoes occur.
I can name communities in my State that were just leveled
which are now brandnew cities. I mean, except for the tragedy
of the deaths it was almost a good thing because they are just
beautiful cities. Arkadelphia will not be any exception.
College Station is going forward thanks to you with things they
never dreamed would ever come their way.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
Ms. Thompson, we appreciate your being here again. Please
introduce the panel of witnesses who are with you and proceed
as you like.
Statement of Jill Long Thompson
Ms. Thompson. Thank you. Thank you all for your very kind
words. I am very appreciative. I must tell you that for me this
is a labor of love, and working with you over the past 2\1/2\
years and reaching out and working with communities across the
country has been just 100 percent pleasure for me. Again, so I
thank you very much.
With me today are Dayton Watkins, who is the Administrator
of the Rural Business Cooperative Service; Dennis Kaplan, who
is with the Office of Budget and Program Analysis; Jan
Shadburn, with the Rural Housing Service; Wally Beyer with the
Rural Utility Service; and Bob Armstrong with the Alternative
Agricultural Research and Commercialization Corporation. It is
quite a mouthful.
If it pleases the chairman, I will simply summarize my
remarks and submit the statement for the record.
Senator Cochran. We appreciate your giving us the statement
in advance and it will be printed in the record in full. You
may summarize it as you like.
Ms. Thompson. Well, Mr. Chairman, I am very pleased to be
here today and to present to the subcommittee the ``President's
Budget Request for Rural Development'' for fiscal year 1999.
This particular request reflects the budget's strong commitment
to the needs of rural areas even when balancing the Federal
Budget has been his highest priority.
I think the President's commitment to balancing the budget,
as well as the commitment of both the House and the Senate, to
deficit reduction and balancing the budget have resulted in
unprecedented economic growth. I think it really presents a
very important lesson to us as a nation. The lower deficit has
generated the lowest interest rates in decades, and that has
lowered the cost of capital, which has generated new investment
in plant and equipment and it has created millions of new jobs.
In addition, the level of home ownership in this country
has reached an alltime high of 66 percent, and perhaps the best
news is that the misery index, the combination of unemployment
and inflation, is at its lowest level in 30 years.
Almost all of the new jobs that have been created are in
the private sector. Government has been a very important
partner in this expansion, but its role has been to create an
environment of investor confidence and this is the way that our
economy works best. This is also the role we think appropriate
in rural areas to help create the environment that generates
the confidence and private investment.
I wish that I could report today that the full benefits of
the economic expansion have reached rural areas, and we are
beginning to see some improvement in the net creation of new
jobs and some increases in salaries, but not as much as I would
like to see. After a full decade of decreasing real income,
rural wages are beginning to increase because of the tight
labor markets.
However, income levels in rural areas continue to lag
behind those in urban areas and rural areas continue to
experience very high poverty rates. The rural median household
income is only about 77 percent of that in urban areas and
additionally the median household income for African-American
and female headed households is only about 50 percent of the
overall rural median income.
One disturbing fact is that employment still does not
always lift a family out of poverty in rural areas. A typical
rural wage is below the poverty line and is not sufficient to
support a family of four. Poverty in rural areas is 2
percentage points higher than it is in urban areas, 15.6
percent compared with 13.4 percent, respectively. Poverty in
the rural South is just under 20 percent.
Probably, the most devastating effect of rural economies is
that 3.2 million rural children live in poverty and 48 percent
of the African-American children in rural areas live in
poverty. It is very difficult for these children to attain the
educational levels the will be necessary to compete for jobs in
this information technology-dominated economy.
These are the reasons that the President is committed to
continuing Federal investment in rural areas. Yet, he is
cognizant, as we are at USDA, that the Federal Government alone
cannot solve these problems. An additional benefit of the
economic expansion is that interest rate-sensitive programs
administered by the rural development area are 40 percent less
costly than they were in fiscal year 1993. We are in the
enviable position of being able to deliver these programs to
rural America at less cost.
The budget request for the programs administered by rural
development agencies totals $10.4 billion, requiring $2.2
billion in budget authority. These are increases of about $540
million and $110 million, respectively, over the levels enacted
for fiscal year 1998. I will briefly, if you would like, go
through the three agency areas and highlight the requests in
those three agency areas.
Rural Utility Programs
If you would prefer that I be briefer, just indicate so and
I will be glad to cut it even shorter. In the Rural Utilities
Service, the programs that are administered by rural
development contribute significantly to the economic viability
of rural communities. Perhaps, none are more important than the
programs that provide the basic infrastructure investment
because economic growth and vitality cannot occur without the
systems that provide water and sewer, electric, and
telecommunications service.
The telecommunications and electric industries throughout
this country are in the vortex of change and a monopolistic
supply is giving way to open competition. While the generally
held perception that competition will drive down cost may be
true for the two industries from a macroeconomic perspective,
we have to be vigilant that rural areas are treated fairly in
the process.
The Telecommunications Deregulation Act continued the
universal service concept and that ensures that rural areas
will continue to have access to the telecommunications network
at a reasonable cost. The administration is in the process of
addressing similar issues for electric service. A lack of
consumer density in rural systems combined with the fact that
construction costs in rural areas is virtually the same as in
urban areas means the cost per rural consumer is much higher.
The budget authority requested for the Electric and
Telecommunication Loan Program is $40.3 million, which will
support lending levels totaling $1.7 billion. When we factor in
the private capital that accompanies this investment, the total
investment in electric and telecommunications grows to $5.1
billion.
Due to the growing demand for electric loans, we are also
proposing a new Treasury rate direct loan program of $400
million, which would require budget authority of only $840,000.
The reason that we are proposing this program rather than
increasing the request for the Federal financing bank is that
the FFB financing has traditionally been used only for
generation and transmission loans and distribution borrowers
have expressed some reluctance to use the FFB authority because
of the additional time needed to process the loans.
The budget authority requested for telecommunications
loans, including the rural telephone bank, totals $10.3
million. As you all are very well aware, there are still many
rural areas that cannot access the full benefits of modern
telecommunications because the basic switching equipment has
not been modernized.
Also, as you are very familiar, in prior years we have
proposed immediate privatization of the rural telephone bank,
but because of concerns of the bank's ability to suddenly begin
operating effectively as a private lending institution in a
deregulated environment without a transition period, the
administration is now proposing that the bank operate as a
performance-based corporation. As such, it would be required to
set specific targets and strategic goals to be achieved in not
less than 10 years.
For the distance learning and telemedicine loans and
grants, the budget requests a lending level of $150 million and
a grant level of $15 million. The request for grants is an
increase of $2.5 million. The loan request is the same as
enacted for 1998.
For water and waste, we are requesting $1.3 billion in
loans and grants for this program, which is a slight increase
over the amount made available in 1998. This level of funding
would provide new water service to about 500,000 rural
residents, improved water service to an additional 400,000
rural residents, provide new or improved waste disposal service
to about 410,000 rural residents, and in the process support
about 30,000 jobs primarily in the construction trades.
Rural Housing Programs
In the Rural Housing Service, we believe very strongly that
no single factor contributes more to community stability than
does home ownership, and even though home ownership is at an
alltime high there are still some very serious needs that are
not being met in housing.
The budget request for the Rural Housing and Community
Facilities Program is $5.5 billion, requiring $895 million in
budget authority and 65 percent of that is for rental
assistance. This represents an increase in the program level of
$300 million over the 1998 level and an increase of $27 million
in budget authority. The request for the home ownership
program, which is the flagship program, is $4 billion of which
$1 billion is for direct loans, the same amount enacted for
1998. The average income for families borrowing under this
program is $17,000, which is barely above the poverty level.
For the Guaranteed Ownership Program, we are requesting $3
billion. Together these two programs would finance over 60,000
new and improved homes. In addition, we are again proposing
legislation that would permit use of the Guaranteed Loan
Program for refinancing direct loans and that is because if
these loans could be made available to borrowers who do not
have enough equity in their homes to refinance in the private
market but are paying interest rates in excess of the existing
market rates, then they would be allowed to refinance their
homes with this program. We are currently prohibited from
refinancing direct loans.
For multifamily housing and rental assistance, we are
requesting $250 million of which $100 million is for direct
loans, requiring $48 million in budget authority, which is a
decrease from the level enacted for 1998. This level of funding
will provide 1,100 new units and will provide for the
rehabilitation of just under 5,000 units. The average income of
tenants in this program is $7,300 a year. We are also
requesting $150 million for the Guaranteed Multifamily Housing
Program, which has operated as a pilot program for the past 2
years. This program serves tenants with higher incomes up to
115 percent of an area median income.
For rental assistance, the budget requests $583 million.
That is a $42 million increase over 1998. Of this amount, $544
million is needed for expiring contracts and the remainder will
be used for rehabilitation and construction and servicing, as
well as for farm labor housing.
We are again requesting $26 million for the Mutual and
Self-Help Program, which as you know provides technical
assistance required for families engaging in the construction
of their own homes. For the community facilities programs, we
are requesting a total of $418 million, $200 million for direct
loans, $210 million for guaranteed loans, and $8 million for
grants. As you know, these programs finance a wide variety of
facilities throughout rural America.
Rural Business-Cooperative Programs
In the Rural Business-Cooperative Service, we believe that
the key to improving economic conditions in rural America is
the creation of business opportunities and jobs and the role of
the Federal Government is to assist in creating the environment
that generates the private investment.
Our budget request for the Rural Business-Cooperative
Service Program totals $1.2 billion, which requires $77.6
million in budget authority for the flagship program,
guaranteed business and industry loans we are requesting $1
billion and $50 million for direct B&I loans.
Direct lending will be targeted to those traditionally
underserved areas of the country for the rural economic
development loan and grant programs. We are requesting $15
million in loans and $11 million in grants, $35 million for
intermediary relending, and $40.3 million for the rural
business enterprise grants.
For assistance to cooperatives, as Senator Harkin so
eloquently stated, we are seeing quite an interest in
developing cooperatives in a variety of areas across the
country. We are requesting $1.7 million in rural cooperative
grants and $2 million for Federal, State research on
cooperatives.
Research on cooperatives has not kept pace with the growth
in cooperatively owned businesses, and particularly with
respect to nontraditional cooperative activity such as
processing and retail and export cooperatives. In addition, we
are also requesting $2 million for the appropriate technology
transfer for rural areas programs.
For the Alternative Agricultural Research and
Commercialization Corporation, we are requesting a total of $10
million, $8.5 million for investments and $1.5 million for
administrative costs. This level of funding is expected to help
bring six new products to market and would create about 1,000
new jobs in rural America.
Salaries and Expenses
Finally, the request for salaries and expenses for rural
development is $527 million and that is an increase of $18
million over 1998. There are several reasons for the increase.
First, because of all of the organizational changes that have
occurred within rural development over the past few years, we
have lost a disproportionate share of employees at the lower
level of employment. Even though we have used every means
available to keep them, that just has not happened. That has
caused our average salary costs to increase significantly.
While our costs are less than they would have been without
those changes, they are still more than they are going to be in
this fiscal year 1998.
If sufficient funding is not available for salaries and
expenses, then it will be necessary to execute a reduction in
force to remain within our available funding levels. That
action would only exacerbate the problem, because a RIF will in
turn eliminate additional lower paying positions and that
drives the average salary cost even higher. The vast majority
of these staff are in our field offices and are primarily
responsible for delivering the programs that we are discussing
today. I feel that we really need them to continue doing the
work that they are.
Another reason for requesting an increase is that in order
to retain our employment level through 1998 we have deferred
investment and information technology and training, and that is
something that we cannot afford to continue to do. Investments
in information technology and training are means through which
we can realize additional efficiencies, but there are some
initial investment and startup costs to accomplish that.
With that, Mr. Chairman, I will conclude my formal remarks
and we will be glad to answer any questions that you or the
committee have.
Prepared Statements
Senator Cochran. Thank you, Ms. Thompson. Your complete
statement will be made part of the record along with the
statements of the other witnesses.
[The statements follow:]
Prepared Statement of Jill Long Thompson
Mr. Chairman, I am very pleased to be here today to present to the
subcommittee the President's Budget request for Rural Development for
fiscal year 1999. This request reflects the President's strong
commitment to the needs of rural areas even when balancing the Federal
Budget has been his highest priority. I think the President's
commitment to balancing the budget and the resulting unprecedented
economic growth presents us with a very important lesson. The lower
deficit has generated the lowest interest rates in decades, thereby
lowering the cost of capital which has generated new investment in
plant and equipment and created millions of new jobs. In addition, the
level of home ownership in this country has reached an all time high of
66 percent. Perhaps the best news is that the ``misery index'', the
combination of unemployment and inflation, is at its lowest level in 30
years.
Almost all of the new jobs that have been created are in the
private sector. Government has been a very important partner in this
expansion, but its role has been to create an environment of investor
confidence, and this is the way our economy works best. This is also
the role we think appropriate in rural areas, to help create the
environment that generates confidence and private investment.
I wish I could report to you that the full benefits of this
economic expansion have reached rural areas. We are beginning to see
some improvement in the net creation of new jobs and some increase in
rural salaries, but not as much as I would like to see. After a full
decade of decreasing real income, rural wages are beginning to increase
because of tight labor markets. However, income levels in rural areas
continue to lag behind those in urban areas, and rural areas continue
to experience very high poverty rates. Rural median household income is
only about 77 percent of that in urban areas. Additionally, median
household income for African American and female headed households is
only about 50 percent of the overall rural median income. One
disturbing fact is that employment still does not always lift a family
out of poverty in rural areas. A typical rural wage is below the
poverty line and is not sufficient to support a family of four. Poverty
in rural areas is 2 percentage points higher than it is in urban areas,
15.6 percent and 13.4 percent respectively. Poverty in the rural south
is just under 20 percent. The unemployment rate is 16 percent higher in
rural areas than in urban areas. And as I stated last year, the most
devastating effect of rural economies is that 3.2 million rural
children live in poverty and 48 percent of the African-American
children in rural areas live in poverty. It is very difficult for these
children to attain the educational levels that will be necessary to
compete for jobs in this information technology dominated economy.
These are the reasons that the President is committed to continuing
Federal investment in rural areas. Yet, he is cognizant that the
Federal government alone cannot solve these problems. I recently had an
opportunity to review a report prepared by a USDA Task Force on rural
poverty. Its authors concluded that a healthy rate of economic growth
is essential to the alleviation of rural poverty, but it is not (by
itself) a sufficient condition to bring the adjustments needed. The
report was written in 1961.
I think the authors also had the answer to much of the problem of
rural poverty when they stated ``the problems of rural economic
stagnation are so deep-seated and the effects are so widespread on all
community facilities, resources and attitudes, that the only
development program that will work is one that attacks many problems
simultaneously, and in depth''. The President recognized this approach
when he created the Empowerment Zone/Enterprise Community (EZ/EC)
legislation, the concept of which is to address the structural economic
problems comprehensively and in depth.
As noted in the President's Budget, the Kentucky Highlands, one of
the three rural empowerment zones, has used $11 million of its EZ funds
to expand the amount of investment capital. From the amounts obligated
to date, they have leveraged an additional $38 million in private
capital for 11 new manufacturing enterprises creating 575 new jobs, and
they have commitments to create an additional 1,600 jobs. According to
one of the EZ/EC Board Members, the current unemployment rate for the
three county area is below 6 percent for the first time in memory. The
President's budget provides for a second round of EZ designations, five
for rural areas and 15 for urban areas. This comprehensive and in depth
approach was also part of the Administration's thinking in the Rural
Community Advancement Program (RCAP) which we have discussed previously
with the subcommittee. The budget again requests the authority to
transfer funds among the program areas within RCAP to provide us the
flexibility to address problems as they need to be addressed. The
budget also provides for the 3 percent set-aside of the RCAP funding
for federally recognized Indian tribes as authorized by the 1996 Farm
Bill.
rural development budget request
An additional benefit of the economic expansion is that the
interest rate sensitive programs administered by Rural Development are
40 percent less costly than they were in fiscal year 1993. We are in
the enviable position of being able to deliver these programs to rural
America, at less cost. The budget request for the programs administered
by the Rural Development agencies totals $10.4 billion requiring $2.2
billion in budget authority. These are increases of about $450 million
and $110 million respectively over the levels enacted for fiscal year
1998. This includes the program level and budget authority, $2.8
billion and $715 million, requested for the programs under RCAP.
rural utilities service
Mr. Chairman, each of the programs administered by Rural
Development contributes significantly to the economic viability of
rural communities, but perhaps none are more important than the
programs that provide basic infrastructure investment. Economic growth
and vitality cannot occur without the systems that provide water and
sewer, electric, and telecommunications services. The presence of these
systems does not guarantee economic growth. But one thing is an
absolute certainty: growth and stability will not occur without them.
These programs are responsible for much of the economic growth that has
occurred in rural areas during the past fifty years, but as you well
know, many rural areas still have not prospered and many of the
infrastructure systems that we have built are now old and they need to
be replaced. These programs are still very much needed in rural
America, but the measurement of need has shifted from prior years when
success was the number of farms or households connected to electricity
and telephone systems for the first time to the amount of economic
activity generated by these investments.
electric and telecommunications
The telecommunications and electric industries throughout this
country are in the vortex of change. Monopolistic supply is giving way
to open competition and while the generally held perception that
competition will drive down cost may be true for the two industries
from a macro-economic perspective, we must be vigilant that rural areas
are treated fairly in the process.
The Telecommunications Deregulation Act continued the ``universal
service'' concept which ensures that rural areas will continue to have
access to the telecommunications network at reasonable cost. The
Administration is in the process of addressing similar issues for
electric service. The lack of consumer density in rural systems,
combined with the fact that construction cost in rural areas is
virtually the same as in urban areas, means the cost per rural consumer
is much higher. On average, revenue per mile for urban utility systems
is 8 times that of rural areas. This, of course, translates to higher
rates in rural areas and puts rural systems at a competitive
disadvantage with neighboring systems. We are working with electric
borrowers to ensure they are in the best possible competitive position
and to ensure that our loan security is protected when the electric
industry is deregulated.
budget request
The budget authority requested for the electric and
telecommunication loan programs is $40.3 million. This will support
lending levels totaling $1.7 billion and factoring in the private
capital that accompanies this investment, the total investment in
electric and telecommunications grows to $5.1 billion. This level of
investment will provide new or improved service to at least 1.8 million
residents of rural areas and in the process support over 34,000 jobs
primarily in the construction trades.
Due to the growing demand for electric loans, we are also proposing
a new Treasury rate direct loan program of $400 million which requires
budget authority of only $840,000. We are proposing a new direct loan
program rather than increasing the request for the Federal Financing
Bank (FFB). The reason for this request is, since FFB financing has
traditionally been used only for generation and transmission loans,
distribution borrowers have expressed some reluctance to use the FFB
authority because of the additional time needed to process the loans.
This new authority requires authorizing legislation which will be
submitted to Congress in the very near future. The total budget
authority requested for electric loans is just under $30 million.
The budget authority requested for telecommunications loans,
including the Rural Telephone Bank, totals $10.3 million. There are
still many rural areas that cannot access the full benefits of modern
telecommunications because the basic switching equipment has not been
modernized. Most of the exchanges in this category for the past few
years are being sold and the new owners are installing newer equipment.
We do not provide financing for the purchase of these systems, but we
are financing the new equipment, and require that the equipment that we
finance will provide the capability to provide subscribers full access
to modern telecommunications.
As you know, in prior years the Administration has proposed
immediate privatization of the Rural Telephone Bank. Because of
concerns of the Bank's ability to suddenly begin operating effectively
as a private lending institution in a deregulated environment, without
a transition period, the Administration is now proposing the Bank
operate as a performance based corporation. As a performance based
organization, the Board and managers would be required to set specific
strategic and financial goals, one of which would be to achieve
privatization in not less than ten years, and more quickly if possible.
The Bank would have the authority to hire its own personnel, and
funding for salaries and expenses and the subsidy cost of loans would
be requested from balances in the liquidating account. Legislation is
necessary to effect this proposal.
distance learning/telemedicine loans and grants
For Distance Learning/Telemedicine loans and grants the budget
requests a lending level of $150 million and a grant level of $15
million. The request for grants is an increase of $2.5 million. The
loan request is the same as enacted for 1998. The demand for this
program continues to grow, not only because of the education and
medical benefits that it provides rural areas, but also because more
and more people are beginning to realize its potential as an economic
development tool. As firms are assessing areas for opportunities to
locate facilities in rural areas, among the first questions asked are
about the quality of education and health care. This program provides
the opportunity to rural areas to reap immediate benefits in education
and medical care, but the presence of these capabilities also provides
the longer term benefits of attracting new growth.
water and waste disposal loans and grants
Mr. Chairman, the value and benefits of this program are best
demonstrated by comments made in 1995 by the manager of a water system
in the southwestern part of the country--``Thanks to the Department of
Agriculture, we have running water in our faucets. We hauled water in
barrels and water tanks until you gave us a loan and grant * * * for
the first time since the town was founded the citizens were able to get
a drink of water from a faucet. Without your help, it never would have
happened.'' This statement was made following completion of a Water
2000 project awarded in 1995.
The 1980 Census reported 2.1 million rural Americans did not have
any drinking water flowing into their homes. The 1990 Census reported
that this number had been reduced to just over 1 million and since the
Water 2000 Initiative was implemented in fiscal year 1995, Rural
Development has invested $1.3 billion in loans and grants that have
afforded just under 300,000 people the opportunity to have safe, clean
water in their homes for the first time.
Water 2000, as ambitious, challenging and rewarding as it is, is a
small part of the water and waste disposal program in rural America.
The Drinking Water Infrastructure Needs Survey conducted periodically
by the Environmental Protection Agency estimates the total investment
needed in small systems (serving less than 3,300 people) to bring them
into compliance with the Nation's Drinking Water standards is $37
billion. A similar investment is needed for water disposal systems. At
present the applications for loan and grant assistance through this
program total over $3 billion.
The budget requests $1.3 billion in loans and grants for this
program, a slight increase over the amount made available for fiscal
year 1998. This level of funding would provide new water service to
about 500,000 rural residents, improved water service to an additional
400,000 rural residents, provide new or improved waste disposal service
to about 410,000 rural residents and in the process support about
30,000 jobs primarily in the construction trades.
rural housing service
No single factor contributes more to community stability than does
home ownership. Since the early 1970's USDA's rural housing programs
have played a key role in improving the availability and quality of
housing in rural America. These programs reach families and individuals
who cannot otherwise afford decent, safe, and sanitary housing. The
Rural Housing Service (RHS) has financed over 2 million single family
homes since the inception of its home ownership program. RHS has been
particularly successful in reaching those residents that the private
market and other government programs cannot reach--low and very low
income families living in isolated rural areas.
single family housing
The budget request for the rural housing and community facilities
programs is $5.5 billion requiring $895 million in budget authority, 65
percent of which is for rental assistance payments. This represents an
increase in the program level of $300 million over the 1998 level and
an increase of $27 million in budget authority. The request for the
home ownership program, the flagship program, is $4.0 billion of which
$1.0 billion is for direct loans, the same amount enacted for 1998. The
average income for families borrowing under this program is $17,000,
barely above the poverty level. For the guaranteed ownership program we
are requesting $3.0 billion. These two programs will finance over
60,000 new and improved homes. Each home constructed provides 1.75
years of employment, over $50,000 in wages and over $20,000 in taxes
for the local economy.
In addition, we are again proposing legislation that would permit
use of the guaranteed loan program for refinancing direct loans. These
loans would be made available to borrowers who do not have enough
equity in their homes to refinance in the private market and are paying
us interest in excess of the existing market rates. We are currently
prohibited from refinancing direct loans.
multi-family housing/rental assistance
For the multi-family housing programs, we are requesting $250
million, of which $100 million is for direct loans, requiring $48
million in budget authority. This is a decrease from the level enacted
for 1998. This level of funding will provide over 1,100 new units and
will provide for the rehabilitation of just under 5,000 units. The
average income of tenants in this program is $7,300.
We are also requesting $150 million for the guaranteed multi-family
housing program which has operated as a pilot program for the past two
years. This program serves tenants with much higher incomes, up to 115
percent of area median income, than in the direct program and is
therefore much less costly. The budget would provide for the
construction of about 4,100 units.
For rental assistance, the budget requests $583 million, a $42
million increase over the 1998 level. Of this amount $544 million is
needed for expiring contracts and the remainder will be used for
rehabilitation, new construction, and servicing, as well as for farm
labor housing consistent with the recommendations of the Civil Rights
Action Team. Rental assistance payments are made to the developers of
the projects as the difference between the 30 percent of income
required by the tenants and the market rental cost of the unit.
mutual and self housing grants
We are again requesting $26 million for the mutual and self-help
program which provides the technical assistance required for families
engaging in the construction of their own homes. As you are well aware,
Mr. Chairman, this is one of the most rewarding programs that we
administer. It provides not only a decent, safe housing unit, but it
also provides a measure of self confidence and self assurance for the
family and it is the only way the participants will ever have the
opportunity to own a home. One measurement of success for this program
is that the delinquency rate is significantly below that of the direct
loan program. The participants are incredibly and justifiably proud of
their accomplishment.
community facilities
For the community facilities programs we are requesting a total of
$418 million, $200 million for direct loans, $210 million for
guaranteed loans, and $8 million for grants. These programs finance a
wide variety of facilities throughout rural America, but the priorities
are health and safety projects. During the past two years RHS has also
placed an emphasis on funding child care centers. The decrease in real
income for rural families during the 1980's; the fact that close to 50
percent of rural workers have income that is near or below the poverty
level; and the fact that women are filling many of the new jobs created
in rural areas dictate that child care facilities be available in rural
areas. This is critical for families to make the transition from
welfare to work. RHS, working with a national non-profit organization,
began the rural child care initiative in 1996 and since then we have
increased the number of child care projects funded from 6 in 1992 to 44
in 1997 and we expect to fund even more in 1999.
rural business-cooperative service
The key to improving economic conditions in rural areas is the
creation of business opportunities and jobs and the role of the Federal
government is to assist in creating the environment that generates
private investment. Economic growth tends to occur with concentrations
of population and investment capital, or is associated with the
abundance of extractable natural resources. For too many years, this
country has been attempting to apply what is known about economic
growth in urban areas to rural areas. This is not practical. And it is
equally true that there is no single ``solution'' that can be employed
in each situation. Rural areas hold two key advantages in economic
development, the abundance of natural resources, including agricultural
production, and a labor pool that has a tremendous work ethic.
We can be more effective if investment is channeled into businesses
associated with what is readily available in rural areas. The
concentration of agricultural production and processing causes the
migration of investment capital out of rural areas and the population
tends to follow in hopes of economic improvement. In addition, the out-
migration of capital and people diminishes prospects for attracting
external capital.
The question is, ``how do we maximize the advantages that rural
areas have to offer''. One solution is to ensure that a larger portion
of the income generated from agricultural production remains in rural
areas. One way this can be done is through the establishment of more
businesses engaged in processing and marketing of agricultural
commodities. The processing of food and non-food as well as feed and
non-feed uses of agricultural commodities in rural areas helps retain
income and capital needed for other investments in rural areas.
With the $1.0 billion requested for the Business and Industry loan
guarantee program, I intend to set aside $200 million exclusively for
the use of cooperative businesses. These funds will be available only
for cooperatives for a time certain, and if not used for this purpose
will be available for other loans. We will also continue to work
closely with AARC and other organizations to ensure that no investment
opportunity is missed and we will continue to work with cooperative
associations to develop other investment opportunities, both for the
Rural Business-Cooperative Service and for AARC.
budget request
Mr. Chairman, the budget request for the Rural Business-Cooperative
Service programs totals $1.2 billion, requiring $77.6 million in budget
authority. For the flagship program, guaranteed Business and Industry
loans, we are requesting $1.0 billion, and $50 million for direct B&I
loans. Direct lending will be targeted to those traditionally under-
served areas of the country. For the Rural Economic Development loan
and grant programs (cushion of credit) we are requesting $15.0 million
in loans and $11 million in grants; $35.0 million for Intermediary
Relending loans and $40.3 million for Rural Business Enterprise Grants.
For assistance to cooperatives, we are requesting $1.7 million in
Rural Cooperative grants and $2.0 million for Federal/State Research on
Cooperatives. Research on cooperatives has not kept pace with the
growth in cooperatively owned businesses, particularly with respect to
non-traditional cooperative activity such as processing and retail and
export cooperatives. In addition, we are also requesting $2.0 million
for the Appropriate Technology Transfer for Rural Areas program. The
volume of requests handled by this office has grown significantly in
recent years and the level of financial support has remained constant.
We need to increase funding for this activity in order to respond
quickly to customers.
aarcc
For the Alternative Agricultural Research and Commercialization
Corporation we are requesting a total of $10.0 million, $8.5 million
for investments and $1.5 for administrative costs. This level of
funding is expected to help bring 6 new products to market and will
create about 1,000 new jobs in rural America based on agricultural
commodities. Mr. Chairman, this helps retain more income in rural
America and I would like to do more of this. This program can take what
has been a waste product like wheat straw or peanut hulls, which
actually have a negative value, and develop new products and creating
positive economic values for farmers and producing jobs for other rural
residents. Other countries invest much more in this type of activity
than we do and we are losing business opportunities. For example, a
firm in England is exporting non-load bearing wall panels made from
wheat straw to this country, of all places. The largest wheat producing
country in the world is importing products made from wheat straw.
salaries and expenses
The request for Salaries and Expenses for Rural Development, $527
million, an increase of $18 million over 1998. There are several
reasons for this increase. First, because of all of the organizational
changes that have occurred within Rural Development over the past few
years, we have lost a disproportional share of the lower level
employees, even though we have used every means available to keep them,
such as buyouts and early retirements of our more senior employees.
This has caused our average salary costs to increase significantly.
While this is a situation I would not have preferred, it is something
that has to be dealt with because the alternative is no better. If
sufficient funding is not available for salaries and expenses then it
will be necessary to execute a reduction-in-force (RIF) to remain
within available funding. This action will only exacerbate the problem
because a RIF will, in-turn, eliminate additional lower level employees
driving the average salary cost even higher. The vast majority of these
staff are in our field offices and are primarily responsible for
delivering the programs we are discussing today. We need to keep them
employed.
Rural Development is blessed with very dedicated and hard working
staff that have maintained a positive attitude toward public service
through our reorganization, restructuring and streamlining efforts.
They know the value of the programs we deliver because most of them
live and work in the communities in which we provide assistance.
Another reason for requesting an increase is that in order to
retain our employment level through fiscal year 1998, we have deferred
investment in information technology and training, something we cannot
again afford to do. Investments in information technology and training
are means through which we can realize additional efficiencies. In
fact, the Secretary's plan for achieving efficiencies through
convergence of the administrative services of the three county based
mission areas is dependent on investments in the common computing
environment and re-engineering of our business practices. Achieving
additional savings through administrative efficiencies will provide the
flexibility for all three mission areas to continue to support the
staffs responsible for delivering the programs. We will also better
utilize support staffs by directing their efforts to more critical
needs rather than maintaining antiquated, staff intensive systems. Of
the $18 million increase for salaries and expenses, $8.5 million is for
investments in information technology; most of this is for maintenance
of our existing systems, proceeding with service center implementation,
and accomplishing the changes in systems necessitated by the Century
date change.
Providing support to the very dedicated employees of Rural
Development is a priority equal to funding any of the programs we have
discussed. Without the employees we will not be able to continue to
deliver the programs as effectively as we have in prior years and many
needs in rural areas will not be met. I ask for your very serious
consideration of this request.
This concludes my comments. Thank you for the opportunity to appear
before the subcommittee. The Administrators and I will be most happy to
answer any questions you and members of the subcommittee may have.
______
Prepared Statement of Wally Beyer
Mr. Chairman, members of the subcommittee, thank you for the
opportunity to appear here today to discuss the President's budget and
program proposals for fiscal year 1999. I want to begin by thanking you
and the members of the subcommittee for our productive working
relationship over the years. A relationship that, I am proud to say,
has helped rural America contribute to the nation's continuing
prosperity.
Rural America continues to be a vital part of our nation and its
economy. As we look to the future, we see an environment of challenge
and opportunity. The global marketplace is redefining rural America.
Rural America's customers and competitors are no longer just down the
road, but around the world as well. National and global changes are
constant and rapid.
Safe, affordable, modern utility infrastructure is a key component
of economic competitiveness. The telecommunications and electric
industries are at the vortex of change. Rural America is at a critical
juncture, and the challenge is to secure its role, as well as its
future, in a rapidly changing national and global economy. USDA/RUS is
helping communities meet this challenge.
To secure this role, rural America must reinvest in infrastructure,
provide quality education, and continue to address quality of life
issues. Rural youth must be provided with educational opportunities
that will enable them to compete with the best and brightest from
around the world. The aging rural population must have affordable
access to quality health care, and rural businesses need state-of-the-
art communications technologies to foster new economic growth, create
new jobs and enhance the quality of life.
Through a successful local/public partnership with the federal
government, RUS programs help provide needed capital and critical
credit support to leverage private capital for infrastructure
financing. RUS programs focus scarce resources into areas burdened by
poverty, low population density, and high out-migration. These factors,
contributing to a lack of economies of scale, make it significantly
more expensive to construct infrastructure in rural areas.
As rural America is changing to meet these challenges, USDA/RUS is
changing as well. We are reinventing program delivery, streamlining our
organizational structure, and leveraging private investment. We embrace
these changes as new opportunities. Our goal is to help provide rural
America with the tools and resources necessary to realize the full
extent of its potential. This requires creative thinking, commitment,
and value-added program delivery. From the point of initial contact, to
project reality, the USDA/RUS role has never been more important.
the federal partnership with rural america
The nearly $42 billion RUS loan portfolio includes investments in
approximately 7,000 small community and rural water and wastewater
systems, and 2,000 telecommunications and electric systems, servicing
approximately 84 percent of America's 3,096 counties. This 60-year old
local/federal partnership is a classic American success story. It is a
partnership providing critical infrastructure to 80 percent of the
nation's landmass while enhancing the lives of 25 percent of the
nation's population. That infrastructure spurs economic growth, creates
jobs, and improves the quality of life in rural America. The vitality
of rural communities truly depends on access to modern, reliable, and
affordable utilities.
telecommunications
This year's telecommunications budget proposes $4.895 million in
budget authority to support $50 million in direct telecommunications
loans and $810 thousand in budget authority to support $300 million in
Treasury-rate loans, as well as $4.638 million in budget authority to
support $175 million in Rural Telephone Bank (RTB) loans.
Implementation of the Telecommunications Act of 1996 poses many
challenges for rural consumers. RUS continues to work with our
borrowers to assure that rural citizens share in the benefits of the
digital revolution. I am very proud of the role RUS plays in assuring
that citizens outside America's great urban centers have affordable and
quality service. Our borrowers are providing modern, reliable
telecommunications service that enables rural Americans to benefit from
the rapidly improving technologies of the information age. Continued
capital investments and operational and technical support are critical
to maintaining that level of quality in areas served by RUS borrowers.
The budget also reflects our commitment to move the RTB toward
privatization within the next 10 years. The RTB is proposed to become a
performance based organization, under which the RTB can demonstrate its
financial and managerial independence, as an intermediate step towards
full privatization. This move toward independence is consistent with
funds for subsidy budget authority and administrative expenses being
transferred from the unobligated RTB liquidating account balances in
fiscal year 1999.
distance learning and telemedicine
In the Distance Learning and Telemedicine (DLT) Program, the budget
request of just over $15.2 million in budget authority will support
$150 million DLT Loans and $15 million in DLT grants.
The Distance Learning Telemedicine Program provides financial
assistance for rural education and health care providers utilizing
state-of-the-art telecommunications technologies. The DLT loans and
grants provide for needed infrastructure and end-user equipment for
rural areas. This program is a powerful complement to the new schools,
libraries and rural health care discounts recently authorized by the
FCC, which primarily focus on the recurring monthly telecommunications
costs to those entities.
When Vice President Gore announced the 1997 DLT awards, he stated
``This country cannot afford a digital divide between those who have
access to the benefits of the Information Superhighway, and those who
do not.'' A range of financing options that includes loans, grants, and
combinations of the two makes this program a flexible tool and resource
for any rural community that wants to use telecommunications to bring
the advantages of technology in the 21st Century to rural America's
students and citizens.
The DLT Program is making a real difference in people's lives. RUS
made a grant to the Fiber Optic Consortium United Schools (FOCUS)
project. This initiative united eight school districts in Northeast
Montana to share teachers and other course resources in foreign
languages, vocational agriculture, science and mathematics, and for
staff training. These same facilities are used by the community for
fire, emergency medical, and environmental training.
Since 1993, the DLT program has funded 192 projects totaling $52
million in 41 states and one U.S. territory. These projects serve 850
schools and learning centers and 600 hospitals and rural health
clinics. The DLT program provides seed money to leverage almost two
times its investment from other private and public sources.
Simply put, rural Americans must be connected to America's
Information Superhighway. USDA/RUS is the catalyst for the rural
connection.
electric program
The Electric Program budget proposes $30 million in budget
authority to support a program level of over a billion dollars. The RUS
Electric Program continues to serve as one of the most effective local/
public partnerships of the federal government. Today's program ensures
that all areas of our nation have access to reliable, reasonably
affordable, electric energy.
Fiscal year 1997 budget authority for RUS loans and loan guarantees
enabled 136 rural electric utilities in 33 states and the Marshall
Islands to upgrade their electric systems to provide more reliable and
efficient electric service to their customers.
Over the last several years, changes have been made in the electric
lending program to reduce the overall federal cost of the program. This
year's proposal contains $1 billion of funding for the electric
program, an increase from $925 million in fiscal year 1998. In an
effort to reduce the cost of the electric program and provide yet
another financing tool to meet increasing demand, the Administration
proposes a new Treasury Rate Loan Program to complement its existing
loan programs. This $400 million loan program can be generated with
only $840,000 of budget authority.
Each RUS electric loan dollar leverages three dollars from private
sources. RUS provides only 1/3 of the $3 billion annual capital needs
of the RUS borrowers. The following chart illustrates leveraging of the
Federal dollars:
INVESTMENT IN ELECTRIC PLANT--YEARS 1991 THROUGH 1996
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Private and
Gross Funds general
Year additions RUS advanced capital
to plant FFB expended
----------------------------------------------------------------------------------------------------------------
1996........................................................ $3,212 $682 $93 $2,437
1995........................................................ 3,269 809 211 2,249
1994........................................................ 3,344 618 242 2,484
1993........................................................ 2,833 388 169 2,276
1992........................................................ 3,104 401 208 2,495
1991........................................................ 2,833 592 98 2,241
----------------------------------------------------------------------------------------------------------------
We believe that RUS has a continuing role to play in assuring that
electric systems serving rural communities have access to the capital
needed to maintain reliable, high quality, affordable electric service
to support economic development and meet new environmental
requirements.
In the coming years, rural distribution and power supply systems
will require assistance in upgrading and replacing an aging electric
infrastructure to support growing electricity demand, new technologies,
and a more competitive industry structure. For example, RUS financing
will enable rural electric systems to replace aging, inefficient and
undersized electric transformers and conductors to enhance the
reliability of distribution and transmission systems to meet load
growth while cutting line losses, improving energy efficiency, and
reducing carbon and other air pollution emissions.
RUS is also working very closely with borrowers facing financial
stresses from past nuclear and large base-load generating plant
investments and from increasing pressures from wholesale and retail
competition. In each instance, RUS is diligent in ensuring that work-
out agreements maximize the recovery to the Federal taxpayers. Today,
RUS is actively working with 6 financially stressed borrowers as
compared with some 15 borrowers 3 years ago.
water and waste disposal programs
This budget seeks $503 million in budget authority for Water and
Waste grants and $126 million in budget authority to support $839
million in loans.
The RUS Water and Waste Disposal (WWD) program improves the quality
of life of thousands of rural Americans each year by bringing safe
drinking water and environmentally sound wastewater facilities to those
rural communities in the greatest need. The program is delivered by a
field network of Rural Development employees who provide ``hands-on''
technical and financial assistance. The funding for this program is
contained in the Rural Community Advancement Program (RCAP), and could
be enhanced as a result of the flexibility of funding offered by RCAP
authorizations. This funding is also part of the Environmental Fund for
America.
water 2000 presidential initiative
The demand for this program is high. As of January 1998, $3.7
billion of unfunded loan and grant applications were on hand. Based on
the Administration's belief and policy that low income, high
unemployment and high poverty areas--especially those with water-
related public health problems--represent the greatest need, we
increasingly target drinking water and waste disposal investments to
those areas.
In a state-by-state safe drinking water assessment performed in
1995, RUS found that at least 2.5 million rural Americans had very
critical needs for safe, dependable drinking water, including one
million rural residents who had no water piped into their homes.
Approximately 5.6 million more were found to have serious needs under
Safe Drinking Water Act standards. The costs of meeting all of these
needs was estimated at $10 billion. Water 2000 is an initiative to
clearly assess rural drinking water needs and target loan and grant
investments to address them.
Under Water 2000 targeting guidelines, over three fiscal years, RUS
has committed almost $1.3 billion in loans and grants to over 1,000 of
the high priority safe drinking water projects throughout the nation.
Water 2000 projects serve communities with the most limited financial
resources and highest poverty rates. They are financed with significant
grant assistance and our lowest interest rate loans to ensure safe
drinking water at affordable cost. We estimate that the Water 2000
projects funded through September 1997 will serve an estimated
1,900,000 rural Americans and leverage approximately $437 million in
additional investments from other federal, state, and local sources.
For the first time ever, 280,000 Americans will receive water from
properly maintained and tested public sources.
A good example of Water 2000 in action is a project funded with
Water and Waste Disposal loans and grants for the Pueblo of Acoma, in
New Mexico, in fiscal year 1997. The RUS investment is allowing the
Pueblo, which has an annual median household income of less than
$17,000 (slightly above the national poverty standard), to expand and
improve its drinking water treatment and distribution system to
overcome serious water quality, quantity, and dependability problems.
To overcome the constraints of the relatively low income of the
population and limited resources of the community, New Mexico Rural
Development field personnel worked closely with Pueblo officials to
develop a fundable application. In April 1997, Rural Development
announced a grant/loan package of $1.5 million, to be combined with
funds from the State of New Mexico, to allow the Pueblo to develop
Phase One of a drinking water system that will supply 177 homes, two
schools and a Head Start center, and a 25 bed Indian Health Service
hospital that serves three pueblos.
In summary, we are very proud of our record of bringing drinking
water and wastewater facilities to thousands of rural Americans--
serving those who truly need our services the most.
the new telecommunications and electric competitive environments
To ensure that newly formulated policies address the role of rural
utility systems in a deregulated marketplace, RUS has assumed a
proactive role in discussions with FCC, FERC and our partners within
the executive branch to protect and enhance RUS loan security, and
improve the lives of rural residents. As this nation grapples with
telecommunications and electric market reforms, the RUS will remain in
the forefront of these discussions and will lead the policy debate as
it impacts on rural Americans. In an ever-changing legislative and
regulatory environment, ensuring the security of a $42 billion loan
portfolio while providing modern, high quality, reliable, and
affordable infrastructure in rural America will present a formidable
challenge into the 21st century.
The February 2nd issue of U.S. News and World Report article
outlines, in human terms, the impacts of a deregulated environment in
rural areas. It points out that in Arizona alone, 5,000 rural Americans
remain involuntarily phoneless. The spokesperson for one of America's
large for-profit telecommunications companies was quoted as asking
``Why should we be spending money in expensive rural areas if we need
to upgrade our network in the cities to compete with competitors?'' No
other statement better illustrates the need for the RUS program to
provide financial support to high-cost rural areas.
Financial support mechanisms will be critical to supporting high
costs, rural areas in a market driven, for-profit environment. The
stage is now set for serious reflection on the rural challenges of
electric infrastructure deregulation in state legislatures and Congress
as well.
Although the pace of restructuring in the electric industry may
have slowed, many states are moving ahead. At last count, 10 states
have passed legislation providing for retail electric competition and 6
state public service commissions have issued comprehensive
restructuring orders to promote competitive retail electric markets.
Other states are continuing to study the issue and may act on
legislative recommendations in 1998 or 1999. Many unanswered questions
remain concerning how to transform America's $200 billion plus electric
industry from a traditional, monopolistic, industry to a more
competitive, market-based, consumer-driven environment. One of those
questions is, what happens to electric rates in high cost rural areas?
In a recent letter to Energy Secretary Pena, Secretary Glickman
expressed concern that in a restructured marketplace, electric rates in
high cost to serve rural areas will likely increase.
``In examining the potential effects of restructuring on rural
areas, it is important to consider the common practice of `cost-
averaging' across customer classes within utility systems. This
practice has been supported historically by public utility systems. It
most often occurs when utilities use revenues from industrial and large
commercial consumers to offset other fixed costs within the system.
This is done to maintain reasonably affordable cost of service to
residential customers and to balance the high cost of service in rural
areas.''
In a competitive environment, larger industrial and commercial
power purchasers in high cost areas will be lured away from incumbent
utilities. New competitors will engage in ``cherry-picking''. The
Secretary went on to state that ``Although distribution companies may
be able to institute ``wire charges'' to cover delivery cost of another
company's power, these charges may not be sufficient to maintain
reasonably affordable rates for smaller customers.''
conclusion
USDA/RUS continues to be an integral part of rural America's
future. Rural America's ability to capitalize on new opportunities
depends, to a large extent, on the success of RUS in meeting its goals
of creating modern community facilities and infrastructure. RUS is
enabling rural communities to utilize state-of-the-art
telecommunications technologies to improve education and health care.
By continuously reinventing our programs to address the changing needs
of rural residents, RUS will achieve its ambitious goals, and continue
to play a significant role in advancing rural America's quality of life
and enhancing its competitiveness in the global marketplace.
Thank you Mr. Chairman for the opportunity to appear before your
committee.
______
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 1999 budget
proposal and discuss some of the accomplishments and goals of the Rural
Housing Service.
The Rural Housing Service continues to provide 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 and sustainability. We accomplish this by
providing rural people and communities access to credit--which, as you
know, is often limited in rural areas. We also subsidize loans and
rents and provide technical assistance and support to complete their
community development efforts.
Our community facilities direct and guaranteed loan and grant
programs provide funding for essential facilities such as health care
centers, fire stations, municipal buildings and day care centers. These
facilities allow rural communities to improve the quality of life for
their citizens and remain competitive in attracting jobs and
businesses.
In the rural United States, 5.6 million households live below the
poverty line. Almost one quarter of rural households pay more than 30
percent of their income for housing with more than four of every 10
rural poverty level households paying more than 50 percent of their
income for housing. Minorities in rural America are disproportionately
likely to be low-income or in poverty and have housing problems. One
third of African-American households, and almost one third of Hispanic
households, pay more than 30 percent of their income for housing. Rural
African-American households are far more likely to live in seriously
inadequate housing than are rural white households or urban African-
American households. Native Americans continue to be the most poorly
housed population in America.
Our programs are largely targeted to lift these populations out of
poverty and provide stability for the family, the community and rural
America. Some communities have been rebuilt from disaster or economic
downturn, others have reversed the outward migration of their people
and jobs and have built a sustainable economy and tax base. We have
invested in two of our most vital assets--our people and our small
communities--and enabled them to have a part of the American Dream. To
assure our programs meet the needs of rural America, RHS has developed
five strategies to further the implementation of the Rural Development
Strategic Plan.
The five strategies are as follows:
--Support self sufficiency;
--Expand access to our programs to all eligible rural Americans;
--Continue reinvention;
--Expand partnerships and leveraging opportunities; and
--Protect the government's interest.
support self sufficiency
The RHS home ownership programs offer rural people and their
families the most basic piece of the American Dream--the chance to own
their homes. The President's fiscal year 1999 Budget requests a program
level of $1 billion for the Section 502 Direct program and $3 billion
for the Section 502 Guarantee program. This $4 billion dollar program
level will provide approximately 65,000 homes for individuals and
families in fiscal year 1999 and ensure that the home ownership
opportunities that are accessible in suburban and urban America are
equally available to rural America.
RHS has also proposed legislation to permit the use of Federal
guarantees to help graduate current direct loan borrowers to private
credit. Many of our 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
fiscal year 1999 Budget requests an authorization of $100 million for
graduating direct loan borrowers into the guaranteed program.
The Mutual Self-Help Grant program enables low and very-low income
rural families to become homeowners through the efforts of their
``sweat equity'' contribution while simultaneously building and
stabilizing their communities. The sweat equity contributed by these
families not only builds communities, but also reduces the cost of the
mortgage and enables the Agency to reach a lower-income customer. The
majority of the mortgages are provided by the Agency's Direct 502 loan
which allows the interest rate to be subsidized down to as low as 1
percent based on income.
These Self Help borrowers have exceptional track records--both
lower delinquency rates and better graduation. Over half have paid off
their loans in full or graduated to private credit. Approximately
27,000 self-help loans have been made since the program's inception in
1971, providing housing for approximately 1,000 families per year. In
fiscal year 1995, RHS received over a 100 percent increase in the grant
program. In fiscal year 1998, the program expanded to 46 states with an
estimated 121 grantees serving approximately 1,600 new homeowners. The
fiscal year 1999 request of $26 million would enable RHS to serve over
100 grantees.
Time and time again we hear stories of how participating in the
self-help program has truly turned borrowers lives around--enabling
them to achieve the equity from home ownership that can finance
children's education, launch entrepreneurial careers and move families
towards financial independence.
For example, Rudy and Angie Lopez lived from one paycheck to
another; he was a cook, she was a waitress. Owning a home seemed out of
reach until they qualified for the Mutual Self-Help Housing program.
After completing their home, Rudy and Angie Lopez decided to open their
own business. Now they operate Rudy and Angie's Mexican Restaurant in
Grover Beach, California.
In support of Secretary Glickman's Civil Rights Action Team Report,
the Administration is requesting a significant increase for Farm Labor
Housing over the available level in fiscal year 1998. For fiscal year
1999, the $20 million increase in budget authority would provide for
$32 million for farm labor housing loans and $13 million for grants.
These additional funds will address some of the worst housing in the
country by providing increased safe and affordable rental housing for
our farmworkers. The horrendous housing conditions that some of these
families endure impact their health and their quality of life.
In Molalla, Oregon, Soledad Morales lives with her farmworker
husband, his elderly mother, and her four children; she cares for other
farmworker's children in her apartment. Before they moved into RHS'
farmworker housing, they lived together with many families. ``Meal
preparation and access to the bathroom were the worst part; with so
many in one kitchen and one bathroom, sometimes I'd have to get up at
2:00 a.m. to bathe or make my husband's lunch, and sometimes I'd have
to wait until 11:00 at night. It was chaotic and impossible to keep
clean, since there wasn't agreement about cleanliness.''
``Our health is better here; I think we live better. The children
live better because they have the freedom to play outside in the lawns,
playground and court. There's also counseling, classes, more access to
programs, more communication. Also, here, those of us who give and
receive childcare can participate in co-payment and reimbursement
programs that we couldn't access before, due to the condition or
distance of our homes from services.''
This is just one example of the thousands of hardworking, low-
income American families whose housing and quality of life will benefit
from the increased funding requested for farm labor housing loans and
grants in fiscal year 1999.
The President's fiscal year 1999 request for Community Facilities
program levels provides an increase of approximately $50 million over
the available levels in fiscal year 1998. We have significantly
increased the utilization of the guaranteed program. In reviewing
applications for assistance, we first consider if the project can be
funded by a guaranteed loan. If this is not feasible, we look at a
blended approach prior to considering the direct loan and/or the grant
program. As a result of this approach, we have significantly expanded
the number of guaranteed loans made to rural communities by
approximately 100 percent between fiscal year 1995 and fiscal year
1997.
Access to high quality, affordable child care is a major priority
for many young working rural families. The benefits of this kind of
care are numerous: children are nurtured in a safe environment, parents
have the opportunity to enter the work force to earn sufficient income
to obtain an acceptable standard of living, and employers maintain a
work force whose productivity is not impaired by unstable child care
arrangements. Recognizing the importance of providing excellent child
care to America's low-income rural families, the Rural Housing Service
has consistently invested in child care facilities through the
Community Facilities program.
In fiscal year 1997, 19 States obligated $8.8 million in direct and
guaranteed Community Facility loans and grants for 32 new child care
centers. Five of these centers are funded through a new partnership
that includes RHS, the Federal Housing Finance Board, Head Start, the
Freddie Mac Foundation and the Rural Local Initiatives Support
Corporation (Rural LISC). These partnerships and others go beyond
funding to provide technical assistance and build capacity.
RHS programs also enable many rural elderly residents to remain
self sufficient by continuing to live independently. The Section 504
repair loan and grant program, the Section 515 multi-family housing
program and the Section 521 rental assistance program all enable
elderly residents to live independently. For others who can no longer
be independent, RHS helps provide a decent quality of life in their own
rural communities. The Community Facilities Programs finance assisted-
living, adult and child day care, emergency services, nursing homes and
health care facilities to help improve the quality of life.
These programs are helping people like Ms. Caroline Young, a 70
year old tenant currently living in LaPaula Villa Apartments, a 515
complex located in Friars Point, Mississippi, a poor Delta town. Ms.
Young rented a home on the outskirts of Friars Point, prior to moving
to the complex four years ago. The living conditions were deplorable,
with cracks in the walls and floor. Ms. Young indicated she could see
the ground through the cracks. The house was very old and extremely
cold in the winter months. Even though the home had gas heat, she had
to wear layers of clothes to keep warm. Now that she lives in the 515
project, she feels her health has improved significantly. Ms. Young
said, ``it's like living in a mansion compared to my previous living
conditions.''
If it were not for the Section 515 multi-family housing and rental
assistance programs, Ms. Young would likely not have been able to live
independently in a decent safe environment. Ms. Young sought other
housing options before finding a vacancy at a local 515 project,
including an assisted living facility and a group home, both of which
would have resulted in a greater cost to the government.
For fiscal year 1999, the President's Budget requests $583 million
for rental assistance. This level is needed to renew $544 million of
expiring contracts, enabling 37,516 elderly individuals and families to
continue to live in decent and affordable housing. In addition to
renewals, based on the fiscal year 1999 loan and grant request for Farm
Labor Housing, $8.4 million of rental assistance will be used
specifically to ensure affordability for all new Farm Labor tenants.
For Section 515, $5.9 million has been requested to preserve
affordability in projects eligible for prepayment and prevent
displacement of tenants.
expanding access to our programs to all eligible rural americans
Under Secretary Glickman's leadership, the Rural Housing Service is
continuing its outreach to underserved communities and populations.
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.
RHS has also improved the quality of life on tribal lands by
expanding the use of the Community Facilities programs by Native
American communities. The Agency has placed increased emphasis to
provide funding opportunities to tribal colleges through the Community
Facilities loan and grant programs. In fiscal year 1997, the Agency
provided a total of $9,950,000 in financing through the direct,
guaranteed and grant program to Native Americans. This funding provided
day care, administrative, medical and food preparation facilities.
RHS has been promoting outreach activities to historically
underserved customers. For example, RHS has participated in the ``Home
Ownership Opportunities for Women'' (HOW) partnership, one of 58
national partners in the President's Home Ownership Initiative. HOW is
committed to increasing national home ownership rates for women.
On July 11, 1997, Secretary Glickman and HUD Secretary Cuomo signed
a Memorandum of Understanding outlining the responsibilities between
the two Departments on how to manage Fair Housing complaints. This MOU
provides a more efficient and streamlined process for handling
discrimination claims. In addition, RHS has worked hard to ensure that
all of our borrowers and staff follow the Fair Housing Laws. We are
continuing to incorporate a Fair Housing training component at all
national housing training meetings.
reinvention and partnerships
We are continuing our reinvention and partnership efforts we
initiated over three years ago. Our reinvention efforts in the single
family 502 direct loan program were a great success and have set the
standard for future efforts. We reduced the size of the 502 regulation
by almost 90 percent and made it easy to read. We are currently
streamlining and simplifying our other housing programs. As we move to
a balanced budget with the President's fiscal year 1999 Budget request,
we all recognize the need for automation and modern technology to
increase our efficiency, improve our customer service and cut costs.
The USDA field structure has been reduced in the number of offices and
employees. We have to work harder and smarter to continue to reach our
customers. The ongoing reinvention of the housing programs include the
following:
--Continuation of our Congressionally mandated servicing for escrow
and taxes of the single family housing portfolio. The DLOS
initiative, which automated our loan origination and servicing
functions, established the Centralized Servicing Center (CSC)
in St. Louis. In September of 1997, the Agency completed the
last phase in the transfer of approximately 700,000 single
family loans for 550,000 plus borrowers from the states to one
centralized facility in St. Louis. This was a massive
undertaking and one of the largest portfolio transfers, private
or public, in history.
--We are proceeding with the reinvention of the guaranteed single
family housing and the mutual self help regulations. We will
create new handbooks for both programs that will act as a guide
for our employees and customers.
--Reinvention of the multi-family regulations will ease the burden on
our borrowers and our staff. This streamlining effort, which
will include the Section 515 Multi Family Housing and the
Section 514/516 Farm Labor Housing programs, will be completed
by the end of 1998.
expanding our partnerships and leveraging opportunities
I would like to share with you our continued efforts to build
partnerships and leveraging opportunities which expand our limited
resources, drive dollars 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
formed many successful partnerships. Let me tell you about one.
The Rural Home Loan Partnership, formed in June of 1996 by RHS, the
Rural Local Initiatives Support Corporation (Rural LISC) and the
Federal Home Loan Bank System, enables more families below 80 percent
of area median income to achieve home ownership. RHS provides a fixed-
rate, subsidized 502 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 partnership is just one example of our
leveraging success. In fiscal year 1997, with all partners, we
leveraged 46.24 percent or $125,699,475 of the Section 502 low-income
allocation with $58,149,512 from lenders.
RHS' loan guarantee programs have brought increased numbers of
financial institutions into partnership with the Agency. Over 2,000
lenders now participate in the Section 502 guarantee loan program which
serves low and moderate-income residents.
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 new Section 538 Guarantee Multi Family housing program, we
have completed two years under a demonstration mode and are in the
third year of operation. For fiscal year 1996 and fiscal year 1997, the
Agency provided $41 million in guarantees for 25 projects, which when
leveraged with other funding, financed total development costs of $71.5
million. For fiscal year 1998, the Agency proposes to issue final
regulations and a Notice of Funding Availability in the late Spring.
In the Community Facilities programs for fiscal year 1997, RHS has
leveraged over 50 percent of its Direct funds and 26.5 percent of the
guarantee funds, with state, local and private partners. RHS developed
a new partnership with the Department of Health and Human Services Head
Start, the Freddie Mac Foundation 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.
protecting the government's interest
I would like to offer my appreciation for the reforms to the
Section 515 program that were passed by this Committee in the fiscal
year 1997 Appropriation Act. The Department worked diligently to
expedite the implementation of these reforms, and they were published
as an interim rule on May 7, 1997 and as a final rule on December 23,
1997. In developing these rules, RHS 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.
As a result of this Congress' and the Administration's efforts to
provide the necessary tools to provide the proper oversight and
management, the 515 portfolio is healthier and safer today. The
tenants' and government's interest are protected.
In March of 1998, a joint effort between the Office of Inspector
General (OIG) and the Rural Housing Service will begin. This will
include joint participation between National and field staff from both
RHS and OIG to identify and review projects, owners and management
companies in 12 states that potentially are at risk for financial
abuse. This will allow RHS and OIG to assess the recent legislative
changes including the equity skimming provision and their effect on
curbing fraud, waste and abuse in the 515 program.
We have become concerned, as I know this Committee has, with the
increasing need for budget authority for our rental assistance program,
which has grown from $404 million in 1993 to $541 million last year,
and is projected to reach $650 million by 2000. We are exploring ways
to address this issue while preserving the safety net for rural
families. We will work with the Congress on this effort in the coming
months.
Since 1994, the Agency has placed a high priority on rehabilitation
of Section 515 Multi Family projects. Currently, the 515 Multi Family
portfolio consists of over 18,000 projects with over 458,000 units.
With this large and aging portfolio, the Administration is committed to
preserve the integrity of these structures and protect both the
tenants' and government's interest.
Now I would like to highlight the following points from the fiscal
year 1999 Budget proposal.
For section 502 direct single family housing loans in fiscal year
1999, we are requesting a loan level of $1 billion. This is the same
level provided in the fiscal year 1998 Appropriation Act. For the
Section 502 guaranteed loans, we are requesting a loan level of $3
billion.
In the section 515 multi-family housing loans, a loan level of $100
million is requested for fiscal year 1999. The loan level request for
housing repair loans (Section 504) is $25 million. For domestic farm
labor housing loans, we are requesting $32 million program level, a $17
million increase over fiscal year 1998 to meet the needed housing for
farm workers consistent with the recommendations in Secretary
Glickman's Civil Rights Action Team Report. We are requesting $5
million for two loan programs for housing site development. This
significant increase over current levels will allow the Agency to
effectively serve applicants on a national level.
The loan level request for the Multifamily Housing guarantee
program (section 538) is $150 million. This will allow RHS to have a
fully operational program that will provide approximately 2,000 units
to low and moderate-income tenants in rural areas.
The budget authority appropriation requested for the housing and
community facilities loan programs is $231 million, approximately $13
million less than in the 1998 appropriation.
An increase of $42 million to $583 million is requested for rural
rental assistance in 1999.
For the Self Help Technical Assistance Grants we are requesting $26
million, the same level as appropriated in fiscal year 1998.
The housing grant programs are being requested for fiscal year 1999
under the Rural Housing Assistance Grants Program. Within this program,
our requests include $13 million for farm labor grants, $25 million for
housing repair grants, and $9 million for housing preservation grants.
The supervisory and technical assistance grant program and the
compensation for construction defects grant program will continue to
operate in fiscal year 1999 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 $200 million will be available for direct community
facility loans and that another $210 million will be available in the
guaranteed loan program. Approximately $8 million is proposed for
community facility grants. The appropriation requested within RCAP to
support the community facility programs is $36 million for fiscal year
1999. This is $10 million more than is available for fiscal year 1998.
For administrative expenses, the Budget requests $429 million. This
is a $15 million increase from fiscal year 1998. RHS's ability to
successfully implement the Centralizing Servicing Center and deliver
the programs in the field and protect the portfolio requires this
increase in administrative expenses.
This is the conclusion of my statement. I appreciate the
opportunity to appear before this Committee today and as always, I will
respond to any questions that you may have at this time. For release
only by the Senate Committee on Appropriations
______
Prepared Statement of Dayton J. Watkins
Mr. Chairman and members of the Subcommittee, I am pleased to
appear before you today to report on our progress in rural development
and to present the Administration's fiscal year 1999 Budget for the
Rural Business-Cooperative Service (RBS).
demographic data on rural development
As I am sure the Subcommittee will agree, we in RBS firmly believe
that, there cannot be a strong America without an equally strong and
participating rural America. The USDA Economic Research Service (ERS)
in a 1995 report identified a re-shift of population from urban areas
back to rural communities. This underscores an increased need for our
programs. The proportion of real poverty is worse in rural areas than
in the cities according to ERS data. In some areas of the rural south
and on some Indian reservations, poverty and its associated ills of
poor health, poor nutrition and poor educational opportunities is
staggering.
The RBS is a component of the Rural Development Mission area and as
such strives to make significant contributions to the enhancement of
life for rural Americans. In partnership with the other agencies of the
Rural Development Mission area, we share in the belief that a strong
rural America requires a continuing investment from all levels of
government and the private sector in people, education, technology,
health care, infrastructure and social and community affairs.
Certainly, there can be no sustainable development without employment.
According to the ERS report, the unemployment rate in rural areas is 16
percent higher than in urban areas. There is energy and resources for
business development in rural areas which can be harnessed to address
this issue. Our efforts have been focused on leveraging this energy and
investment potential to maximize employment in rural communities. The
rural business programs proposed in this Budget will create and save
about 83,000 jobs.
These investments will enable rural Americans to continue advancing
in the economic mainstream of this great nation and help citizens build
sustainable rural communities. The RBS contribution to this effort
continues to be our ability to make our financial and technical
resources available to rural America.
partnerships for rural development
These resources facilitate the building of partnerships within
rural communities when leveraged with public, private, and non-profit
resources and stimulate economic growth and development. New jobs,
paying higher wages, are created or saved. This further enhances the
ability of rural citizens to be able to meet the individual needs of
their families for the basic necessities of life.
This is accomplished by assisting rural residents in acquiring
adequate income to pay for the educational expenses of their children,
meet their housing needs, and building their pride and self esteem.
This means helping new entrepreneurs implement their dream of owning
and operating their own businesses by providing for the credit and
financing needs of rural business owners who are unable to find credit
from traditional sources. Further, it means helping agricultural
producers analyze alternative business forms, like cooperatives, which
offer greater economic opportunities than currently found in the
marketplace. Each of these efforts touches rural America in a
meaningful way. Our responsibility is to provide efficient and cost
effective access to our programs so that rural Americans can maximize
the resultant benefit.
A paramount objective is to use this opportunity to be creative in
developing new concepts and approaches to serving our customers. To
ensure that rural Americans continue to have access to our programs and
services, we are continuing to develop and advance new and exciting
initiatives. These initiatives will focus more resources on
individuals, businesses and communities that have not been traditional
participants in our programs. By continuing this effort, we can and
will be instrumental in increasing the contributions made to the
overall growth of rural America by putting underutilized resources to
better use. This is consistent with the overall strategic 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 continue along the direction
begun last year to increase strategic alliances through creative
partnerships with other Federal departments and/or agencies of the
United States Department of Agriculture, corporate America, educational
institutions, non-profit organizations and others. Through strategic
alliances, we can serve more people and communities because more
organizations will be available as resources to rural residents.
role of agricultural cooperatives
We endeavor to enhance the quality of life for rural Americans by
encouraging the use of cooperatively owned businesses as a self-help
tool in the marketplace. Our programs of research, technical
assistance, education/information, finance and assistance in starting
new cooperatives are designed to establish viable business entities
that help individual farm operators and other rural residents retain
access to markets and sources of supplies and services in a sector that
is rapidly becoming vertically integrated and industrialized.
Cooperatives are a means for rural people, both farm and non-farm, who
typically have weak market power compared to buyers and suppliers, to
be treated more fairly in the marketplace.
The existence of these rural cooperative businesses is an important
component to most rural communities providing jobs, opportunity for
purchase of more reasonably priced supplies and services, and a market
outlet and improved returns for farm products. A noticeable trend in
recent years has been the attempt to add value to raw commodities by
primary and further processing in the communities near the source of
production. The Cooperative Services Program continues to augment these
efforts by helping to determine feasibility, assistance in the
development of new cooperatively owned businesses, and maintaining
statistical data on aggregate trends and commodity sector developments.
Since 1926, USDA has worked as a partner to farmer cooperatives,
helping interested groups of agricultural producers form new
cooperatives and working with existing cooperatives to improve their
efficiency and expand the scope of services to members. This work is
carried out by our National Office staff who specialize in research,
technical assistance, statistics and educational/informational
activities and the State Rural Development Offices that are identifying
Cooperative Development Specialists on their staffs to assist in
starting and servicing the needs of new cooperatives. We are further
aided by partnerships with universities, State departments of
agriculture, and non-profit associations through various programs aimed
at strengthening rural people's ability to use mutual self-help efforts
to earn a decent living and to enhance their quality of life.
outreach through innovative programs
The National Commission on Small Farms recently released its report
A Time To Act which points to the role of cooperatives in assisting
small farm operators to survive and prosper in a rapidly changing
production agriculture. The Department is formulating a response to the
recommendations in this report that will address effective marketing
methods and other needs of small farmers throughout the nation. We will
be an integral part of this overall effort since group action, so
prominently recommended in the report, is also the focus of our
programs. As part of this effort, we want to determine how under served
rural Americans can utilize the cooperative form of business to help
overcome market access barriers.
During the past year, we implemented a Cooperative Value-Added
Program funded from the Fund for Rural America. Eligible applicants
were institutions of higher learning or nonprofit associations that
would provide technical assistance to specific value-added projects. We
were surprised, and a bit overwhelmed, to receive 104 applications
requesting a total of $19.4 million. After review, 18 projects were
funded up to $75,000 each for a total of $1.1 million. We think this
experience is good evidence of the expanded interest in the value-added
strategy.
Another major initiative of this Mission Area is to expand the
types of cooperatives serving rural America. Legislation has been
developed and introduced at the Secretary's request under which we
would assist rural residents interested in forming cooperatives for
rural non-farm business. Based on our proven track record of success,
we believe we can maximize their chances for business success.
Successful nonagricultural cooperatives can assist rural residents to
obtain increased access to technology, housing, rural utilities, health
care and other shared services. These services will strengthen the
infrastructure of many rural communities that are faltering by
providing stable businesses, more reasonable prices for goods and
services, and increased earnings for products sold.
re-invention of programs
Last year, in my testimony to the Subcommittee, I discussed the
sweeping revisions we were making to the regulations for our Business
and Industry Guaranteed Loan Program. The new regulations are shorter,
clearer, and more logically organized. They're certainly more concise,
taking up about one-half the pages of the previous regulations. The new
regulations shift some responsibility for loan documentation and
analysis from the Government to the lenders. We've made the program
more responsive to the needs of the lenders and businesses, and created
an environment for easier and faster application processing.
This year, I'm pleased to be able to update the Subcommittee on
recently published revisions to the Intermediary Relending Program
regulations. These regulations were published in final on February 6,
1998. The new regulations expand the current $2 million cap on loans to
intermediaries to a $15 million cap to any one intermediary in annual
increments of $1 million. The regulation is more user-friendly and
authorizes the Rural Development State Offices to process applications
at the State level, rather than submitting applications to the National
Office for processing. This change will speed up the applications
process and allow State Offices to work closer with borrowers to
provide immediate feedback concerning their applications. There will
continue to be a nation-wide competition for funding the applications.
A revised priority scoring system will help us target more funding
to the neediest communities such as those in low-income or in under
served areas, those with declining population, or communities faced
with economic restructuring or natural disasters. In addition, the
eligible purposes for loans to businesses have been expanded.
Mr. Chairman, since the streamlined Business and Industry
Guaranteed Loan Program regulations were published last December,
demand for the program has increased 300 percent. This increased demand
for the program will mean that the quality of the applications and the
opportunity of providing funding to the communities most in need will
be enhanced.
Now, I'd like to address our specific programs and their
accomplishments in a little more detail.
business programs
To meet our goals and objectives and the growing demand for our
services and resources, we have increased partnerships and strategic
alliances with other Federal agencies. One example is the
implementation of a Memorandum of Understanding between Rural
Development and the U.S. Department of the Treasury to carry out the
Community Adjustment and Investment Program under the North American
Free Trade Agreement (NAFTA). We estimate that this partnership will
provide for an additional $75 million in business and industry
guaranteed loans in fiscal year 1998.
For all business programs, the emphasis this year is to provide
program funding in our targeted areas of greatest need. This objective
is supported in the Performance Goals identified in the Rural
Development Strategic Plan, the Administrator's Priority Goals, and the
priority selection criteria of the various regulations that are used to
score and select projects. To demonstrate our earnestness, Rural
Development State Directors' annual performance will be evaluated, in
part, based upon how well they accomplish the program objectives of
providing financial assistance to targeted areas and areas of greatest
need.
The following are examples of how the Business and Industry
Guaranteed Loan Program, the Rural Business Enterprise Grant Program,
the Intermediary Relending Program, and the Rural Economic Development
Loan and Grant Program provide economic opportunities in America:
B&I Guaranteed Loan Program and Rural Economic Development Loan
Program: Freshwater Farms, Inc., Mid Delta Employment Zone,
Mississippi
Freshwater Farms, Inc., was originally incorporated in November
1982 under the name ``Humphreys County Catfish Processing'' by Mr.
Robert Edwards. In September 1986, a group of nine local catfish
farmers and businessmen joined with Mr. Edwards to provide new capital,
new management, and increased catfish supplies. Stock in the company
was issued equally to all ten stockholders, a new ten-member Board of
Directors was elected, and the name was changed to Freshwater Farms,
Inc. Under this leadership, the company has grown in annual sales from
$4 million to $18 million, in employment from 75 to 170, and the number
of stockholders has increased to 19.
The Rural economic Development Loan Program provided a $400,000
loan to Twin County Electric Power Associate to finance the processing
equipment for Freshwater Farms.
Rapid growth, requiring continuous repair and renovation, placed a
considerable strain on the company facilities and resulted in
inefficiencies and added expenses. Yet, even with these disadvantages,
the company has proven itself to be a low-cost processor in the
industry, delivering a quality product to markets in over 20 States. By
relying almost exclusively on stockholders to supply catfish, the plant
has been able to operate at near maximum capacity and has been
profitable during varying market conditions.
In order to supply additional processing capacity for the
stockholders, who have expanded their operations, the Board of
Directors unanimously agreed to build a completely new facility which
would accommodate future sales of $30 million, improve efficiencies,
and increase employment from 170 to 235. An increase of 65 new jobs and
the economic activity associated with these jobs have a very positive
impact upon the unemployment rate, sales tax revenues, property tax
revenues, and welfare rolls. The facility is located in the Mid Delta
Employment Zone, one of only three Federally designated Rural
Empowerment Zones in the United States. The new facility is a source of
pride for the owners, employees, and the community as a whole. Had the
new facility not been built, production would have been reduced in
order to meet ever increasing environmental regulations, and employment
would have been reduced by nearly 40 jobs.
Rural Business Enterprise Grant: Town of Medway, Maine
A $30,000 rural business enterprise grant was awarded to the Town
of Medway to develop an industrial site. The project was a cooperative
effort between the town, the State of Maine, private business, and RBS.
In addition to the $250,000 provided by the funding partners, Great
Northern Paper, Inc., donated the land for the roadway.
The project enabled Medway to bring in much-needed employment.
Earthgro, Inc., a manufacturer and processor of bark, wood chips, and
other forest byproducts, initially provided 16 new jobs when the
company started a new operation in the industrial park in 1997. The
business now provides 25 jobs and is Medway's largest employer. Since
this is a new operation, it did not just relocate the company's
existing jobs.
Medway is an economically depressed area which has depended on the
paper mills located in adjacent towns to provide jobs. Since 1990, the
mills have eliminated more than 2,500 jobs, significantly affecting
Medway's economy. The area unemployment rate exceed the State rate by
approximately 50 percent. This project provided immediate jobs to the
area, and it is expected that additional businesses will locate to the
park in the future, thus further mitigating economic distress in the
area.
Intermediary Relending Program: Northeast Delta and Macon Ridge
Enterprise Communities, Louisiana
Magnolia Home Health Services of Tallulah, Louisiana, is a family
owned home health care business situated in rural Madison Parish,
within the Northeast Delta Enterprise Community. The family saw the
need to provide home health care services to this impoverished Delta
Region and developed a plan to implement the service. After several
unsuccessful attempts to obtain funding through traditional lenders,
the business presented a plan to Northeast Delta Enterprise Community.
The Northeast Delta Enterprise Community was not yet set up to provide
business loans, and Macon Ridge Economic Development Region, Inc.,
stepped in and provided a loan of $112,500.
Magnolia Home Health Services has not only provided rural Madison
Parish with quality home health care, but has grown well beyond the
projected 10 employees to a staff of more than 20. In addition to
Madison Parish, it now serves a total rural population of 12,463
including areas of Tensas Parish and Richland Parish, which are within
Macon Ridge Enterprise Community.
The business has been so successful that it paid the original loan
of $112,500 down to $38,000 in just over a year, $50,000 ahead of
schedule. The business is still growing and has certainly boosted the
economy and health care service in Madison and surrounding parishes.
Rural Economic Development Loan Program: Winnebago Cooperative
Telephone Cooperative, Lake Mills, Iowa
A $350,000 zero-interest loan was made to the Winnebago Cooperative
Telephone Cooperative for the purpose of assisting the Larson
Manufacturing Company of Lake Mills with its plant expansion.
Larson Manufacturing Company produces aluminum wood core storm
doors, aluminum windows, and energy saving products. The Company's
overall plant expansion included the purchase of land, site
preparation, building of roads, sewer and water extensions,
construction of a 70,000 square foot building, parking lots, and the
purchase of new manufacturing equipment. An additional $2.43 million
was leveraged from other funding sources for a total project cost of
$2.78 million. It was estimated that the project would increase
production capacity by 25 percent and warehouse capacity by 50 percent.
It was projected that 50 new jobs would be created within two years
of completion of the project. Plant representatives have indicated
that, in less than one year, the employment projection had already been
surpassed. The jobs created in this small rural community of 2,143
population consist of sales managers, sales persons, truck drivers,
general production workers, warehouse workers, production coordinators,
forklift operators, and office support staff. The new jobs have led to
an increase in the long-term productivity and per capita personal
income in the rural areas of north central Iowa and south central
Minnesota.
Rural Economic Development Loan and Grant Program: Chariton Valley
Rural Electric Cooperative, Albia, Iowa
A $300,000 grant was made to the Chariton Valley Rural Electric
Cooperative of Albia, Iowa, to establish a revolving loan fund program.
The electric cooperative provided $60,000 of its own funds and made
loans totaling $360,000 to the Albia Industrial Development Corporation
to renovate a vacant industrial building in Albia and to purchase 24
acres of land to expand an industrial park. These loans were leveraged
with $662,000 of financing from private sources.
After renovation of the 102,000 square foot industrial building,
one-half of the space was sold to a metal fabricating business which
employs 33 people. The business holds the option to purchase the
remaining building space. In the interim, a plastics company proposes
to lease the remaining space for a period of three years. At the end of
the lease term, the plastics company intends to build a 100,000 square
foot building in the new industrial park.
cooperative services
The Cooperative Services Program 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 a more 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 change often referred to as the ``industrialization of
agriculture.'' United States businesses involved in agriculture are
finding it increasingly necessary to have a coordinated and controlled
supply of a narrowly defined raw product. As previously mentioned, the
report ``A Time To Act'' by the National Commission on Small Farms has
recommended an expanded use of cooperatives as a means for smaller farm
operators to access markets.
A major initiative by RBS has been to encourage the staffing of
Cooperative Development Specialists in each State Office. These
individuals, either solely or collaterally, provide a more localized
source of expertise in guiding the development of new cooperative
businesses and helping to determine their feasibility. We are confident
they will become a more important source of assistance to emerging
businesses as they gain more expertise.
Development of a sound knowledge base acquired through research is
essential to offering sound technical and cooperative development
assistance. This program utilizes researchers at the 1862 and 1890
universities as well as state departments of agriculture on important
agricultural cooperative marketing projects. As an example, Purdue
University completed research on cooperative coordination in the hog-
pork sub-sector that may help maintain the status of independent hog
producers.
There has been a lapse in supporting research on cooperatives in
recent years, and the 1997 budget includes $2 million for the Federal/
State research on cooperatives program. This money will be used in
partnerships with State Departments of Agriculture and State
universities and colleges to fill the void and make up for lost ground.
Among the new areas for research are the role that cooperatives can
fulfill as Federal farm price supports are ratcheted down and perhaps
eventually terminated, the emergence of collaboration between farm
operators in farm production cooperatives, evaluation of types of
strategic alliances developed between cooperatives and with investor
owned firms, identification of key successes and problems of ``new
generation'' cooperatives, and operational adjustments being made by
cooperatives to global competitors.
We met recently with representatives from the 1994 Native American
institutions and encouraged them to develop, with our help, teaching
modules on cooperatives that fit into their expanding curriculums. We
also encouraged development of a Cooperative Center of Excellence at
one or more of their institutions.
As an example of technical assistance, we worked with Shoreham
Apple Growers of Vermont, an apple packing and warehouse operation
serving the majority of apple growers in the state, to develop a plan
to revitalize its organization. A business plan and financial
projections were developed with the help of Cooperative Services staff
to enable them to obtain bank financing required to keep in operation.
The cooperative was also assisted in adopting operational and record
keeping changes required for its long term survival.
The emerging alpaca industry is characterized by its geographical
dispersion and its lack of organization at the producer level. This
past year, Cooperative Services staff worked closely with producers
throughout the western states to establish the framework for a
producers' association that will facilitate development of industry
strategies and orderly marketing. From a disorganized group of
producers at the beginning of the year, the alpaca association has
emerged with a strategic plan, experienced officers, and a sense of
direction that will carry them forward as an effective marketing
cooperative.
Small vegetable growers in Arkansas have been assisted in growing
tomatoes to supply Burger King. The growers are attempting to structure
a cooperative that will continue to provide them market access to the
growing produce market. Similar efforts are being made in eastern
Kentucky to assist small producers accustomed to growing tobacco to
engage in vegetable production as a parallel crop and to market it
through a local cooperative packing facility.
rural cooperative development grants
Another source of assistance to developing cooperatives is the
funding of new and existing cooperative centers through the Rural
Cooperative Development Grant Program. This partnership with
institutions of higher learning and nonprofit associations permitted us
to fund 11 centers for a total of $1.7 million in 1997.
The program is used to facilitate the creation or retention of jobs
in rural areas and enhance producers' incomes through the development
of new rural cooperatives, value-added processing, and other rural
businesses. Grants are competitive and awarded based on specific
selection criteria.
appropriate technology transfer for rural areas (attra)
We have also been providing extensive support for the Appropriate
Technology Transfer for Rural Areas program which provides producers
and agribusiness advisors information on use of the best sustainable
production practices. Encouragement of such practices lessens
dependence on agricultural chemicals and is more environmentally
friendly.
The ATTRA program handled over 18,000 requests this past year and
continues to be a major source of information on sustainable
agriculture throughout the country through its 800 telephone number and
the use of the Internet. We're asking for $2 million, an increase of
$700,000, for the ATTRA program to accommodate expanding requests for
information.
national sheep industry improvement center
The National Sheep Industry Improvement Center was established this
past year. The Center has held three public hearings, developed a
strategic plan, and hired an Executive Director. This program will
become operational under the Board's direction this year and will
assist development of infrastructure in the sheep and goat industries
through a $20 million revolving fund provided in the Federal
Agriculture Improvement Act of 1996.
fiscal year 1999 budget request
The fiscal year 1999 Budget requests a program level of $1.2
billion for the Rural Business-Cooperative Service including amounts
under the Rural Community Advancement Program. The Federal loan
guarantee as used in the Business and Industry Program is an extremely
cost effective mechanism to meet capital needs of rural businesses.
Under Federal Credit Reform, business and industry guaranteed loan
program borrowers or the cooperating financial institutions pay an up-
front fee which is pooled as a reserve to be used in future years to
cover losses in the program. This reserve remains in the Treasury and
draws interest until it is needed. In this way, the participants in the
program ``self insure'' the program against losses and minimize the
cost of the program to tax payers. The result of this self insurance
feature is that the loan subsidy rate, that is, the proportion of the
program cost that must be provided from tax money is currently less
than a penny on the dollar.
As part of the Rural Community Advancement Program (RCAP), the
Budget requests program levels of $1 billion for business and industry
guaranteed loans, $50 million for business and industry direct loans,
and $40.3 million for rural business enterprise grants.
The Intermediary Relending Program of the Rural Development Loan
Fund is requested at the $35 million level.
The Rural Economic Development Program budget proposal includes a
$15 million loan level and $11 million for grants.
The total program request for Cooperative Services is $5.7 million.
This includes $1.7 million for cooperative development grants and $2
million for appropriate technology transfer. Federal/State cooperative
marketing research agreements are proposed at $2 million.
For administrative expenses, the budget includes $29.9 million for
the Rural Business-Cooperative Service. Although this amount is
slightly greater than the current level, the increase is less than the
rate of inflation and will call for a reduction in employment in 1999
and belt tightening in other administrative activities.
empowerment zones and enterprise communities
The Rural Business-Cooperative Service continues a strong fiscal
year 1999 Program in Empowerment Zones and Enterprise Communities. The
Budget estimate includes a program level of $31 million to be reserved
for these designated areas. We are also proposing legislation to
provide for additional rural Empowerment Zones as authorized in the
Taxpayer Relief Act of 1997.
conclusion
Mr. Chairman, this concludes my formal statement on the fiscal year
1999 Budget. I would be happy to respond to any questions the
Subcommittee may have regarding the business and cooperative
development programs of the Rural Development Mission Area.
______
Prepared Statement of Jeffrey W. Gain
Mr. Chairman and members of the Subcommittee, I am pleased to
testify today on the President's fiscal year 1999 budget proposal of
the Alternative Agricultural Research and Commercialization Corporation
(AARCC). It is a pleasure to provide you with an update on the
Corporation's investment successes and the impact the AARC Corporation
is having on the economy of rural communities.
I am not a federal employee and am not here to support the growth
of another Federal bureaucracy. I do, however, own and operate a
diversified farming operation near Hardin, Illinois, producing grain,
orchard crops, and livestock. I also serve as Chair of the
Corporation's Board of Directors. I am here today on behalf of the
mostly private sector members of the AARCC Board of Directors to
testify to the unique opportunity the AARC Corporation offers to add
value to agricultural raw materials and create economic opportunities
in rural communities.
The committee has copies of the latest Source Book which lists many
of the AARCC-supported companies and the products now being produced
and sold. The committee also has a copy of our first annual report as a
corporation. You will notice such industrial products as absorbents,
building materials, lubricants, cleaners, and others. Many of these
products are made from what was considered agricultural waste.
As an aside, I would be remiss if I did not point out that because
of their very nature, these products may be environmentally friendly.
In many instances, they replace finite or polluting raw materials such
as petroleum. Certainly, using renewable, sustainable raw materials
from agriculture can be viewed as having a positive impact on the
environment.
I would like to offer the committee a short background on how we
got to where we are today. Congress created the AARCC Center in the
1990 Farm Bill and reauthorized it in the 1996 Farm Bill as a wholly-
owned corporation of the U.S. Department of Agriculture (USDA). AARCC's
creation followed a 1987 report of the New Farm and Forest Products
Task Force. I served on that task force which met for 2\1/2\ years. The
task force recommended developing and commercializing a wide array of
new farm and forest products utilizing the excess productive capacity
of American agriculture as a way to revitalize ailing segments of rural
America.
When we downsize agricultural production through set-aside or other
non-production incentives, we also downsize rural communities and the
infrastructure which supports agricultural production. Rural America
must harness the productive capacity of idled acres by producing crops
for value-added industrial use, or by growing new unsubsidized
industrial crops. The U.S. ``farm plant'' is running under capacity.
The National Agricultural Statistics Service reports that in 1996, only
336 million out of a possible 430 million acres of cropland were
cultivated in the United States. Approximately 94 million acres of
cropland, or 22 percent of our total productive capacity, lay idle.
Companies in the U.S. must create and sell bio-based, value-added
industrial products from agricultural and forestry materials and animal
by-products if we hope to restore productivity and economic vitality to
Rural America and expand world markets for U.S. agricultural products.
It is true that many of the things we make today from petroleum
can, in fact, be made using biodegradable materials. This is not a new
idea. USDA's four regional research laboratories were built in 1938-41
to find new uses for farm products. A national Presidential Commission
on Increased Industrial Uses of Farm Products studied new uses in 1956-
57. I have already mentioned the work of the 1985-87 USDA Task Force.
Predating all these activities was the formation of the ``Chemurgic
Council'' in 1935 under the leadership of Wheeler McMillen with
financial support from Henry Ford. Other notables on the council
included Thomas Edison, Irenee du Pont, MIT President Karl Compton,
Nobel Prize winning physicist Robert Milliken, General Motors Vice
President Charles Kettering, and Sears, Roebuck & Company Board
Chairman Robert E. Wood. George Washington Carver was also a leader in
the work of finding new uses for agricultural materials. Henry Ford
even built a car body from vegetable plastic and plant fibers. He felt
we could ``grow our cars.'' Today we are beginning to see a move in
Europe to a car which can be totally recycled. Increased use of
vegetable fibers is part of that effort. Here in the U.S. a number of
car manufacturers are also moving toward a ``green'' automobile.
The AARC Corporation, a unique venture capital entity, is
attempting to restart the bio-based economy by investing in small
businesses that are using agricultural materials to produce
environmentally-friendly industrial products. The decision as to which
companies and industrial sectors should receive AARC Corporation
investments is made by a largely private sector board. Eight of the 11
members of the AARCC Board are from the private sector representing
processing, financial, producer, and scientific interests.
It is important to recognize the AARC Corporation intends to make a
profit for the Federal government from these investments and reinvest
those repayments in other companies. But AARCC has a larger mandate.
Unlike private sector venture capital firms, the AARC Corporation's
investment strategy considers much more than profit, also referred to
as return on investment (ROI). In pursuing AARCC's investment strategy,
no one variable--ROI, jobs creation, or agricultural material used has
priority. Investment decisions are made after weighing these three
factors in order to maintain a balance in our portfolio. To date the
AARC Corporation has invested $33 million in Federal funds, leveraging
an initial $105 million in initial private investments creating more
than 5,000 new jobs in rural communities. AARCC continues to be an
engine for rural development by investing in technologies that create
real jobs and increase the use of agricultural materials or
agricultural wastes.
AARCC's first investments were made in 1993. We know that not all
the companies in which the AARC Corporation invests will be successful.
However, many will. The venture capital industry norm for portfolio
performance is that companies do not begin to break even until 75
months after the initial investment, somewhere between the sixth and
seventh year. Even so, some 15 companies have already repaid the AARC
Corporation over $200,000 in royalties. The business plan anticipates a
continued and steady increase in repayments over the next 5 years.
We are constantly working with those companies in which we have
invested to help them secure additional outside financing. Because the
AARCC partnership places the USDA ``stamp of approval'' on these
companies, it gives private investors a better ``comfort level'' and
many partners have been able to attract significant follow-on financing
from private sources. The AARC Corporation has secured an additional $3
dollars in private follow-on financing for each $1 dollar it has
invested.
Many AARCC companies have succeeded in penetrating difficult to
access retail distribution channels for consumer products. Those
marketing efforts are continuing. Perhaps the biggest near-term market
for AARCC-supported companies, however, is government. To help jump-
start these companies, as part of the 1996 Farm Bill, Congress included
language which gives Federal procurement preference to products
produced by AARCC partners. The preference language is part of the new
Agricultural Acquisition Regulations (AGAR), which govern USDA
purchases, recently published in the Federal Register. This year,
similar information will be included in the Federal Acquisition
Regulations (FAR), which govern all Federal purchases. As part of on-
going marketing efforts to the Federal government this past fall, AARCC
and 30 of its partners participated in the National Marketplace for the
Environment here in Washington attended by Federal procurement
officials, private buyers, and environmental organizations.
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 the AARC Corporation investment serving as
a catalyst, private sector funds, which otherwise would not be
available, will be committed to these companies. The AARC Corporation
respectfully requests $10 million in 1999 to continue its mission. An
appropriation at this level would enable the AARC Corporation to fund
approximately 20 new investments. In addition, these funds would make
it possible for AARCC to provide follow-on financing to some of its
existing portfolio companies which have begun to transition from the
start-up stage of their development to intermediate stage in which they
are beginning to penetrate markets and make sales. At the requested
funding level of $10 million, AARCC can attract some $30 million in
private capital investment in its portfolio companies, thereby creating
hundreds of new jobs in rural communities.
In conclusion, AARCC's venture capital approach is quite different
from that of traditional government loan or grant programs. Indeed,
AARCC may be seen as a model for public/private cooperative
developments and several other Federal departments are investigating
the possibility of establishing AARCC-like programs. The AARCC model of
eventual self-sufficiency, coupled with the program's role as an engine
for economic development, makes it an attractive option for a new way
of doing the government's business.
______
Biographical Sketches
jeffrey w. gain
Jeff Gain was appointed to the Board of Directors of USDA's
Alternative Agricultural Research and Commercialization (AARC)
Corporation in 1995 and serves as Chairman of the Board. The AARC
Corporation makes equity investments in small, mostly rural-based
companies to commercialize industrial uses for agricultural materials.
Mr. Gain currently manages his farm in Calhoun County, Illinois, and is
also engaged in agricultural policy, marketing, and management
consulting.
Mr. Gain served for 10 years as the Chief Executive Officer the
National Corn Growers Association, retiring October 1, 1994. Prior to
that, he was Executive Director of the American Soybean Association
from 1977 to 1984. He is one of the original founders of the New Uses
Council, formed in 1990 to serve as an advocate for commercializing new
industrial uses for agricultural raw materials and to help coordinate
public and private sector activities in that regard. He was Chairman of
the New Uses Council from 1991 to 1993.
Mr. Gain was one of the founders of the St. Louis Agri-Business
Club and served as its first president. He was named the Agri-Business
Leader of the Year by the Club in 1985. He also served as a member of
USDA's New Farm and Forest Products Task Force, which resulted in the
new industrial uses initiatives for U.S. agriculture. The Task Force
recommendations in 1987 led to the creation of the AARC Corporation in
the 1990 Farm Bill.
For his work in promoting the development of industrial products
from agricultural materials, he received the Outstanding Leadership
Award from the American Crop Protection Association. Most recently, he
was presented the prestigious Wheeler McMillan Award from the New Uses
Council. Mr. Gain has traveled extensively on various agricultural
marketing missions to Europe, South America, and Asia, including the
People's Republic of China.
Jeff is a native of Rushville, Illinois, and has a B.S. degree in
management from the University of Illinois. After graduation as a
Lieutenant, he served as a Public Information Officer and as an
admiral's aide in the U.S. Coast Guard. He then served as Executive
Secretary of several Illinois county chapters of the American Farm
Bureau Federation and was director of Commodity Programs for the
Illinois Agricultural Association for 10 years. He has two daughters,
Ann and Gretchen, and a 6-year old son, Jeffrey.
______
robert e. armstrong
Dr. Armstrong joined the Alternative Agricultural Research and
Commercialization (AARC) Corporation in early 1993. Since that time, he
has assumed a variety of increasing responsibilities, culminating in
being named Executive Director in 1997.
The AARC Corporation is a wholly-owned corporation of the U.S.
Department of Agriculture (USDA). Operating under the guidance of a
largely private-sector Board of Directors, the Corporation functions as
a venture capital firm that invests in companies commercializing non-
food/non-feed products derived from agricultural raw materials. The
AARC Corporation currently has $35 million invested in companies
throughout the U.S. As Executive Director, Dr. Armstrong is responsible
for the daily operations of the Corporation, as well as the on-going
growth and management of the Corporation's portfolio.
He was graduated summa cum laude/Phi Beta Kappa with a B.A. degree
in psychology from Wabash College in Crawfordsville, Indiana. He holds
an M.A. in experimental psychology from Oxford University, Oxford,
England. In addition, he holds an M.S. in biology and a Ph.D. in
agronomy (plant breeding and genetics), both from Purdue University in
W. Lafayette, Indiana.
His early professional work centered on Third World issues, and he
has worked in a number of developing countries. His work includes
projects related to famine relief and food availability in Sahelian
Africa, agricultural development in the Persian Gulf and deforestation
in Southeast Asia.
Dr. Armstrong is a Vietnam veteran and continues to serve in the
U.S. Army Reserve. He has two sons and two daughters and is married to
the former Leslie Carlson, a career USDA employee.
Delta Region Economic Development Program
Senator Cochran. Ms. Thompson, we appreciate your comments
and the written statement that you submitted. There is a
proposal the administration has made to create a Lower
Mississippi Delta regional economic development program and to
have it administered, in effect, by the Appalachian Regional
Commission or in some way be managed by the Appalachian
Regional Commission staff.
The President's budget request includes $426 million for
the Appalachian Regional Commission and a $26 million program
is proposed for the Lower Mississippi Delta Region. Senator
Bumpers has taken an active role in earlier years, and I
cosponsored his initiative to establish a study commission to
see if there were ways that we could deal with problems of
poverty, education, economic development, transportation, and
the like in this region. A lot of information was compiled and
work was done and the Commission went out of business after it
made its recommendations.
I like the idea of targeting funds to this region because
it is one that has characteristics that are similar throughout
the area. I am curious to know what your reaction would be if
the Congress decided to approve the idea, but place the
responsibility for administering the program in the Department
of Agriculture, and specifically under your jurisdiction. What
would your reaction be to that?
Ms. Thompson. Well, I think that it could be extremely
valuable to that region of our country. The reason I do is that
this particular approach would be a broader regional approach
to partnering with communities. The more we learn about the
role that the Federal Government can play, the more I
personally and we as a department appreciate that we work best
as a partner and the communities have the greatest potential
for sustainable growth when each community works harmoniously
within the community, but also partners and joins with other
communities in a larger regional area, that long-term
sustainable growth and economic and social development are
going to occur probably only if there is a regional approach to
economic development and rural development.
National Centers for Excellence
Senator Cochran. Earlier this year, I think in January, you
announced that you were establishing some national centers for
excellence to provide technical expertise to rural America. One
of those centers is to be located, as I understand it, at
Mississippi Valley State University in Itta Bena. The center is
to receive $100,000 and a Peace Corps fellow to assist as
liaison between the community and the university. What other
funds would be available to support this center's activity, and
what is the status of it now?
Ms. Thompson. Well, this, as you stated, is a new
initiative. The funds, additional funds, that would be
available would be funds through our traditional programs that
are administered in rural development. I think this is an
excellent approach to economic development because community
colleges have always served a variety of purposes in the
communities.
In addition to providing education opportunities, they very
typically are doing outreach and working with community
leaders, both local government leaders as well as business
leaders, and so I believe that there is considerable potential
for this partnering to occur between us and the community
colleges and the community colleges and their communities that
they are serving. As they put together plans and initiatives
for their own communities, then that will allow them to come
back to us, or us to go to them, to discuss and explore how the
programs that are administered through rural development at
USDA could also benefit those communities.
Rural Utilities Service
Senator Cochran. The Rural Utilities Service is one of
those agencies that ends up being under some pressure from time
to time because of the growing awareness of deregulation, the
idea that we are going to have a new national energy policy in
utility service. What is being done to prepare for these
changes, and are these changes having any effect on the ability
to provide utility services in rural America under the
traditional government programs that are administered by the
agency?
Mr. Beyer, would you be able to respond to that?
Ms. Thompson. I would ask Mr. Beyer to elaborate on that.
Mr. Beyer. Thank you, Mr. Chairman and Senator Bumpers. I
would be happy to respond to that. Thank you for the question.
The electric and telecommunications industries, as you know,
are in a revolution. It is a milestone in the history of
providing infrastructure services, moving from the old
traditional monopoly structure to an open-access, market-based
price, customer choice.
The telecommunication industry has now moved over to the
Federal regulatory and the Public Service Commission activities
in rulemaking to comply with the legislation, which is another
difficult, very difficult process from the standpoint of
providing support into high-cost-to-serve areas. I think, you
know, we are going to be all right, but there are a couple of
critical things that we are working with, with the FCC and with
the Public Service Commission where we have an opportunity.
Basic to our loan security issue is certified areas, which
is now multiple. States can issue as many certified areas as
they wish. The second principal thing for our loan security
traditionally has been the universal service pool mechanism
that exists in the telecom industry. About 65 cents out of
every revenue dollar, on the average, of the RUS borrowers
comes from that pool, which includes toll separation.
There is another part that addresses the high-cost-to-serve
areas and high-cost-to-maintain-and-operate areas. That pool is
now about $20 billion that is generated from within the
infrastructure, and is a huge issue at FCC in the rulemaking.
We are working with the FCC and making as much input as we
can to stand up for the rural systems, obviously. You know, it
is going to continue to evolve and we are hopeful that in the
end--Congress will provide a public policy that says we need to
support the high-cost-to-serve areas so that we don't end up
with infrastructure have-nots and haves in this country. I am
marching forward with that 50-year-old, 60-year-old policy that
has been enacted since the Rural Electrification Act.
Senator Cochran. One provision of the budget request
suggests the Administrator of RUS will have the ability to move
subsidy budget authority among the electric loan programs under
your jurisdiction. Is this something that is going to require
additional legislation to provide that authority, or do you
suggest or does the budget suggest that you now have that
authority? What is the reason for that?
It seems to me it might bypass the appropriations process
where we appropriate specific amounts and identify subsidy
levels and the like in our bill. Now we are going to have the
provisions of the bill ignored and instead we are going to see
the administrator moving subsidy authority among the programs
without any further action by Congress?
Mr. Beyer. Well, Mr. Chairman, we view that as a tool in
managing the dollars invested in infrastructure. If there is a
need for additional hardship loans, we would like some
authority to utilize budget authority to increase hardship
loans from funds that are not being utilized. It would simply
be another tool for us to better manage the portfolio.
Senator Cochran. I assume the answer is that you think you
have that authority now? No new legislation is required?
Mr. Beyer. No; my understanding is we do not have that
authority now.
Senator Cochran. This proposes that that authority be
given?
Mr. Beyer. Appropriation legislation is required, Mr.
Chairman.
Water 2000 Initiative
Senator Cochran. I see. The President's Water 2000
Initiative has a goal of providing clean running water by the
year 2000 to all rural households. Is that something that is
possible under the budget that is proposed by the President? I
suppose that should be asked of the Secretary?
Ms. Thompson. Under the budget that is being proposed, we
will not be able to reach every household by the year 2000, but
we have made tremendous progress over the last several years in
this initiative. The numbers in the beginning of 1993, before
the Water 2000 Initiative, were about 400,000 households with
about 1 million rural residents without any running water.
Through the Water 2000 Initiative we are now down to about
300,000 households and about 800,000 residents without running
water.
The challenge gets greater the closer we get to reaching
the goal because we are now reaching the hardest to reach
clients, and so it is a real challenge.
Because I have an optimistic nature, I think it is
important to keep working toward that goal that was established
in the Water 2000 Initiative. I think it is also important to
realize that it is a very, very difficult goal to achieve given
our commitment to also balancing the budget.
I, as well as our Administrator and others in the Rural
Utilities Service--John Romano was recognized earlier--we will
continue to have a very, very strong commitment to reaching as
many homes as we can by the year 2000. You know, there is
always 2001 and we can just keep moving forward at that point
as well.
Senator Cochran. Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman.
Home Ownership Loans
Mr. Shadburn, let me ask you, Secretary Thompson alluded to
the President's commitment to add 8 million homeowners by the
year 2000. Is that correct?
Mr. Shadburn. Yes, sir.
Senator Bumpers. How many of those are not going to be in
rural areas, but how many of those are you going to be
responsible for under the Agriculture Department housing
programs? Do you have any idea?
Mr. Shadburn. In terms of----
Senator Bumpers. Have you been assigned any kind of a quota
on this?
Mr. Shadburn. We have not been assigned a quota, but
obviously we are working with our rural partners throughout the
Nation to look and see how we can take $4 billion in the
housing programs to maximize the total number of units we can
place toward reaching that 8 million goal that the President
has set.
Senator Bumpers. Well, it is a very laudable goal, but it
is a pretty long stretch, I think, to get there. I applaud the
President for doing it.
Delta Regional Commission
Secretary Thompson's statement, I was especially impressed
with the statistics you gave about poverty still being fairly
pervasive in the rural areas, and especially in the South. Let
me just add my own comments to what the chairman has already
mentioned, and that is, the Appalachian Regional Commission
[ARC]. I will tell you now, I am not for putting this $26
million in the ARC. I would like to see the Delta Commission
stand on its own. They have unique problems. I just do not want
it to get lost in the Appalachian Regional Commission.
I have a lot of time invested in that in my life, and the
President has too. The only person I would yield to in my
commitment to the delta is the President, because when he was
Governor he did everything but stand on his head down there to
try to help those people.
Delta Teachers Academy
In any event, one other question I wanted to ask you on the
delta and you mentioned education and the role it plays in
rural areas. Are you familiar with the Delta Teachers Academy?
Ms. Thompson. I am not, per se.
Senator Bumpers. You are not. Is anybody here?
Senator Cochran. I am. [Laughter.]
Ms. Thompson. Is there a role that we can play through
community facilities or distance learning with the Delta
Teachers Academy? I may have someone here.
Senator Bumpers. I will submit a question to you in writing
on that, because that is something that Senator Cochran and I
are both committed to. It is a $3.5 million program. It is for
the delta. I want it continued, and I would like to see it
expanded. I would like to get the Department's view on how well
they are performing.
Ms. Thompson. Well, we will be very happy to respond.
Appropriate Technology Transfer for Rural Areas
Senator Bumpers. Yes; for many years, Senator Cochran's
former colleague in the House, Jamie Whitten, and I fought
vigorously, long, and hard over a program which was originally
housed in Memphis. I do not think--Jamie is not with us anymore
and I am reluctant to say that I think Jamie turned against it
when it moved from Memphis to the University of Arkansas. Of
course, that is what peaked my interest.
In any event, we had a long, rather volatile battle about
that. I was always convinced that in the coming days as we
looked for different methods of farming using less herbicides,
less pesticides that the so-called appropriate technology
transfer program at the university had great potential.
I think Jamie was right to some extent. Back when I was
fighting it--I guess that has been 10 years ago--he had some
arguments on his side. They were not as busy as they would have
you believe, but now all of a sudden--not just all of a sudden,
but the demands on their services have been increasing almost
exponentially. Really, this is not a question. It is just a
statement that applauds you for asking--who has that program?
Mr. Watkins. [Raising hand.]
Senator Bumpers. Mr. Watkins, I want to applaud you for the
request for the increase in that program, because they are
really--the demands on them are increasing dramatically as you
probably know. I am sure that is the reason--is that the reason
you have asked for the increase?
Mr. Watkins. Yes, sir; actually, Senator Bumpers, the
demands on the program, as you have already indicated, are
growing exponentially. Information requests are coming from
farmers, from small farmers, from extension agents throughout
the entire country. One of the things that you suggested in a
previous hearing, I believe, was that we consider bringing
technology, the use of Internet and computers to that program.
That is something that we would like to see going forward as
well. That is part of the reason for the request for an
increase.
Senator Bumpers. Sometime, Mr. Watkins, if you get a
chance, I wish you would go down to Fayetteville and look at
the brewery.
Mr. Watkins. I certainly will.
Water and Waste Programs
Senator Bumpers. Mr. Beyer, I will probably submit some
questions to you in writing, but I wanted to ask you, first of
all, it is my understanding that private companies are making
efforts to buy some of these rural water programs. Is that
true?
Mr. Beyer. Senator Bumpers, Mr. Chairman----
Senator Bumpers. Systems, I mean, some of the systems.
Mr. Beyer. In some cases where a community starts growing
out into a rural area, then, you know, you have a little bit of
a confrontation between the community and the rural areas.
There is some of that.
Senator Bumpers. Is that presenting any kind of a problem
for you?
Mr. Beyer. Well, we have looked at this this particular
year, and, you know, we do not think the problem is wide enough
for Federal legislation. We would not recommend that at this
point in time. It is all down to the local community issues.
Where communities work together, where the rural people work
together with their urban neighbors, they work this out and
they sell it. Where they do not work together, it is a very,
very difficult process and they fight.
You know, unless it really spreads all over, it would not
be our recommendation that there be Federal legislation. That
would just create another big problem.
Senator Bumpers. I do not have any planned. I just wanted
to know what kind of a problem it was, if any, for you.
Mr. Beyer. It crops up here and there. I can give you some
numbers, if we go back and look at it. We would be happy to do
that.
Electrical Restructuring
Senator Bumpers. OK. Mr. Beyer, you and I have discussed
electrical restructuring in my office, but I think two or three
questions for the record might be helpful. It is no secret that
the co-ops in the municipalities are the biggest opponents, I
think, generally of electrical restructuring.
Now I would assume since the President has said that he
feels electrical restructuring will go a long way toward
helping with the global warming problem, that the Agriculture
Department, the Rural Utilities Service, you are not adamantly
opposed to this bill, even though most of your members in the
co-op, electrical co-ops, out there are. What is the official
position of the Agriculture Department? I assume it is the same
as the President's, is it not?
Mr. Beyer. Yes, sir.
Ms. Thompson. It is precisely the same as the President's.
[Laughter.]
Mr. Beyer. To the letter. The dilemma is that as we move
along in this country toward molding a new infrastructure it is
a very complicated process as you all know.
Senator Bumpers. Well, let us get down to the heart of it.
There are two or three things. No. 1, they have enjoyed a great
deal of independence----
Mr. Beyer. Right.
Senator Bumpers. A lot of Government assistance, never had
a better friend than Senator Cochran and me. I do not enjoy
being on the opposite side of them for the first time really in
my public career. I must say that I really have some reluctance
to say this publicly, but I think their fears are largely
unfounded.
Now, California has allowed municipalities and, I think,
co-ops to opt in or opt out of their program. There are some
people who think we ought to do that here. I have always felt
this thing will only really work well if you don't make any
exceptions. I am not going to make an exception for TVA and I
would not make an exception for the PMA's, municipalities, co-
ops, or anybody else because I think everybody ought to have a
chance to enjoy the benefits of competition, picking and
choosing whom they want to provide them with electricity.
I must say because of the political and other alliances I
have had with the co-ops I just want to ask this question.
Their principal concern, at least I think it is their principal
concern, is, as I have always said, the guy that lives down at
the end of the lane. Now INRON, for example, may come and pick
off some of your industrial customers and the Arkansas Electric
Co-Op through one of their regional co-ops supplies one of the
biggest steelmills in the United States.
The point is they have got a contract which the steelmill
must honor, but at some point that is going to be up for
renewal and the co-op may get it and they may not. That is
competition. When you are in the steel or aluminum business,
you cannot stay in business unless you compete and unless you
have a competitive electric rate.
The fear is that the big customers are going to be picked
off, the little guy at the end of the lane is going to be
left--this is the traditional case--and his rate is going to go
up. Now I want to give you the opposite of that and then ask
you to comment.
No. 1, there are a few States that allow competing
distribution lines to be built, but I do not think very many.
In my State, you cannot just walk in and build a competing
distribution line. Let us assume for a moment that that is not
a problem, that people cannot come in and build a distribution
line.
Let us assume further that the steelmill, that you lose the
steelmill and not just because of my bill, because as I said in
my illustration the REA is having to compete for that business
anyway, but at the end of that contract, say, they lose it.
That takes a big chunk out of their revenue. They have
generating capacity that they have gone in debt for to supply
the steelmill. When the steelmill leaves, let us assume that
they now have a 50-percent excess in generating capacity that
they cannot use.
Is everybody with me so far?
[No response.]
Senator Bumpers. The question then becomes, What are you
going to do with the rest of your customers? How are you going
to pay for it? Now, No. 1, under my bill as you know, and it is
the only bill in the House or Senate either one that provides
for stranded costs. I feel very strongly about that, because
that just takes away a lot of arguments against the bill, but I
also think it is right to do that.
In my State under the bill, the co-op has the right to
collect stranded cost. You know who sets the amount of stranded
cost they are entitled to recover? They do.
Let us assume that they wind up with a generating plant
that they owe $2 billion and they lose $1 billion of generating
customers, customers who would use that generating capacity, so
they are stuck. They say, ``How do we get our $1 billion
back?'' You get it through stranded costs. They set it
themselves.
That means that the steelmill or any other customer--now
that steel would apply because that is a private contract--but
most every customer in the co-op system if they leave the
system and the co-op has stranded cost there will be a wire
charge against the people who have left to make sure that
people's rates do not go up until that stranded cost is
collected.
Do you follow me on what I am saying, Mr. Beyer?
Mr. Beyer. Yes, sir; yes, I do.
Senator Bumpers. Now, you still have the distribution line
to the guy at the end of the lane. My question is, How is the
co-op hurt? They are going to recover their cost of the lost
generating capacity, and nobody else is going to be able to
build a distribution line to somebody else that they are going
to lose customers with. Why is that not a fair deal?
Mr. Beyer. Well, Mr. Chairman and Senator Bumpers, my sense
is that most people agree there needs to be some mechanism to
recover that cost on generation and transmission facilities,
high-cost stuff. When you get down to the distribution system
where the folks are, where the meters are, the wire system, if
you please, if you take a big load like a steelmill, for
example, out of that system there is a huge revenue loss. You
are suggesting that they will pick that up with a wire charge.
The wire charge is going to be a big issue because I can
tell you that the average cost to operate a distribution system
in our loan portfolio--excluding power costs now, this is
everything--is 2.9 cents a kilowatt hour. It ranges from, you
know, probably 1.5 to 6 cents. Now, if that steelmill is on a
6-cent line, there is going to be some negotiations.
The Public Service Commission will probably get involved,
and probably some lawsuits, because those entrepreneurs, those
power marketers, that want that steelmill to make some profit
are not going to be interested in what happens to that system.
They are not going to want to pay a 6-cent wire charge.
Therein, I think, lies the dilemma.
I just want to go on and say that--and I am sure this is
the administration's position--I really feel that competition
in the electric industry would in the long run now, I am
talking about, would be useful.
I also feel very strongly that the high-cost-to-serve areas
will continue to need some support. It simply costs more money
to build a capital investment to build, per consumer to build,
lines in high-cost-to-serve areas in rural America and it costs
more to operate. We have some figures on that. It simply costs
more. Not unlike the telecom, this universal service is to me
one of the critical elements of deregulation in our portfolio
along with the stranded investment as well.
To me it is not such a huge issue. I mean, it is not a
multibillion-dollar issue. With a little tweaking and a
continuation of Federal policy that has been there for 60
years, this thing could work. This thing could really work.
There is going to be a lot of--you know, EEI is not going to
want it. There is going to be all kinds of opposition to it.
You know more about that than I do, really. In the end, if
Congress sets up some financial support mechanism that does not
have to be huge in my judgment, it will work. I think that will
work.
Senator Bumpers. Mr. Beyer, I want you to know that I want
to be accommodating.
Mr. Chairman, I will finish after this. I have taken too
long, but obviously this is a big issue with me and I can talk
about it for a long time. Let me just suggest that, if you
will, along the lines we are talking about--because nobody is
any more concerned--I have got more people at the end of the
lane than just about anybody in the country, and I do not want
those people to be penalized as a result of this legislation.
If this legislation does not work for everybody, then it is no
good.
I believe strongly it will, but there is one other thing I
might just say by way of digression, and that is: I try every
time I speak to groups to disabuse them of the notion that they
are going to have a 20-percent utility cut almost immediately.
The truth of the matter is the benefits of competition are down
the road. It is going to take a little while to flesh this
whole thing out. Stranded costs are going to have to be taken
care of. In the long run, I think it is the right thing for us
to do.
I am concerned as much about the REA as I am anything else.
I wish I could dampen their opposition to this bill. I
understand they have done their own thing for a long time, and
I can understand that. If you would, just assume that I have
asked you this question to be responded to in writing and
include in your answer some of those figures you have said that
you have. Because as I say, it seems to me that as long as the
co-ops own the distribution lines and they get their stranded
costs, there really should not be much left to recover in order
to service the guy at the end of the lane. That is sort of the
point I am trying to make.
Mr. Chairman, thank you very much.
Rural Housing Programs
Senator Cochran. Thank you very much, Senator.
In the budget request for housing, there are proposals to
increase funding for some of the housing programs and there is
also a proposal for some legislative changes, one of which
would require tenants to pay a monthly minimum rent to cover
costs of the Rural Housing Service finance programs.
Specifically, though, there are requests to decrease funds for
a number of these housing programs: Section 515 multifamily
housing programs, the Direct Housing Repair Loan Program, the
Rural Housing Preservation Grant Program.
Multifamily Housing
In a meeting I recently had with the Inspector General for
the Department of Agriculture, he told me that there were
serious problems of fraud and waste and abuse in some of these
programs. He specifically mentioned the 515 program. Is the
Department cooperating with the Inspector General to try to get
to the bottom of some of these problems, and is that why you
are requesting decreased funding for some of these programs?
Ms. Thompson. Well, in a moment I would like to defer to
Jan to talk about some of the specifics of our housing
programs. We are more than cooperating with the Office of
Inspector General. We are working as a partner with the Office
of the Inspector General in particular to address the issue of
equity skimming among 515 multifamily housing borrowers, and
feel very strongly that this is an important program that for
the most part is working well to serve some of the lowest
income individuals and families in rural America.
There are a few borrowers who are simply not adhering to
the rules and are taking advantage of the program, and more
significantly taking advantage of the people who live in the
facilities and are to be the ultimate beneficiary of the
programs.
With regard to some of the lower requests, some of the
decisions are made simply because we have to make some tough
fiscal decisions that if we are serious about balancing the
budget, and we are serious as I know you are, we just have to
make some tough choices. That explains part of it. Jan Shadburn
can answer some of the more specific questions regarding the
specific programs that you have referenced.
Senator Cochran. Thank you.
Mr. Shadburn. Yes; Mr. Chairman, we have initiated several
administrative changes over the last couple of years to
strengthen the 515 program. We have also initiated the reforms
that the Appropriations Committee enacted, and we have those in
place.
We feel very comfortable with the steps that have been
taken to strengthen the program over the last couple of years,
as well as initiating this OIG/USDA partnership to look at
incidents of fraud, waste, and abuse. We have been working with
the 12 States on the reforms that we have enacted with the OIG,
and looking at creating a model that identifies the potential
for fraud, waste, and abuse. Obviously no one is more
interested in the future integrity of the 515 program than the
Under Secretary and myself. We want to make sure that we do
prevent fraud, waste, and abuse, as well as making sure that we
continue to provide safe, sanitary, and affordable living
conditions for our tenants.
Alternative Agricultural Research and Commercialization
Senator Cochran. The AARC program, as I understand it, is
under a legislative mandate to phase out its loan programs into
a totally private ownership situation. Could you tell us, Mr.
Armstrong, what the timetable is for this phasing out or
sunsetting of the program and whether or not you are prepared
to meet those dates? Help us understand what the funding needs
are going to be in view of the legislative timetable.
Mr. Armstrong. Thank you, Mr. Chairman. Before I answer
your question, I want to take a second and introduce Mr. Jeff
Gain, the chairman of our board. As you know, AARCC is run by a
largely private sector board of directors, and Mr. Gain serves
as our chairman. He is my boss and I thought it would be nice
to introduce him.
In answer to your question, Senator, in the 1996 farm bill
the mandate was that by the year 2001 we would present a plan
to privatize. The actual privatization date was not set, but
the plan is to be submitted by 2001. We are ahead of that date
in terms of our preparation of the plan.
At the moment, we are working through a number of scenarios
that we would identify as likely endpoints for AARCC when we do
privatize. Would we become a small business investment
corporation? Would we put it up for sale in private markets?
Would we become a government-sponsored enterprise? Those
decisions are being worked through by the board after they
identify what they think makes the best economic sense, then we
will take it to the secretary and then bring it to the
Congress.
Now, in preparation for all of this, you know, AARCC has
done a business plan where we have projected out our repayment
schedule over the next 5 or 6 years. In fiscal year 1998, we
project $300,000 in repayments. We are right on target for
that. In fiscal year 1999, we are projecting we will recover
about $1.7 million. If some of the notes--and which I feel
certain they will--the repayment agreements that we have in
place are paid off on time, we will be right on target for
that.
Now to get to the question of the appropriations to meet
this repayment schedule, in determining the business plan we
laid out appropriations through 2001. In fiscal year 1997, we
actually fell short. The number that we placed in our business
plan was $10 million. We received $7 million, but we still have
been able through our investment strategy to recover the
$300,000 in fiscal year 1998 that we were projecting would be
derived from that fiscal year 1997 investment.
My point is that the $10 million that is being requested in
this year's appropriation, although it is $2 million less than
what we had in our business plan, and the business plan was put
together 3 years ago, it is less than what was in the business
plan. We feel we can still track with the repayment schedule,
and that is really the key to making sure that we are
financially sound to privatize.
Senator Cochran. What would be the projected outyear
appropriations? Do you have those in your timetable? Will the
$10 million level be funded for the balance until you get to
2001?
Mr. Armstrong. No, sir; not for the balance. Actually, we
increased it in the business plan. Now that is strictly AARCC's
Board of Directors' business plan, not anything to do with the
administration's budget. In the business plan, we had projected
$15 million for the next 3 years and then dropped it back down
to $12 million for the final 2 years of the business plan.
Senator Cochran. OK. Will the schedule for repayments
continue to go up over that period of time in your view or in
the business plan? What is contemplated with respect to
repayments?
Mr. Armstrong. In the business plan repayments, Mr.
Chairman, as I said $300,000 is anticipated for fiscal year
1998 and we are at--oh, already here at the first of March we
are at $248,500, I think, is the actual figure. I am very
confident by the end of the fiscal year we will have $300,000;
next fiscal year is projected $1.7 million; in 2000 we are
projecting $3.801 million; $7.9 million; and in 2002 $12.2
million.
As we have structured these investments, you know, some of
them are based on a royalty repayment, some of them are
predicated on a company undergoing an IPO or an acquisition. We
have identified a core within the AARCC's portfolio that we
feel is going to carry the bulk of this repayment. That is very
typical of how the private sector venture capital fund works.
You know, there is a certain core that really carries the rest
of the investments forward.
In total, we are looking at, just through the year 2002 we
are looking at, almost $26 million anticipated in repayments. I
do not anticipate a problem in meeting that sum, particularly
given the strength of three or four of those core companies
that we have identified to focus on.
Senator Cochran. My impression of the program has been that
it has worked pretty well. I know that you have had an
opportunity to be, you know, more closely involved in assessing
the quality of the performance. What is your impression overall
of this program? Is it one that we should continue, or are we
just throwing money away by supporting AARCC?
Mr. Armstrong. Gosh, Senator Harkin is not here.
Senator Cochran. I know, he has left. [Laughter.]
Mr. Armstrong. Well, obviously, Senator, we do not feel
that this is good money after bad. The real crux of the
question, I think, is why isn't the public sector doing this?
If this is such a great idea, why isn't the private sector
doing this? I think the answer to that is the private sector is
doing it, but we have had to show the way; in a sense, jump off
the bridge.
The idea of investing in agriculture to many in the private
sector is simply an agricultural loans for major agriculture
projects like irrigation or for farming equipment or for seed
money to buy next year's seed or whatever. We are about value
added. We are about investing in companies that use these raw
materials from agriculture to process and manufacture things
that then are not nonfood and nonfeed.
Our long-term vision, our 100-year vision is really
transforming the economy to one based on biology they derive
from agriculture, as opposed to the one we have at present
based on geology, which uses petroleum. The advantages are
numerous. The environmental advantages, the life cycle cost
analysis of our products versus something made out of
petroleum, you cannot compete with our products because there
is hardly any disposal issue. The private sector is just now
beginning to realize that this biologically based economy makes
some long-term sense.
As I say, we have been the first to jump off the bridge in
a sense in these investments, but as Senator Harkin pointed out
we, we attract $3, $3.50, $4, private sector dollars, for every
$1 of public money that we put in. More and more we are getting
attention from the private sector. We are developing a network
based on environmental investment funds, based on socially
responsible investing funds.
We are beginning to understand what AARCC does and we are
using them as coinvestors. I think the momentum that the public
sector has started, the momentum needs to continue. I think the
2001, 2002, 2003 timeframe is appropriate, and then AARCC as an
investment portfolio sunsets out of the Federal Government.
The mission, however, the mission of this bio-based economy
of job creation in rural America, and that is really what it is
an engine of, if you use biologically-based materials because
of literally the physical chemistry in the molecules, you have
to process and manufacture close to the source. You cannot drag
it out of the ground like we can with petroleum and bring it
one-half way around the world and still make any money. As we
use these biological molecules, then the jobs are going to have
to go to where they are, and that is rural America.
Ms. Thompson. Mr. Chairman, could I also answer that?
Senator Cochran. Sure, Secretary Thompson.
Ms. Thompson. The private sector does not traditionally
invest in, whether it is venture capitalists or rural lenders,
they simply do not invest in the kinds of development
traditionally that we are investing in. There is tremendous
potential for the small firms that we are partnering with, but
there is even greater potential for the agricultural community
and rural communities in general because of the technological
development that comes as a result of these investments. I can
say without any reservation, without any question that this is
something that ought to be invested in, and that many rural
communities will benefit down the road in the long run as a
result of a very small investment.
Business and Industry Programs
Senator Cochran. Mr. Watkins, I know that you and I have
talked in the past about how can we do a more aggressive job
and more active job of identifying needs for loans and
technical assistance to develop business opportunities and job
opportunities in rural communities and small towns. For a
while, I was a little aggravated because it seemed like the
administration was interested in having meetings, not in making
loans. There were meetings being held all over the Mississippi
Delta and my State and other States. You were traveling around
and identifying folks to come talk about how we could help the
people who need help in these areas.
I think we have finally gotten around to seeing some money
loaned and some businesses started and expanded. I wondered if
you could give us a report on how you see the progress that has
been made? Has it been good? Tell me what you are doing with
the money that you are supposed to be awarding to these
borrowers in rural communities.
Mr. Watkins. Thank you very much, Mr. Chairman. You are
exactly correct. The business activity in rural America has
mushroomed beyond actually our own estimates. At the end of
fiscal year 1997 in our flagship, the Business and Industry
Loan Guarantee Program, we had more than $950 million in
applications and preapplications pending. We only had a fund of
about $815 million that we could finance business deals. We
project a very similar activity in fiscal years 1998 and 1999.
You know, we certainly cannot take credit. We can take
credit for having gone around the country, as you said, and
held all of those meetings, but a part of that was required in
order for us, one, to get the lenders back to the table to
participate in the program; and then, second, to alert
businessowners and entrepreneurs in rural America that this
opportunity existed for them to gain access to this kind of
financing. It has worked. You know, we are creating and saving
and maintaining a lot of jobs in rural America.
As the Under Secretary mentioned in her testimony, you
know, the poverty line and the wage rates and wage levels in
rural America are certainly behind urban America. We are still
financing traditional businesses that are located or that have
always been located in rural communities. We are beginning,
though, to focus on value added companies that are agriculture
related, but that are adding value to their agricultural
product.
We are also interested in trying to attract high-technology
companies, companies that are, in fact, affiliated with AARCC
that are invested in by AARCC. We see those in the future as
having some tremendous value and benefit to increasing the
standard of living to Americans in rural America. The picture
is very bright. You know, it is certainly not any brighter than
the picture for the U.S. economy.
Mississippi Delta
Senator Cochran. Do you have any statistics from the last
fiscal year about how many loans were made or how many jobs
were created so we will know what the money went for and what
was the result of the loans that were made, Madam Secretary?
Ms. Thompson. Yes; we do. We have funded projects totaling
just under $160 million in the Mississippi Delta, of which
about $75 million has been for water and waste disposal
projects and about $80 million for business loans and grants.
In fiscal year 1997, specifically we funded $65 million in
various types of projects.
In my testimony I made mention, in the written testimony I
made mention, of the lowest unemployment rate in the Kentucky
Highlands Empowerment Zone counties in recent history. You, of
course, are very familiar with the warehousing facility in the
zone in Mississippi and the number of jobs that are going to be
created there.
Senator Cochran. That would be good to have for the record,
particularly as to what has happened this year too.
Ms. Thompson. I will be happy to do that.
Senator Cochran. Thank you very much. Secretary Glickman
made a statement the other day which caught my attention. He
said that the Department had awarded $1.1 million in rural
business enterprise grants to 10 States to support business
development in economically depressed areas. We only
appropriated $40,000 for rural business enterprise grants, and
we were wondering where the money came from to make up the $1.1
million in grants. Do you think he misspoke, or do we have our
numbers confused in my notes?
Ms. Thompson. There was $41 million appropriated?
Senator Cochran. Well, my notes say $40,000. I am not sure
that is right, but anyway that is what my notes say.
Ms. Thompson. I am sure what we did----
Senator Cochran. For rural business enterprise grants.
Ms. Thompson. I am sure what we did was within the law
but----
Senator Cochran. Yes, sure, I am not suggesting--I am just
curious whether it was reprogrammed or whether maybe these were
not grants. Maybe they were grants plus some guaranteed loans
or something and he just grouped it all under one. It sounded
like the Government was giving away $1 billion in grants for
business subsidies, and we did not remember appropriating any
money, but just a little bit of money for it.
Ms. Thompson. I believe it was $41 million.
Research on Cooperatives
Senator Cochran. OK. Thank you. There is also another item
that I was going to ask about. There is an increase proposed in
your budget request of $2 million in funding for research on
cooperatives. I am curious to know what research is being done
by the Department on cooperatives and what the increased amount
of money will be used for? What will this extra funding
accomplish; what you are going to find out when you do this
research on cooperatives?
Ms. Thompson. We actually have not been doing much research
over the last several years, but because of opportunities that
are developing as a result of the 1996 farm bill and the
phasing out of the commodity program, there has been a
considerable increase in interest. We are very strong advocates
of the cooperative approach to business development and growth,
because it allows small producers in rural America to gain
advantage in the food chain in the marketing of their products,
either through value added or through a marketing cooperative.
There are also, we believe, some new kinds of opportunities
in existence out there, and that is what the research will be
used for, to determine in a very methodological way how, in a
methodologically sound way how, we might better provide
technical assistance and so forth to individuals and entities
that are interested in pursuing the cooperative approach to
business development and growth.
Senator Cochran. Will this money be used for additional
staff at the Department of Agriculture here in Washington to do
the research, or would you contract out the research activity
and actually pay some outside group to do the research? How do
you propose to spend the money?
Ms. Thompson. It will be, I believe, entirely through
contracting. As you know, we are downsizing at the Department
of Agriculture and don't expect that we will be adding new
positions, and also believe that the kinds of research that
need to be done can be done through contracting with
universities that are involved in cooperative research already.
Submitted Questions
Senator Cochran. We really do appreciate your assistance to
our committee by being here this morning and providing the
information that you have and by agreeing to respond to
questions for the record. We have some additional questions
that we will submit for the record so that we will fully
understand the requests and what the needs are for these funds,
and how the programs that we are funding are working, and
whether changes need to be made in them.
[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 business-cooperative service
Question. The budget includes $200 million for guaranteed loans
that will be directed to cooperative-owned businesses. How much demand
does the agency have for these loans?
Answer. Due to the fact that many cooperatives operate businesses
that are incorporated we cannot give you an accurate indication of
demand at this time from our automated management information system.
We are, however, in the process of surveying our field offices to
determine the demand. Results of that survey will be provided to your
office.
Question. In fiscal year 1998 and in the fiscal year 1999 budget
request, the Rural Cooperative Development program grants were
allocated $1.7 million. The National Cooperative Business Association
claims that there is a need for $5 million to fund grant requests. How
many grant requests does the agency have on hand and how many grants
will be funded with the $1.7 million appropriated?
Answer. In fiscal year 1997, the agency received 30 applications
for the Rural Cooperative Development Grant program. Those applicants
requested a total of $4.8 million. Eleven grants totaling $1.7 million
were awarded. Unsuccessful applicants, and any other eligible
applicants can apply for the fiscal year 1998 program which will be
announced in the spring of 1998. The number of grants to be funded with
the $1.7 million appropriation will not be determined until the
applications are received and scored.
intermediary re-lending program (irp)
Question. The fiscal year 1999 budget request proposes an increase
in the intermediary relending direct loan subsidy. The explanatory
notes says this increase is due to two factors--the cashflow model has
been changed and the new methodology for calculating the subsidy cost.
What is meant by ``the cashflow model has been changed?''
Answer. We found an error in the Cashflow model we had been using
and corrected it. The cash flow model was adding the two year grace
period to the term of the loan when calculating the amortization
schedule.
Question. What is the backlog for the Intermediary Re-lending
Program (IRP)?
Answer. As of March 10, 1998, there are 31 IRP projects pending for
a total of $25,650,000. The balance of remaining IRP fiscal year 1998
funds available, including the amounts earmarked for the Pacific
Northwest (PNW) and Empowerment Zones and Enterprise Communities (EZ/
EC) initiatives, is $18,990,506. For fiscal year 1997, the number of
loan requests unfunded at the end of the fiscal year, by State, was as
follows:
INTERMEDIARY RELENDING PROGRAM LOAN REQUESTS NOT FUNDED IN FISCAL YEAR
1997
------------------------------------------------------------------------
State Number Amount
------------------------------------------------------------------------
Alabama...................................... 1 $1,000,000
Alaska....................................... 1 750,000
Arkansas..................................... 1 1,000,000
California................................... 1 1,000,000
Hawaii....................................... 1 750,000
Idaho........................................ 4 3,150,000
Illinois..................................... 1 1,000,000
Kentucky..................................... 3 2,390,000
Louisiana.................................... 1 2,000,000
Michigan..................................... 1 600,000
Minnesota.................................... 2 1,500,000
Mississippi.................................. 1 2,000,000
Montana...................................... 2 200,000
North Carolina............................... 3 5,500,000
New Hampshire................................ 1 500,000
New York..................................... 2 1,200,000
Pennsylvania................................. 1 1,000,000
South Carolina............................... 1 1,000,000
Vermont...................................... 1 500,000
--------------------------
Total.................................. 29 27,040,000
------------------------------------------------------------------------
Question. What major changes have been made to this program?
Answer. The new regulation was published in the Federal Register
and became effective on February 6, 1998. The regulation for the
Intermediary Relending Program (IRP) is renumbered and completely
reorganized and rewritten for improved clarity. Major program changes
include the following:
--Definitions are provided for ``Agency IRP loan funds,'' ``IRP
revolving fund,'' and ``revolved funds.'' Each section of the
Regulation that imposes a requirement states whether that
particular requirement applies only to Agency IRP loan funds or
to everything in the IRP revolving fund (including revolved
funds). This will result in the reinstatement of some
requirements on loans made from revolved funds that had been
determined to be unenforceable under the previous Regulation.
--A new purpose statement is provided.
--The program is made available in the Republic of Palau, the
Federated States of Micronesia, and the Republic of the
Marshall Islands.
--Eligibility requirements are revised to provide that applicants
with any outstanding delinquent debt to the Federal Government
are not eligible.
--State Offices are authorized to accept and process applications
without the application having to go through the National
Office. State Directors may delegate IRP responsibility to
other offices under the State Director's jurisdiction provided
the staff has had adequate training. The National Office will
continue to allocate funds based on a quarterly national
ranking of priority scores.
--Eligible loan purposes have been expanded to include refinancing
(under certain conditions), management consultant fees,
educational institutions, commercial fishing, revolving lines
of credit (under certain conditions), and hotels, motels, and
other tourist and recreational facilities except golf courses,
race tracks, and gambling facilities.
--The definition of agriculture production is revised and exceptions
to the prohibition against loans for agriculture production are
eliminated.
--Security requirements are revised to provide that no assignments of
promissory notes or collateral documents will be obtained at
loan closing. The documents must, however, be assignable. The
Intermediary will agree to provide additional security or
documents later if requested to protect the Agency's interest.
--Guidelines are provided for rates and terms of loans to ultimate
recipients. All rates and terms must be within limits
established in the intermediary's work plan.
--Loan ceilings are revised to provide that, subject to certain
conditions, intermediaries may receive initial loans of up to
$2 million and subsequent loans of up to $1 million per year to
a total of up to $15 million.
--The ceiling on the size of loans to ultimate recipients is raised
to $250,000. However, no more than 25 percent of the
intermediary's portfolio may be used for loans of over
$150,000.
--A requirement is added for the intermediary to establish a reserve
for bad debts.
--Loan disbursement procedures are revised to allow intermediaries to
draw up to 25 percent of their loan at loan closing.
--The contents of a complete application and work plan are revised to
eliminate some unnecessary items; provide more detail on what
should be covered regarding relending plans; add certifications
regarding debarment, Federal debt collection policies, and
lobbying; provide goals, strategies, and anticipated outcomes;
provide information on technical assistance available to
ultimate recipients; and provide for streamlined applications
for subsequent loans.
--The priority scoring system is revised by reducing the number of
points for other funds, adjusting the threshold for points
based on service area income compared to the poverty line,
adding a category of points based on service area income
compared to statewide income levels, adding a category of
points for service to under represented groups, and providing
additional guidance regarding justification for Administrative
points.
--The frequency of required reports from intermediaries is adjusted
to quarterly during the first year and until all Agency funds
have been advanced, then semiannually unless there are
servicing problems.
Question. Please provide information on the performance of the IRP
to date, by fiscal year.
Answer. The following chart provides the performance of the IRP to
date by fiscal year.
INTERMEDIARY RELENDING PROGRAM--ALLOCATIONS/LOANS/OBLIGATIONS SINCE PROGRAM INCEPTION
----------------------------------------------------------------------------------------------------------------
Number of
jobs
Number of Amount Average loan created/
Fiscal year Allocation loans obligated amount saved over
life of
loan \2\
----------------------------------------------------------------------------------------------------------------
1988 \1\................................ $14,000,000 9 $13,990,000 $1,544,444 11,890
1989.................................... 14,000,000 13 13,625,980 1,048,152 11,580
1990.................................... 19,135,000 15 19,050,000 1,270,000 16,190
1991.................................... 32,500,000 28 32,499,540 1,160,698 27,625
1992.................................... 32,500,000 35 32,500,000 928,571 27,625
1993.................................... 32,500,000 42 32,500,000 773,809 27,625
1994.................................... 77,365,918 71 77,365,918 1,089,661 65,760
1995.................................... 85,153,646 81 85,153,646 1,051,279 72,380
1996.................................... 37,638,655 47 37,638,655 800,822 31,990
1997.................................... 37,155,765 53 37,155,765 701,052 31,580
-----------------------------------------------------------------------
Totals............................ 381,948,984 394 381,479,504 968,222 324,245
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 1998 was the first year the new program was implemented as a result of the 1985 Farm Bill
authority.
\2\ Historically, other funds have been leveraged to assist borrowers at the rate of $3.75 for every dollar of
IRP assistance. Over the 30-year life of an IRP loan, for each $4,000 of initial IRP program funding, a total
of 3.4 jobs will be created/saved.
As of December 31, 1997, no loans are delinquent under the current IRP Program which was authorized by the 1985
Farm Bill. However, there are delinquent loans under the old Rural Development Loan Fund (RDLF) Program that
were inherited from HHS, which makes the total delinquency rate below 1 percent.
rural electric
The fiscal year 1999 budget proposal signals a shift in Rural
Utilities Service (RUS) programs from the highly subsidized direct 5
percent and municipal rate electric loans to direct Treasury rate
electric loans at an interest rate that is tied to the Government's
cost of money. This proposal would result in an additional $400 million
in available loans to consumers. This proposal would require
legislation, I understand.
Question. Instead of requesting a new program, the Administration
can propose to simply increase the request for direct Federal Financing
Bank (FFB) loans. Why did the you not request an increase for direct
FFB loans?
Answer. The proposed Treasury rate program would differ somewhat
from the FFB program. First, the FFB program is a loan guarantee
program; that is, RUS guarantees loans made by FFB. The Treasury rate
program would be a direct loan program in which the borrower deals with
only one federal agency. RUS would administer all phases of the
program, as it does with the hardship and municipal rate programs. The
Treasury rate program would, therefore, be a more customer friendly
financing source for RUS borrowers.
The Treasury rate program would also be a less costly alternative
to RUS borrowers. FFB interest rates reflect Treasury's cost of money
plus one-eighth of one percent (0.125 percent). Under the proposed RUS
Treasury rate program, this one-eighth of one percent would not be
added thereby reducing the interest rates to RUS borrowers.
Question. Why can't you use these FFB funds, along with the
transmission and generation loans? Why are distribution borrowers
reluctant to use the FFB program?
Answer. The Treasury rate program is intended to supplement, not
replace, the FFB program. FFB offers a complex range of financing
options that many borrowers, especially smaller distribution borrowers,
find confusing. In addition, FFB's former reluctance to allow borrowers
to refinance high interest loans has disillusioned some borrowers.
Although current law now provides for refinancing of FFB loans, many
borrowers believe that dealing with FFB represents an unnecessary
complication. In contrast, the Treasury rate program would offer
borrowers a simple, streamlined financial tool. By offering a wider
range of financing options, the RUS program becomes more flexible and
more responsive to the constantly evolving electric utility industry.
Question. Are any costs associated with this legislation in budget
authority or outlays?
Answer. The cost associated with this legislation is $840,000 in
budget authority to support a lending level of $400 million. The
subsidy rate for this program would be very low, only 0.21 percent.
Question. Should the authorizing committee decide not to pass this
proposed legislation, what would the fiscal year 1999 estimate be to
meet the current demand for direct electric loans?
Answer. The estimates to meet the current demand for direct
electric loans are $7.172 million in budget authority to support a
lending level of $55 million for hardship rate loans, and $56.940
million in budget authority to support a lending level of $650 million
for municipal rate loans.
Question. How many loans will be supported with a loan level of
$400 million?
Answer. Approximately 80 Treasury rate loans would be supported by
a loan level of $400 million.
A provision in the Balanced Budget Act of 1997 states that the
surcharge on the Treasury's Federal Financing Bank (FFB) loans is to be
deposited in the RUS account held by the Treasury and used to finance
the cost of the guaranteed loans for electricity and
telecommunications.
Question. Why is the Administration proposing to implement this in
fiscal year 1999 when you had the authority to do it fiscal year 1997?
Answer. Legal issues arose concerning the appropriate
implementation of the enacting legislation. The Administration is in
the process of resolving these issues for implementation in fiscal year
1999.
Question. In a GAO report it was suggested that RUS should use a
repayment rate of no less than 100 percent to control the vulnerability
to losses on guaranteed loans. What percentage of guarantee does the
RUS use for these loans? Why?
Answer. A report entitled ``Rural Utilities Service: Opportunities
to Operate Electricity and Telecommunications Programs More
Effectively'' issued by GAO in January 1998 notes, on pages 2 and 17-
18, that RUS guarantees 100 percent of FFB loans, and that some rural
development programs reduce their exposure risk by guaranteeing less
than 100 percent of a loan. RUS' risk would not, however, be reduced by
lowering the guarantee percentage. As the report goes on to note, on
page 2, since FFB is a part of the Treasury Department, the ``risk to
the federal government as a whole would not be reduced if the FFB
continues to be the sole source of loan funds.''
Traditional lending practice may suggest that a loan should be
guaranteed for less than 100 percent to help ensure that the lender is
diligent in its loan processing and servicing because a portion of its
own funds would be at risk. In the case of FFB loans, however, RUS
performs virtually all processing and servicing functions, while FFB
establishes the terms and conditions of the loan. Reducing the amount
of the guarantee would, therefore, have no practical effect on FFB's
vigilance.
The subsidy rates for fiscal year 1999 seem to be higher than for
fiscal year 1998, yet interest rates decreased.
Question. Can you explain the reasons for this increase?
Answer. Most of the increase in subsidy rates for electric and
telecommunications programs can be attributed to a change in the
methodology used in calculating the subsidy rate. The change is the
direct result of the Federal Credit Reform Act of 1990 being amended by
the Balanced Budget Act of 1997. The 1997 Act requires that the
Treasury discount rate utilized to calculate the subsidy be the same
for all cash flows, regardless of whether the loan disbursement is made
in the budget year or in subsequent years. In the past, the Treasury
discount rate utilized in calculating the subsidy rate could be
different, based upon Office of Management and Budget (OMB) Economic
assumptions, for each loan disbursement year.
While interest rates have recently decreased, the interest rate
used in this year's OMB Economic Assumptions is not lower than that
used last year. The OMB Economic Assumptions used to calculate fiscal
year 1999 subsidy rates were based upon a Treasury discount rate of
6.11 percent for 20-year plus loans regardless of when the loans were
disbursed. The fiscal year 1998 subsidy rates were based upon a
Treasury discount rates of 6.1 percent for first year disbursements,
5.76 percent for second year disbursements, 5.48 for third year
disbursements, and 5.24 percent for fifth year and all later
disbursements for 20-year plus loans.
Question. How does this new calculation affect the program level
and loan subsidy for the electric and telecommunications programs?
Answer. This change in the calculation methodology has a greater
affect on loan programs that have low disbursement rates in the first
year and/or slower annual disbursement patterns. The electric and
telecommunications programs experience both; therefore, the impact is
more clearly evident and is less likely to be offset by other technical
assumptions.
rural telecommunications
The Economic Research Service (ERS) is requesting an increase of
$200,000 for an interagency research activity with USDA's Rural
Utilities Service (RUS) and the Department of Energy (DOE) to expand
Research, Education and Economic's (REE) capacity to assess the
potential impacts of electric utility deregulation.
Question. Will this project be completed in fiscal year 1999, or do
you anticipate funding requests in future fiscal years?
Answer. We expect that ERS will be asked to extend its research on
issues associated with electric utility deregulation for one additional
fiscal year beyond 1999.
Question. Will RUS and DOE fund any portion of the research
project? If so, how much is being provided by each agency? If not, why?
Answer. DOE is not funding any portion of the research project
beyond its commitment to provide a series of model runs, using its
Policy Office Energy Modeling System (POEMS) computer model, to provide
input into the analytic framework being developed by ERS. RUS is
currently exploring options that may allow RUS to contribute
financially to the project.
Question. What will be the role of each agency in this project?
Answer. DOE has committed to provide ERS with the output of several
model runs of its POEMS model using ERS developed scenario assumptions.
DOE has not yet provided the requested model runs because it is still
calibrating its POEMS model. RUS has made operational and trade area
data on rural electric cooperatives available to ERS.
The fiscal year 1999 budget request cuts the Rural Utilities
Service (RUS) 5 percent hardship telecommunications loan program from
$75 million to $50 million. In the President's budget request for
fiscal year 1998, the program was cut from $75 million to $40 million.
The other loan programs were left intact.
Question. How much total backlog in loan requests exists for this
program?
Answer. As of March 1, 1998, hardship loans approved totaled $65.1
million, with an additional $61.5 million in applications on hand. With
an authorized lending level in fiscal year 1998 of $75 million, we
estimate that, based upon the number and amount of applications
currently on hand and anticipated by the end of the fiscal year, the
hardship program will have a backlog--or excess demand over available
funding--of $79 million at the end of fiscal year 1998.
rural telephone
The fiscal year 1999 President's budget request also proposes that
the Rural Telephone Bank (RTB) become a performance-based organization
``to establish its financial and operational independence prior to its
being privatized within ten years.''
Question. The Administration has proposed in the last two fiscal
years to privatize the RTB. Why has the Administration changed its
position and now proposed to make the RTB a performance-based
organization before it is privatized?
Answer. We became concerned with the Bank's ability to make an
immediate transition to a private entity given deregulation of the
telecommunications industry. We chose a more gradual approach with
privatization to occur within ten years. During this period we expect
full retirement of the government's investment of just under $600
million, if the limit on retirement of this debt is removed by the
Congress.
Question. Does this require legislation?
Answer. Establishing the Bank as a Private Base Organization (PBO)
would require legislation. RUS would craft legislation to fit the
Bank's needs. Once established, the Bank could pursue privatization
efforts while still under the U.S. Department of Agriculture (USDA)
umbrella. As the proposed budget language stated, the Bank would hire
its own Chief Executive Officer (CEO) and Chief Financial Officer and
begin to take independent responsibility for its operations, acting
more like a private corporation than a government agency. As a PBO, the
Bank would ``enjoy'' a less restrictive operating environment than its
current organizational structure provides. A primary reason for
establishing a PBO is to foster the more efficient operation of a
government agency performing a public purpose. One of the key
qualifications to becoming a PBO is the ability to generate cash flow.
The PBO status is a way for the government to increase operating
efficiency by allowing certain exemptions from government rules; yet at
the same time, maintain control over the function the agency is
performing. For most government agencies, becoming a PBO is a permanent
status. However, for the Bank, it is a stepping stone to privatization.
At the direction of the CEO, the Bank would focus its efforts on
becoming a fully private entity within ten years while fulfilling its
mission of providing financing for rural telecommunications
infrastructure. PBO status will heighten the goal of privatization and
provide a platform for the Bank to structure itself for complete
privatization.
Question. Does this proposal result in budgetary savings? If yes,
how much?
Answer. If the Bank were able to use its cash reserves in the
liquidating account to pay administrative expenses and cover loan
subsidies, those amounts would not require appropriations as they do
now. Federal Credit Reform currently limits the use of those funds in
the liquidating account to meet advances on loans obligated prior to
fiscal year 1992 and to pay expenses associated with those loans, i.e.,
debt service to Treasury, dividends to shareholders, and retirement of
government stock.
Question. Will the government's Class A stock still be repaid?
Answer. To transition the Bank from a government agency/PBO to a
fully privatized entity within ten years, as the proposed budget
states, all of the Class A stock of the Bank must be retired.
Funding for the RTB's loan subsidies and administrative expenses
are proposed to be paid for by transferring funds from unobligated
balances in the bank's liquidating account.
Question. Would this proposal not affect the bank's solvency and
ability to privatize?
Answer. As of December 31, 1997, the liquidating fund balance
totaled $493 million. Principal outstanding on loans in the liquidating
account totals more than $1.2 billion while Treasury debt associated
with those loans--excluding A stock--totals only $316 million. Last
year, the budget authority required for a $175 million loan program was
$3.7 million. The use of liquidating account funds for administrative
expenses and loan subsidies would only decrease slightly, and
temporarily, the amount of funds available for retirement of Class A
stock and other purposes. The repayment of principal on loans in the
liquidating account and associated interest on those loans in future
years will enable the Bank to generate sufficient capital to privatize
on its own.
Question. How were subsidy costs of loans and administration
handled last year? Does this proposal save money?
Answer. The funds were appropriated in fiscal year 1998. The
proposal is to use funds in the liquidating account in fiscal year
1999.
rural housing service
The fiscal year 1999 budget request proposes an increase of $42
million for rural rental assistance, from $541 million to $583 million.
Question. What is the breakdown of funding for rural rental
assistance for renewal of contracts, new construction, and for repair
and rehabilitation?
Answer. The following chart provides a breakdown for the projected
use of rental assistance in fiscal year 1999:
RENTAL ASSISTANCE CHART
----------------------------------------------------------------------------------------------------------------
Existing Number
Type of unit demand in requested in Total funds
units units requested
----------------------------------------------------------------------------------------------------------------
Renewals........................................................ 37,516 37,516 $551,898,000
New construction:
515......................................................... 1,667 1,003 12,868,000
Farm labor.................................................. 658 658 8,442,000
Servicing....................................................... 100,000 .............. ..............
Rehab........................................................... 326 292 4,289,000
Debt forgiveness................................................ 401 401 5,900,000
-----------------------------------------------
Total..................................................... 140,568 39,870 583,397,000
----------------------------------------------------------------------------------------------------------------
Note.--This chart assumes that all renewals and Farm Labor new construction will be funded. Funding for Section
515 new construction and rehabilitation units will be limited. At this time, we estimate that the $17 million
available will be split 75 percent towards new construction and 25 percent towards rehabilitation needs.
Question. How does the difference in the subsidy rate and the
separate line items for single-family credit sales of acquired property
and multi-family credit sales of acquired property affect these loans?
Does this save money in fiscal year 1999 and other future fiscal years?
Answer. Our proposal to have separate line items for single family
and multi-family is designed to make the credit sale programs easier to
administer. Combining these two programs with different subsidy rates
and providing a single cohort is not typically done. With more closely
related program, this would be feasible. Operating this program though
two accounts will better serve the Agency in addressing portfolio
management.
Question. The fiscal year 1999 budget request proposes a decrease
of $1.8 million in rural housing preservation grants which will support
2,500 units. At the fiscal year 1998 appropriated level, how many units
are supported? Why does the Administration propose to cut these grants
which are used for elderly housing?
Answer. For fiscal year 1998, the Housing Preservation Grant (RPG)
Program was appropriated $10,820,000. The Agency estimates that 2,500
units will be repaired/rehabilitated.
The Administration believes the fiscal year 1999 request balances
the high demand for all the housing programs while striving to maintain
financial restraint necessary to balance the budget.
Question. The fiscal year 1999 budget request proposes legislation
to allow Section 502 single-family housing direct loan borrowers to
graduate to guarantee financing, and then ultimately to strictly
conventional private financing. The projected subsidy rate for the
program in fiscal year 1999 is negative, so no additional subsidy
budget authority is required. However, would this program cost in out
years? If so, what subsidy appropriations are projected to be required?
Answer. We do not anticipate future budget authority costs from
this proposed legislation. Section 502 Direct borrowers who use the
Guaranteed Rural Housing loan program as a vehicle for refinancing will
generally be seasoned home owners with adequate loan repayment
histories. We would expect defaults for these established borrowers to
be minimal.
rural community advancement program
The 1996 FAIR Act authorizes the Rural Community Advancement
Program (RCAP) which has 5 funding streams that include a rural
communities facilities account, rural utilities account, rural
business--cooperative account and the federally recognized Indian tribe
account.
Question. Do Federally recognized Indian tribes not already qualify
for these programs under the RCAP? How would the 3 percent reserve
account be administered?
Answer. Federally recognized Indian tribes do qualify for these
programs. The reserve account would be administered by the National
Office. Tribes would submit applications through the State Offices and,
following review for eligibility, the applications would be submitted
to Washington for decisions.
Question. How much funding has been received by Indian tribes
during the past three fiscal years? What percentage of the total RCAP
program dollars will the set-aside receive for each fiscal year?
Answer. Over the past three fiscal years Indian tribes have
received $14,138,798 in Water and Waste loans, $13,753,307 in Water and
Waste grants, $11,757,806 in Business and Industry guaranteed loans,
$1,313,860 in Rural Business Enterprise grants, and $23,381,730 in
Community Facilities loans, totaling $64,345,501, which is roughly
equivalent to 3 percent of the RCAP budget authority over the same
period.
Question. How much funding have the Mississippi Choctaw Indians
received in the past two fiscal years?
Answer. During the past two fiscal years the Mississippi Choctaw
Indians have not received any funding.
Question. Is there a demand and/or need from the Rural Development
State Directors to transfer funds between the different funding
streams, rural community facilities, rural utilities, and rural
business and cooperative service? If so, between which accounts would
they most want to transfer?
Answer. There is a need by the State Directors to transfer funds
between the different funding streams to manage their program monies
more efficiently and to address more appropriately the unique and
changing needs in each state. It is not expected that transfers of
funds would be used frequently, but the ability to do so would be very
useful when it is needed in a state. The amounts of funds transferred,
and the direction of the transfers, would vary from year to year
depending on the needs in the states.
The Administration did not propose in the fiscal year 1999 budget
request to earmark funding for Rural Alaskan Villages for water and
waste grants. In fiscal year 1998, the Committee earmarked $15 million
for direct water and waste loans for Alaska. The fiscal year 1999
budget also proposes a decrease of $7.2 million for water and waste
grants.
Question. Should the Committee again earmark funding for direct
water and waste loans for the Rural Alaskan Villages, would the funding
for water and waste grants need to be increased rather than decreased
as the fiscal year 1999 budget proposes to supplement loans? If so, how
much?
Answer. In the event that the Committee earmarked funding for
direct water and waste loans, funding for water and waste grants would
not need to be increased.
Question. How much funding would Alaska receive if no funds are
earmarked? Why did the Administration propose not to earmark this
funding for Alaska?
Answer. If no funds were earmarked Alaska would receive a state
allocation of about $1.8 million in direct water and waste loan funds
and approximately $1 million in grants. The policy of the
Administration is to eliminate all earmarks that do not have a specific
statute requiring an earmark in the appropriation language or those
that are not included in specific policy initiatives.
rural development--lower mississippi delta development center, inc.
The Department has urged the Lower Mississippi Delta Development
Center (LMDDC) to become involved with the Enterprise Zone/Empowerment
Community program and to become partners with these Federally approved
communities of the Delta to work on a variety of regional efforts in
order to attract non-government funds.
USDA has provided LMDDC with funds for three separate fiscal years
and this has allowed the Center to stay open and to work on a variety
of agricultural and rural development activities. This money has been
given to the Center at the end of the fiscal year, once USDA has
evaluated and allocated its funds. Because of limited funds, the Center
wants assurance of this continued funding and is asking that report
language be included in the fiscal year 1999 committee report to
instruct USDA to include approximately $200,000 for the Center.
Question. How much money has USDA provided to the Center in past
fiscal years? Was this grant money?
Answer. USDA has provided approximately $400,000 since 1994 to the
Center for the purposes of updating the socio-economic characteristic
data contained in the original report on the Lower Mississippi Delta,
to develop a data base of development success stories throughout the
Delta that could be utilized by other communities, and to retain staff
of the Center to permit them to continue to work on behalf of the
residents of the Delta area. The funds were not grant money, but rather
salaries and expense monies and were provided to the Center through a
cooperative agreement.
Question. How did the Center use this funding?
Answer. The bulk of the funding was used to update the socio-
economic data that was contained in the original report on the Delta
which primarily reflected the 1980 Census information.
Question. What sort of work is USDA currently doing with the
Center? What does it plan to do in the future?
Answer. The most important role of the Federal government is to
help create an environment that attracts private investment and creates
jobs. This is what we are attempting to accomplish with the Empowerment
Zones; providing tax incentives and infrastructure investment as well
as directed job training, education and counseling and a variety of
other services through a well orchestrated plan with specific
objectives directed by local residents. We have also recently been
working with the Lower Mississippi Delta Center and the EZ/EC
designated areas to get them to work together to improve the region. A
partnership agreement will be signed in March to effect this
cooperation.
Question. How much funding will the Center need to help with these
projects?
Answer. The Center has indicated that it may need as much as
$200,000 over the next two years.
Question. Has the agency included funding for the Center in the
fiscal year 1999 budget request? If not, why?
Answer. The budget constraints under which we are working do not
provide the flexibility to fund activities such as the Center's
operations and therefore no funds were requested.
salaries and expenses
Question. In what areas of Rural Development does the decrease of
150 staff years occur in the fiscal year 1999 budget request, and how
will those reductions be accomplished?
Answer. The reductions occur throughout the Mission Area; 80 in the
Rural Housing Service; 49 in the Rural Utilities Service; and 24 in the
Rural Business-Cooperative Service. The reductions will primarily come
from administrative areas rather than program areas. We anticipate that
administrative convergence will provide the reductions.
Question. The President's request for Salaries and Expenses for
fiscal year 1999 is significantly higher than the level enacted for
fiscal year 1998 which was close to the fiscal year 1997 level. With
streamlining and the conversion of loans to a new servicing system, one
would assume the administrative expenses should be decreasing. Why is
there such a significant increase in cost?
Answer. The request for Salaries and Expenses for Rural
Development, $527 million, is considerably higher than the level
requested and appropriated for fiscal year 1998. There are several
reasons for this. First, because of all of the organizational changes
that have occurred within Rural Development over the past few years, we
have lost a disproportional share of the lower level employees, even
though we have used every means available, to keep them. This has
caused our average salary costs to increase significantly and while
this is a situation I would not have preferred it is something that has
to be dealt with because the alternative is no better. If sufficient
funding is not available for salaries and expenses then it is necessary
to execute a reduction-in-force (RIF) to remain within available
funding. This action would only exacerbate the problem because a RIF
will, in-turn, eliminate additional lower level employees driving the
average salary cost even higher. The vast majority of these staff are
in our field offices and are primarily responsible for delivering the
programs. We need to keep them employed.
Another reason is the need for investment in Information
Technology. In fiscal year 1998, we decided to defer investment in
information systems and training in order to maintain our employment
level. We cannot afford to make the same decision in fiscal year 1999.
Information systems and training are means through which we can realize
additional efficiencies in future years and we need to maintain our
investments in these areas. Converging the administrative systems of
the three county based organizations into one and completing the move
into the service center which will house the three mission areas can be
accomplished if we have a common computing environment. Further, in
order to continue to function, we must maintain our legacy systems
while we are building new systems to replace them and we need to
complete the Year 2000 assessments and corrections where necessary.
The Department of Agriculture is in the midst of converging the
administrative system of the three county-based organizations into one
system.
Question. What is the status of the administrative convergence? How
will this affect Rural Development?
Answer. The Secretary announced his decision on March 16, 1998 to
proceed with administrative convergence, implementing the plan
developed by the three Under Secretaries. A manager of the planning
effort has been selected and the planning will commence shortly. The
Secretary is still committed to having a new administrative structure
in place on October 1, 1998.
Question. Are there any savings in the fiscal year 1999 budget
related to administrative convergence?
Answer. There are no savings reflected in the fiscal year 1999
budget attributed to administrative convergence but, from the
perspective of Rural Development, consolidation of the administrative
functions at headquarters and in the field will provide the flexibility
needed to ensure an effective program delivery system remains in place.
Question. Why does the fiscal year 1999 budget request propose a
significant increase in the Rural Housing Services' salaries and
expenses account amounting to $15.2 million?
Answer. The Rural Housing Service has by far the largest staff of
the three agencies, so pay costs will necessarily be large. In
addition, the account includes the management initiatives for the
mission area. For instance, $8.5 million of the total covers
information technology needs, including the $1.5 million mentioned
later regarding Rural Utilities service information technology. The
balance of the increase is salary related.
Question. The fiscal year 1999 budget request proposes an increase
of $1.5 million for the Rural Utilities Services' information
technology. This increase will be used for software development for the
century date change, among other things. Will this funding proposed in
the fiscal year 1999 budget for the computer system century date change
complete these efforts?
Answer. Yes. The funding proposed in the fiscal year 1999 budget
will complete Rural Development's Year 2000 conversion efforts.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. Rural Development established one strategic plan which
supports the three agencies in the mission area. The Rural Development
Strategic Plan contains a mission statement which encompasses the role
of the entire mission area and three Goals, one for each agency. It
also contains four broad Management Initiatives which support the
entire mission area. By having a Goal for each agency, alignment with
the existing budget structure, which is agency-based, is achieved. The
Annual Performance Plan for the mission area consists of a Purpose
Statement for the mission area, an Annual Performance Plan for the
Management Initiatives, and separate Annual Performance Plans for each
agency. The separate Annual Performance Plans for each agency
facilitate the reconciliation of the Plan with the budget request. The
Goals in the agency Annual Performance Plans, which align with the
Objectives in the strategic plan, are supported by one or more
quantifiable performance measures to be achieved during the fiscal
year.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. Since the Goals and funding are by agency, and the
performance measures are aligned to the Goals, there were no particular
difficulties encountered. The primary challenge was determining how to
aggregate the numerous programs included in the budget into reasonable
Program Activities in the Annual Performance Plan. Many of the programs
are used jointly when providing assistance, for example, grant programs
are often combined with a loan to assist a community. Attempting to
develop separate performance goals for both the grant and loan programs
would be tedious and generally meaningless. We have instead aggregated
performance goals along major program activities, i.e., single family
housing, multi-family housing, water and waste, telecommunications,
etc.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. As indicated above, we do not have performance measures for
each account since they are often used together to finance a project.
We have aggregated the accounts into various program activities which
result in a more meaningful expression of the expected impact on the
public.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. Agency performance plans focus on the major programs that
account for, by far, the bulk of the mission area's funding.
Performance measures are not provided for all of the small programs and
activities. Further, in some cases performance measures reflect
achievements in similar programs and programs that are often used
concurrently (i.e. certain loans and grants). We are continually
refining the process as we learn from our experiences. Measures will
change as we determine what best indicates the outcomes of programs and
what is most useful for our management and monitoring purposes. For
instance, in future submissions guaranteed and direct single family
housing measures will probably be desegregated to describe more
effectively our results in improving housing in rural areas.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. Rural Development does not propose any changes to the
account structure for fiscal year 2000.
Question. How were performance measures chosen?
Answer. Performance measures in the five-year strategic plan were
developed over time through a series of drafting sessions involving
major stakeholders and were then refined through reviews by mission
area and other Departmental officials. Performance measures in the
annual plans are based on measures in the long range plan but are
limited to data that are currently available or will likely be
available in fiscal year 1999.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. Existing data collection systems in place have been able to
produce most of the information necessary to address performance
measures which have been proposed. The mission area is considering
changes to the data collection systems to allow the use of performance
measures for which data is not currently available, provided the data
is needed for purposes other than just reporting performance under the
Government Performance and Results Act.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. Reliable data should be available for the performance
measures included in the fiscal year 1999 Annual Performance Plan, for
which the first performance report is due in March 2000.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. Performance goals reflecting the themes from Rural
Development's Strategic Plan would be the most useful to use to track
results. These themes include leveraging, partnering, and directing
resources to the weakest communities, and are consistent with the Rural
Community Advancement Program (RCAP). For most programs we have
developed a handful of measures that, together, describe the results of
the program activity. Identifying only one measure for a particular
program could lead to focusing too narrowly on only one facet of that
program or activity.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. The development of outcome measures has been a significant
challenge for the mission area. The limited size of our programs mean
that there is not a National outcome which can be verified through
existing data. The impact of our programs are on the individuals and
communities who received assistance and on their immediate, surrounding
community. Developing data to measure this impact is expensive for the
agency and would have a significant reporting burden for the public. We
have elected, instead, to use existing data, such as the number of
loans made, to project the impact on the local community through the
number of jobs produced using a recognized multiplier which currently
exists. As we develop or enhance our systems in the future, we will be
looking for opportunities to obtain better outcome data so long as the
cost and impact are reasonable.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. The mission area has conducted performance measurement
training sessions for program managers and their staffs. They have
developed an understanding of the difference between inputs, outputs,
and outcomes.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. A sample performance measure for external customers is;
``obtain feedback from Program Customers for: (applicable program). A
sample performance measure for internal customers is; ``Reduction in
program and EEO complaints backlog.''
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The measurable goals in the Annual Performance Plan were
not used to develop the fiscal year 1999 budget. The long lead time in
the development of the budget required that the fiscal year 1999 budget
be developed ahead of the Annual Performance Plan.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. The impact of budget number changes by the committee could
be determined for those measures which are budget sensitive. The impact
of some changes could not be defined, for example, the impact on
customer service if staffing levels were reduced.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. We are relying on existing data bases for most performance
measures. We can, therefore, monitor performance during the year for
most measures.
The Government Performance and Results Act requires that your
agency's Annual Performance Plan establish performance goals to define
the level of performance to be achieved by each program activity set
forth in your budget.
Many agencies have indicated that their present budget account
structure makes it difficult to link dollars to results in a clear and
meaningful way.
Question. Have you faced such difficulty?
Answer. Yes. Because several of our programs are often used
together to assist a customer, having performance measures for each
budget account would result in a great deal of duplication or tedious
sorting out of data to a level that is meaningless to the user.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. For GPRA reporting purposes, combining of similar accounts
would be helpful.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. Combining like accounts (those with the same basic purpose
and customer) would result in a reduction in the number of accounts
which both the agency and the Congress must manage. It would be easier
for a third party to understand the budget document.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. A modified account structure would not necessarily result
in a strengthening of accountability.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. The Performance Plan discusses extensively the potential
impacts of external factors on goal achievement. The ability of the
mission area to achieve the goals of its strategic plan can be impacted
by a variety of factors beyond its control including macroeconomic
influences, legislative and other regulatory changes, and reductions in
funding.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. No steps have been defined as the identified external
factors are beyond the control of the mission area.
Question. What impact might external factors have on your resource
estimates?
Answer. Changes in legislative, regulatory, or funding levels will
impact our ability to assist our customers. Significant changes in the
economy will affect the amount of funds we have available, after
considering Treasury's discount rate. Likewise, changes in the economy
may impact our delinquency and loss rates.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. We have identified no overlapping functions or program
duplication for the specific customers we have been mandated to assist.
Future funding decisions will take into consideration actual
performance compared to expected or target performance. Given that:
Question. To what extent are your performance measures sufficiently
mature to allow for these kinds of uses?
Answer. To the extent that performance measures are based upon
existing data bases, they are basically mature. Outcome-based measures
which are not tied to an established data base will be much less
reliable.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. The concept of impact or outcome-based data is very new and
very little experience exists for relating the cost of such data to its
usefulness.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. The current mission area strategic plan has been several
years in development, clearly defines our priorities, and is adequate
to meet our needs. While we have no plans for substantive changes, we
are committed to reviewing it this year to ensure the recommendations
from the Departmental civil rights activities are adequately included.
At the time of that review there may be other areas in need of
enhancement.
______
Question Submitted by Senator McConnell
rural community development venture capital
The Rural Community Development Venture Capital Demonstration which
is authorized in section 761 of the Federal Agriculture Improvement and
Reform Act of 1996. Under this demonstration, the Secretary may
designate ten organizations per year to establish and operate rural
venture capital pools. Using federal guarantee authority, these rural
venture capital programs will seek to encourage private sector
investors in rural business enterprises. This is a very important
demonstration. Economic Research Service reports indicate that there is
a lack of investment or equity capital for rural businesses. Most rural
businesses have neither the size nor the proximity to private sector
investment company to attract much private sector equity investment.
In August, 1996 USDA published in the Federal Register a notice of
intent to publish regulations on the demonstration. Nothing has been
published since that time.
I have written, along with Senator Leahy, to the Secretary urging
the Department to get regulations so that the Subcommittee may consider
an appropriation for the program.
Question. Please provide the Subcommittee with a status report on
the regulations and a date certain for publication.
Answer. This program is authorized as part of the Rural Community
Advancement Program Rural Development Trust Fund in the 1996 Farm Bill.
The Agency is considering options available for promulgating
regulations to implement this program. As part of that process, an
advanced notice of proposed rule making was published in the Federal
Register on April 9, 1997, requesting suggestions for implementing this
authority. Five comments were received and are being considered in the
drafting of the regulation. The fiscal year 1998 Appropriations Bill
does not appropriate funding for this program, and the President's
fiscal year 1999 Budget does not request funding for this program.
However, we are in the process of developing a proposed rule. We
anticipate publication of the proposed rule by early calendar year
1999.
______
Questions Submitted by Senator Bumpers
loan subsidy rates
A couple of years ago, rising interest rates cut the program level
of many rural development loan programs nearly in half. Last year
Congress enacted legislation that helped avoid that problem by locking
in the loan subsidy amount over a period of years. In addition, you
state that lower interest rates will reduce the costs of these
programs. Still, we see the subsidy rates increase for fiscal year
1999. For example, $67 million in BA for the water and wastewater loan
program in fiscal year 1998 provided a program level of $691 million.
For fiscal year 1999, the budget increases the BA to $126 million
(nearly double) but the program level only increases to $764 million
(roughly 10 percent).
Question. Please explain why the subsidy rate increase by this
amount.
Answer. Provisions in the Balanced Budget Act of 1997 changed the
economic assumption requirements for subsidy calculations on all
Federal credit programs. Previously, economic assumptions provided by
OMB assumed a declining baseline of Treasury interest rates used for
the present value calculations of loan subsidy rates. This declining
interest cost baseline assumption drove down the subsidy rate for loan
programs that are long term disbursers. Under provisions of the new
law, Treasury interest rates are held constant and are based on actual
Treasury rates from the current year.
The water and wastewater loan program is a long term disbursing
program, with loans expected to disburse over six or more years, and
the bulk of the loan program level being disbursed in years two through
four.
OMB economic assumptions for the fiscal year 1998 President's
Budget assumed a baseline of Treasury interest rates used for
discounting the present value calculation of loan subsidy costs as
follows: 6.16 percent for fiscal year 1998, 5.76 percent for fiscal
year 1999, 5.48 percent for fiscal year 2000, 5.29 percent, for fiscal
year 2001, and 5.24 percent for fiscal year 2002 and thereafter. The
average Treasury rate of this forecasted baseline is 5.586 percent. OMB
economic assumptions for the fiscal year 1999 President's Budget assume
a constant baseline of 6.11 percent for fiscal year 1999 and
thereafter. This is an increase of over one half of one percent from
the average Treasury rate baseline assumed in the preparation of the
fiscal year 1998 President's Budget and is enough of an increase to
double the subsidy costs in fiscal year 1999.
Question. What would the subsidy rate have been if the process of
previous fiscal years had been used?
Answer. We are unable to provide specific estimates of the subsidy
rates, but it is reasonable to assume the rates would be lower than the
rates used in the President's budget.
Question. Were the subsidy rates in the fiscal year 1999 budget
directed by OMB and if so, did USDA appeal these rates?
Answer. These subsidy rates calculated for fiscal year 1999 were
not directed by OMB. After the Balanced Budget Act of 1997 was passed,
OMB and Agency officials realized that these new provisions in the
Credit Reform Act would drive up subsidy costs, so we worked together
to provide the budget authority necessary to offset these technical
changes that were now required by law without exposing these loan
program levels to substantial cuts.
rural community advancement program (rcap)
The 1996 Farm Bill created the RCAP with funding flexibility
greater than provided in the appropriations acts. The Farm Bill
envisioned USDA being able to transfer certain funds between rural
development programs. This subcommittee has not provided you that full
amount of flexibility. Still, you request this ability again for fiscal
year 1999.
Question. Had you been granted full flexibility in fiscal year 1997
or fiscal year 1998, how would you have administered the programs
differently?
Answer. It is impossible to predict how the funds would have been
used differently if we had been granted full flexibility to transfer
funds under RCAP. With the full authority to transfer funds, the State
Directors would have been afforded the flexibility to respond to their
unique, changing needs and circumstances.
Question. With the exception of natural disasters, what events have
occurred that would have led you to shift funds from accounts where you
had allocated the funds in the first place?
Answer. One example of an unanticipated occurrence was the dramatic
increase in demands for the B&I program that appeared subsequent to the
publication of revised regulations on December 23, 1996. Since that
date demand for the B&I program has increased by 300 percent.
Question. In other words, if you wanted more funds for water and
sewer, why didn't you allocate them to that account in presentation of
the budget request?
Answer. The key concept in the RCAP program is the ability to
provide State Directors the flexibility to respond to unanticipated
needs or events. Our budget request reflects the best information that
we have available at this time, but the ability to respond and
reallocate funds in the future to changing situations, unique to states
or regions and identified by local staff, would greatly increase Rural
Development's effectiveness.
water and wastewater programs
Question. Please provide information regarding attempts by private
water distribution companies to acquire systems financed by RUS.
Answer. Nationwide, few attempts have been made by private
companies to purchase RUS financed water systems. The most significant
activity has been in the State of West Virginia, where at least three
systems have been purchased and several others are under consideration.
In Kentucky, one RUS-financed system is in the process of being
purchased by a private company.
Question. Is this trend viewed as potentially harmful to RUS
programs and customers?
Answer. Since the volume is so small, we do not anticipate that
these sales will have a harmful impact on RUS programs. When RUS grant
funds are used to finance all or a portion of a system, RUS' consent to
the sale of the facilities is required under the terms of the grant
agreement. Based upon information reviewed at the time of sale,
customers have benefited from lower water rates and, in some cases,
improved quality of water. Our concerns are the effect of water rates
in future years and whether the private company will provide service to
``pockets'' of low income rural residents that may be less profitable
for the company to serve.
Question. Is there a role in RUS programs for private well
installations as a means to reduce total overall project costs and if
so, what precautions would be necessary to ensure safety standards for
customers and to protect overall RUS program integrity?
Answer. In rural America, most wells are, and will continue to be,
privately owned and maintained by individual homeowners, farmers, and
businesses. For RUS to finance individual or cluster wells with RUS
water and waste disposal funds, applicants must be eligible public
bodies, nonprofit organizations, or recognized Indian tribes that would
own and operate the facilities. Even though our regulations have
permitted such financing for many years, we have financed no projects
recently. Applicants could propose individual or cluster wells rather
than a piped water system as the solution to provide drinking water to
residents of a particular community. We have discussed the possibility
of three pilot projects with water well industry representatives. RUS
regulations require that applicants comply with all applicable Federal,
State, and local laws and regulations pertaining to water quality. If
individual or cluster wells are proposed, the Federal and State rules
that apply to community water systems may not apply, depending upon the
circumstances and the States in which the facilities are located. Water
systems proposing individual or cluster wells would be expected to
provide essentially the same quality water that a community water
system would. If the usual RUS requirement of complying with all
applicable laws and regulations would not assure water quality, an
appropriate loan condition would likely be added to the loan agreement.
electric and telephone programs
Last week, a national news broadcast portrayed the rural electric
programs as wasteful, misguided, or both. These are not new attacks. In
fact, a GAO study released in January of this year also made
suggestions on ways this program and the rural telephone program could
be operated more efficiently.
Question. Please respond to the claims made by last weeks news
story and the recommendations contained in the GAO study.
Answer. I am pleased to have the opportunity to respond to the
statements made in this broadcast. The broadcast contained many half-
truths and I appreciate the opportunity to clarify the information
provided. The broadcast pointed out that America is now fully
electrified. While this is generally true, the challenge today is to
maintain the rural electric infrastructure intact and to provide the
same high levels of service that all Americans have become accustomed
to, while holding rates at reasonable levels.
Electric infrastructure, like all infrastructure, requires periodic
maintenance to prevent the potholes from ruining the road, so to speak.
Electric systems also require improvements to accommodate the new
technologies that we all enjoy. This maintenance and improvement is
inherently more expensive, on a per consumer basis, in rural areas than
in urban areas, while revenue per mile of line is far lower for RUS
borrowers than for most investor-owned utilities. Today, the main
emphasis of the RUS program, and, in fact the electric industry as a
whole is on ensuring the continuing availability of high quality
electric service at affordable rates.
The broadcast discussed a number of specific RUS borrowers and
provided isolated facts and statistical data about each--facts that,
without a more complete discussion of the borrower's profile, were
quite misleading. I appreciate the opportunity to provide background on
each.
The borrower that serves Vail, Colorado, has not received an RUS
loan since 1991. The borrower voluntarily rescinded this 1991 loan in
1995, before the loan was fully advanced.
The borrower that serves Hilton Head, South Carolina, serves four
counties in that state. Three of these counties are classified as
poverty counties, with one of the three having the lowest per capita
income in the state. Recent RUS loans have been targeted only to
provide service in those poverty-stricken counties. It should be noted
that if the lucrative Hilton Head Island consumers were ``cherry
picked'' off the system by an investor-owned utility, we estimate that
rates to the RUS borrower's remaining consumers would increase by 20
percent.
Hoosier Energy Rural Electric Cooperative in Indiana submitted its
last loan application to RUS in 1990. After resolution of all
outstanding issues, RUS approved the loan in 1995 contingent upon
Hoosier executing addenda to its wholesale power contracts with its
member systems. Since Hoosier and the member systems could not agree on
these addenda, RUS never released the loan and no funds have been
advanced.
Withlacoochee River Electric Cooperative in Florida serves over
140,000 consumers, as stated in the broadcast. The number of customers
served, however, is not truly indicative of an entity's need for RUS
financing. Withlacoochee, for example, serves only about 17 consumers
per mile of distribution line, about half the consumer density of the
average investor owned utility. Moreover, 130,000 of Withlacoochee's
140,000 consumers (92 percent) are residential with very little
commercial or industrial base to support affordable service rates. This
relatively low consumer density and the nature of the consumers allow
Withlacoochee to meet the statutory tests for a municipal rate loan
with a 7 percent cap on the interest rate. Its average revenue per
kilowatt hour is higher than the state average, indicating that its
service territory is indeed expensive to serve, and both the average
per capita income and the median household income of its consumers are
lower than the state average and median, respectively.
The broadcast also discusses Soyland Power Cooperative. As you are
aware, Soyland's financial problems were the result of investments in
nuclear power plants. RUS' loans to Soyland were made under the 1978
National Energy Policy Act that encouraged investment in nuclear
plants, initially restricted the use of natural gas, and, by 1990
forbade its use in power plants. The assumptions behind this policy
with respect to projections of costs of construction, load growth, and
the economy turned out to be inaccurate.
Soyland's problems go back to a small minority share in the Clinton
Nuclear Station. Because of cost overruns and significant delays in the
construction of the Clinton Nuclear Station, and interest rates that
were among the highest ever in this nation's history, Soyland's
investment quadrupled. During the decade of the 1980's, Treasury did
not allow RUS borrowers to refinance their high interest-rate loans.
This investment, coupled with a sagging rural economy left Soyland
economically unviable. Please also note that Soyland has not received
an RUS loan since 1984.
GAO Study.--RUS provided GAO with a detailed response to the
recommendations contained in the January 1998, study entitled ``Rural
Utilities Service: Opportunities to Operate Electricity and
Telecommunications Loan Programs More Effectively. The complete text of
the RUS response is provided for the record.
Rural Utilities Service's Response to GAO Report Entitled Rural
Utilities Service: Opportunities To Operate Electricity and
Telecommunications Loan Programs More Effectively
We appreciate the opportunity to review and comment on the draft
General Accounting Office (GAO) report entitled ``Rural Utilities
Service: Opportunities to Operate Electricity and Telecommunications
Loan Programs More Effectively.''
The report offers a number of recommendations to make these loan
programs more effective and less costly. The report mentions a portion
of 7 U.S.C. 930. We believe that your abbreviated version of the
provision does not accurately reflect the meaning of the provision. The
provision in its entirety states:
``It is hereby declared to be the policy of the Congress that
adequate funds should be made available to rural electric and telephone
systems through direct, insured and guaranteed loans at interest rates
which will allow them to achieve the objectives of the Rural
Electrification Act of 1936, as amended, and that such rural electric
and telephone systems should be encouraged and assisted to develop
their resources and ability to achieve the financial strength needed to
enable them to satisfy their credit needs from their own financial
organizations and other sources at reasonable rates and terms
consistent with the loan applicant's ability to pay and achievement of
the Act's objectives.''
We recognize that the goals of the report: ``(1) make the
electricity and telecommunications loan programs more effective and
less costly for the government and (2) decrease RUS' vulnerability to
loan losses'' are, to some extent, contradictory. Financially stronger
borrowers have easier access to reasonably priced private sector
capital, while borrowers in greater need of a government subsidy are
poorer credit risks. Nonetheless, these goals can be reconciled in
order to support the electric and telecommunications infrastructure
that is vital for rural communities, while maintaining the integrity of
the RUS loan portfolio.
general comments
Since the report recommends fundamental changes in the RE Act, we
believe that it is important for its readers to have a comprehensive
understanding of the current characteristic of RUS borrowers and the
uncertainty surrounding the industries in which they operate.
Rural communities
The Rural Electrification Act of 1936, (7 U.S.C. 901 et seq.) (RE
Act) is intended to benefit rural communities by supporting their
electric and telecommunications infrastructure. The residents of these
communities are the true beneficiaries of the RE Act. The benefits of
low interest loans are reflected in rates to residential electric and
telecommunications customers in rural areas, and in rates for
commercial and industrial service that make rural communities
attractive to business opportunities.
The implication that a change in the composition of a borrower's
service territory should disqualify that borrower from participating in
the RUS loan programs is not fundamentally sound. Many borrowers'
service territories include both rural and non-rural customers. This
diversity of customer base contributes to the financial health of the
utility, helps maintain reasonable rates for rural customers, and
reduces the risk of RUS loans. We believe that this diversity of
customer base will be critically important to the long-term financial
stability of borrowers as their industries become more competitive at
the local level.
Congress recognized this changing nature of borrower when it
enacted the Rural Electrification Loan Restructuring Act of 1993. It
set interest rate eligibility based upon per capita income of
consumers, rate disparity, and consumer density. This Act also revised
the definition of ``rural'' for new borrowers of both the electric and
telecommunications loan programs. We suggest, therefore, that caution
be used in strictly applying classifications such as rural, urban, and
metropolitan to service territories as the measure of whether an RUS
borrower is achieving the Congressionally stated policy objective of
the RE Act.
The changing environment of the electric and telecommunications
industries
The movement to a more competitive environment in both the electric
and telecommunications industries substantially increases risk both for
utilities and for customers in areas that are seen as less profitable
to serve. New telecommunications regulations take effect January 1998,
and their impacts will be felt gradually. The impacts of restructure of
the wholesale end of the electric industry are just beginning to be
felt. Statutes and regulations to make the retail end of the electric
industry more competitive are under development at both the federal and
state levels. The increased risk of both industries affects capital
markets and the ability of utilities to attract private sector capital.
RUS urges, therefore, that any recommended changes to RUS loan programs
take this volatility into consideration.
The nature of RUS borrowers
The report makes repeated mention of what it terms borrowers'
``profit''. The repeated use of the term ``profits'' shows a lack of
understanding of the characteristics of cooperative organizations. In
fact, most electric borrowers and many telecommunications borrowers are
cooperatives owned by the consumers they serve. Rather than earning
profits that yield dividends to shareholders, these cooperatives
allocate their ``margins'' earned during any reporting year as
patronage capital to their members. These patronage capital allocations
result in de facto rate reductions to the cooperative members, reducing
the cooperative's operations to a break-even level. The benefits of
these patronage allocations, therefore, flow to the consumers/
subscribers who are, coincidentally, the intended beneficiaries of the
RUS programs. The member-sourced earnings of RUS cooperative borrowers
are not considered profits by the Internal Revenue Service and as such,
are exempt from federal income tax.
opportunities to make the loan programs more effective and less costly
The report states that ``opportunities exist to make the loan
programs more effective and less costly.'' We have analyzed the
report's conclusions and recommendations, along with the underlying
premises and data, and we offer the following:
Loans are sometimes made to borrowers serving large customer
populations
The report bases its findings to a great extent on significant
mischaracterizations of RUS borrowers. While a few RUS borrowers do, in
fact, serve large customer populations, most borrowers serve small
subscriber populations and are considered small businesses according to
the size standards established by the Small Business Administration
(SBA). The telecommunications borrower specifically cited as an example
illustrates this point. The borrower serves a city and the surrounding
sparsely populated rural area. RUS financing was not used to provide
service to the city because it does not meet the Urban/Rural test of
the RE Act. The only telecommunications plant financed by RUS was that
dedicated to serving rural subscribers outside the city. Absent RUS
financing, prudent business practice would dictate that this borrower
invest its higher cost capital in the areas in which it will earn the
best return--the high density urban area. Ultimately rural area service
would be improved only after the higher density city subscribers, if at
all. Under the Telecommunications Act of 1996, as competition comes to
rural areas, the pressure to invest in competitive markets will place
even greater pressure on the availability of capital to improve service
in rural areas. It is important to note that over 85 percent of RUS'
telecommunications borrowers have less than 10,000 subscribers, nearly
70 percent serves less than 5,000, and the medium number of subscribers
per borrower is less than 2,800.
We strongly disagree with the use of customer size as a criterion
for determining eligibility for loans. Large customer population alone
is not an accurate measure of a borrower's financial strength or its
ability to attract capital. The average RUS electric borrower serves
between 5 and 6 consumers per mile of distribution line, while the
average investor owned utility (IOU) serves about 35 consumers per
mile. Because the electric and telecommunications industries are highly
capital intensive, a utility that serves a large number of mostly
residential consumers over a large geographic area may not be able to
achieve the economies of scale necessary to attract steady infusions of
private sector capital at interest rates that can support reasonable
electric and telecommunications rates for rural consumers.
Loans with subsidized interest rates are made to financially healthy
borrowers that may not need RUS' assistance
The RUS electric and telecommunications programs provide a
financial incentive to encourage rural electric and telecommunications
utilities to provide modern service in areas that otherwise might not
be well served, or served at all. RUS is, therefore, quite different
from other Federal lending programs, particularly the single-family
housing program. High financing costs of capital investments in
sparsely populated areas may inhibit the construction of necessary
facilities and/or dramatically increase electric and telecommunications
rates. It is critical, therefore, to the provision of reliable service
that all rural borrowers, including those that are financially healthy,
be afforded the opportunity to obtain Federal financing to make
improvements in rural service areas.
The report notes that many RUS borrowers have high equity levels
and favorable debt to asset ratios and alleges that RUS borrowers do
not invest significant amounts of their own funds in plant nor obtain
non-Federal financing when opportunities exist. Many RUS borrowers
maintain these somewhat favorable statistics because they have, in
fact, invested considerable amounts of their internally generated
capital in plant. In 1996 alone, a total of $1.5 billion was expended
by RUS borrowers on telecommunications plant, of which RUS financing
accounted for only $261 million.
By investing the cash generated by operating margins in plant, a
borrower's debt-to-asset ratio improves as does its ability to generate
positive margins. Plant that is financed by internally generated funds
is, by definition, debt free thereby alleviating the impact that
additional interest expense would have on a borrower's margins while
increasing the borrower's equity. Equity, it should be noted, is a
measure of an entity's operations and is not cash, as the report seems
to imply.
The debt to asset ratio, (or similar measures of leverage such as
equity to assets, or debt to equity) is certainly a valuable component
of an analysis of creditworthiness but only when interpreted correctly.
In evaluating creditworthiness, private sector lenders compare loan
applicants to industry benchmarks. The report discusses debt-to-asset
ratios for borrowers that obtained loans between 1994 and 1997. The
figure cited is the ratio prior to obtaining the new debt, and the
report implies that a debt to asset ratio of less than 70 percent is
looked upon favorably by lenders. Comparisons to other electric
utilities, however, show otherwise. DOE figures show that the average
debt to equity ratio for IOU's is about 48 percent.\1\ Virtually all
IOU's are vertically integrated. RUS data for the same year shows that
distribution borrowers had an average debt to asset ratio of about 40
percent, and G&T's about 70 percent. In the light of the IOU
benchmarks, the ratios for RUS borrowers, even if the ratios are
blended as a surrogate for vertical integration, do not seem as
favorable. By this measure RUS borrowers have a distinct disadvantage
in capital markets.
---------------------------------------------------------------------------
\1\ Financial Statistics of Major U.S. Investor-Owned Electric
Utilities 1995, DOE/EIA-0437(95)/1, Department of Energy, Table 29.
---------------------------------------------------------------------------
Finally, the current ratio can hardly be considered an appropriate
tool for measuring ability to obtain long-term debt. A ratio that
indicates to what extent current assets are available to meet current
obligations simply does not demonstrate a borrower's long-term
borrowing capability.
A graduation program could assist in moving financially healthy direct
loan borrowers to commercial credit
The report correctly notes that the RE Act offers electric
borrowers the opportunity to voluntarily graduate out of the direct
loan program by prepaying direct loans at a discount. It is important
to note that the discounted value is calculated on a net present value
basis thereby resulting in no cost to the Government. To date, 115
borrowers have prepaid their loans and we expect that there will be
more. Borrowers who take advantage of this opportunity are ineligible
for direct loans for 10 years
Specifically, the electric borrower cited in the report to support
GAO's recommendation of forced graduation is, in fact, voluntarily
moving away from the RUS program. RUS has not advanced loan Finds to
this borrower since 1975, over 22 years ago. The borrower has been
repaying its debt and now owes RUS only $128,000. Its total long-term
debt from all sources is approximately $145,725 and interest on all
long-term debt for 1996 was only $3,211. This borrower has achieved a
high TIER and current ratio, and high levels of equity by avoiding all
financial leverage, a rare feat, indeed, in the electric industry, or
any industry today. By graduating itself from all lending programs,
this borrower is truly an anomaly. The medium TIER for electric
borrowers in the United States and in this borrower's state are 2.44
and 2.62, respectively.
A recent RUS analysis of borrowers who graduated out of RUS under
this provision shows two significant trends. First, these borrowers
tend to be stronger according to a number of measures. They are
typically characterized by: ability to realize economies of scare
measured by high consumer density and kWh sales per mile of line; size
measured by larger number of consumers (as noted above, one of the
report's suggested criteria for measuring strength), total kWh sold,
and total utility plant; and newer plant. Interestingly, equity as a
percent of total assets seems to be almost the same for borrowers who
graduated and borrowers that did not. Also, most of these borrowers
serve in states where electric rates are at or below the national
average, and their territories show higher load growth.
Finally, while these graduated borrowers are not eligible for
direct RUS loans for 10 years, the law leaves them the option of
applying for a loan guarantee. As the report points out, the lender is
almost always the Federal Financing Bank (FFB), part of the Treasury
Department. The interest rate is one-eighth of one percent above
Treasury's cost of borrowing, and RUS guarantees 100 percent of the
loan. In other words, if these graduated borrowers find that private
sector capital is no longer affordable, the RE Act offers a backstop.
Similarly, recent lending activity indicates that a number of RUS
telecommunications borrowers have sought financing through non-Federal
sources. Borrowers are, in fact, seeking alternative financing through
CoBank and/or the Rural Telephone Finance Cooperative as indicated in
the GAO report. We believe that this voluntary graduation protects
rural communities against the capital risks inherent in the
restructuring of the industry.
We are extremely concerned about requiring electric and
telecommunications borrowers to refinance their direct loans with
private sector financing at this time. In contrast to the relatively
stable operating environment of the water and waste disposal program
that currently graduates borrowers, the operating environment of the
electric and telecommunications industries is highly volatile. The
Federal Energy Regulatory Commission is implementing wholesale
competition in the electric industry, and many provisions and impacts
of wholesale restructuring are not yet clear. At the same time, the
Federal Communications Commission (FCC) is implementing the
Telecommunications Act of 1996 which will have a dramatic impact on
revenue streams for rural telecommunications providers.
RUS direct loans for electric infrastructure are generally
available only to borrowers that serve at retail, and restructuring of
the retail side of the electric industry has barely begun. The 105th
Congress has already seen five bills introduced in the Senate and seven
in the House that would, in some form or another: allow, promote or
require retail competition; revise or remove restrictions on utility
holding companies; institute new requirements on sources of energy
sold; or otherwise profoundly alter the industry. In a few states
retail choice of electric supplier will be available to all consumers
in a few months. Other states are still exploring options.
While not mentioned in the report, the Telecommunications Act of
1996 will have a profound effect on the telecommunications industry.
RUS is closely following the FCC as it moves toward implementing the
Telecommunications Act, and believes that rural telecommunications
service providers will be affected in at least these ways. RUS
telecommunications borrowers receive, on average, 65 percent of their
revenues from long distance access charges and cost pooling; however,
nationwide, telecommunications service providers receive only 44
percent of their revenues from these sources. The Telecommunications
Act will change the way in which revenues from these sources are
collected and distributed. Access charges will decline at a controlled
rate and cost pooling (the current method for collecting and disbursing
funds to cover high cost service) will be completely restructured. The
rulemaking process intended to design the new universal service cost
pooling support mechanism is scheduled to begin in 1998; however, until
that mechanism is operational, the degree of negative impact on
borrowers' revenue streams cannot be fully determined.
While small rural telecommunications companies may be protected
(depending upon the policies of their state regulatory commissions) in
the short-term from competition in their service areas, competition
will ultimately come, in some form, to all areas of the nation.
Initially, competition will most likely come from another service
provider who will attempt to serve the lowest cost subscribers in an
area. This will leave RUS borrowers with only their high cost
subscribers to serve, thereby reducing the density of the service area
and increasing the average cost per subscriber.
Since the debate over retail choice in the electric industry has
barely begun, impacts are even more uncertain. We believe that this
uncertainty will be reflected in higher costs of private sector capital
for electric and telecommunications utilities. Decreasing revenues and
increasing costs will strain rural service providers and may endanger
universal service. Forcing direct loan borrowers to private sector
financing during this period of uncertainty may leave them paying
extremely high interest rates that would be directly translated into
higher electric rates for rural consumers. Since the vast majority of
these borrowers are, as noted above, cooperatives, they cannot raise
equity capital by selling stock. Since they are small businesses, as
well, they may lack the large cash how cushion that can protect large
businesses against such ``sticker shock.'' Even borrowers that have
been historically strong could be left with no alternative other than
raising rural service rates.
opportunities to decrease rus' vulnerability to loan losses
The report made several recommendations for decreasing RUS'
vulnerability to loan losses: ``(1) limit loan size and total amount of
debt outstanding to a borrower, (2) reduce loan guarantees from 100
percent and (3) establish policies to preclude loans to risky
borrowers. Second only to RUS' mission of financing high quality
electric and telecommunications service to rural consumers reasonable
rates, is its concern for the creditworthiness of its borrowers and the
security of its loans. It is important to note that the
telecommunications program, based upon its policies and procedures
currently in place, has an outstanding record of loan repayments--zero
defaults since its inception. Equally important to consider is the fact
that the majority of loan losses in the electric program arise from
investments in ill-fated nuclear plants that were either constructed at
costs substantially higher than initial projections or totally
abandoned during the construction phase.
Loan and debt limits could reduce RUS' vulnerability to losses
We do not agree that loan limits equate to a reduction in
vulnerability to loan losses. RUS cannot make a direct loan or loan
guarantee unless the agency determines that the borrower will be able
to repay the loan according to its terms and conditions, and that the
security for the loan is adequate. These determinations are based on
the borrower's past performance, its management and operating
environment at the time of loan approval, and projections of load
growth and financial performance. Applications for electric loans
include long-range financial forecasts as well as engineering studies
of facilities that will be constructed with loan funds. The requirement
that security for a loan be adequate effectively limits the borrower's
total amount of secured debt.
Lending limits also constrain a borrower's ability to take
advantage of certain economies that arise from system-wide
improvements. A single loan may finance the upgrading and improvement
of an entire electric or telecommunications system. All pertinent plant
could be constructed under a single contract under one simplified
competitive bidding process. This method is, by far, the most efficient
way for small utilities to construct plant. If loan limits were
imposed, system-wide construction would take place only in small
segments thereby significantly increasing the cost to serve rural
subscribers. increased subscriber costs are certainly not in the best
interest of rural ratepayers, rural electric or telecommunications
service providers, or the Federal lending programs that finance such
service.
Establishing policies to preclude loans to certain risky borrowers
would reduce future exposure to loss
We believe that this recommendation is based on faulty premises.
The rule \2\ in the report implements the new statutory authority of
the Secretary of Agriculture to compromise, adjust, reduce, or charge
off debts or claims owed to the governments. The rule adequately
addresses the issues raised in the report by requiring credit support
in the full amount of the loan as a condition of any subsequent loan.
---------------------------------------------------------------------------
\2\ The rule, adding a new subpart Y to 7 CFR Part 1717, was
published September 26, 1997, at 62 FR 50486.
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electric program issues
Impacts of the electric loan program in maintaining electric
infrastructure
The electric loan program provides an efficient and effective use
of taxpayer funds to support electric infrastructure. The subsidy
amounts cited in the report actually support relatively high lending
levels. The total subsidy for fiscal years 1994 through 1996 for
electric hardship rate loans was $49.6 million while the lending level
was $273.9 billion. For municipal rate loans during this period, $148.9
million in subsidy supported lending levels of $1,489.8 billion.
This subsidy actually generates increases in electric utility plant
far greater than what lending levels indicate. For example, in calendar
year 1995, RUS advanced a total of $860 million in direct and
guaranteed loan funds to electric borrowers. During the same year,
additions to plant by electric borrowers totaled almost four times this
amount, $3.3 billion. In calendar year 1996, RUS advanced $1.02 billion
to borrowers, and additions to plant totaled $3.3 billion. Borrowers
make up part of this difference with internally generated funds, and
part with loans from non-RUS sources. In the case of municipal rate
loans, most borrowers are required to obtain part of their debt
financing from a supplemental source with no RUS guarantee.
Financially healthy borrowers obtain municipal rate loans at interest
rates lower than rates on hardship rate loans
The report's description of the interest rate structure for
municipal rate loans is generally accurate. We emphasize only that, as
a general principle, short-term interest rates are lower than long-term
rates. A borrower that locks in a low rate for a short term runs the
risk of a sharp increase in the rate when the advance rolls over.
Moreover, the federal subsidy is based on the difference between
RUS interest rates and the rate at which RUS borrows from the Treasury.
While the interest rates on RUS borrowings and municipal interest rates
may not rise and fall strictly in tandem, they do follow similar
trends. In other words, the subsidy rate does not necessarily increase
when municipal rates fall, and vice versa.
telecommunications program issues
Nonrural Areas
RUS strongly supports its policy of making loans for service to
nonrural areas when it is incidental to providing service in rural
areas. In instances where telecommunications service is to be provided
in a nonrural area, RUS applies a ``necessary and incidental'' test to
determine that, without financing plant in a particular nonrural area,
the rural area would suffer the consequences by receiving less or no
service. In addition, when making a loan to a telecommunications
borrower where funds are to used in a nonrural area, RUS conducts
Urban/Rural studies to determine that the majority of the benefit from
the financing will be derived by the rural residents. Defining a rural
area is simply not as easy as assigning a number. These policies enable
RUS to apply judgment in making loans that ultimately benefit the
residents in rural areas, be they rural, extremely rural, or some
mixture. The goal of ``universal'' service can only be achieved if
service is provided in areas, both rural and nonrural.
Once again, we appreciate the opportunity to review and comment on
the draft report. If you wish to discuss these comments on a more
detailed basis, we are available at your request. While we welcome
suggestions that will improve the operational efficiency of our loan
programs, any recommendations that are forthcoming should take into
consideration the revolution that is taking place in both the electric
and telecommunications industries. Due to the numerous uncertainties
surrounding the eventual evolution of these industries, it is important
the RUS lending programs remain flexible in their abilities to provide
financing to ensure modern, reliable electric and telecommunications
service to rural America.
The report states that loans are sometimes made to borrowers
serving large customer populations. I emphasize again that, although a
few RUS borrowers serve large customer populations, the vast majority
have customer bases that are, quite small, by industry standards.
Furthermore, all but a handful are small businesses according to the
Small Business Administration's size standards, which are based on MWH
sales for electric utilities and number of employees for
telecommunications companies.
I strongly disagree with the use of customer base as a criterion
for determining loan eligibility. Large customer size alone is not an
accurate measure of a borrower's financial strength or its ability to
attract capital. The electric and telecommunications industries are
both capital intensive, and a utility that serves a large number of
customers over a large geographic area may not be able to attract
steady infusions of private capital at interest rates that can support
reasonable electric and telecommunications rates for rural consumers.
The report also asserts that RUS makes loans to financially healthy
borrowers that may not need RUS assistance. The measures of financial
health used in the report do not accurately measure a borrower's true
borrowing strength. High equity, for example, does not automatically
translate to credit worthiness for a cooperative. The debt-to-asset
ratio of RUS borrowers is not nearly as favorable as indicated in the
report, when the ratio is compared with industry benchmarks. Similarly,
the current ratio has little or no relevance to a utility's long-term
borrowing capability.
GAO recommends a graduation program to forcibly move borrowers out
of the RUS program and into private sector financing. RUS now offers
electric borrowers the opportunity to voluntarily prepay their RUS debt
at a discounted present value. Borrowers who choose this option are
ineligible for direct loans for 10 years. To date, 115 borrowers have
voluntarily moved to private sector financing, and I fully expect that
there will be more.
I am also concerned that requiring electric and telecommunications
borrowers to graduate to private sector financing would be detrimental
to the rural economy at this time. In contrast to the relatively stable
operating environment of the water and waste disposal program that
currently graduates borrowers, both the electric and telecommunications
industries are now in a state of flux. Forcing borrowers to ``fire
sale'' refinancing could place them at a competitive disadvantage,
leading to higher electric rates for rural consumers.
GAO believes that RUS' vulnerability to loan losses could be
reduced through loan and debt limits, and by precluding loans to
certain risky borrowers. I disagree. RUS cannot make a loan unless the
agency determines that the borrower will be able to repay the loan
according to its terms and conditions, and that the security for the
loan is adequate. Imposing rigid limits on the size of individual
loans, or the borrower's total debt could constrain the borrower's
ability to take advantages of economies of scale, or to build
facilities to serve consumers in areas of rapid growth.
An absolute prohibition on loans to risky borrowers could adversely
impact electric and telecommunications service to needy consumers in
rural areas. RUS prefers its current individualized approach, one in
which the agency can place conditions on certain loans to mitigate
risks.
Question. Please provide your views of the current trends in
electricity deregulation and its effect on the rural electrification
programs?
Answer. RUS is concerned about the potential impacts of electric
industry restructuring on RUS borrowers and on Federal financial
interests in these borrowers. RUS is also concerned about the continued
availability of reliable, reasonably priced, electricity in rural
areas.
Experience with deregulation in other industries has not been a
positive one for many rural consumers. Too often, the unfortunate and
unintended consequence of deregulation has been a decline in the
quality and availability of service and an increase in costs in rural
areas. Airline and railroad deregulation are prominent examples. If
experience in other industries is any guide, the benefits and costs of
electric industry restructuring will be spread unequally both
geographically and among customer classes. This has prompted concern
that if implemented too quickly and without adequate safeguards,
electric utility restructuring could bring rural Americans higher
prices and degradation of reliability and safety.
The underlying premise of deregulation is that competition among
suppliers will result in lower prices, technological innovation, and
more choices for consumers. In many cases, powerful industrial
consumers are already negotiating lower electric rates either from
their historical providers, or by switching to lower cost providers. In
either case, the historical provider is left with fixed costs that must
be recovered from a shrinking revenue base. To the extent that the
historical provider is unable, in a competitive market, to charge rates
sufficient to recover these costs, the costs are stranded. Because
almost all RUS borrowers are consumer-owned entities, there are no
shareholders with which to share stranded costs.
Competition in generation alone, is unlikely to significantly
affect many of the factors that contribute to the higher costs of
serving rural systems. To achieve the benefits offered by electric
industry restructuring while preserving access to reliable and
affordable electric service, the transition must take into account the
special circumstances of rural electric systems and their customers.
The Administration is continuing to develop its comprehensive
policies on electric industry restructuring. RUS believes that rural
areas can share in the benefits of a competitive retail electric market
if adequate safeguards are provided to assist high-cost to serve rural
areas, and reliability of service is ensured.
Many RUS borrowers serve small, scattered, mostly residential loads
that may not attract competitive interest to produce significant
savings for most consumers. RUS is concerned that as a result of
competition, larger customers will increasingly be ``cherry picked''
from RUS borrowers, requiring these borrowers to raise rates to the
remaining customers to meet fixed costs, including debt service
payments. If rates rise too sharply for the remaining consumers, the
economic base of the community could be threatened. If, however,
competitive pressures prevent a borrower from charging sufficient
rates, the borrower's ability to meet its debt service payments is
threatened.
It is almost impossible today to determine the magnitude of
stranded cost exposure of RUS borrowers, except to say that all
generation assets are potentially at risk, and that nuclear facilities
and other high cost producers are at the greatest risk. Various
proposals for retail choice transition have been introduced in the
105th Congress and in various State legislatures and public service
commissions. These proposals differ greatly in their likely impacts on
power supply borrowers and on the extent of permissible recovery of
stranded costs.
USDA is also concerned that the future availability of investment
capital for rural electric infrastructure can be jeopardized if current
and future investments are allowed to become stranded.
RUS currently has approximately $31 billion in outstanding electric
loans. Typically, RUS loans are used to leverage two-thirds of
investment capital from private sources. These loans are the lifeblood
in maintaining and improving rural infrastructure. If these loans
become stranded, the investment resources from federal programs as well
as private sources could easily diminish.
Question. Please explain why you think the ``universal service''
concept should be applied to electrification programs?
Answer. The universal service concept dictates that all customers,
including those that are high-risk, and or costly to serve, will be
assured access to reliable electric service at just, reasonable, and
affordable rates. The obligation imposed on utilities to provide
universal service to all customers within their territories at just and
reasonable rates has long been a fundamental and highly-valued premise
of electric utility regulation.
Even today, providing electric service to rural areas requires more
capital investment and higher costs of operation and maintenance and
results in lower revenue per mile of line than service in most urban
and suburban areas. The availability of universal service and the
investment in a safe, reliable electric infrastructure in rural America
should not be put at risk during or after the transition to a more
competitive electric industry.
In a ``deregulated'' competitive electric industry, retail electric
providers will be able to pick and choose the areas and customers they
serve based upon their expectation of profits to be won, and not on the
customer's need for service. In a competitive environment, profit-
maximizing retail electricity providers will be attracted first to
high-volume, high-load factor industrial and large commercial
customers. They may demand unacceptably high prices to serve low-
volume, low-load factor residential and small commercial consumers, if
they are willing to serve them at all.
Question. Other than loan subsidy rates, why would the proposed
Treasury rate direct loan program be an improvement over continued FFB
activities?
Answer. The proposed Treasury rate loan program would supplement,
not replace, the FFB loan guarantee program. A Treasury rate loan
program would offer a number of advantages. It would be a direct loan
program, not a loan guarantee. The borrower would have only one federal
agency to work with. FFB loans offer a complex range of options for
long- and short-term interest rates, amortization schedules, and the
ability to prepay or refinance the loan. These options confuse many
borrowers while a new direct loan program could be simpler. FFB
interest rates reflect Treasury's cost of money plus one-eighth of one
percent. FFB also charges a small annual servicing fee to cover certain
administrative costs. The Treasury loan program would not have the
interest rate adder or the fee.
The Treasury rate loan program would allow RUS to offer a range of
financing options in a customer friendly format. FFB financing would
still be available to power supply borrowers and to distribution
borrowers that favor the range of choices offered by FFB.
Question. In what ways might the Treasury rate proposal be harmful
to electric utility borrowers?
Answer. I do not believe the Treasury rate proposal could be
harmful to electric utility borrowers, to rural Americans, or to the
government.
Question. Has RUS engaged in a survey to determine the problems and
costs associated with ``an aging electric infrastructure'' and if so,
would you provide that information to the Committee?
Answer. RUS has not surveyed borrowers concerning the problems and
costs associated with aging electric plant. Our understanding of the
problems posed by aging electric system components is based on
historical information on in-service dates of electric plant and trends
in requests for loan funds and system upgrades. Electric systems, just
like other forms of infrastructure, require maintenance and periodic
replacement of components as the systems age. Demand for electricity
has also been growing in many rural electric service areas thereby
requiring distribution and transmission facilities to be upgraded to
preserve safety and reliability.
empowerment zones/enterprise communities (ez/ec)--delta initiative
The USDA budget suggests legislation will be submitted to create
additional rural Empowerment Zones. Additionally, the Appalachian
Regional Commission is suggesting expansion of their activities to
include the region of the Lower Mississippi River Delta.
Question. Do you think the ARC initiative for the Delta could
largely be conducted under the EZ/EC initiative? Have you discussed the
Delta initiative with the ARC? Please describe how the benefits from
the current EZ/EC program have helped the Delta.
Answer. We believe that implementing the recommendations of the
Lower Mississippi Delta Commission fits closely with the objectives and
implementation methods of the EZ/EC Initiative. Two organizations in
the Mississippi Delta region--the Lower Mississippi Delta Development
Commission and the Southern EZ/EC Forum--have already taken major steps
to build a coalition through which this can occur. We have met with the
ARC to discuss the proposal to expand their service area to include the
Delta. We are concerned about their proposal to increase the size of
their organization and favor an approach that would direct a larger
proportion of the funds to development projects in rural communities by
using an organizational structure that is already in place. Since this
Administration has come into office, USDA Rural Development has
invested more than $446 million in the 219 counties of the Lower
Mississippi Delta region. In addition, the EZ/EC Initiative will invest
over $60 million in Social Services Block Grants. At the rate these
dollars are being leveraged nationally, this will result in
approximately $600 million in total investments in these poor
communities.
Question. Since you note the importance of assistance for children
to attain appropriate educational levels in regions like the Delta, are
you aware of the work of the Delta Teachers Academy and if so, would
you provide your views on this program?
Answer. I am not familiar with the Academy, I understand this is a
project funded by the Extension Service.
centralized service center
Last year, there was much discussion about the effect of budget
cuts and FTE ceilings on the work force at the St. Louis Service
Center.
Question. Please provide an update on workload and FTE's currently
employed and projected for fiscal year 1999 at the Service Center.
Answer. September of 1997 marked the completion of the conversion
of loans from the field to the new Dedicated Loan Origination and
Servicing system and the transfer of servicing activities to the
Centralized Servicing Center (CSC) in St. Louis. The CSC provides full
servicing of these loans from closing to acceleration of the account,
with a Full Time Equivalency (FTE) authorized level of 633 employees,
we project our workload to remain constant in fiscal year 1999 and our
FTE requirements to remain at 633.
Question. What is the status or special needs of information
technology at the Service Center?
Answer. All information technology initially planned is in place
and operational in the Centralized Service Center (CSC). With any
portfolio conversion of this size, modifications to the current system
is an ongoing process. These modifications to the software are unique
because of the Congressional mandated Supervised Credit that must be
available to our borrowers to preserve home ownership though economic
or other hardships individuals and families may experience. For this
reason, we have had to modify the private sector serving software we
purchased to ensure these servicing options were handled in a
consistent and efficient manner. These servicing features include: 7
day a week, 24 hours voice response for detailed information on loans;
nationwide consistency for servicing, including payment assistance,
moratorium, reamoritization and other services; centralized cash
management providing fiduciary control; a monthly statement sent to
each borrower; escrow of taxes and insurance; and expanded (7:00 am-
6:00 pm) customer service representatives to handle more complex issues
for our borrowers.
We will continue to monitor our program needs in conjunction with
the constant changes in technology, increased use of technology, and
the needs to respond quickly to requests for information and prepare a
plan to achieve this result.
Question. To what extent are you coordinating information
technology for the Service Center with overall Department needs?
Answer. The Centralized Service Center (CSC) identifies their
program needs, prepares the proper documentation for approval by the
Information Resource Management organization. Like every other
organization in the Department of Agriculture, the CSC is currently
under a $25,000 limit on any technology purchase without a wavier from
the Department. The waiver requires concurrence by all USDA mission
areas involved in the CSC initiative and also ensures that any and all
technology is Year 2000 compliant, unless emergency situations exist.
section 502 single family housing
You state 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.
Question. What rate of program increase per year will we need to
see in order to realize this goal?
Answer. For fiscal year 1999, we estimate that we will provide home
ownership to approximately 65,000 individuals or families in rural
America. RHS is only one of the 65 national organizations working
together to meet this goal. Increases in our direct and guaranteed home
ownership programs would assist additional home ownership in rural
America, however, we have not formulated our appropriation request
fiscal year 2000 at this point.
Question. What amount of this program do you intend to support
through the direct and through the guaranteed program?
Answer. As mentioned in the previous answer, the fiscal year 1999
request would allow us to provide home ownership to approximately
65,000 rural individual or families. This figures includes the entire
request for both the direct and guaranteed 502 programs.
Question. What is the policy rationale for the statutory
prohibition of graduating a 502 ``direct'' borrower to the guaranteed
program?
Answer. The Department does not have a rationale for the
prohibition, in fact we have transmitted proposed legislation to
Congress to repeal the statutory prohibition. One of the RHS goals is
to graduate borrowers to commercial credit. Additionally, the 502
guaranteed program provides 100 percent financing which will enable
direct borrowers to refinance who don't have the financial capability
for a down payment.
section 515 multi-family housing
Question. Please describe the status of Section 515 housing
rehabilitation and include the number of projects and, to the extent
possible, the number of units for which rehabilitation has been
complete and the number of projects/units still in need of repair or
upgrades.
Answer. Since fiscal year 1995, the Agency has dedicated
approximately $194 million in repairing and rehabilitating our existing
portfolio, which equates to nearly 640 projects. Our most recent
survey, conducted September 1997, indicated $106.4 million outstanding
repair needs. For fiscal year 1998, we estimate approximately $50.5
million will be used for this purpose.
Question. The budget reduces the 515 program substantially and,
instead, provides an increase for the Section 538 guaranteed program.
What has been the response from developers in accepting the guaranteed
program over the direct?
Answer. The Section 538 program is not a replacement or
substitution for the 515 program, which is, a below-market-interest-
rate loan program. Loan guarantees cannot significantly lower the costs
of borrowing enough to allow occupancy by the low- and very-low-income
households which the 515 program serves. However, developers understand
that the Section 538 will play an important role in providing rental
housing in rural America for low to moderate-low income families.
Question. Has shifting from the direct to the guaranteed program
had any effect on the ability of developers to acquire tax credits?
Answer. As previously stated, the Section 538 program is not a
replacement or substitution for the 515 program; however, many
developers expect to use the LIHTC program in conjunction with the
Section 538 Program as the two programs are compatible. The combination
of tax credits and a guaranteed loan achieves rents that are affordable
to low-income households in those rural areas where median incomes are
relatively high because the LIHTC program must be used for households
with incomes at 60 percent of area median income, while households
eligible for the Section 538 program are those whose incomes at the
time of initial occupancy do not exceed 115 percent of the median
income of the area.
galt, california
Last year, there was substantial debate about an amendment that
would have affected rural housing programs in Galt, California. Had
this amendment been adopted, it would have served as a precedent USDA
felt detrimental to its mission.
Question. Please provide an update on continuing negotiations with
the City of Galt regarding this problem.
Answer. The Department has worked with a mediator from Sacramento
State University to access the scope and cost for the full mediation
process. The mediator has met with the principals and is preparing a
preliminary analysis for the Department to review for consideration of
a contract. The principals have agreed to work together to identify the
goals of the mediation process.
Question. Have other requests similar to those of Galt been brought
to the Department's attention and if so, what is the status of those
requests?
Answer. The grantees of the Mutual Self-Help Grant Program and farm
labor housing providers have reported instances where communities have
resisted the construction of affordable low-income housing. Barriers
include local building approvals and zoning restrictions. Many of these
cases are resolved on the local level with negotiations conducted
between the housing provider and the local community, including elected
officials. We are currently not aware of a situation similar to Galt
where a City or local government is attempting to halt all construction
of RHS low-income housing. Our experience has been that after the RHS
housing has been constructed and occupied, the community and neighbors
are very supportive. The Agency strives to ensure the housing reflect
the local building styles including amenities and we take great
measures to ensure the high quality of our rental housing is
maintained.
business and industry loan program
You mention that since last December, the demand for the Business
and Industry Guaranteed Loan Program has increased 300 percent.
Question. What is the explanation for this rate of increase?
Answer. This rate of increase is the result of three factors:
1. The streamlined Business and Industry Guaranteed loan program
regulations were implemented, which reduced these regulations by 50
percent, reduced the number of forms required (from 19 to 6), and made
the forms available to the public in an automated electronic format;
2. An aggressive program outreach initiative was conducted by
National and State Office staff; and
3. The eligible loan purposes were expanded to include such
purposes as the financing of hotels, motels, bed-and-breakfasts, and
some recreational-type facilities.
Question. What is the source of the additional $75 million in
Business and Industry loans resulting from the Community Adjustment and
Investment Program under NAFTA?
Answer. In conjunction with the North America Free Trade Agreement
(NAFTA), the U.S. Department of Treasury entered into a Memorandum of
Understanding with USDA, which enabled USDA to administer a guaranteed
loan program, with budget authority provided by funds available through
the Community Adjustment and Investment Program (CAIP), using its RBS
B&I Guaranteed Loan Program regulations. The funds for this program are
available because of deposits made into the CAIP as the result of the
provisions of NAFTA.
cooperative development
You mention that the role of cooperatives might replace some of the
support of the traditional farm price support programs that were
discontinued in the 1996 Farm Bill.
Question. What are some examples of cooperatives serving this
function? Are any currently in place and if so, in what fashion? What
are you doing to support this concept? Are you consulting with the
Commission on 21st Century Agriculture on this issue?
Answer. Cooperative strategies can be adopted by farmers to assist
them in increasing net farm incomes and reducing their exposure to
fluctuating prices. There are a range of roles that cooperatives can
play, some strictly private sector initiatives that we in the public
sector can encourage, and others requiring cooperatives to take on a
more public role in the marketplace. These strategies have two basic
dimensions: (1) Giving farmers more market power in negotiations
relative to other players in the food sector, and (2) aiding farmers to
get a larger share of the consumer's food dollar. Some of these
strategies could include more use of pooling, value-added production,
global marketing, enhanced bargaining, and operation of a cooperative
managed supply control system. Cooperatives in some commodity areas,
particularly non-program commodities, are currently involved in some of
these activities. Cooperative investment in value-added processing has
been particularly active in recent years.
RBS has historically promoted use of cooperative strategies for
improving farm income through its program of research, technical
assistance and education. These activities continue. The Department is
presently examining possible strategies and contingencies for the post-
price support era, including strictly cooperative-base strategies and
others. We want to be prepared, with well thought out options, to
ensure that the well being of American farms will be sustained over the
long run. We are in the beginning stages of this process and not yet to
the point where we are consulting actively with outside groups. When we
get to that stage, however, we will involve a broad range of
individuals and organizations to insure that our policies are effective
and address the needs of all American farmers.
appropriated technology transfer rural areas (attra)
The budget proposes $2 million for ATTRA, and increase of $700,000
above the fiscal year 1998 level.
Question. Please provide an update on the activities at ATTRA.
Please describe any effects on ATTRA that have resulted from the
program not receiving an increase for a number of years. Please
describe the role ATTRA has served in USDA's overall strategy to attain
sustainable farming methods on a national scale.
Answer. In fiscal year 1997, ATTRA responded to and provided
information to more than 18,000 requests about sustainable agriculture
received through its national toll-free phone lines, its new Web page,
and direct contacts at workshops and agricultural trade shows. Already
in fiscal year 1998, ATTRA staff are struggling to respond to more than
9,000 requests in the first 5 months of the fiscal year. ATTRA staff
members provide leadership, technical training and materials to
regional and national efforts on professional development in
sustainable agriculture for extensionists, Natural Resources
Conservation Service staff and others. The ATTRA newsletter updates
8,000-10,000 groups, individual farmers, educators and others about
sustainable agriculture news and resources of interest.
The greatest impact of level funding has been on staffing. Key
areas in the program are now severely understaffed because funding
limitations have prevented filling positions to meet increased overall
demand. The number of requests has more than doubled in 7 years while
funding has remained level, but there has been no corresponding
increase and, in some cases, reductions in the number of staff hours
available to serve those needs. Especially hard hit have been the areas
of pest management, marketing, livestock, and agronomy, as well as
operational areas such as computer/information management and staffing
for the toll-free phone lines. The program is now faced with
implementing limitations on numbers and types of requests, and staff
struggle with a backlog in updating of highly requested materials.
Labor projections needed to meet current and future demands indicate
that the program is understaffed by 50-60 percent, and the proposed
increase would allow a modest staff increase to partially offset the
impacts of chronic under staffing.
With its toll-free (and now electronic) access, ATTRA continues as
the unique sustainable agriculture information source available to
farmers across the country, and is in a special position to promote and
interpret USDA efforts in sustainable agriculture, such as the results
of the Sustainable Agriculture Research and Education (SARE) program,
to a broad audience. ATTRA has been a visible and easily accessible
place for farmers to start or to deepen their practice of sustainable
farming methods, no matter what their geographic location. Several
editions of a national expertise directory and other ongoing contacts
have been produced and maintained by ATTRA and publicized through the
USDA-sponsored Sustainable Agriculture Network (SAN). These and other
networking tools have helped those practicing, researching and learning
sustainable farming methods to more easily find each other across the
United States. Also, ATTRA staff are in a unique position to provide
information to USDA and other Federal agencies on farmer interests and
needs in sustainable agriculture.
alternative agricultural research and commercialization corporation
(aarcc)
You mention that a number of companies which have participated in
AARC have repaid over $200,000 to the AARC Corporation.
Question. At what point do you think the program will be self-
sustaining?
Answer. AARCC's 10-year business plan projects three repayment
scenarios. The low case has AARCC recovering its investments on a
dollar:dollar basis. Even at that rate, the American taxpayers still
gain, as jobs have been created and unused land put to use.
In the intermediate case, the plan projects a 6 percent return on
the money. The high case projects a 10 percent return. Presently, the
repayments are tracking with the high case scenario.
We believe AARCC will have the financial resources to be
independent of appropriated funds by the end of fiscal year 2002. The
business plan projects that to be the case, regardless of which
repayment scenario is realized.
rural utilities service
Your testimony refers to a letter which Secretary Glickman recently
sent to Energy Secretary Pena expressing concern that, even if rural
coops are permitted to recover their stranded costs associated with
generation (as provided for in the Bumpers/Gorton bill), rural coops
may not be able to ``maintain reasonably affordable rates for small
consumers.'' As I understand this statement, Secretary Glickman is
suggesting that a coop will not be able to recover all of its
distribution costs.
Question. While a coop may lose generation customers as a result of
retail electric competition, it won't lose distribution customers. Why
would a coop not be able to recover all of its distribution costs as
long as it retained all of its distribution customers?
Answer. Secretary Glickman did not assert, as a general matter,
that a cooperative would not be able to recover all of its distribution
costs under retail competition. Rather, the Secretary cautioned that
``wires charges'' imposed by distribution utilities to deliver another
supplier's power may not be a sufficient replacement source of revenue
to assure reasonably affordable electric service for smaller customers.
Secretary Glickman's letter expressed the Department's concern that
the benefits of cost averaging--a key tool for assuring affordable
universal electric service--could be lost under retail competition.
Electric systems and regulators would no longer be able to rely on the
practice of averaging the costs of servicing high and low cost
customers to support reasonably affordable rates for smaller customers.
The operating efficiencies and revenues from larger customers have
historically helped to lower average systems costs and benefited
smaller customers. With the loss of generation revenues from large
industrial customers, an important source of revenue support for
affordable service could disappear. Moreover, utilities could face
higher costs to provide power to remaining customers with less
attractive load profiles. The result is likely to be upward pressure on
rates for residential and small commercial customers. This threat is
one reason why USDA believes that it is essential that an adequate
safety net be assured for rural and other costly to serve customers as
part of electric industry restructuring.
Question. Secretary Glickman's letter seems to suggest that
residential and commercial customers will have to pay more if a coop
loses its industrial customers. However, a coop won't lose an
industrial customer for distribution service and it will be able to
recover all of its stranded costs from generation customer losses as a
result of retail competition under the Bumpers/Gorton bill. Therefore,
wouldn't you agree that rates charged to residential and small
commercial customers should not rise when retail competition is
implemented?
Answer. We do not agree that rates charged to residential and small
commercial customers should not rise when retail competition is
implemented. There is already evidence that they could rise, which
prompts USDA's concerns over consumer impacts. Most state retail choice
plans would impose transition charges on retail customer bills for
stranded cost recovery, in addition to the costs of electric service.
Unless a regulatory device is adopted to defer these costs--as in
California and Massachusetts--the retail choice transition could
increase costs for many customers in the short term. Additional costs
for unbundling, customer education, and creation of power exchanges and
independent system operators will be ultimately passed through to
retail customers. These costs are likely to be proportionately higher
on a per customer basis for smaller utilities.
Question. Please identify what you perceive to be the risks of
retail electric competition, assuming the recovery of stranded costs
from customers leaving a system, to residential and small commercial
customers of rural coops.
Answer. Under several state plans, and, as we understand it, the
Bumpers-Gorton bill, stranded costs will be recovered from all
customers, not just those leaving the system to obtain the benefits of
competitive supplies. This one-time, up-front recovery of stranded
costs, if spread to all customers over a short transition period, could
substantially raise rates in the short-term for residential and small
commercial customers. While larger customers leaving the system to
obtain lower wholesale energy costs may see no net increase in service
costs, USDA has yet to see any indication that small residential and
commercial customers in scattered rural communities will attract the
aggressive attention of competitive energy providers or are likely to
do so in the future. The recovery of stranded costs from all consumers,
therefore, will only tend to raise rates to rural residential and small
commercial customers.
Even today, providing electric service to rural areas requires more
capital investment and higher costs of operation and maintenance and
results in lower revenue per mile of line than service in most urban
and suburban areas. The larger industrial loads have, in the past,
provided rural electric cooperatives with a mechanism to average these
higher costs of service, thereby allowing the cooperatives to provide
residential service at rates that, while still higher than most urban
and suburban areas, were more affordable rates. In a ``deregulated''
competitive electric industry, retail electric providers will be
attracted first to high-volume, high-load factor industrial and large
commercial customers. If these lucrative consumers are ``cherry
picked'' from the system, all cost averaging mechanisms will disappear
and residential and small commercial rates will, most certainly, rise.
USDA does not view short-term stranded cost recovery for investments in
generation assets as a substitute for the support for affordable
universal electric service.
______
Questions Submitted by Senator Harkin
alternative agricultural research and commercialization corporation
(aarcc)
Question. AARC in some ways functions as a venture capital entity.
To what degree do government accounting standards accurately reflect
the AARC portfolio? How do those standards differ from the standards
used in the private sector regarding the capture of audited financial
statistics?
Answer. AARCC functions very much as a private sector venture
capital (VC) fund does. Our expectations of return on investment (R.I.)
are not as high, given our other concerns for job creation and use of
agricultural land. However, our basic investment strategy and deal
structure closely resemble private sector arrangements. Thus, we own
shares in a lot of companies that at present are difficult to value.
Moreover, the value of our equity positions change over time.
In the private sector, a venture capital firm receives its
investment money from limited partners. In effect, AARCC has one
limited partner--the U.S. taxpayer and their funds appropriated to the
Corporation by Congress.
Private sector limited partners have an expectation that the
overall value of the fund will appreciate over time. When money is
invested, an exit strategy is negotiated that gives the fund an overall
expected return at the end point. Calculation of the value of the
investment at any point preceding the exit, however, is problematic, as
discussed above. Typically, a private sector firm values the investment
by looking at the price it paid for its shares and comparing that to
the most recent purchase by another party. Thus, if the VC firm paid
$10 per share last year and the most recent sale this year was for $20
per share, the firm would calculate its investment as having doubled in
value. So, if the total investment was $1 million, the VC firm would
show it to be worth $2 million today. From the perspective of the
limited partners who provided the initial capital, their investment is
appreciating in value, leading up to the exit.
Auditors, however, do not view the calculation of a portfolio's
current value in the same manner. Their concern is with dollars out and
dollars in. Thus, an investment of $1 million will appear as a debit,
until money is recovered. Furthermore, they calculate an allowance, or
discount factor, which is essentially a measure of the probability of
loss. The allowance is calculated based on a number of objective and
subjective measures. An investment of $1 million last year, with zero
allowance--i.e., a 100 percent probability of recovery--is carried
forward as a $1 million debit. There is no room for calculating any
appreciation.
Thus, an investment will not show any record of appreciation until
repayment begins, at which time income will be recognized. Because of
the structure of venture capital investments, repayment may be several
years in the future. AARCC's portfolio, then, may appear to be
depreciating in the near-term, as it will show only debits.
Independent of the financial audits performed on AARCC, we have
made our own informal estimation of the portfolio's value, based on
procedures discussed above as being typical of the VC industry. Based
on that approach, we estimate AARCC's portfolio has increased in value
by about 20 percent since 1993.
Question. What is your assessment of the AARCC portfolio?
Answer. The AARCC Board of Directors prepared a 10-year business
plan for the Corporation. It shows no appropriations following 2002,
and it projects repayments through that same year. There are three
repayment scenarios: low; medium; and high. The high case scenario
anticipates $300,000 being repaid by the end of fiscal year 1998. To
date, AARCC has received $247,713.75 in repayments. Thus, the portfolio
is performing at the high end of the financial projections.
Additionally, as part of the Corporation's 10-year strategic plan, the
Board set goals of 10,000 new jobs created as a result of AARCC
investments and 500,000 acres of unused farmland being put back into
production. We estimate that halfway through the 10-year plan,
approximately 5,000 jobs can be attributed to AARCC investments and
250,000 acres are in use as a result.
Question. How is the AARCC portfolio performing at this time?
Answer. The AARCC Board of Directors prepared a 10-year business
plan for the Corporation. It shows no appropriations following 2002,
and it projects repayments through that same year. There are three
repayment scenarios: low; medium; and high. The high case scenario
anticipates $300,000 being repaid by the end of fiscal year 1998. To
date, AARCC has received $247,713.75 in repayments. Thus, the portfolio
is performing at the high end of the financial projections.
Additionally, as part of the Corporation's 10-year strategic plan, the
Board set goals of 10,000 new jobs created as a result of AARCC
investments and 500,000 acres of unused farmland being put back into
production. We estimate that halfway through the 10-year plan,
approximately 5,000 jobs can be attributed to AARCC investments and
250,000 acres are in use as a result.
Question. What is AARCC's capacity to effectively use a funding
level of $20 million for fiscal year 1999?
Answer. AARCC's vision of agriculture in the 21st century sees a
diverse crop mix, with fibers available for numerous industrial uses.
Some of the fibers will be from waste, e.g. wheat straw, others will be
from plants grown specifically for the fibers. In order to use the
fibers, they will require a variety of processing/pulping steps. What
we envision are regionally placed mini- mills that can process a
variety of fibers for a variety of uses. We have held several meetings
with pulping experts and farmers during the past year, all of whom
agree with the agricultural, technical, and economic soundness of our
vision. With additional funding, AARCC would move to establish a pilot
facility, in conjunction with a grower's group, to demonstrate the
feasibility of the concept.
Additionally, there is a group of companies that constitute the
real financial opportunity in the AARCC portfolio. With additional
funding we would make further investments in them, helping to move them
towards an Initial Public Offering (IPO).
Question. What effect can the work of AARCC have on rural America
in 20 years?
Answer. AARCC's role in the next 20 years will be part of its 100-
year vision for the economy and rural America's role in that economy.
Presently, the basic raw material for the world's economy is petroleum.
We envision an economy where the basic raw material is derived from
biological sources--primarily plants and animals. Given the physical
and chemical nature of petroleum sources, it is profitable to extract
the raw material from one part of the world, transport it halfway
around the globe to process it, and transport it even further to
manufacture a finished product. The physics and chemistry of biological
raw materials do not allow for such economics, however. To be
profitable, the processing and manufacturing of bio-based products must
be done close to the source of the raw materials. Hence, the growth of
jobs in this new bio-based economy takes place in rural America. As
stated previously, our 10-year strategic plan estimates 10,000 new
rural jobs as a result of AARCC investments.
There are other advantages to shifting from an economy based on
geology to one founded on biology. By their chemical structure, the
waste and by-products will be largely biodegradable and eco-friendly.
Moreover, the raw materials will be domestically produced and annually
renewable. To borrow a phrase used by just one group of producers: The
U.S. is the Saudi Arabia of corn. The further national security and
geopolitical implications of such a bio-based economy are evident.
Rural America will be the focal-point of this new economy.
Question. Some ask: if investing in value-added enterprises in
rural areas is such a good idea, why isn't the private sector doing
just that? What is your answer to that question?
Answer. AARCC's role has been and continues to be to serve as a
catalyst for the development and manufacture of bio-based products,
using the raw materials produced by our vast agricultural capacity. A
catalyst is needed, because the price of petroleum still makes it
difficult for such bio-based products to compete. However, with
improvements in bio-processing, the cost differential is shrinking.
Also, when two comparable products--one petroleum-based, the other bio-
based--are subjected to life-cycle cost analysis, the disposal costs of
the bio-based product usually make it more competitive. We are at the
beginning of the transition from geology to biology, and AARCC's
catalytic role is still needed.
The private sector is not ignoring the transition. For every dollar
that AARCC invests, approximately $3.50 of private sector money is
invested in AARCC projects. In addition, there are several examples of
follow-on multi-million dollar investments in AARCC companies, where
the private sector investment was initially attracted by AARCC's ``USDA
Seal of Approval'' on a project.
The AARCC Board of Directors has a 10-year strategic plan and a 10-
year business plan that do not anticipate appropriations after fiscal
year 2002. During this transitional phase, however, it is the Board's
view that AARCC needs to continue to identify and fund those companies
that are the nucleus of the bio-based economy.
business and industry loan program
Question. What is the current level of demand for the B&I loan
guarantee program? What is the expected value of applications for
fiscal 1998 that the Department is likely to not be able to fulfill
because of budget limitations.
Answer. As of March 6, 1998, there were 469 applications on hand
for a total of $923,543,753, with approximately $500 million of the
fiscal year 1998 $1 billion allocated amount either obligated or
authorized for funding. The level of demand for the B&I Guaranteed Loan
Program has remained relatively constant throughout the year. Based on
the above, we expect $900 million of applications will not be funded
due to funding limitations this fiscal year.
Question. If the Department promoted the program to a significant
degree, what would be the likely increase in B&I applications?
Answer. Current efforts to promote the program are centered around
informing lenders and local governments of its availability as well as
responding to general inquiries from businesses. Since publication of
the new regulation on December 23, 1996, the demand for the program has
increased by over 300 percent. With increased promotion of the program,
we can only anticipate the program will continue to grow at a
significant rate.
Question. What is the Department's belief concerning the loss of
employment and economic growth in rural America because of the shortage
in B&I loan funds?
Answer. Based upon our response to your question 1. above and the
expectation that $900 million of applications will not be funded in
fiscal year 1998 due to the lack of available funding, we project
34,200 will not be either created or saved due to the lack of
sufficient funding.
Question. In your personal opinion and based on your research, how
critical is the need for enhanced credit in rural areas?
Answer. Numerous studies, including one conducted by the USDA
Economic Research Service and testimonies at the September 4, 1997,
Senate Agriculture Committee hearing on Rural Credit, indicated that
there are areas in rural America that have a lack of access to
sufficient capital to meet their economic development needs. Without
this credit, these areas do not have the same opportunities other rural
areas have in providing economic opportunity for their residents.
Question. What are your views concerning the proposal by Senator
Bennett to expand the authority of the Farm Credit System and Farmer
Mac to allow them to acquire business loans from rural banks?
Answer. We are currently evaluating the proposal by Senator Bennett
to expand the authority to Farmer Mac. If that proposal provides
additional capital to rural businesses, then we support it. Recently
the Under Secretary for Rural Development has been asked to chair a
task force to evaluate ways the Department may work with Farmer Mac in
order for Farmer Mac to expand its involvement in providing economic
opportunities for rural commercial lenders and businesses.
rural housing service
Question. What would the impact of an increase in the FHA loan
limits, as proposed by the Administration, be on rural housing and on
the rural housing programs of the Rural Housing Service?
Answer. The base HUD 203(b) loan limit in much of rural America is
currently $86,317. An increase in the loan limit, such as the one being
proposed, could prompt an increase in lending activity. This is
especially true for new construction type homes, where some have argued
that the current base is not high enough to support building a new home
in some areas.
Regarding the impact to the rural housing programs of the Rural
Housing Service, the Agency has a mandate to ensure that the dwellings
being financed are modest in design and cost. The proposed uniform HUD
203(b) level exceeds $200,000. Of course, given the incomes of the
customers the Agency serves, it is unlikely that any could afford such
a sizable loan. By statute, maximum loan limits for the Guaranteed
Rural Housing loan program are tied to HUD 203(b) limits. The
guaranteed program has an income gap that will constrain costs with an
increased 203(b) limit. The section 502 Direct loan program currently
uses 203(b) limits as an index for gauging maximum loan amounts and
modest housing, and this philosophy may have to be examined if a
single, uniform 203(b) limit is adopted. The Agency is currently
exploring alternative definitions of modest housing and will publish
the results in the Federal Register in the future.
______
Questions Submitted by Senator Kohl
section 502 single family housing
Question. Section 502, Direct Single Family Program Housing, has
seen a four-fold increase in funding for guaranteeing housing loans
since fiscal year 1994 while, your Direct 502 funding has been cut in
half over that same time period. Has the Agency analyzed how higher
equity requirements that banks have for loan approval will impact
lower-income users of the program?
Answer. The Section 502 direct program serves low and very low-
income rural residents who can not obtain commercial credit under
similar terms. Additionally, we offer payment assistance which reduces
the interest rate down to as little as 1 percent based on income. This
program serves low and very low income residents under 80 percent and
50 percent median income respectively. The Guaranteed Rural Housing
loan program is designed to serve low and moderate income families,
under 115 percent median income, and provides for 100 percent
financing. The Agency's loan guarantee takes the place of the
traditional down payment terms lenders require. Approximately 27
percent of the Guaranteed loans made during fiscal year 1997 went to
low income families primarily due to the prevailing low interest rates
in the commercial market.
Question. The State of Wisconsin is the only state that has changed
their Section 502 formula that establishes ``targeted'' counties. They
found that the allocations formula approved by USDA inadvertently
targeted larger urban counties. I have two concerns with this
situation; first, why did Rural Development's national office create a
formula that targeting funds to areas that not completely rural?
Second, if the formula is skewed, are funds currently targeted to the
rapidly developing rural/urban area?
Answer. The Agency's allocation formula is based on the following
criteria for the Section 502 Housing Loan Program and the data source
for each of these criteria is based on the latest census data
available. The States use these same criterion adjusted with State and
county census data to allocate to the filed offices:
--State's percentage of the National number of rural occupied
substandard units;
--State's percentage of the National rural population;
--State's percentage of the National rural population in places of
less that 2,500 population;
--State's percentage of the National number of rural households
between 50 and 80 percent of the area median income; and
--State's percentage of the National number of rural households below
50 percent of the area median income.
There are a number of factors that contribute to larger numbers of
loans being made in rural areas adjacent to more metropolitan areas.
The first factor is the higher income limits as determined by HUD, of
families living in these areas. The second is the higher section 203(b)
loan limits that are allowed in higher cost areas. Another contributing
factor is the proximity of these rural areas to metropolitan areas
offering good and plentiful job opportunities. Also affordable, new
housing is more plentiful due in part to the more aggressive nature of
the real estate market to serve the low-income population.
The Agency has included in its goals providing outreach and
targeting areas with the greatest need and that have historically been
underserved. Another goal is to use 30 percent of the guaranteed funds
in these targeted counties. We believe the Agency is making every
effort to offer and use its home ownership programs in areas with the
greatest need.
rural telecommunications
Question. For the second year in a row, the Rural Utility Service
hardship telecommunications loan program was cut. However, there is an
increasing demand for loans from that program. Last year there was a
$68 million backlog in requests, and for fiscal year 1998 the RUS is
projecting a $60-$100 million backlog. With such high demands on the
program, when can we expect funding to stabilize or increase?
Answer. As of March 1, 1998, hardship loans approved for fiscal
year 1998 totaled $65.1 million, with an additional $61.5 million in
applications on hand. With an authorized lending level for fiscal year
1998 of $75 million, we estimate that, based upon the number and amount
of applications currently on hand and anticipated by the end of the
fiscal year, the hardship program will have a backlog--or excess demand
over available funding--of $79 million at the end of fiscal year 1998.
As you are aware, the hardship loan program has a fixed interest rate
of 5 percent per annum, thereby resulting in much higher subsidy
appropriation per loan dollar than our Treasury or near Treasury rate
programs.
______
Questions Submitted by Senator Leahy
rural empowerment zones and enterprise communities
Despite the fact that Vermont is the most rural state in the
nation, no area of the state qualified for designation as a Rural
Empowerment Zone or Enterprise Community during the 1994 competition. I
support the EZ/EC program, which has done a great deal to revitalize
the Old North End in Burlington, Vermont. However, I am concerned that
the areas facing the greatest long-term and persistent problems of
unemployment and poverty--our rural areas--can not even compete for
this valuable funding. In particular, a three-county area of the state
known as ``the Northeast Kingdom'' has consistently held some of the
highest unemployment rates in the state, with residents held back by
the lack of job opportunities, training and investments.
As I mentioned in my questions last year, the National Science
Foundation has shown that the way the government measures poverty
today, a basic criteria for eligibility as an EZ/EC, is inaccurate and
that shelter costs among other things should be factored into the
measure. The findings of a 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.
Question. How will the proposed Rural Empowerment Zones be funded?
Will Enterprise Communities be considered again as well, or will this
competition be limited to Zones? If it will be limited to Zones, is
that based on requirements of the authorizing language or was it a
choice of the Administration.
Answer. Although new Zones have been authorized, funding
legislation language has not been introduced as yet for Round II of the
Empowerment Zone program. Since Round I was funded through Social
Service Block Grant (SSBG) funds, it is assumed Congress may use the
same vehicle for Round II.
The Taxpayer Relief Act of 1997 authorized five (5) Rural Zones and
no Enterprise Communities for Round II. The President's budget called
for $200 million ($100 million for USDA and $100 million for Housing
and Urban Development (HUD) for the Rural Zone program in Round II,
giving a total of $40 million for each of 5 Zones over a 10 year
period. Unless that is changed in the funding legislation the new
designations will be limited to Zones only.
Question. Can and will the Department take into consideration the
National Science Foundation's recommendations and studies like the
Vermont report I mentioned above when setting the eligibility criteria
for the new round of awards?
Answer. The Empowerment Zone & Enterprise Community legislation
requires that we use the 1990 census figures along with the poverty
levels in determining eligibility. The criteria are as follows:
legislation limits the program to rural communities of 30,000
population or less, and not exceeding 1,000 square miles in size. The
pervasive poverty and distress criteria require a minimum poverty rate
of 20 percent in each census tract, or 25 percent poverty rate in 90
percent of the census tracts, or a 35 percent poverty level in 50
percent of all census tracts used in the application. For Round II the
authorizing legislation drops the 35 percent poverty level criterion,
and adds criteria for selecting communities with out-migration
concerns. New legislation would be required to change the basic
criteria to include such factors as underemployment.
Question. I understand that communities which applied for EZ/EC
status during the 1994 competition but were unsuccessful, have still
been able to tap into program funding that the Department has set-aside
for EZ/EC's. Will that option continue to be available for unsuccessful
applicants, and if so, please describe the programs affected and how
communities can tap into them?
Answer. It has been our experience that more potential designations
provide greater incentives for community participation. Community
participation is essential to the success of this program. With only
five Rural Empowerment Zones in Round II the likelihood of small,
impoverished rural communities taking the time, effort and money to
prepare an in-depth proposal is greatly diminished. The new Round II
legislation also allows, for the first time, tribal lands and the
problem of out-migration to be addressed, thus further reducing the
potential for success of an individual community.
Even participating communities that are not designated end up
winners by going through the rigorous strategic planning process
required by the program. At USDA we call them our Champion Communities.
In Round I, over 225 rural communities participated by pulling together
community resources and developing a strategic plan, only 33
communities were designated, the rest were champion communities.
Champion Communities.--Today there are nearly 200 Rural Champion
Communities who lost out in the Round I designation competition, yet
they have been successful in attracting federal and state dollars to
their communities over $100 million federal dollars in housing, water/
sewer funding, business programs and other assistance. They have been
successful because they had developed a strategic plan of action for
the Round I EZ/EC Application. These were not special set-asides, they
were normal USDA programs available to most rural communities, but
these Champion Communities had strategic plans that put them a step or
two up on competing rural communities for federal, state and private
programs designed to improve their economic and social conditions.
venture capital program
Question. Administration testimony indicates that rural America is
losing business opportunities because we don't fund programs that help
diversify local rural economies. Everyone acknowledges there is a lack
of investment capital in rural areas. Yet the administration does not
support a demonstration program which would work to get venture capital
to rural America. Section 761 of the 1996 farm bill provides for the
use of a limited amount of guarantee authority to attract private
investor funding for rural venture capital pools. Why is no funding
requested for this program in fiscal year 1999? On December 11, 1997 I
wrote to Secretary Glickman clarifying the intent of the fiscal year
1998 Agriculture Appropriations Report language regarding the Venture
Capital funding and requesting that the Department proceed with the
development of rules for this program. Three months later I have not
yet received a response to that letter, and have received no indication
that work on these regulations is proceeding. When does the Department
expect regulations for the program to be published? Is the Department
consulting with outside organizations with experience in venture
capital in the development of those regulations?
Answer. The Agency is considering options available for
promulgating regulations to implement this program. As part of that
process, an advanced notice of proposed rule making was published in
the Federal Register on April 9, 1997, requesting comments for
implementing this authority. Five comments were received and are being
considered in the drafting of the regulation. The fiscal year 1998
Appropriations Bill does not appropriate funding for this program, and
the President's fiscal year 1999 Budget does not request funding for
this program. However, we are in the process of developing a proposed
rule. We anticipate publication of the proposed rule by early calendar
year 1999.
In addition, the Department has consulted with House and Senate
staff on implementation of the program and have had limited
consultation with outside organizations. Since regulations will be
published as a proposed rule, with a public comment period, additional
opportunities will be afforded to outside organizations with experience
in venture capital funding to comment.
centralized loan servicing
I am hearing from an increasing number of Vermonters about problems
they have experienced with the USDA Centralized Loan Servicing program.
Some have told of treatment at the hands of Rural Housing personnel
that would not be acceptable in any lending situation. An example of
these problems follow.
One constituent initially wrote to me in January when RHS raised
her payments from $300 to $451, even though her husband's income had
decreased and she was not working. An RHS worker in St. Louis was rude
to her on several occasions and told her the Vermont office had been
doing the calculations wrong all along, resulting in a history of
underpayment. The Vermont office advised her to apply for a review of
interest credit and she got permission to continue paying the $300 a
month. By February 10, RHS did reduce the payment amount to $210 a
month, but the constituent no longer trusts RHS and wants to refinance
because the fluctuating interest rates (up to 13\1/2\ percent) are hard
to take. Her next problem was getting the information she needed
regarding the recapture fee. When she finally got her payoff packet,
she couldn't believe they still owed $48,000 recapture fee on a loan
that was originally $43,000 sixteen years ago. When she called
centralized servicing with questions, she couldn't find anyone who
could answer her questions. A month later she finally found a bank to
refinance her home, but the bank pulled out after all the paperwork was
approved and the appraisal was scheduled. The reason given: the bank
didn't agree to RHS subordination requirements. This came up after she
had put the appraiser in touch with St. Louis to make sure he
understood the specific requirements that RHS had been telling her. The
branch manager told her the bank was afraid of being sued by RHS if,
for instance, the bank had to foreclose on the mortgage and failed to
contact RHS. Instead, the bank is only willing to finance the entire
amount, including the amount subordinated by RHS, and option the
constituent would not be able to afford. She is now searching for
another lender who will refinance the home and work with RHS
subordination requirements.
Question. What is the current first year delinquency rate for loans
serviced at the centralized servicing center?
Answer. As of March 14, 1998, the first year delinquency rate at
the Centralized Service Center (CSC) was 11.7 percent for borrower
delinquency and 11.0 percent for loan delinquency. The borrower figure
represents subsequent loans for repair or rehabilitation work on their
homes. Some of these loans are delinquent due to the impact of
conversion of all of the single family direct loans in the field to the
CSC and the transition to a new system.
Question. What is the current overall delinquency rate?
Answer. As of March 20, 1998, the overall delinquency rate for all
loans serviced at the CSC is 19.8 percent. This includes subsequent
loans that many borrowers have taken for repair or rehabilitation work
on their homes. In any conversion of a large portfolio, whether public
or private, the delinquency rate is expected to spike initially as
staff and customers adjust to a new system and implementation
conversion problems are fixed. We expect the delinquency rate to fall
significantly by the end of the fiscal year.
Question. What were the first year delinquency rates and overall
delinquency rates during the year preceding the switch to the
centralized servicing system.
Answer. The first year delinquency rate was 7.3 percent during
1996. The overall delinquency rate on September 30, 1997, (the
effective date of the last conversion) was 15.0 percent.
Question. What is being done to correct problems which appear to be
causing RHS personnel to contact loan recipients with inaccurate
information on loan delinquency or payment levels?
Answer. The Section 502 borrowers initially receive payment
assistance which subsidizes the interest rate down to 1 percent based
on income. Our regulations require that we verify the income for each
borrower on an annual basis and make adjustments to the subsidy if
there were changes in income. In the conversion of the loan portfolio
to the Centralized Service Center (CSC), we experienced delays in
recertifying the payment assistance to borrowers. Performance in the
processing of expired payment assistance has improved significantly.
There were many issues in obtaining complete subsidy renewal packages
from borrowers. If necessary documentation for subsidy renewal was not
forwarded to the CSC in a timely manner, the borrower would be billed
at the note rate of their mortgage. Plans are under way to utilize
field personnel to assist in those cases where the borrower has not
sent in the complete package. Currently, approximately 70 percent of
recertification packages received at the CSC are completed and
processed immediately. The remaining 30 percent of incomplete packages
require additional contact to obtain the necessary information needed
to certify income. The 70 percent completion rate of recertification
packages is a significant from when the CSC first began operations, as
the borrowers adapted to the new system.
Question. What difficulties are harried RHS loan recipients who
seek to refinance their homes in the private market facing from RHS and
what is RHS doing to make this transition smoother for clients who feel
they can be better served in the private market?
Answer. The Section 502 borrowers initially receive payment
assistance which subsidizes the interest rate down to 1 percent based
on income. Our regulations require that we verify the income for each
borrower on an annual basis and make adjustments to the subsidy if
there were changes in income. In the conversion of the loan portfolio
to the Centralized Service Center (CSC), we experienced delays in
recertifying the payment assistance to borrowers. Performance in the
processing of expired payment assistance has improved significantly.
There were many issues in obtaining complete subsidy renewal packages
from borrowers. If necessary documentation for subsidy renewal was not
forwarded to the CSC in a timely manner, the borrower would be billed
at the note rate of their mortgage. Plans are under way to utilize
field personnel to assist in those cases where the borrower has not
sent in the complete package. Currently, approximately 70 percent of
recertification packages received at the CSC are completed and
processed immediately. The remaining 30 percent of incomplete packages
require additional contact to obtain the necessary information needed
to certify income. The CSC modified request forms to educate our
borrowers when completing the recertification packages. This has
resulted in a significant improvement from the 30 percent rate of
completed forms received in the CSC in March of 1997 compared to the
current rate of 70 percent.
fund for rural america
Question. The Senate Agriculture Committee, on which I am also a
member, is currently in conference with the House on a bill to
reauthorize agricultural research programs. The Senate bill also
corrected a technical error in the Farm Bill which eliminated funding
for the Fund for Rural America in fiscal year 1998. If funding for the
program is restored for fiscal year 1998, will the Department be ready
to publish a Request for Proposals and administer a competition in
fiscal year 1998, and when would that RFP be published? What division
of funding between research and rural development would you anticipate?
During the fiscal year 1997 competition virtually all of the funding
for rural development was used to simply boost funding for current
programs. The role of the Appropriations Committee has traditionally
been to establish the appropriate program funding levels. I was very
disappointed that the Department chose to dedicate such a large
percentage of the rural development dollars in the Fund to changing
those program levels. If funding is restored for fiscal year 1998 will
the Department take a more creative approach to the rural development
funding piece? In particular, there is a real need for funding for
initiatives which do not fit neatly within a specific rural development
program, but achieve the same goals such as economic and infrastructure
development. Will the Department consult with the authorizing and
appropriating committees when deciding on the focus of a potential
fiscal year 1998 competition?
Answer. The Department's ability to respond to restored funding for
fiscal year 1998 will depend on the timing of the funding restoration
and the legislation itself. The Department has made no decisions on the
division of funding between research and rural development. Regarding
the use of funds for rural development in fiscal year 1997, the statute
required the funding to go through existing programs. Our ability to be
innovative was constrained by the statute and existing program
regulations. We chose to dedicate a significant amount of funding to
Section 502 housing because of the decrease in the program level. If
funding is restored for fiscal year 1998, the Department will still be
restricted, by the statute and program regulations, in its ability to
be creative. The Department would be pleased to discuss with the
authorizing and appropriating committees your views on how the funds
should be used.
lan/wan/voice
Question. Can you comment on how the Department is implementing the
cost savings from a common computing and telecommunications environment
in local USDA service centers?
Answer. The Business Process Reengineering (BPR) efforts underway
are the foundation for all Information Technology investments. The base
infrastructure provided by Service Center implementation initiatives
like the Common Computing Environment and the LAN/WAN/VOICE project are
essential to implement reengineered business processes such as Rural
Development's Dedicated Loan Origination and Servicing (DLOS) System.
For example, LAN/WAN/VOICE installations at the DLOS sites permitted
timely implementation of the DLOS system. The cost savings from DLOS
implementation are already reflected in Rural Development's budget
which has already been reduced by Congress to account for the DLOS
reengineering effort. In the future, the Service Center
implementation's BPR's underway will result in additional cost savings
to Rural Development and the other partner Agencies. We are in the
process of validating the cost savings resulting from BPR.
section 515 housing program
I am very concerned with the continuing decline in funding for the
Section 515 Multi-Family housing program. In fiscal year 1999 the
Department is proposing a decrease in funding of approximately $30
million.
Question. What would the impact of this reduction be on the number
of people served and the number of units created or rehabilitated in
comparison to fiscal year 1998?
Answer. With a program level of $150 million for the Section 515
program, in fiscal year 1998, the Agency will use approximately $99.5
million for new construction and $50.5 million for repair/
rehabilitation purposes. At these levels, the Agency estimates that we
will build 2,287 new units and repair or rehabilitate 5,012 existing
units. A reduction of $50 million for fiscal year 1999 would result in
only 1,667 new units and the repair or rehabilitation of 2,445 existing
units, if costs remained constant. Consequently, less families will be
served with the reduced funding.
Question. Please provide me with this same data over a 10 year
period of time--I am interested in seeing the comparative funding
levels and number of units created over the past 10 years.
Answer. The information follows:
SECTION 515 APPROPRIATIONS AND OBLIGATIONS--FISCAL YEARS 1988-1998
[Run Date: March 9, 1998]
----------------------------------------------------------------------------------------------------------------
Obligations to
Fiscal year Allocations date Units built
----------------------------------------------------------------------------------------------------------------
1998 \1\........................................................... $150,000,000 $110,000,000 2,468
1997 \2\........................................................... 153,132,327 152,497,187 1,913
1996 \3\........................................................... 151,009,628 151,009,628 2,853
1995............................................................... 183,319,000 182,037,517 11,542
1994............................................................... 540,107,000 509,380,278 15,340
1993............................................................... 573,900,000 569,704,650 14,787
1992............................................................... 573,900,000 564,262,480 15,396
1991............................................................... 576,185,201 573,904,776 16,063
1990............................................................... 571,904,000 568,236,051 15,996
1989............................................................... 554,934,000 551,503,713 16,465
1988............................................................... 554,935,000 551,503,713 16,465
----------------------------------------------------------------------------------------------------------------
\1\ The $110 million figure represents obligations to date including one subsequent loan. Approximately $94
million will be used for new construction.
\2\ $95.9 million was used for new construction. The balance was used for rehabilitation/repair.
\3\ Approximately $74.4 million was used for new construction. The balance was used for critical health and
safety and deferred maintenance.
______
Questions Submitted by Senator Byrd
water and waste
Chairman Cochran, Senator Bumpers, members of the subcommittee, and
Undersecretary 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. In
particular, the Rural Utilities Service (RUS) programs provide small
rural communities with grants and loans for water and waste disposal
systems--infrastructure that I deem 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 $1
billion dollars.
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 slights the most basic needs of the people, and
that we must take action to restore common sense to our budget
priorities. This hearing is a welcome opportunity to renew attention to
the critical need for federal investment in basic infrastructure, and I
have several questions regarding the President's proposed budget in
this regard.
First, I am pleased that the proposed budget for water and waste
water systems includes an approximately $100 million increase for the
loan programs. You state in your prepared remarks that this proposed
budget will provide new water service to about 500,000 rural residents.
I would be interested in reviewing a state-by-state breakdown of the
residents expected to benefit from this budget.
Question. Do you have such a breakdown?
Answer. The estimate was based upon nationwide averages. We can
allocate this estimate, by state, using the amount of funds initially
allocated per state and the same ratio of loan and grant dollars to
people served.
Question. If not, I would appreciate your providing me with such a
chart.
Answer. The following table is submitted for the record.
RUS water systems--estimate of people to be serviced in fiscal year 1999
Alabama....................................................... 12,061
Alaska........................................................ 1,172
Arizona....................................................... 3,976
Arkansas...................................................... 9,148
California.................................................... 12,777
Colorado...................................................... 3,872
Connecticut................................................... 3,173
Delaware...................................................... 1,010
Florida....................................................... 11,310
Georgia....................................................... 15,815
Hawaii........................................................ 899
Idaho......................................................... 3,496
Illinois...................................................... 12,469
Indiana....................................................... 11,554
Iowa.......................................................... 7,369
Kansas........................................................ 5,112
Kentucky...................................................... 14,376
Louisiana..................................................... 10,022
Maine......................................................... 4,443
Maryland...................................................... 4,459
Massachusetts................................................. 3,884
Michigan...................................................... 16,931
Minnesota..................................................... 8,858
Mississippi................................................... 12,910
Missouri...................................................... 11,463
Montana....................................................... 3,197
Nebraska...................................................... 3,123
Nevada........................................................ 965
New Hampshire................................................. 3,043
New Jersey.................................................... 3,144
New Mexico.................................................... 3,982
New York...................................................... 14,489
North Carolina................................................ 19,548
North Dakota.................................................. 2,116
Ohio.......................................................... 17,152
Oklahoma...................................................... 7,819
Oregon........................................................ 6,013
Pennsylvania.................................................. 20,298
Puerto Rico................................................... 21,008
Rhode Island.................................................. 742
South Carolina................................................ 10,131
South Dakota.................................................. 2,525
Tennessee..................................................... 13,296
Texas......................................................... 21,008
Utah.......................................................... 1,689
Vermont....................................................... 2,403
Virginia...................................................... 11,889
Virgin Islands................................................ 515
Washington.................................................... 7,194
West Pacific Areas............................................ 515
West Virginia................................................. 9,319
Wisconsin..................................................... 10,126
Wyoming....................................................... 1,373
Unallocated................................................... 83,593
--------------------------------------------------------------
____________________________________________________
Totals.................................................. 504,774
It is my understanding that Water 2000 was designed to assist those
communities with the most limited financial resources and highest
poverty rates. I have been advised that many West Virginia communities
awaiting federal assistance for water and waste disposal systems would
require substantial grant funds to make water or waste water systems
economically feasible for the community to operate.
Question. Do you agree with this assessment? Does a similar
assessment exist nationwide?
Answer. We agree that there are rural communities in West Virginia
and in other parts of the country that need substantial grant funds in
order to construct or improve a water or waste disposal system.
However, the majority of rural communities across the nation can afford
to repay a loan to cover some, if not all, of the construction-related
costs and successfully operate the system. We assist communities in
constructing facilities that are modest in size, design and cost which
helps lower the overall project cost and the need for grant funds.
Additionally, the lowest income communities can qualify for a loan with
an interest rate of 4.5 percent thereby helping to lower user rates. A
majority of the loans made by the Agency were at the 4.5 percent rate
or the intermediate rate, which is currently 4.875 percent. Higher
income communities pay the market rate which is now 5.25 percent.
If this assessment is accurate, the loan programs are effectively
worthless to many small towns, unless accompanied by a grant.
Question. Given this situation, why has there been no proposed
increase in funding for the water and waste disposal grant program?
Answer. The requested budget authority levels for water and waste
disposal loans and grants reflects budgetary considerations and the
funding needs of all Rural Development programs. The Rural Development
State Directors have been given authority to transfer budget authority
between the water and waste loan and grant accounts. This provides them
with the flexibility necessary to match dollars with the needs of their
States.
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? In West Virginia?
Answer. We see the policy initiative of Water 2000 as a continuing
effort to help rural people achieve a better quality of life. Bringing
clean water to rural households is only part of the battle. Once water
is available, it must continue to meet Safe Drinking Water Act
standards. Over 60 percent of the water and waste loan and grant funds
is used for expansion, replacement, and renovation of existing systems,
replacements and renovations necessary for the systems to provide
quality service to their rural customers.
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. The water and waste programs have over $3 billion in
funding requests on hand. If additional funding were provided for Rural
Development programs, the water and waste programs should receive
consideration for these funds.
______
Questions Submitted by Senator Bumpers for Senator Dorgan
rural area economic partnership (reap)
In fulfillment of a promise made by the President in 1993 to
address rural out migration and the resulting economic hardship, the
USDA's Office of Rural Development signed a Memorandum of Understanding
with several entities in North Dakota to create the Rural Area Economic
Partnership (REAP) Pilot Program. The President made a commitment to
the REAP zones because the standard EZ/EC programs did not work for
areas of high out migration.
I think the grassroots organization of the REAP zones is going
well. However, I have some concerns that USDA is presenting what might
be usual Department expenditures in these zones as commitments toward
the President's promise of $10-$25 million for each of the zones as
demonstration areas.
Question. I have received a report from USDA on expenditures in the
REAP zones, but I would like the Department to provide for the record a
dollar figure on what it believes was provided to the REAP
demonstration areas in fiscal year 1997 above and beyond the funds
these areas would normally receive through USDA programs.
Answer. USDA Rural Development assistance to participating North
Dakota counties has risen sharply over the level for the period of
1991-1995. The 14 county area encompassed within the two REAP zones
show an average of less than $3 million a year in Rural Development
funding dollars (not including single family housing) during 1991-95.
During the fiscal years 1996 and 1997 and a small portion of fiscal
year 1998 the annual average to the REAP counties is approximately $12
million annually.
Question. What formal planning and accounting mechanism is in place
to assure that funding promised to the REAP zones is delivered?
Answer. The Office of Community Development is in the process of
completing a data base program for all related rural development
programs that will provide an annual tabulation of all of this
information for the future.
Currently, applications for certain USDA grant and loan programs
submitted from the REAP zones receive up to five additional points.
These programs are the Rural Business Enterprise Grants (RBEG), Rural
Economic Development Loan and Grant Program (REDLG), Business and
Industry (B&I) and the Community Facilities (CF) Program.
This means that the REAP zones receive no additional points for the
Water and Waste Program, the Intermediary Relending Program, several
important rural housing programs, and the Forest Service economic
development programs.
Question. What is the rationale for applying the additional points
only to those four programs listed? What steps are being taken to
incorporate the REAP zones into all aspects of Rural Development's
portfolio?
Answer. With the exception of the Forest Service economic
development program, which is not in the North Dakota Rural Development
portfolio, the North Dakota State Director for Rural Development gives
maximum points to all Rural Development programs to the extent allowed
by regulations.
Currently USDA is working to establish the first ever rural
Enterprise Zone (EZ) based on, in part, out migration. Rural North
Dakota has suffered from staggering net outmigration (more than 15
percent) and the accompanying economic stagnation.
Question. How is USDA going to inform and involve local entities
interested in pursuing the designation for the Rural EZ?
Answer. In coordination with the official announcement of Round II
during the month of April, USDA has tentatively scheduled 12 Regional
Workshops strategically placed around the country. One workshop, which
will have a large concentration of communities with problems of
outmigration, is tentatively scheduled to be held in South Dakota.
We will officially notify all Members of Congress with the specific
dates, times and places of these workshops as they are finalized. We
would hope that Members would provide this information to their
communities and to other special interest groups within their states
and Districts.
All State Rural Development offices will be involved in contacting
and informing state agencies, community interest groups, and others.
The USDA Office of Intergovernmental Affairs.
Subcommittee Recess
Senator Cochran. This will conclude our hearing today. We
will continue to review the Department of Agriculture budget at
another hearing on Tuesday, March 10 in this room 138 of the
Dirksen Senate Office Building. At that time, we will be
looking at the budget request for the Department's food,
nutrition, and consumer services programs. Until then, the
subcommittee stands in recess.
Ms. Thompson. May I?
Senator Cochran. Please.
Ms. Thompson. Mr. Chairman, I do not know that I have
appropriately thanked you for your leadership on rural
development issues. I sort of went into my budget testimony
without doing that. As I have traveled around the country and
had an opportunity to meet with community leaders in
communities that are really challenged, I know from firsthand
experience talking with these leaders, these folks, that your
leadership is truly making a difference. Your leadership here
in the U.S. Senate is truly making a difference. Because I
continue to live in a rural community and my husband sits on a
local school board of a small school, I also know from that
experience how valuable your leadership is. Thank you for the
very strong support that you give to rural America.
Senator Cochran. Well, I appreciate very much the kind
remarks. I am grateful to you for saying that, and I look
forward to continuing to work with you and your staff and
associates in helping achieve even better success in the
future. Thank you very much.
The hearing is adjourned.
[Whereupon, at 11:30 a.m., Tuesday, March 3, the
subcommittee was recessed, to reconvene at 10:11 a.m., Tuesday,
March 10.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, MARCH 10, 1998
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, Burns, and Bumpers.
DEPARTMENT OF AGRICULTURE
STATEMENT OF SHIRLEY R. WATKINS, UNDER SECRETARY, FOOD,
NUTRITION, AND CONSUMER SERVICES
ACCOMPANIED BY DENNIS KAPLAN, BUDGET OFFICE
Food and Nutrition Service
STATEMENT OF YVETTE JACKSON, ADMINISTRATOR
ACCOMPANIED BY RONALD J. VOGEL, ASSOCIATE DEPUTY ADMINISTRATOR, SPECIAL
NUTRITION PROGRAMS
Center for Nutrition Policy and Promotion
STATEMENT OF RAJEN ANAND, EXECUTIVE DIRECTOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
Today we continue our review of the budget request for
fiscal year 1999 submitted by the President for the Department
of Agriculture and related agencies. We are specifically
reviewing today the request for programs and activities of the
Food and Nutrition Service of the Department of Agriculture.
The Under Secretary for Food, Nutrition, and Consumer
Services is Ms. Shirley R. Watkins, whom we welcome to the
hearing today. She is accompanied by others responsible for
activities in the Service. We will invite her to introduce her
associates and colleagues on the panel.
I notice that this year's request represents about 68
percent of the total budget authority proposed for all USDA
programs and activities under the jurisdiction of this
committee. Sixty-eight percent. Now, that ought to illustrate
to everyone how important it is for us to review this budget
proposal carefully and to understand the programs that are
funded by this appropriations request.
Some of the better known programs, of course, are the Child
Nutrition Programs. We see a $1.5 billion increase in mandatory
funding is required to support these programs for fiscal year
1999. We have the Food Stamp Program; the Special Supplemental
Nutrition Program for Women, Infants, and Children [WIC]; and
other food assistance programs to review in this hearing.
We appreciate very much the cooperation with the
subcommittee of Ms. Watkins and others who have endeavored to
stay in touch with us and keep us aware of problems and
situations regarding the funding of these programs. We had a
difficult time last year resolving some of these differences
with our friends over in the other body, but nonetheless, we
worked our way through a number of issues and we were happy to
see the administration become creative, as we have suggested
they might have to, in order to continue to carry out
responsibilities that are required of them by law.
I have been impressed with the work of Ms. Watkins and
others who have tried very hard to see that those who do need
assistance in meeting their own nutrition needs have that
assistance available.
We cannot do it all through these programs. There are many
others who are involved, many private organizations,
foundations, churches, neighbors, friends, and others who all
are committed, I think, to the proposition that nobody in
America ought to go without food. That we are a rich country;
we are a caring country; and that working together, Federal,
State, and local governments and private associations and
charities surely can meet all these needs that exist out there.
So, we are not in this alone. That is another point that I
want to make. To assume the responsibility for trying to solve
every problem that we have in this country and the world too
through appropriations from this committee is probably a
mistake from the beginning. But we do feel that we have a role
to play and a very important one--a role of leadership.
So, we will seek to work with the administration to define
that role in a thoughtful way and a responsible way and to
provide the funds that are available to us under the allocation
process. We cannot generate money out of the air. We have to
have it allocated to us under a budget resolution, and that is
yet to be completed.
So, with those realities in mind, we welcome Ms. Watkins
and her associates. I am happy to now yield to my distinguished
friend and colleague from the State of Arkansas, Senator
Bumpers.
STATEMENT OF SENATOR BUMPERS
Senator Bumpers. Thank you very much, Mr. Chairman.
Do you know why you are impressed with Secretary Watkins?
She is from Arkansas. [Laughter.]
And you know what else? She is from Hope, AR.
Senator Cochran. Oh, my goodness.
Senator Bumpers. Is this nepotism? Did you go to school
with you know who? [Laughter.]
We are very proud of Secretary Watkins, and I agree with
you, Mr. Chairman. She is doing an excellent job.
I just wanted to welcome her and her colleagues to the
hearing this morning. This is something that should not be
terribly controversial, just a few questions about how some of
these programs are working.
Prepared Statement
With that, Mr. Chairman, I will ask unanimous consent that
I be permitted to insert my opening remarks for the record.
Senator Cochran. Without objection, it is so ordered.
[The statement follows:]
Prepared Statement of Senator Bumpers
It is a pleasure to welcome Secretary Watkins to our subcommittee
not only as a representative of the Department of Agriculture, but also
as a fellow native Arkansan. I also want to extend my welcome to the
other USDA officials who are with us today.
I am often asked by constituents why food stamps and other programs
associated with ``welfare'' are included in ``farm'' legislation. It
seems to make little difference to them whether that legislation is a
farm bill or an agriculture appropriations bill. The more cynical
answer to that question is that you have to include programs in farm
legislation that have the support of urban Members of Congress in order
to assure passage. In other words, if you want to pass legislation for
agricultural research, conservation, or rural development, you had
better include provisions to provide assistance to large numbers of
people in the cities as well.
As is usually the case, a more accurate answer can be found in
history. In 1936, the forbearer of the Food Stamp program began as the
Commodity Distribution to Needy Families Program. This New Deal era
program was not designed primarily as a ``food assistance'' program.
Instead, the main purpose of this program was to create markets for
farm assistance purposes. The original federal food assistance program
was a farm program. Gradually, the program evolved by 1975 into the
nation-wide Food Stamp program it is today, by far the largest single
program in this subcommittee's jurisdiction.
The Food Stamp program may be the largest single program we fund
every year, but it is by no means the only food assistance program in
our appropriations bill. The Child Nutrition Programs, the WIC program,
the various commodity distribution programs, and others, all contribute
to our national standard that there is no place in the United States
for hunger. These programs are expensive, but they go far to reduce
future health care costs and to calm the national conscience in a
recognition that the well being of all our people does matter.
In recent times, the Congress has given much attention to so-called
Welfare Reform and the concept that people need to take greater
responsibility for themselves. To a large extent, Welfare Reform is
tied to food assistance. Changes in the Food Stamp program were a part
of Welfare Reform. We are now presented with proposals to revisit some
of the reform provisions that have been concluded as overly harsh.
There is certainly nothing wrong with expecting more responsibility,
especially among our adult populations, but we must keep in mind our
own responsibilities to children and other members of our society who
may have nowhere else to turn but to a benevolent government.
I do not mean to imply that food assistance is totally a
governmental responsibility. For many years before the government
linked farm and food assistance together in 1936, churches, synagogues,
and numerous charities and civic groups joined together in a common
cause to protect the most vulnerable among us. The USDA food assistance
programs are not designed to replace the traditional charitable
efforts, but supplement and support them. In fact, this subcommittee
has provided funding to help with transportation and other
administrative costs to facilitate the donation of food from various
donors through the TEFAP program. In addition, the Secretary is now
committed to develop a nation-wide food gleaning program to make use of
the billions of pounds of food that is wasted every year at our retail
and food service outlets. Just because the United States is a land of
plenty does not excuse ours being a land of wastefulness.
Concurrent with consideration with the fiscal year 1999
appropriations bill is congressional attention to reauthorization of
the Child Nutrition Programs and WIC. The purpose of that legislation,
as with this subcommittee's responsibility, is to assure that national
resources are put to best use and that all our people are given
adequate opportunities to proper nutrition and a healthy life. I look
forward to hearing today's testimony by our friends from USDA and to
working with Senator Cochran and others on this subcommittee in
crafting the coming year's appropriations bill to assure the mission of
us all is properly achieved.
Statement of Shirley R. Watkins
Senator Cochran. Ms. Watkins, we have a copy of your
statement, which we appreciate very much. It will be printed in
full in the record. We encourage you to make whatever comments
you think would be helpful to the committee. Please introduce
those who are with you.
Ms. Watkins. Mr. Chairman and Senator Bumpers, thank you
very much for letting us appear before you this morning. I
would like to present the staff who are joining me today.
Yvette Jackson, the Administrator for the Food and Nutrition
Service. She has previously appeared before this committee as
the Deputy Administrator for the Food Stamp Program. We also
have to my right Ron Vogel who is the Associate Deputy
Administrator for Special Nutrition Programs for the Food and
Nutrition Service; Dr. Rajen Anand who is the Executive
Director for the Center for Nutrition Policy and Promotion; and
Dennis Kaplan who is the Department's Deputy Director for
Budget, Legislative, and Regulatory Systems in the Office of
Budget and Program Analysis. And in the audience, we also have
the Deputy Under Secretary for the Food and Nutrition Service,
Julie Paradis.
Food and Nutrition Service Fiscal Year 1999 Budget Request
Mr. Chairman, I appreciate so much this committee's support
for these programs and you have shown that throughout the
years.
As you have indicated, I am submitting my written testimony
for the record, and I do have a few comments that I would like
to make.
The fiscal year 1999 budget request for the Food and
Nutrition and Consumer Services totals some $39.2 billion. This
includes $25.1 billion for the Food Stamp Program, another $9.2
billion for the Child Nutrition Programs, $4.1 billion for the
WIC Program, $317.1 million for the Commodity Assistance
Program, and $111.8 million for our Food Program
Administration.
The Food and Nutrition Service funds more than 100 million
meals every day, and most of these go to poor families. We
strive to enhance the public's confidence in these programs by
ensuring that they are efficient, that they have program
integrity, and that there is fairness in the programs.
Additionally, these programs support American agriculture
by providing families and individuals the means to purchase
food products and by purchasing commodities for donation to
many of the public and private cooperators at both the State
and the local levels.
We view the 15 food assistance programs--and I like to call
them Nutrition Assistance Programs--collectively as the
critical link to alleviating hunger in this country. Each one
of these programs plays a significant role in the nutrition and
health of children and families.
The Food Stamp Program
I want to address first our largest program and that is the
Food Stamp Program.
The Clinton-Gore administration will submit legislative
proposals to restore food stamp benefits to legal immigrants
with certain exceptions and to ensure that common
administrative costs are allocated fairly among TANF, food
stamps, and Medicaid.
In fiscal year 1997, FNS had significant success in the
Food Stamp Program, and I would just like to cite some of
those.
Continuing the nationwide campaign to increase payment
accuracy. In the last 5 years, there has been a steady decline
in the overpayment error rate. The rate has fallen from 8.3
percent in fiscal year 1993 to 6.9 percent in fiscal year 1996.
This reduction has resulted in a savings of nearly $665
million.
Increasing recipient fraud disqualification from 94,000 in
fiscal year 1996 to 105,000 in fiscal year 1997. This is an
increase of about 12 percent.
Some 28 States have implemented EBT, and 13 of those
systems are statewide, as of the end of December 1997.
We are going to contract for approximately 35,000 onsite
and postauthorization store visits annually beginning in fiscal
year 1998 to supplement FNS' oversight of retailers. We
disqualified over 1,500 retailers for violations during fiscal
year 1997. Of those, 933 were permanent disqualifications for
trafficking violations. This represents a 23-percent increase
from fiscal year 1996.
The Child Nutrition Program
The next area I would like to address is the Child
Nutrition Program whose authorization expires at the end of
this fiscal year. We do have a legislative proposal to
reauthorize WIC and several child nutrition programs as they
expire at the end of this fiscal year. That should be in your
hands sometime before the day is over.
Beginning with the school meals, these programs we feel are
the foundation in nutrition supplying children with food that
they need and low-income adults with the help to meet their
families' food budget. Every day we serve 26 million
schoolchildren a nutritious school lunch, while about 7 million
children eat a school breakfast.
Low-income children served by the National School Lunch and
School Breakfast Programs need basic nutrition assistance not
just during the school year, but they also need that assistance
in the summer as well. The Summer Food Service Program fills
that critical need in providing meals at schools and at
recreational sites during the summer. We have made a concerted
effort to reach more children in the Summer Food Service
Programs. Only a fraction of the needy children who eat a
school lunch during the regular school year also receive a meal
in the Summer Food Service Programs.
In fiscal year 1999 we estimate that in excess of 149
million meals will be served. That is an increase of about 8.6
million meals over the fiscal year 1998 projections. In
addition, we estimate that the summer program will serve almost
2.6 million children. That is an increase of almost 150,000
children over 1998.
In our Nutrition Education and Training Program, that
program has a 19-year history of delivering cost-effective
nutrition education, training, technical assistance as a
component of our Child Nutrition Programs. Funding NET at the
requested $10 million level will enable State and local food
authorities to use the established NET infrastructure to
deliver nutrition education to students, educators, and
parents, as well as our food service personnel in the schools
and in child care centers. The NET infrastructure offers an
effective and cost-efficient vehicle for reaching some 94,000
schools across the Nation.
The other area is our Child and Adult Care Food Program.
That program provides assistance in reimbursements and
commodities to child and adult care programs across the
country. This includes providing nutritious meals to serve
preschoolers and elementary school age children in child care
arrangements, and also to impaired adults who need day care
services. Last year our CACFP subsidized over 1\1/2\ billion
meals to children in day care homes, children in family day
care, and the impaired adults in the adult day care setting.
The WIC Program
The other area I would like to comment on is our WIC
Program. It is a program whose purpose is to improve the health
and nutrition of at-risk, low-income, pregnant, breastfeeding,
postpartum women, infants, and children up to their fifth
birthday. This program is one of our stars. The fiscal year
1999 budget request meets the President's full commitment to
fully fund the WIC Program. The requested funding of $4.1
billion will maintain the projected fiscal year 1998
participation level of approximately 7.5 million participants.
In the WIC Program, we are striving to improve the overall
program management and again program integrity. This spring we
plan to issue guidance to State agencies on more uniform
application of science-based nutritional risk criteria. The
core risk criteria were developed through a yearlong process
with Federal-State partnerships. The criteria will ensure the
consistency in the nutritional assessment of WIC applicants.
This budget request also assumes the continued success of State
agencies to obtain significant savings in the cost of infant
formula to the program.
In fiscal year 1997, an additional 1.9 million participants
per month were served because of the great success States had
in collecting almost $1.3 billion from infant formula
manufacturers. This program continues to collectively save
money and contribute to healthier mothers, babies, and children
who will enter school unfettered by the consequences of poor
nutrition and inadequate health care in their formative years.
Mr. Chairman, every dollar that is spent on WIC services
for low-income pregnant women saves $1.77 to almost $3.13 in
Medicaid costs for the first 60 days after birth. That is a
success.
I am aware of this committee's concern about the level of
funds that were carried over from one year to the next. Our
fiscal year 1999 request assumes that $130 million will be
carried into and out of fiscal year 1999. This level is about
$20 million less than what we project as being carried into
fiscal year 1998. We believe that these are the minimum levels
necessary for our State and Indian tribal organizations to
maintain the current participation levels in this grant
program. These State and local operators must live within their
budgets. Collectively these States underspend their available
resources from about 3 to 4 percent so that they can ensure
that they are on target.
These carryover issues manifested themselves during the
four WIC listening sessions I had around the country with a
diverse group of recipients and program operators, health care
providers, and State officials. They disclosed a variety of
issues. Because the Federal grant is only one source, and
sometimes the only source for WIC funds in most States, the
States exercise extreme caution to ensure that they do not
spend more than their Federal grant.
In addition, because the States commonly distribute WIC
food benefits to participants in the form of checks and
vouchers, it is difficult for them sometimes to determine the
program's cost until after those vouchers and checks have been
redeemed and processed. So, the unspent funds relate to
specific situations or circumstances that sometimes limit
program participation.
In one State, as an example, they described that they were
installing a new computer system, so they wanted to use that to
verify WIC eligibility and to issue WIC food vouchers
temporarily. That reduced the amount of time that they had for
the clinical staff to certify and serve new clients, because
they instead had to spend more time learning the new software
and operating procedures.
Having unspent Federal WIC funds did not necessarily
indicate a lack of need for the program benefits. Some States
even reported that more eligible individuals could have been
served by WIC had it not been for the reasons related to the
program's structure and/or State-specific situations or
circumstances.
Another program area where we have made some changes is the
WIC Farmers' Market Nutrition Program. It has been moved from
our WIC account to the Commodity Assistance Program account.
This was done to ensure that we had funds available for the
operation of the program. We believe that this change will
enable States to improve the program for WIC recipients as well
as facilitate better program planning for our farmers.
Center for Nutrition Policy and Promotion
Our budget supports the Center for Nutrition Policy and
Promotion that was established in 1994. The focal point for
this program is for USDA to promote the health of all Americans
through good nutrition by linking the scientific research for
the dietary needs of the consumer. The importance of this
mission cannot be overstated particularly when 4 of the 10
leading causes of death in our country are related to poor
diet. That is a significant contributing factor. The budget for
the Center is shown in our FPA account which is over some $2.5
million.
Studies and Evaluation
As I come to closure, Mr. Chairman, there are four more
issues that I would like to address.
One, the administration strongly believes the funding for
studies and evaluation should be with the entity administering
the programs in order to maximize the value of these efforts in
our food assistance programs. As such, this budget proposes the
return of funding for studies and evaluations to the Food and
Nutrition Service agency.
Training and Technical Assistance
Two, we are requesting $2 million to provide training and
technical assistance to State and local school cooperators to
promote safe food handling in our school meals preparation.
Food Gleaning
Three, one of Secretary Glickman's top priorities is
ensuring that USDA does everything within its power to expand
the recovery and food gleaning process so that we can have
wholesome food for distribution to Americans in need. While
this administration firmly believes that the fundamental
Federal nutrition assistance program, such as food stamps and
WIC and our National School Lunch and School Breakfast
Programs, will continue to be the first line of defense for
Americans facing hunger, recovered and gleaned food can
increasingly provide nutritious additions to the diets of low
income Americans and provide some access to food banks and soup
kitchens.
Food Program Administration
Finally, our budget request for our Food Program
Administration account is $111.8 million. In recent years our
FPA account has not been enough to keep demand with the rising
demands made on this agency. As you indicated, Mr. Chairman,
over 68 percent of Agriculture's budget is in food assistance
programs, and these reduced administrative funds has required
that more than 18 percent reduction be made in our staffing
since 1993 and nearly a 40-percent reduction since the early
1980's. Recent OIG and GAO audits have cited FNS for
insufficient staff to ensure program compliance with statutory
requirements in program areas. And clearly, ensuring proper
program and financial management for an agency managing almost
$40 billion in program funds must be a top priority.
Mr. Chairman, I appreciate your allowing me to make these
brief remarks. This concludes my oral presentation. I would be
happy to answer any questions that you and the other members
may have. Thank you very much.
Prepared Statements
Senator Cochran. Thank you, Madam Secretary. We appreciate
your comments and the full statements which you have submitted
for our hearing record.
[The statements follow:]
Prepared Statement of Shirley R. Watkins
Mr. Chairman. Members of the Subcommittee, it is my pleasure to
appear before you for the first time to discuss the President's Fiscal
Year 1999 Budget Request for USDA's Food and Nutrition Programs. In
July, 1997 I was confirmed as the Under Secretary for Food, Nutrition,
and Consumer Services (FNCS), responsible for the Nation's domestic
nutrition 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
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC). I am accompanied today by Yvette Jackson, the Administrator of
the Food and Nutrition Service, who has previously appeared before you
as the Deputy Administrator for the Food Stamp Program, George Braley,
the Associate Administrator of the Food and Nutrition Service, Dr.
Rajen Anand, Executive Director of the Center for Nutrition Policy and
Promotion and Stephen Dewhurst, the Department's Director of the Office
of Budget and Program Analysis.
The Food, Nutrition and Consumer Services is responsible for
ensuring that all Americans have access to healthful diets and
nutrition information. We accomplish this by providing nutrition
assistance to needy families, school-age children and women, infants
and children at nutritional risk. We make available nutrition education
and information to all Americans, regardless of income, and provide
health referrals to certain program participants. FNCS sponsors and
supports research aimed at improving the nutritional quality of diets
consumed not only by the participants in our programs, but by all
Americans. We strive to enhance the public's confidence in our programs
by ensuring the efficiency, integrity and fairness of our programs.
Finally, we support American Agriculture by providing families and
individuals the means to purchase food and food products and by
purchasing commodities for donation to our many public and private
cooperators at the State and local levels. Together, these programs
provide a nutrition safety net for low-income Americans. We view the
food assistance programs collectively as the critical link in
alleviating hunger in this country. They are absolutely crucial to many
millions of Americans. I do not wish to forget for one minute the
responsibility that this Administration and I have to ensure both the
program and financial integrity of each program and that the delivery
of benefits to all qualified recipients be accomplished with integrity
and timeliness.
The Department is the lead Federal Agency in human nutrition and is
charged with the goal of promoting a healthy and well nourished
population through research and nutrition education. The Center for
Nutrition Policy and Promotion, established in 1994, serves as the
focal point within USDA to promote the health of all Americans,
including those participating in the food assistance programs, through
good nutrition by linking scientific research to the dietary needs of
the consumer.
The importance of this mission cannot be overstated when one
considers that in 4 of the 10 leading causes of death in our country,
poor diet is a significant contributing factor: heart disease, cancer,
stroke and diabetes account for 1.4 million deaths annually, nearly
two-thirds of the total deaths in the U.S. Diet also plays a critical
role in other health concerns such as obesity, hypertension, and
osteoporosis. Taken together, these diet-related diseases cost society
an estimated $250 billion each year in medical cost and lost
productivity.
economic success
Our Administration has led the Country to exceptional economic
success. The Country is currently experiencing record job creation,
extremely low unemployment rates and projections of continuing low
inflation. Our budget projections reflect these strong economic
conditions; notwithstanding these successes, there continue to be many,
many people who genuinely need the food assistance these programs
provide. FNS programs, particularly WIC, the Child Nutrition Programs
and the Commodity Assistance Programs are in increasing demand insofar
as they help low-income Americans transition from welfare to work.
program highlights and initiatives
legislation
The Clinton Administration will submit legislative proposals to
restore food stamp benefits to legal immigrants with certain exceptions
and to ensure that common administrative costs are allocated fairly
among Temporary Assistance to Needy Families (TANF), Food Stamps and
Medicaid. There will be proposals to reclassify recipient claims as
State rather than Federal debt and to reauthorize WIC and several Child
Nutrition Programs whose authorization expires at the end of this
fiscal year.
food stamp program
Restore Benefits To Legal Immigrants
The Administration proposes to restore Food Stamp benefits for
vulnerable groups of legal immigrants. Upon signing the 1996 welfare
law, the President pledged to work toward reversing the harsh,
unnecessary cuts in benefits to legal immigrants that had nothing to do
with moving people from welfare to work. The President believes that
legal immigrants should have the same opportunity, and bear the same
responsibility, as other members of society. The fiscal year 1999
budget would provide Food Stamp benefits to 730,000 legal immigrants at
a cost of $2.5 billion over five years. The proposal expands access to
Food Stamps for families with children, people with disabilities, the
elderly, and refugees and asylees.
The Balanced Budget Act of 1997 helped somewhat by restoring SSI
and Medicaid eligibility to elderly and disabled legal immigrants who
were already in the United States at time of enactment.
This proposal would restore food stamp benefits to the most
vulnerable groups of immigrants--children and their families; the
elderly; and the disabled. This proposal also recognizes that refugees
often need more than five years to become established in this country;
thus, it lengthens eligibility from five years to seven for refugees
and those granted political asylum. It also provides food stamp
eligibility to certain Hmong and highland Lao tribal members who
entered the United States after the Vietnam conflict. Finally, it
restores eligibility to certain Native Americans in reservations that
span United States/Canadian borders.
Allocate Administrative Costs Fairly
An unanticipated consequence of the landmark welfare reform
legislation is the ability of States to gain a windfall by reallocating
common administrative costs to the Food Stamp and Medicaid Programs.
Prior to welfare reform, common administrative costs in the Food Stamp,
Medicaid, and Aid to Families with Dependent Children (AFDC) programs
were charged primarily to AFDC. These charges were included in the
State TANF grants created by welfare reform. As a result, if States now
share common administrative cost among the programs, they can claim
additional payments from the Federal Government in the Food Stamp and
Medicaid Programs without a reduction in their TANF grant thereby
experiencing a windfall.
To mitigate this windfall, starting in fiscal year 1999 States will
be required to allocate common administrative costs among all three
programs in a manner which results in each program paying its fair
share. Costs will be shifted from TANF to Food Stamps and Medicaid;
however, the TANF block grant will not be reduced. Instead, the Federal
share of administrative costs for the Food Stamp and Medicaid programs
will be reduced from 50 percent to 47 percent. This proposal is
administratively simple to implement and it removes the incentive for
inflated cost allocation by establishing a uniform Federal share of
administrative costs.
Recipient Claims
Finally, we will be submitting legislation to reclassify claims
against food stamp recipients for erroneous benefit issuance as State
debt rather than Federal debt. We believe this proposal's effect to be
cost-neutral in the near term; however, we think that if States respond
to the incentives being proposed, it has great potential to
substantially increase collections in the future.
reauthorization
The authorization for several of our programs expires at the end of
this fiscal year. We will be submitting cost-neutral legislation to
reauthorize the WIC, Summer Food Service, Child Nutrition Commodity
Distribution Program, and State Administrative Expense Programs. We
will also submit proposals to improve the operation, management and
integrity of the National School Lunch and School Breakfast Programs,
the Child and Adult Care Food Program and the WIC Program.
program integrity
In fiscal year 1997, FNS had success in combating fraud and abuse
while promoting program integrity. In the Food Stamp Program, FNS
aggressively continued its Nationwide campaign to increase payment
accuracy and has been successful in obtaining commitments from many
States to make payment accuracy a top priority. Since fiscal year 1993,
there has been a steady decline in the overpayment error rate. During
this period, that rate has fallen from 8.3 percent in fiscal year 1993
to 6.9 percent in fiscal year 1996, resulting in a savings of nearly
$665 million. The payment (overpayment and underpayment) error rate in
fiscal year 1996 was 9.22 percent. This is down about 12 percent from
the 1995 rate of 10.30 percent.
FNS collected a total of $186 million in recipient claims in fiscal
year 1997. Recipient fraud represented $60 million of the total, errors
by households represented $104 million and errors by the State Agency
represented $22 million of this total.
The Federal Debt Collection processes (Federal Tax Refund Offset
and Federal Salary Offset) resulted in collections of almost $60
million in fiscal year 1997. This represents an approximate 50 percent
increase from the previous fiscal year.
Recipient fraud disqualifications have increased from 94,124 in
fiscal year 1996 to 105,759 in fiscal year 1997, an increase of about
12 percent over fiscal year 1996. Although Federal reimbursement and
retention rates have dropped over time, States have continued to invest
increasing amounts of State funds into fraud control.
During fiscal year 1997, FNS' Compliance Branch completed intensive
investigative efforts in several major urban areas--Detroit, New
Orleans, Los Angeles, Jersey City, Miami, and Philadelphia--in which
almost 1200 suspect stores were investigated. Approximately 550 of
those stores were found to have committed food stamp violations and, of
those, almost 200 were found to have trafficked in food stamp benefits.
Based on Compliance Branch cases, Department of Justice (DOJ) levied
penalties of over $1 million against retailers convicted of making
false claims.
Electronic Benefit Transfer (EBT) continues to be a positive means
of combating food stamp trafficking. At the end of December 1997, 28
States had implemented EBT systems, 13 of those being Statewide.
During fiscal year 1997, FNS successfully deployed an automated
anti-fraud profile system known as ALERT in all active EBT areas. The
ALERT system analyzes individual EBT transactions for patterns of
violations both for investigation selection and support as well as for
taking direct administrative action against retailers found in
violation.
Funds provided by this Committee resulted in successful contracting
for pre- and post-authorization visits to participating stores. In
fiscal year 1997, FNS tested contracting for on-site store visits and
will contract for approximately 35,000 on-site store visits annually
beginning in fiscal year 1998 to supplement FNS oversight of retailers.
This effort should significantly improve program integrity.
FNS disqualified 1,561 retailers for violations during fiscal year
1997; of those, 933 were permanent disqualification for trafficking
violations. This represents a 23 percent increase over fiscal year 1996
and reflects results from combining the use of EBT data, targeted
sweeps and joint efforts involving FNS, USDA/Office of the Inspector
General (OIG) and State Law Enforcement Bureaus (SLEB's).
In the School Nutrition Programs, each school food authority must
be reviewed over a 5-year cycle. In conducting these reviews, we assist
States in determining whether Federal reimbursement is properly
claimed. We believe this information indicates that these reviews are
useful in recovering improperly paid Federal funds as well as providing
a tool to improve the management of local food services.
Also on the business side of the school food service programs, FNS
has continued its review of dairy and other food vendors' pricing
practices and has followed through with active suspension and debarment
when warranted.
In the WIC Program, we are striving to improve overall program
management and integrity. This spring we plan to issue guidance to
State agencies on more uniform application of science-based nutritional
risk criteria. The core risk criteria were developed through a year-
long Federal/State partnership and will ensure consistency in the
nutritional assessment of WIC applicants. In the near future we will
propose new vendor regulations that will establish mandatory uniform
sanctions across WIC State agencies for the most serious WIC
violations, and require the disqualification of any WIC vendor who has
been disqualified from the Food Stamp Program. In addition, we plan to
address issues of income documentation in policy as well as during the
reauthorization process.
highlights
Child Nutrition Participation
We are proud that the Child Nutrition Programs continue to be a
source of nutritious meals for our Nation's children. We are also aware
that a large portion of our participating children are needy, and in
some cases the meals they receive in schools or child care facilities
may be all that they have to eat all day. It is vital that sufficient
funds continue to be available for these programs. In view of this, I
wish to bring to the Committee's attention the fact that we are
experiencing an increase in the total number of meals served in the
School Lunch Program. After remaining stable through the 1980's and the
first part of the decade of the 1990's, we have seen the total number
of school lunches served rise by more than a million a year. This
increase is attributable at least in part to increased enrollment in
schools caused by our recent ``mini-baby boom'' and improved quality
and service. Consequently, the total reimbursement in the Program will
increase beyond the normal adjustment for changes in the Consumer Price
Index, and our appropriation request reflects this.
wic program
Consistent with this Administration's long-standing goal, this
budget proposes funding to continue WIC participation at its expected
fiscal year 1998 level of 7.5 million women, infants and children every
month. This budget request assumes the continued success of State
agencies to obtain significant savings in the cost of infant formula to
the Program. In fiscal year 1997, an additional 1.9 million
participants per month were served because of the great success States
had in collecting almost $1.3 billion in rebates from infant formula
manufacturers. This program continues to collectively save money and
contribute to healthier mothers and babies and children who will enter
school unfettered by the consequences of poor nutrition and inadequate
health care in their formative years. President Clinton and this
Administration is committed to this continued success.
wic farmers' market nutrition program
The funding request for this popular adjunct to the main WIC
Program has been moved in the fiscal year 1999 budget from the WIC
account to the Commodity Assistance Program account. This was done to
ensure that funds for FMNP are not dependent on the WIC Program and can
be allocated on a timely basis to ensure effective operation of the
program. We believe this change will enable States to improve their
program planning and development.
studies and evaluations
In this budget, the Administration reiterates its belief that the
studies and evaluations for the Food Assistance Programs should remain
with the entity administering these programs. Both the President and
the Secretary of Agriculture have stated their belief that the funding
for studies and evaluations of the Food Assistance Programs belongs
with FNS and this budget supports that belief.
The three FNS 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. FNS
research has a proven track record of improved government performance.
For example, FNS research established a basis for future assessments of
the efficacy of food assistance programs by developing the first
credible measure of the food security of the American population;
provided the foundation for historic changes in domestic nutrition
programs by providing the only nationally representative data on the
nutrients provided to children in the Child Care, School Lunch and
School Breakfast Programs; made critical contributions to the emergence
and expansion of EBT, supporting the first demonstrations of
feasibility and cost-effectiveness; helped fight fraud and abuse and
improve program operations; generated the only data-based estimates of
the prevalence of food stamp trafficking and WIC overcharging; and
documented the Federal cost savings associated with participation in
the WIC Program.
With the funding requested for fiscal year 1999, 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 Congressional questions about the
impact of legislative changes and collect and analyze data to provide
Congress with outcome measures of program performance.
The relatively small investment made on FNS research will help to
protect the $37 billion investment made in the Federal nutrition
programs. This research is most effective when done in conjunction with
food assistance program operations. Without such research support, we
run the very real risk of making crucial policy decisions without
adequate information which may lead to unforeseen consequences.
food safety
We are requesting $2 million to provide technical assistance to
State and local school cooperators to promote and enhance safe food
handling in school meals preparation. We would use these funds to
provide training and technical assistance on safe food handling to
cooperators. The funding would be used to enhance the health and safety
of children participating in school meal programs by operating training
workshops for local food service professionals and revise, print and
distribute an updated version of ``Serving it Safe''.
food recovery and gleaning
One of the top priorities of Secretary Glickman is ensuring that
USDA is doing everything within its power to expand the recovery and
gleaning of excess, wholesome food for distribution to Americans in
need. While this Administration firmly believes that the bedrock
Federal nutrition assistance programs--such as Food Stamps, WIC, and
the National School Lunch and Breakfast programs--will continue to be
the first line of defense for Americans facing hunger, recovered and
gleaned food can provide nutritious additions to the diets of low-
income Americans.
In June of 1997, USDA released a study indicating that 96 billion
pounds--or 27 percent--of the 356 billion pounds of food produced in
this Country each year is lost to human consumption at the retail and
food service levels. In response to the study, USDA joined with key
non-profit organizations in co-sponsoring the first-ever National
Summit on Food Recovery and Gleaning--at which we jointly set a
National goal of increasing the amount of food recovered by 33 percent
over the 1.5 billion pounds currently recovered by the year 2000, which
will provide an additional 500 million pounds of food a year to feeding
organizations. At a time when food banks across the Nation are
reporting increasing need but decreasing donations, such a boost is
vitally needed.
USDA has taken a wide variety of steps to begin reaching the goal
of a 33 percent increase, such as: working with the National Restaurant
Association to produce a food recovery handbook for their members;
facilitating the ability of hunters to donate venison to food banks;
empowering schools to do more to donate excess food from the National
School Lunch Program, encouraging airlines to donate meals not served;
working with the Department of Transportation to develop a
comprehensive way to boost the transportation of recovered foods;
facilitating the donation of excess food from the Department of
Defense; and providing technical assistance to thousands of community-
based groups and private citizens across the Country who seek to help.
As we have intensified these efforts, we have heard more and more
requests from States and nonprofit groups for limited Federal funds to
help implement and expand such efforts as a cost-effective way to
supplement traditional ways of fighting hunger. That is why we are
proposing the creation of a $20 million food recovery and gleaning
grant program to provide limited seed money for such efforts; we
anticipate this Federal money will leverage a great deal of matching
funds from private, non-profit, and State and local governmental
sectors. We are not seeking to create a large-scale Federal
bureaucracy, but rather to empower community-based efforts. The funds
are needed primarily to support start-up costs so that local
communities can develop an infrastructure to begin their own food
rescue operations.
food program administration [fpa]
Our budget request for FPA is $111.8 million. In recent years, FPA
funding has not been sufficient to keep up with the rising demands made
on the Agency. Reduced administrative funding has required more than an
18 percent reduction in staffing since 1993 and nearly a 40 percent
reduction since the early 1980's.
Recent OIG and GAO audits have cited FNS for insufficient staff to
ensure program compliance with statutory requirements. Reported areas
of insufficient oversight include retailer integrity and food stamp
fraud, the Agency's financial statements, documentation and collection
of food stamp recipient claims, frequency of management evaluations
required by program regulations, oversight of the Child and Adult Care
Food Program, oversight of State information technology, and State cost
allocation and claiming.
Clearly, ensuring proper program and financial management for an
Agency managing almost $40 billion in program funds must be a top
priority. It is imperative that FNS maintain a minimum work force to
meet the challenges of program delivery and keep pace with new
legislation and changing program needs. This budget is the bare minimum
needed to effectively deliver our programs to children, needy families
and individuals to help those less fortunate obtain access to a more
healthful diet, and provide nutrition education to the American public.
CNPP is charged with developing nutrition policy and providing
research-based human nutrition education and information to all
Americans, including those involved in Food Assistance Programs, and
has become the Department of Agriculture's focal point for linking
nutrition research to the consumer. Center staff develop integrated
nutrition education research programs and assist policy makers in
devising better strategies to target nutrition programs cost-
effectively to different customers in order to assist all Americans in
adopting healthy, nutritious eating patterns that match lifestyles.
The CNPP staff strive to improve the dietary behavior of all
Americans by translating nutrition guidance into consumer-oriented
promotion programs. The Center has already accomplished many valuable
activities that have helped Americans to gain a better understanding of
good nutrition and proper diet. As an integral part of the FNS Food
Program Administration budget, we are requesting $2.542 million to
continue the work of the Center and help Americans enjoy healthier
diets and lives.
conclusion
In conclusion, Mr. Chairman, I appreciate the support this
Committee has shown throughout the years for these programs. I am also
grateful for the opportunity to present the fiscal year 1999 budget
proposals for the Food and Nutrition Assistance Programs. I will be
happy to answer any questions that you or the other Members may have.
______
Prepared Statement of Yvette Jackson
Mr. Chairman, thank you for the opportunity to appear before this
subcommittee to discuss the fiscal year 1999 budget request proposed
for the U.S. Department of Agriculture's Food and Nutrition Service
(FNS).
1999 budget request
The Food and Nutrition Service requests $39.2 billion in new budget
authority in fiscal year 1999. This includes contingency reserves of
$1.0 billion for the Food Stamp Program and $20 million for the
Supplemental Nutrition Program for Women, Infants, and Children (WIC).
The request is an increase of $1.5 billion above the fiscal year 1998
appropriation level. The increase is driven by legislative proposals in
the Food Stamp Program, food recovery and gleaning initiatives, program
integrity initiatives, increased meal service and overall inflationary
adjustments. Our budget request reflects this administration's
continued commitment to providing access to healthful, nutritious diets
to low income families and to maintaining effective and efficient
program operations.
food stamp program
The Food Stamp Program is the primary source of federal nutrition
assistance for low-income Americans. The mission of this program is to
assure access to a nutritious, healthful diet for low-income Americans
and improve their knowledge of good nutrition, thereby improving the
nutritional status of low-income households and strengthening the food
and agriculture economy. We are requesting $25.1 billion for the Food
Stamp Program, including a benefit reserve of $1.0 billion to ensure
funding availability to meet any unforeseen economic disturbances,
natural disasters and changes in the estimated savings due to welfare
reform. The amount includes $1.2 billion for the Nutrition Assistance
Program for Puerto Rico, as well as funds for nutrition assistance for
the Northern Marianas, $75.0 million for the Food Distribution Program
on Indian Reservations and $100 million for commodity purchases in the
Emergency Food Assistance Program. Based on the current economic
forecast for fiscal year 1999:
--The average unemployment rate is projected to be 5.1 percent;
--Food Stamp Program participation is projected to average 21.6
million persons monthly; and
--The average monthly benefit is projected to be $76.41 per person.
In fiscal year 1998, all welfare reform changes have been fully
implemented and unemployment is at a record low. As a result, average
monthly participation is estimated to be 21.07 million compared to
22.859 million in fiscal year 1997. However, beginning in fiscal year
1999 we project that participation will rise slightly to 21.64 million
due to a projected slight increase in both the unemployment rate and
the overall population.
Although we have requested a benefit reserve since the early
1990's, the need for this reserve has become increasingly important
given the Personal Responsibility and Work Opportunity Reconciliation
Act (PRWORA) of 1996. More than one-third of all food stamp households
receive Temporary Assistance for Needy Families (TANF), and these
households receive over half of all food stamp benefits. The
combination of these households encountering time limits on their TANF
eligibility, the flexibility afforded States under Welfare Reform and
the uncertainty of some of the effects of welfare reform makes it
difficult to anticipate the direction and magnitude of changes in food
stamp costs. This benefit reserve is necessary in the event of
unpredictable changes and protects the program's ability to get food to
people who need it.
food stamp program integrity
In fiscal year 1999, FNS will continue its efforts for increased
integrity in the Food Stamp Program. The budget request includes
funding for increased investigative sweeps. Approximately 850 stores
redeeming over $100 million in food stamps annually will be
investigated during these sweeps. Funding is also requested for
increased error reduction activities, as well as funding to support
enhanced Integrated Quality Control and Disqualified Recipient Systems.
food stamp program legislative proposals
The Food Stamp Program legislative proposals offer two changes to
the Personal Responsibility and Work Opportunity Act of 1996 (PRWORA).
The first proposal would provide exemptions to the restrictions on
eligibility for permanent non-citizen residents. When the President
signed welfare reform legislation in 1996, he indicated that some
provisions were too harsh on some program participants. Legal
immigrants are one such group being affected by the legislation. The
Balanced Budget Act of 1997 helped by restoring SSI and Medicaid
eligibility to elderly and disabled legal immigrants who were already
in the United States at the time of enactment. The changes proposed in
this budget would:
--Restore food stamp eligibility to permanent resident families with
children without regard to the date of entry into the U.S.;
--Restore eligibility to permanent residents who are age 65 and over
or who are disabled provided they had permanent resident status
prior to passage of the PRWORA;
--Extend the refugee and asylee exemption from the strict eligibility
requirements for non-citizens from 5 years to 7 years from
their date of entry;
--Restore eligibility to Hmong immigrants who came to the U.S. after
the Vietnam War; and
--Restore eligibility to certain Native Americans whose reservations
straddle the U.S. and Canadian borders.
This proposal will increase spending on food stamp benefits by $535
million in fiscal year 1999.
Another unanticipated consequence of the welfare reform legislation
is that it allows States to claim reimbursement for common
administrative costs in the Food Stamp and Medicaid programs that are
already included in the TANF block grant programs, thereby providing
the States a financial windfall. Our second proposal would alter the
allocation of administrative costs between the TANF, Medicaid, and Food
Stamp Programs. The change will require States to allocate common
administrative costs equally among all benefiting programs in fiscal
year 1999. To address the windfall to States from the new cost
allocation (costs will be shifted out of TANF to Food Stamps and
Medicaid, but the TANF block grant will not be reduced), the federal
share of food stamp administrative costs will be reduced from 50
percent to 47 percent starting in fiscal year 1999. This proposal is
administratively simple to implement and will save an estimated $180
million in fiscal year 1999 in the Food Stamp Program.
In addition, we intend to submit a proposal that would reclassify
claims against food stamp recipients for erroneous benefit issuances as
State debt rather than Federal debt. We estimate that this proposal
will be cost-neutral in the immediate future; however, if States
respond to our proposed incentives, collections may be substantially
increased in the long run.
electronic benefits transfer [ebt]
EBT continues to greatly assist the FNS effort to reduce food stamp
trafficking. By December 1997, 28 states had implemented EBT systems--
13 of them Statewide. FNS successfully deployed an automated anti-fraud
profile system known as ALERT in all active EBT areas. The ALERT system
analyzes individual EBT transactions for patterns of violations both
for investigation selection and support as well as for taking direct
administrative sanction action. The ALERT system helps us target
limited resources to deal with the most egregious violators.
food stamp participation under debt collection act of 1966
FNS's early work with the Federal Tax Refund Offset Program (FTROP)
as a debt collection initiative for Food Stamp State agencies has
expanded in 1996 and 1997 to incorporate provisions of the Debt
Collection Improvement Act. Under this Act and under the authority
provided by the Food Stamp Act, FTROP is now a mandatory part of Food
Stamp State agency operations. FNS is working with cooperating State
agencies to implement Treasury's offset programs, which include the
Federal Tax, Salary, and Administrative Offset Programs. In 1997, 43
State agencies participated in the Federal Tax Refund Offset Program
and as a result, collected almost $60 million. Since the effort began
in 1992, Food Stamp State agencies have collected more than $170
million in delinquent recipient claims using these two forms of offset.
In December 1997, 47 State agencies submitted 380,000 records valued at
$216 million to Treasury. Based on past collection trends, FNS
conservatively projects 1998 collections to be about $85 million. FNS
is working with the remaining nonparticipating State agencies to bring
them into the effort for the fiscal year 1999 offset activity.
the food distribution program on indian reservations [fdpir]
FDPIR delivers benefits under the authority of the Food Stamp Act
to needy Native Americans who do not have access to the regular Food
Stamp Program. There is currently $75 million available in fiscal year
1998 and $75 million is budgeted for fiscal year 1999. Participation
estimates for fiscal year 1999 average 127,000 persons monthly.
Participation in this program has increased in recent years and our
budget request reflects this trend.
child nutrition programs
The purpose of the Child Nutrition Programs is to assist State and
local governments to deliver 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 $9.2 billion for the Child Nutrition Programs.
The request is $1.5 billion more than the fiscal year 1998
appropriation. The increase is largely attributable to growth in meals
served in the National School Lunch Program, the School Breakfast
Program, and the Child Care Program and an increase in the number of
free meals served. 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 1999 the requested funds will
support: 4.5 billion school lunches, 1.3 billion school breakfasts, 1.6
billion meals in centers and family day care homes, 149.3 million
summer food service meals, and 143.5 million half-pints of milk.
FNS will continue its efforts to streamline the administration of
the Child Nutrition Programs at the State and local levels through
regulations and policy guidance.
The Agency is not requesting major changes in the Child Nutrition
account since authorization of the Summer Food Service Program, State
Administrative Expense, Commodity Distribution and other Child
Nutrition authorizations expire at the end of this fiscal year. We will
be proposing some cost neutral simplification and integrity enhancing
measures as part of a reauthorization package, which is forthcoming.
child nutrition program integrity
Since 1988, the Department of Justice and a number of States have
been investigating and prosecuting dairies for illegal bidrigging. The
Food and Nutrition Service is committed to promoting integrity in all
of its programs. The School Lunch Program is not an exception; for
example, we established a task force dedicated to pursuing procurement
and nonprocurement suspension and debarment activities whenever and
wherever suitable cause is present. The Agency joined forces with the
Department of Justice and the Defense Logistics Agency to identify
offenders including companies involved in the food, juice, and dairy
businesses, as well as Food Service Management Companies. In accordance
with Child Nutrition Program regulations and the Federal Acquisition
Regulation, FNS proposed debarment of those companies who have been
convicted of a criminal offense, entered into a civil settlement or
involved in illegal activities such as price fixing, bidrigging and
food adulteration.
At the time of our budget request, FNS had identified 199 companies
and individuals subject to suspension and debarment. Of these, actions
have been initiated against 161. FNS has taken final administrative
action in 142 cases with 85 entities debarred for 3 years from future
involvement on a nonprocurement or procurement basis with all Federal
programs. Compliance agreements aimed at protecting the Federal
interest have been signed or are under discussion for an additional 50
corporations. Voluntary Exclusions have been signed or are under
discussion with 6 corporations. Actions are currently pending on 38
cases. FNS will continue to pursue appropriate debarment action as
deemed necessary.
school meals initiative, team nutrition and coordinated review
The School Meals Initiative for Healthy Children involves a
comprehensive, integrated plan for improving the nutritional standards
of school meals, including dramatically improving the quality of USDA
commodities provided to local school districts as well as improving
their availability. On May 29, 1996, President Clinton signed the
Healthy Meals for Children Act (Public Law 104-149), which further
increases flexibility for local school meal planners and reaffirms the
nutrition standards established in prior law and regulations. The new
law authorizes schools to continue using the traditional meal pattern
and authorizes States to approve schools to use ``any reasonable
approach,'' within guidelines established by the Secretary. In fiscal
year 1997, the Department initiated action to formalize regulations to
allow the use of the traditional meal pattern. At the request of State
agencies, FNS will be conducting extensive training in fiscal year 1998
on how to conduct nutrition assessment reviews of school food
authorities. These nutrition assessment reviews will determine how well
school food authorities are progressing towards meeting the Dietary
Guidelines for Americans and other nutrition standards. Training
sessions are planned for all seven regions.
In fiscal year 1999, we are requesting a total of $10.0 million for
Team Nutrition. This represents an increase of $2.0 million over the
fiscal year 1998 appropriation. The increase in funds will continue and
expand training and technical assistance and nutrition education
efforts begun under the School Meals Initiative. Training efforts will
focus on assisting school food service authorities in improving
business practices and extending nutrition education efforts to the
Child Care and Summer Programs. Almost half of the requested funds will
provide support directly to the school food service community through
technical assistance materials and training provided by either the
States or the Federal government.
Our budget also requests $4.3 million for Coordinated Review. We
are planning to make this program more effective, more user-friendly
more useful for the schools.
supplemental nutritional program for women, infants and 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
fiscal year 1999 request meets the President's commitment to full
funding in the WIC Program. The requested funding of $4.1 billion will
maintain the projected fiscal year 1998 participation level of 7.5
million participants. We have also requested a $20 million contingency
reserve for WIC, to be used if unforeseen increases in food prices
jeopardize maintenance of participation levels.
We believe a major reason for WIC's success is its emphasis on
nutrition education through the provision of educational materials, as
well as, individual and group counseling. One-sixth of funds available
for administrative and program services are earmarked for nutrition
education activities which totaled over $165 million in 1997. Also,
special emphasis is placed on alerting participants to the dangers of
substance abuse during pregnancy, including smoking and alcohol use.
During pregnancy, participants are also alerted to the benefits of
breastfeeding their newborns. Breastfeeding is further promoted by
providing an enhanced food package to women who receive no infant
formula, by permitting breastfeeding women to participate for a longer
period of time than other postpartum women, and by providing breast
pumps and other aids that directly support breastfeeding. WIC also
works in conjunction with the Centers for Disease Control and
Prevention and other public and private organizations to increase
access to immunization services and coverage rates.
wic ebt
FNS is engaging in activities complementary to the FSP to advance
EBT systems to improve program benefit delivery and client services for
the WIC Program. In April 1995, Wyoming implemented an EBT system which
uses smart card technology and off-line authorization to deliver FSP
and WIC benefits and to facilitate the exchange of client data during
clinic visits. Current operations include WIC/FSP in Natrona County,
Wyoming and WIC in six other counties, projected to total 2,100 FSP
households and 3,000 WIC families, 39 WIC-authorized retailers and 45
FSP-authorized retailers. Statewide expansion is being considered. Our
strategic goal is to increase the number of States issuing WIC benefits
via EBT to 4 in 1999.
cost containment initiatives
In an effort to use their food grants more efficiently, all
geographic WIC State agencies and most Indian Tribal State agencies
have implemented cost containment activities. Savings generated by
competitive bidding, rebates, least cost brands, use of economical
package sizes, etc., as well as home delivery or direct distribution
systems allow State agencies to provide benefits to more participants
by reducing food package costs.
The most successful strategy has been competitive rebate contracts
between State agencies and infant formula companies. Rebates have
enabled WIC Programs to dramatically decrease the cost of infant food
packages. In addition, ten State agencies are involved in three multi-
State contracts, relating to infant juice and cereal. Fiscal year 1997
rebate savings were estimated to be almost $1.3 billion. The average
monthly food cost has been kept stable for the past 10 years.
management improvements
As part of WIC's reauthorization this year, we will be proposing
several integrity improvement measures. For example, we are concerned
that not all States are assessing WIC income eligibility evenly. We are
proposing new laws to require that income documentation, sufficient to
demonstrate eligibility, be presented at certification. We will also be
proposing tighter controls over vendors.
commodity assistance programs
The Commodity Assistance Program 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 Farmer's Market
Nutrition Program, which was formerly included in the WIC appropriation
and the Food Recovery and Gleaning Program. The budget requests:
--$96 million in support of women, infants, and children and elderly
caseload in CSFP,
--$45 million for TEFAP administrative expenses plus the $100 million
for commodity purchases available in the Food Stamp Account,
allowing for a total program of $145 million.
--$140 million for NPE which will fund an estimated 250.6 million
meals at a payment rate of 55.86 cents per meal, and
--$15.0 million for the Farmer's Market Nutrition Program.
--$20.0 million for the Food Recovery and Gleaning Program.
food recovery and gleaning
The budget includes $20.0 million for a new grant program to aid
community-based gleaning and food recovery efforts. Given that a USDA
study indicates that 27 percent of the food produced in this country is
lost to human consumption at the retail and food service level, and
given that food banks around the country are reporting an increasing
need but a decreasing supply of food, there is an urgent need to
intensify pubic/private partnerships to glean and recover excess food
for distribution to Americans in need.
Of the $20.0 million, about $19.5 million will be used for
competitive grants, cooperative agreements, and other assistance to
community-based food recovery efforts. Non-profit groups--as well as
state, local, and Tribal governments--have increasingly indicated to
USDA that they need additional resources to help the Nation reach the
goal of increasing the amount of excess food recovered by 33 percent
over the current baseline of 1.5 billion pounds a year. While such
entities are willing to bring significant resources of their own to aid
food recovery--and while volunteers will provide much of the labor for
such efforts--additional Federal assistance is needed to help these
entities pay for vital items such as: vehicles and fuel to transport
recovered and gleaned food; salaries for volunteer coordinators and
training programs for volunteers; heating and refrigeration equipment
and facilities to ensure food safety; printing for handbooks and
instructional materials; equipment to harvest, sort, load, and process
food; computer programs to match up donors to recipients; offices from
which to operate; containers to hold the food, etc.
We anticipate this Federal money will leverage significant matching
funds from the private, non-profit, and state and local governmental
sectors. We are not seeking to create a large-scale Federal
bureaucracy, but rather to empower community-based efforts and
encourage community volunteerism.
studies and evaluation
In fiscal year 1998 FNS' funds for research on our food assistance
programs were transferred to Economic Research Service. The fiscal year
1999 request includes restoration of research funds at FNS. Both the
President and the Secretary of Agriculture have expressed their strong
belief that funding for studies and evaluation should remain with FNS,
the agency which administers the programs to be studied.
Prudent use of these funds requires that research on our programs
be based on expert knowledge of program detail. FNS needs relevant,
practical and focused research to enhance our ability to manage our
programs effectively, measure the effectiveness of program operations
and alternatives, and identify reliable program performance measures.
Therefore, we strongly urge you to restore this funding to FNS.
government performance and results act
The FNS Annual Performance Plan (APP) has been submitted as part of
the fiscal year 1999 budget request. The goals outlined in the APP are
directly linked to the achievement of the Agency's strategic goals and
objectives.
food program administration
Funding for Food Program Administration (FPA) is requested in the
amount of $111.8 million. The FPA appropriation funds the majority of
salaries and administrative expenses of the Agency. In recent years,
FPA funding has not been sufficient to keep up with the rising demands
made on the Agency. In fact, reduced funding has required more than an
18 percent reduction in staffing since 1993--a 37 percent reduction
since 1980. FNS understands the importance of downsizing in the Federal
government. Toward that goal, the Agency has been diligent in
implementing efficiencies and met its fiscal year 1999 target quite
some time ago.
Since the FPA appropriation finances 90 percent of the work force
administering FNS programs, it is the critical account that ensures
program and financial integrity and effective use of other FNS program
appropriations. Recent OIG and GAO audits, between 1995 and 1997, have
cited FNS for insufficient staff to ensure program compliance with
statutory requirements. Reported areas of insufficient oversight
include retailer integrity and food stamp fraud, the Agency's financial
statements, documentation and collection of food stamp recipient
claims, frequency of management evaluations required by program
regulations, oversight of the Child and Adult Care Food Program,
oversight of State information technology, and State cost allocation
and claiming. Many of FNS' functions are labor-intensive and require
constant staff attention. Payment accuracy, store investigations, and
on-site reviews are critical to our Agency's mission and require
intensive staff focus and travel funding.
The Food Stamp Program loses more than $1.4 billion a year in
overpaid benefits. More dollars are lost through inaccurate State
requests for federal administrative funds. Current staffing levels are
clearly insufficient to provide adequate oversight, conduct claims
collections reviews, and provide needed technical assistance to States
to make improvements. Although we have made great strides in reducing
error rates over the last three years, which saved approximately $660
million during this period, reduced staff is making it difficult to
continue these efforts. Management evaluations of state operations in
all our programs require additional attention. For example, in WIC, we
need to strengthen our review of state information systems, our review
of administrative funds and state caseload management. These areas are
essential to ensure the sound management of the resources Congress has
made available for WIC. Additionally, new data analysis tools, EBT and
new authorities in Welfare Reform provide the Agency with a tremendous
opportunity to increase program integrity among food stamp retailers.
Unfortunately our limited and overburdened staff cannot utilize these
tools to crack down on fraud.
New legislation and changing program needs have imposed significant
new and ongoing administrative burdens on the already strained staff.
Diminishing staff resources do not allow the Agency to keep pace with
legislative changes, such as Welfare Reform, Government Performance and
Results Act, the Chief Financial Officers Act, the Debt Collection
Improvement Act, and the Healthy Meals for Healthy Americans Act, to
name a few. At the same time, the Agency is called on to improve the
nutrition of program recipients, strengthen program integrity, and
implement EBT Nationwide.
Clearly, ensuring proper fiscal and program management for an
Agency managing almost $40 billion in program funds must be a top
priority. It is imperative that FNS maintain a steady work force to
meet the challenges of program delivery and keep pace with new
legislation and changing program needs. Mr. Chairman, we strongly
believe the request is the smallest budget feasible to ensure that we
maintain adequate vigilance over the resources entrusted to us by the
Congress on behalf of the American taxpayer.
Included in the FPA request level of $111.8 million is $2.542
million to continue the work of the Center for Nutrition Policy and
Promotion.
conclusion
FNS is committed to providing food and nutrition assistance for the
Nation's children and low-income families. Our fiscal year 1999 request
reflects this commitment. Further, we believe that our request of $39.2
billion is crucial to continued efficient program operations.
Mr. Chairman, this summarizes the fiscal year 1999 FNS budget
request. I will be happy to answer any questions that you may have.
______
Biographical Sketches
shirley r. watkins
Shirley Robinson Watkins was nominated Under Secretary of Food,
Nutrition and Consumer Services (FNCS) by President Clinton on May 19,
1997. She was confirmed by the Senate on July 31, 1997. As Under
Secretary, she has authority over the Food and Nutrition Service and
the Center for Nutrition Policy and Promotion. In this position, she
oversees a budget of over $40 billion for USDA's 15 food assistance
programs, including the Food Stamp Program, the National School Meals
Programs, and the WIC Program.
Mrs. Watkins is the first African-American to be named FNCS Under
Secretary, as well as the first person named with direct management
experience in the school meals programs at the local level. She brings
to this position a life-long commitment to the health and nutritional
well-being of children and families.
Prior to this appointment, Mrs. Watkins was USDA Deputy Assistant
Secretary for Marketing and Regulatory Programs, where, from 1995 until
1997, she oversaw 80 domestic programs and 8,000 domestic and
international employees charged with protecting U.S. agricultural
interests. From 1993 to 1995, she served as the FNCS Deputy Under
Secretary, where she worked closely with all aspects of USDA-
administered domestic food assistance programs.
Before joining USDA in 1993, Mrs. Watkins served as Director of
Nutrition Services for the Memphis (Tennessee) City Schools for 17
years, where the school lunch program received national recognition.
Previous positions within the school system included food service
supervisor, home economics teacher, and elementary teacher. From 1960
to 1962, she served as a home demonstration agent with the University
of Arkansas Extension Service.
Mrs. Watkins received a bachelor of science degree from the
University of Arkansas at Pine Bluff, and master of education from the
University of Memphis.
______
yvette jackson
Washington, Sept. 2, 1997--Agriculture Secretary Dan Glickman today
announced he has named Yvette Jackson the Administrator of the U.S.
Department of Agriculture's Food and Consumer Service. FCS oversees
federal nutrition assistance programs.
Jackson is the first African-American women to head the Food and
Consumer Service. Since 1994, she has served as the agency's Deputy
Administrator in charge of the Food Stamp Program. As FCS
Administrator, Jackson will oversee USDA's 15 nutrition assistance
programs, including the School Lunch and School Breakfast Programs, the
Special Supplemental Nutrition Program for Women, Infants, and
Children--the WIC program--and the Food Stamp Program. She will manage
an agency budget of $40 billion and a staff of 1,700.
``I take great pleasure in announcing the appointment of Yvette
Jackson as the Administrator of the Food and Consumer Service,''
Glickman said. ``She has done an outstanding job directing the Food
Stamp Program, and she has made a career out of helping people in need.
I look forward to working with her to continue to make our programs
even more responsive to the people who need them.''
Jackson began her career with the Pennsylvania Department of Public
Welfare 26 years ago as a caseworker in the Philadelphia County
Assistance Office. She assumed increasing management responsibilities,
culminating in her appointment as Pennsylvania's Deputy Secretary of
Income Maintenance in March, 1991. As deputy secretary, Jackson oversaw
the administration of the state's income security and medical
assistance eligibility programs--including the Food Stamp Program, Aid
to Families with Dependent Children, State General Assistance, Child
Support Enforcement, and Medicaid.
A native of Philadelphia, Jackson holds a bachelor's degree in
social welfare from Temple University and a Masters of Social Work from
Rutgers University.
______
ronald j. vogel
Career Highlights
Mr. Vogel has been with the Food and Nutrition Service for 17
years. He is presently the Associate Deputy Administrator for Special
Nutrition Programs. In this position, he has operational responsibility
for programs such as WIC, the Child and Adult Care Food Program, the
National School Lunch and Breakfast Programs, the Summer Food Service
Program, and a variety of commodity distribution programs, including
TEFAP and the Food Distribution Program for Indian Reservations.
Prior to his current position, Mr. Vogel was Director of the
Supplemental Food Programs Division, which includes WIC and the
Commodity Supplemental Food Program. During his tenure in this
position, he received the Secretary's Distinguished Service Award for
promoting the health and well-being of low-income women, infants, and
children and received a Public Health Service commendation for efforts
to promote childhood immunization through WIC.
Previous assignments included Director of the Program Information
Division in which he was responsible for FNS' financial and program
information management information systems. In this position he also
developed and implemented the Agency's long-range Financial Management
Automation Plan and the National Data Bank, an executive-level program
information and reporting system.
Before coming to FNS, Mr. Vogel was employed in the private sector
as a program evaluation specialist. His work in this capacity focused
on a variety of federal social service programs including Head Start,
the Basic Educational Opportunity Grant Program (Pell Grants) and the
Section 8 Public Housing Assistance Program.
Education
Mr. Vogel received his undergraduate degree from the University of
Virginia. He holds a Master of Arts degree in sociology from Duke
University. He pursued post-Masters studies at Duke as a James B. Duke
Fellow.
______
rajen s. anand
Dr. Rajen S. Anand serves as the Executive Director and chief
executive officer of the Center for Nutrition Policy and Promotion in
the United States Department of Agriculture.
The mission of the Center is to improve the nutritional status of
all Americans by serving as the focal point for linking scientific
research to the dietary and socioeconomic needs of the consumer. The
Center coordinates the overall nutrition education policy within the
Federal government.
Before joining the Department of Agriculture in 1995, Dr. Anand was
Professor of Physiology at the California State University, Long Beach,
where he had taught physiology, pathophysiology and metabolism since
1970. He served as the founding chair of the Department of Anatomy
Physiology (1985-1989), which was started from scratch under his
leadership. He served as chair of the Department of Communicative
Disorders (1990-1992) on a special assignment. As the Department head,
he was responsible for recruitment, evaluation and supervision of
faculty and staff and served as an advocate and leader of the academic
unit. He managed the fiscal resources, developed the budget, and
carried out the administrative operation, space allocation and
equipment maintenance.
In 1994, Dr. Anand was appointed by Education Secretary Richard
Riley to serve on the 11-member National Committee on Foreign Medical
Education and Accreditation. He was reappointed for another 3-year term
in 1997.
He received his Ph.D. in human physiology, nutrition and
biochemistry from the University of California, Davis in 1969. He also
holds a doctorate in veterinary medicine (D.V.M). He completed post-
doctoral fellowships at U.C. Davis in metabolism, and at the UCLA-
Harbor Medical Center in pediatric endocrinology.
Dr. Anand was honored with several academic awards including the
Outstanding Professor Award at the Long Beach campus. He also was twice
recipient of the Meritorious Performance and Professional Promise
Award. At the University of California, Davis he was bestowed with the
Outstanding Student Award in 1967 and 1968, and Hertzendorf Memorial
Award in Physiology in 1969 (for outstanding academic achievements and
humanitarian qualities).
Dr. Anand is a member of the American Physiological Society, Sigma
Xi, Phi Kappa Phi Honor Society and American Association for
Advancement of Science.
Dr. Anand has published more than 35 scientific research articles
in national and international journals. He is also a freelance
journalist and has written over 350 news stories and articles for
various newspapers and magazines.
Food Gleaning and Recovery
Senator Cochran. I am going to ask a couple of questions,
then yield to my colleagues on the committee for any questions
or additional comments that they have.
You mentioned at the conclusion of your remarks the Food
Recovery and Gleaning Program. When the Secretary was before
our committee, he talked about this program too, and he
indicated that the Government could be a facilitator without
costing any money, but I noticed that the budget proposes that
we spend $20 million on the program. That seems to me to raise
a question as to why the administration has now determined that
Federal funding is required for a program that appeared to be
one where we would be a facilitator.
There is also a statement in the prepared testimony talking
about a Department study indicating that 27 percent of the food
produced in the country is lost to human consumption at the
retail and food service level. We would like to have a copy of
that study if you could submit that for our review.
What is your reaction to the question that we have to ask,
and that is, what are you going to do with the money? How are
you going to spend $20 million facilitating a gleaning and food
recovery program?
Ms. Watkins. Mr. Chairman, I appreciate you asking that
question, and this is an area that both the Secretary and I are
very concerned about. We will provide you with a copy of the
study.
[The information follows:]
Estimating and Addressing America's Food Losses
(By Linda Scott Kantor, Kathryn Lipton, Alden Manchester, and Victor
Oliveira)
The U.S. food supply is the most varied and abundant in the world.
Americans spend a smaller share of their disposable income on food than
citizens of any other country and choose from an average of 50,000
different food products on a typical outing to the supermarket. In
1994, the food supply provided an estimated 3,800 calories per person
per day, enough to supply every American with more than one and a half
times their average daily energy needs. Given this abundance, few of
the Nation's resources have traditionally been devoted to measuring or
reducing food waste.
In recent years, growing concern about hunger, resource
conservation, and the environmental and economic costs associated with
food waste have raised public awareness of food loss. This in turn has
accelerated public and private efforts to make better use of available
food supplies by recovering safe and nutritious food that would
otherwise be wasted.
Of course, not all food that is lost is suitable for consumption
(fig. 1). Some losses--like the condemnation of diseased animals at the
slaughtering house, or the discard of moldy fruit from the produce
shelf at the supermarket--are necessary to ensure the safety and
wholesomeness of the U.S. food supply. Such foods are not recoverable
for human use.
----------------------------------------------------------------
figure 1
While Some Food Is Recoverable, Some Is Not
Not recoverable for human consumption
--Livestock condemned at slaughter because of disease.
--Diseased or otherwise unsafe produce.
--Spoiled perishable food, including meat, dairy, and prepared items.
--Plate waste from foodservice establishments.
--Losses of edible portions associated with processing, such as skin
and fat from meat and poultry, and peels from produce.
Recoverable for human consumption
--Edible crops remaining in farmers' fields after harvest.
--Produce rejected because of market ``cosmetics'' (blemishes,
misshapen, etc.)
--Unsold fresh produce from wholesalers and farmers' markets.
--Surplus perishable food from restaurants, cafeterias, caterers,
grocery stores, and other foodservice establishments.
--Packaged foods from grocery stores, including overstocked items,
dented cans, and seasonal.
----------------------------------------------------------------
Likewise, plate scraps are appropriately discarded at eating
establishments out of health considerations. In addition, not all food
that is lost is economically recoverable. Food recovery efforts are
often limited by financial and logistical constraints that make it
difficult to match recovered food with potential recipients.
Nevertheless, large quantities of wholesome, edible food, are lost
at every stage of the marketing system. Examples of such losses include
meats, bread, and other foods prepared by a restaurant or caterer but
never served and the discard of blemished or overripe produce, which
may be unmarketable for cosmetic reasons, but are otherwise nutritious
and safe.
Even a modest increase in the recovery of such wholesome foods
could reduce hunger by supplementing existing food-assistance efforts;
provide tax savings to farmers, supermarkets, and foodservice
establishments that donate food; and lessen the environmental impacts
of waste disposal. Understanding where and how much food is lost is an
important step in reducing waste and increasing the efficiency of food
recovery efforts.
USDA's Economic Research Service (ERS) recently undertook a review
of the current data on food waste and built on this knowledge to
generate new estimates of food loss by food retailers (supermarkets,
convenience stores, and other retail outlets), and consumers and
foodservice establishments (storage, preparation, and plate waste in
households and foodservice establishments). These losses were estimated
by applying known waste factors, gathered from published studies and
discussions with commodity experts, to the amount of edible food
available for human consumption in the United States. However, losses
of nonedible food parts such as bones, pits, seeds, and peels, were
excluded (see box about measuring food loss).
According to the new ERS estimates, about 96 billion pounds of
food, or 27 percent of the 356 billion pounds of the edible food
available for human consumption in the United States, were lost to
human use at these three marketing stages in 1995 (fig. 2). Fresh
fruits and vegetables, fluid milk, grain products, and sweeteners
(mostly sugar and high-fructose corn syrup) accounted for two-thirds of
these losses (fig. 3).
[GRAPHIC] [TIFF OMITTED] T01MA10.004
[GRAPHIC] [TIFF OMITTED] T01MA10.005
ERS does not know the share of these losses that are recoverable.
However, we can get an idea of the significance of loss by calculating
the potential benefit of recovery. On average, each American consumes
about 3 pounds of food each day. If even 5 percent of the 96 billion
pounds were recovered, that quantity would represent the equivalent of
a day's food for each of 4 million people. Recovery rates of 10 percent
and 25 percent would provide enough food for the equivalent of 8
million and 20 million people, respectively.
The loss estimates presented here are tentative and are intended to
serve as a starting point for additional research. Many of the studies
on which these estimates are based date from the mid-1970's or before.
Dramatic changes have occurred in the food marketing system since then,
including innovations in food processing technology and unprecedented
growth in the foodservice sector. While we made crude adjustments for
these changes in our analysis, additional research--especially updated
data on foodservice, processing, and household food losses--is needed
to add precision to these estimates and to provide a more complete
picture of food loss across the entire marketing system.
food losses begin on the farm . . .
Food losses begin on the farm even before a commodity moves into
the marketing system. Although ERS was not able to quantify food losses
that occur on the farm or between the farm and retail levels, anecdotal
evidence suggests that such losses can be significant for some
commodities.
Periodic preharvest losses occur, for example, because of severe
weather, such as droughts and floods, or pest infestations. For
example, each year an average 7 percent of U.S. planted acreage was not
harvested during 1994-96. Freezes that periodically damage Florida's
citrus crop and natural disasters like Hurricane Fran, which destroyed
agricultural crops in North Carolina in the fall of 1996, are examples
of causes of such losses. Most of these commodities are not recoverable
for human use.
On the other hand, many harvesting losses, especially losses of
commodities like fruits and vegetables, are often well-suited for
recovery efforts. Economic factors, which affect producers' willingness
to bring their product to market, are the most common source of such
losses.
For example, minimum quality standards for fresh produce set by
State and Federal marketing orders, bumper crops that reduce commodity
prices, and consumer demand for blemish-free produce often result in
the removal of safe and edible produce from the food marketing system.
With such requirements in mind, fruit and vegetable producers often
harvest selectively, leaving small, misshapen, or otherwise blemished
produce in the field, since these commodities would likely be discarded
in the packing shed or processing plant.
Harvesting losses can also be attributed to technological factors,
such as increased mechanization, equipment malfunction, and new
management practices. Commodities can be lost because mechanized
harvesters cannot retrieve the entire item or because the machines are
unable to discriminate between immature and ripe products. However,
these losses are often viewed as an acceptable tradeoff between field
efficiency (lower production costs and faster operation) and increased
yields.
Many farmers mitigate harvesting losses by using leftover crops as
fertilizer or animal feed. Harvesting losses are also reduced through
gleaning efforts, in which volunteers collect leftover crops from
farmers' fields where it is not economically profitable to harvest a
crop or after a field has been mechanically harvested.
. . . and continue into processing and marketing
Food is subject to additional loss as it leaves the farm and enters
the food marketing system.
Some loss occurs in storage, due to insect infestations or mold,
deterioration, or improper transportation and handling. Produce, dairy,
meat, and other fresh items are subject to shrinkage (loss in weight or
volume) due to inadequate packaging or simply the passage of time.
Also, fresh foods stored or transported at improper temperatures can
deteriorate, wilt, or suffer bacterial degradation or microbial growth.
Frequent handling by food processors, brokers, and wholesalers can lead
to additional losses. According to published studies, a typical food
product is handled an average of 33 times before it is ever touched by
a consumer in the supermarket.
Food-safety regulations also divert some product from the human
food chain. According to USDA's Food Safety and Inspection Service
(FSIS), 0.2 percent of hogs, 1.7 percent of calves, and 0.4 percent of
chickens and turkeys were ``condemned'' or otherwise rejected at
slaughter in 1993 and could not be used for human food. After
slaughter, some meat is trimmed away because of bruises and other
defects. In addition, some viscera, especially livers, are condemned
due to safety concerns. Although some of these losses may be
preventable through improved farm management and marketing practices,
once food becomes spoiled, it is no longer available for human use.
Food losses also occur when raw agricultural commodities are made
into final food products. Some of these losses, like removing edible
skins from fresh produce, are a normal and necessary part of food
processing. For example, about 20 percent of the weight of a fresh
apple is lost when it is processed into applesauce. Other processing
losses, such as the removal of skin and trimming of fat from meat and
poultry, are due to consumer demand for more healthful food choices.
Still others, like the increased trimming associated with precut
produce, are the result of increased demand for convenience foods from
consumers and the foodservice industry.
Although such losses are usually not suitable for direct human
consumption, they are often diverted for use in animal feed or as
ingredients in other food products. For instance, fresh potatoes lose
about half of their weight when they are processed into frozen french
fries. Although this appears to represent a ``loss'' of edible fresh
potatoes, most of the ``loss'' is actually recovered and used by
processors for other potato products, such as dehydrated potato flakes
and potato starch; and potato skins are often sold to renderers for
animal feed.
dairy products and fresh produce account for largest share of retail
food losses
An estimated 5.4 billion pounds of food, less than 2 percent of
edible food supplies, was discarded at the retail level in 1995 (table
1). Nearly half of these retail losses came from fluid milk and other
dairy products and fresh fruits and vegetables. These findings are
consistent with published studies on supermarket discard, which show
that fresh produce, dairy products, and other perishable items make up
the largest share of retail food losses. Overstocking, overtrimming,
improper stock rotation, and post-holiday discard of seasonal items
like Halloween cookies are the main reasons that retailers discard
food.
TABLE 1.--LARGE FOOD LOSSES OCCURRED AT THE RETAIL, FOODSERVICE, AND CONSUMER LEVELS IN 1995
----------------------------------------------------------------------------------------------------------------
Losses from edible food supply--
---------------------------------------------------------------
Edible food Retail food loss Foodservice and Total retail,
supply,\1\ -------------------- consumer food loss foodservice, and
Commodity million ---------------------- consumer food loss
pounds Million ---------------------
pounds Percent Million Percent Million
pounds pounds Percent
----------------------------------------------------------------------------------------------------------------
Grain products..................... 45,606 912 2 13,682 30 14,594 32
============================================================================
Fruit.............................. 48,338 707 2 10,609 23 11,316 23
Fresh.......................... 22,389 448 2 6,717 30 7,165 32
Processed...................... 25,949 259 1 3,892 15 4,152 16
============================================================================
Vegetables......................... 63,077 999 2 14,947 24 15,946 25
Fresh.......................... 36,830 737 2 11,049 30 11,786 32
Processed...................... 26,247 262 1 3,898 15 4,160 16
============================================================================
Dairy products..................... 76,276 1,525 2 22,883 30 24,408 32
Fluid milk..................... 54,474 1,089 2 16,342 30 17,431 32
Other dairy products........... 21,802 436 2 6,541 30 6,977 32
============================================================================
Meat, poultry, and fish............ 51,466 515 1 7,720 15 8,235 16
Red meat....................... 30,350 303 1 4,552 15 4,856 16
Poultry........................ 17,108 171 1 2,566 15 2,737 16
Fish and seafood............... 4,008 40 1 601 15 641 16
============================================================================
Eggs............................... 7,918 158 2 2,328 29 2,486 31
Dry beans, peas, and lentils....... 2,263 23 1 336 15 359 16
Tree nuts and peanuts.............. 1,861 19 1 276 15 295 16
Caloric sweeteners................. 38,827 388 1 11,473 30 11,861 31
Fats and oils...................... 20,250 203 1 6,564 32 6,767 33
----------------------------------------------------------------------------
Total \2\.................... 355,883 5,449 2 90,818 26 96,266 27
----------------------------------------------------------------------------------------------------------------
\1\ Excludes nonedible food parts such as bones, hides, peels, skins, pits, cores, and seeds.
\2\ Totals may not add due to rounding.
Source: Economic Research Service, U.S. Department of Agriculture.
Another important component of food loss is stock removed from
retail shelves because it has reached its ``sell-by'' date. Such losses
chiefly apply to fresh perishable items such as dairy and bakery
products. A rise in the number of instore bakeries and freshly prepared
specialty and deli items may mean that supermarkets are managing larger
quantities of highly perishable food products with shelf lives as short
as a few days. Some of these items, such as day-old bread and expired
dairy products, are safe to eat for a short time and are potentially
recoverable.
Canned fruits and vegetables, breakfast cereals, pasta, and other
nonperishable food products get discarded because of crushed, dented,
or otherwise damaged packaging, and expired shelf dates. For example,
losses of processed fruit and vegetables, including fruit juices (on a
fresh-fruit equivalent basis), were estimated at 521 million pounds, or
almost 10 percent of total retail food losses in 1995. Most of these
losses occur in inventory control, storage, and handling.
High failure rates for new food products may have increased retail
food losses in recent years as the number of new product introductions
has risen. More than 16,000 new food products--including new sizes,
packaging, flavors, and brands of existing products--were placed on
U.S. grocery store shelves in 1995, more than double the fewer than
8,000 introduced in 1988. Although ERS does not know the success rate
for such products, industry experts estimate that more than 90 percent
of new food products are removed from the market.
Food recovery programs, which collect such damaged or unmarketable
products from food retailers and distribute them to charitable food
organizations, can convert these safe but otherwise ``unsaleable''
items into consumable food and provide a tax benefit to food retailers
who donate their products.
plate waste contributes to large losses
From foods forgotten and spoiled in the refrigerator to the uneaten
vegetables tossed in the garbage, consumer and foodservice food waste
is the single largest source of food loss in the marketing chain.
Estimated at 91 billion pounds, this food loss accounted for 26 percent
of the edible food available for human consumption in 1995. Fresh
fruits and vegetables accounted for 19 percent of consumer and
foodservice food losses, with an estimated 18 billion pounds discarded
annually. An additional 16 billion pounds of fluid milk--the equivalent
of one-third of an 8-ounce glass per person per day--and 14 billion
pounds of grain products were also lost. Together these foods accounted
for more than half of total estimated consumer and foodservice food
losses in 1995, partially reflecting their relative importance in the
diet when consumption is measured by the weight of food.
Common sources of foodservice food losses include overpreparation
of menu items, expanded menu choices (which can make management of food
inventories more difficult), and unexpected fluctuations in food sales
due to sudden changes in the weather or other factors beyond the
control of foodservice operators. In addition, consumer plate loss may
be on the rise at restaurants and other eating places due to a growing
trend toward the ``upsizing'' of food portions.
Unless consumers take home uneaten portions for later consumption,
restaurants must discard such plate leftovers for health
considerations, meaning that increasing amounts of food may be going to
waste.
Household food losses occur because of overpreparation, preparation
discard, plate waste, cooking losses, spoiled leftovers, and breakage,
spillage, and package failure, either in the home or en route from the
point of purchase. A variety of factors, including household size,
income, and food-safety concerns, influence the type and quantity of
foods lost at this level.
Archaeological examinations of household garbage by researchers at
the University of Arizona's Garbage Project revealed that household
waste is generally lower for frequently purchased staple items like
bread, milk, and cereal than for less frequently used specialty
products such as sour cream, hot dog buns, or items bought on impulse.
They also concluded that large quantities of single food items, entire
heads of lettuce, half-eaten boxes of crackers, and sprouted potatoes--
rather than plate scraps--account for the largest share of household
food loss.
A 1987 study by the University of Oregon, which examined the
reasons that households discard food, suggests that consumer education
may play an important role in reducing consumer food loss. In the case
of perishable food, knowledge of, or misconceptions about, food safety
were the single most important determinants of household food discard.
The study indicated that many main meal planners confused quality
defects with edibility and were unable to accurately assess whether a
food was safe to eat. Such assessments were particularly difficult for
consumers under the age of 35. All households had difficulty
interpreting package dating information, such as ``sell-by'' dates or
expiration codes.
looking for solutions: food recovery, recycling, and education
Many public and private assistance groups, food retailers, food
manufacturers, policymakers, and consumers have looked for ways to
prevent food losses, recover lost food, and reduce solid waste. These
efforts reach into every corner of the food marketing system. They
include food recovery projects to feed the hungry, recycling projects
to conserve resources and reduce waste disposal costs, and educational
campaigns and economic incentives to prevent food loss.
food recovery efforts feed the hungry
Despite the abundance of food in the United States, hunger is a
reality for some Americans with limited financial resources. In 1995,
36.4 million people in this country were living in poverty (annual
income of less than $15,569 for a family of four). According to USDA
food consumption data for the early 1990's, almost 12 percent of U.S.
households with annual incomes below the poverty line reported that
they sometimes or often did not get enough to eat. USDA spent almost
$38 billion providing food assistance to an estimated 45 million
people--about 1 in every 6 Americans--at some time during 1996. In
addition, an estimated 150,000 nonprofit organizations, including food
banks and neighborhood charity outlets, provided more than 10 percent
of the U.S. population with a portion of their nutritional needs.
However, even with the extensive network of Federal and private food-
assistance programs, almost 20 percent of requests for emergency food
assistance went unmet in 1995, according to the U.S. Conference of
Mayors.
Thus, other sources of food must be utilized.
The term food ``recovery'' refers to the collection, or recovery,
of wholesome food from farmers' fields, retail stores, or foodservice
establishments for distribution to the poor and hungry. Food recovery
programs operate across the United States and target many different
levels of the food marketing system (see box on food recovery efforts).
A few are large operations with offices in many States, but most are
small local programs that depend largely on the efforts of volunteers
from the surrounding community.
``A Citizen's Guide to Food Recovery,'' recently published by USDA,
classifies these efforts into four major types:
Field gleaning--the collection of crops from farmers' fields that
have already been mechanically harvested or on fields where it is not
economically profitable to harvest;
Perishable food rescue or salvage--the collection of perishable
produce from wholesale and retail sources such as supermarkets;
Food rescue--the collection of prepared foods from the foodservice
industry, including restaurants, hotels, and caterers; and
Nonperishable food collection--the collection of processed foods
with longer shelf lives.
Once surplus food has been ``recovered'' or prevented from going to
waste, volunteers pick up and deliver the food to groups that serve the
needy, either directly through neighborhood charitable organizations,
such as food pantries and soup kitchens, or indirectly through food
banks. In addition to providing additional quantities of food to hungry
people, food recovery efforts can also provide food banks with the
ability to offer clients more variety and nutrients in their diets by
adding fiber-rich fresh fruits and vegetables and grain products to the
typical offerings of nonperishable canned and boxed goods.
Food recovery also has benefits that extend beyond providing food
to the needy. For example, the additional food supplied by recovery
programs allows agencies that serve the disadvantaged to reallocate
money to other needed services, money that they would have otherwise
spent on food.
These efforts also provide clean fields and tax savings for farmers
who donate unharvested crops and reduce waste-removal fees for
supermarkets and foodservice establishments. For example, if 5 percent
of retail, foodservice, and consumer food losses in 1995 were recovered
rather than discarded as solid waste, about $50 million dollars
annually could be saved in solid waste disposal costs for landfills
alone. If 10 percent of food losses were recovered, savings for
landfill disposal costs would be about $90 million. These savings would
increase to $200 million with a 25-percent recovery rate.
In addition, large amounts of labor, energy, and other inputs are
dedicated to producing food. For example, ERS estimated total U.S. farm
production expenses--including seed, fertilizer, and other inputs, and
labor, machinery, and other operating expenditures--to be $180 billion
in 1995. Food recovery and other loss reduction programs can make more
efficient use of these resources by reducing the amount of food that
goes to waste.
Food recovery, however, is not without cost. Recovery operations
face a number of logistical and financial obstacles in the course of
turning ``lost'' food into food suitable for consumption. At times,
these obstacles are quite formidable. They include locating food donors
and making them aware of organizations that channel donated food to the
needy; obtaining financial resources for transporting, storing, and
packaging donated foods; securing labor, whether paid or volunteer; and
training those workers in safe food handling and preparation methods.
Second Harvest, the Nation's largest domestic charitable hunger relief
organization, spends more than $5 million annually transporting food
from fields, restaurants, and supermarkets to local food banks that
serve the needy.
Until recently, many potential food donors were reluctant to
participate in food recovery efforts because they feared legal
liability if someone were to become ill from eating their donated
foods. The Bill Emerson Good Samaritan Food Donation Act, passed by
Congress and signed into law by President Clinton in 1996, promotes
food recovery by limiting the liability of food donors to instances of
gross negligence or intentional misconduct. It also establishes basic
nationwide uniform definitions pertaining to the donation and
distribution of nutritious foods, which will ensure that donated foods
meet all quality and labeling standards of Federal, State, and local
laws and regulations.
food waste recycling and byproduct use
Technological advances in food processing and food byproduct
development can reduce food loss. For example, many food parts that
would have been discarded by food processors 10 years ago are finding
new value in industrial raw materials or in other food products. These
products include livestock feeds, biodiesel (a fuel made from vegetable
oils and animal fats), adhesives and solvents derived from citrus oils,
pharmaceutical products made from cow's and goat's milk, and juice
products and vinegar made from apple peels.
The large volume of shells from raw eggs processed into liquid egg
products, for instance, can be used as a source of calcium in poultry
feed or as fertilizer. Eggs taken out of their shells by processing
machines may also mean lower rates of processing loss, since up to 30
percent of the egg white can stay with the shell when shells from raw
eggs are removed manually. Similarly, the introduction of frozen
concentrated orange juice has reduced marketing losses for fresh fruit
by enabling processors to use bruised or blemished fruit for juice and
the nonjuice portions for cattle feed.
Current research on alternative uses for recycled food waste is
focusing on animal feed and compost. For example, research is being
conducted on the efficient extraction of food waste materials, known as
wash water solids, from dairy processing plants. Extraction of these
solids reduces waste disposal fees and results in additional income for
dairy processors who sell the recovered material for animal feed.
Food waste can also be blended with other organic compounds, such
as newspaper, and composted. The resulting organic material could be
developed into a soil-conditioning product. Research is also being
conducted on converting food waste into a biodegradable film similar to
that used for plastic trash bags. The goal is to develop an organic
film that would decompose rapidly and could be used in lawn waste
composting operations.
consumer education and economic incentives
While food recovery and recycling technologies may help to utilize
food that would otherwise be discarded, programs designed to prevent
food loss in the first place may be particularly useful in reducing
consumer and foodservice food losses. A number of programs are
currently being implemented.
According to The Wall Street Journal, economic incentives are
largely behind the Boston Market restaurant chain's recent adoption of
a computer program that monitors food inventories. As menu items are
sold and entered into the cash register, the program converts these
items, such as cole slaw or mashed potatoes, into raw ingredients. At
the end of each day, food inventories that remain in the kitchen are
weighed and entered into the computer where they are compared with
estimated food uses based on product sales. The difference between used
and remaining inventories provides an instant estimate of preparation
and storage losses. Since initiating the program, the chain's self-
reported food loss has declined from 5 percent to 1 percent of food
inventories.
Some local communities are successfully reducing food and other
waste by requiring households and businesses to pay for solid waste
disposal based on the amount of trash that they generate, usually by
charging higher fees for each additional trash container used.
According to the U.S. Environmental Protection Agency (EPA), there are
currently more than 2,000 such programs in place nationwide, with
average reductions in household solid waste of 25 to 45 percent. A 1994
study conducted for the EPA reported that food accounted for about 8.5
percent of municipal solid waste collected from households and
businesses.
Education programs that help consumers change their food discard
behavior may also be effective in preventing food loss. For instance,
educational programs that help meal planners determine appropriate
portion sizes and distinguish between spoiled and safe food can help
consumers reduce plate waste and better utilize leftovers. Improved
meal planning and purchasing skills--including information that helps
consumers understand the meaning of manufacturers' expiration codes,
and ``use-by'' and ``sell-by'' dates--can reduce the discard of food
items.
Government-sponsored initiatives, such as USDA's publication of A
Citizen's Guide to Food Recovery, along with local efforts to train
food recovery volunteers in the safe handling and preparation of
rescued food, can increase the safety and efficiency of food recovery
efforts. Recent legislation that reduces the liability of food donors
has increased the amount of food recovered to feed the needy.
Educational programs that increase the awareness of food loss by
manufacturers, retailers, and consumers may reduce the amount of food
loss and in turn the environmental and economic costs of waste
disposal.
Over the long run, the reduction and recovery of uneaten food in
the United States is a complex undertaking requiring the involvement of
public and private institutions, as well as consumers. Efforts to
reduce or prevent food loss must be balanced against the cost of
conserving and recovering food. However, successful food recovery
programs can provide many benefits to society which can offset a
portion of these costs. Among other things, food recovery programs can
help to reduce hunger; provide tax savings to farmers, food
manufacturers, retailers, foodservice operators, and others that donate
food; conserve landfill space; and lessen the costs and environmental
impact of solid waste disposal. While our estimates of food loss lack
precision, they identify an important issue in the food system that
deserves closer attention.
food recovery efforts reach across marketing system
A Citizen's Guide to Food Recovery.--USDA has recently published A
Citizen's Guide to Food Recovery, a resource guide on food recovery
programs for businesses, community-based organizations, private
citizens, and local governments. The Guide is designed to support food
recovery by showing communities, individuals, and businesses how to
support existing food recovery efforts or to begin new programs in
their communities. The Citizen's Guide and other sources of information
about gleaning and food rescue efforts, including most of those listed
below, are available free of charge by calling toll-free 1-800-GLEAN-IT
or through the Internet at http://www.usda.gov/fcs/glean.htm.
In addition to creating the Citizen's Guide, USDA has taken a wide
variety of steps to promote citizen service related to food recovery
and gleaning:
Food Recovery Roundtables.--Secretary of Agriculture Dan Glickman
has convened ``round tables'' around the country to bring together
interested nonprofit groups, corporate leaders, social service
agencies, and Government officials for collaborative action on food
recovery.
AmeriCorps Summer of Gleaning.--In the Summer of 1996, as one part
of its AmeriCorps program, USDA sponsored a special AmeriCorps ``Summer
of Gleaning'' program that implemented 22 food recovery projects in 20
States. The program was based on the so-called ``volunteer generator''
model, in which a handful of compensated AmeriCorps members recruit
volunteers to help implement large-scale tasks. The 88 AmeriCorps
members in the summer program recruited over 1,600 volunteers who
helped pick, sort, deliver, and prepare recovered foods.
USDA National Hunger Clearinghouse.--USDA has contracted with World
Hunger Year, a national nonprofit organization, to develop the USDA
National Hunger Clearinghouse. The Clearinghouse established a
communications network and comprehensive database identifying all known
organizations providing hunger and poverty-related services,
particularly organizations supporting food recovery efforts.
Food Safety Training for Food Recovery.--USDA's Cooperative State
Research, Education and Extension Service (CSREES), in conjunction with
the Cooperative Extension System, is helping local hunger groups
recover food safely. Nationwide outreach programs like Purdue
University's Safe Food for the Hungry and S.T.R.E.T.C.H. (Safety,
Training, Resources, and Education to Combat Hunger) teach food-
assistance workers how to transport, store, and prepare food safely.
They also show groups dedicated to feeding the hungry how to create
nutritious meals from the most commonly donated foodstuffs and bulk
supplies.
USDA's Food Safety and Inspection Service (FSIS) is working with
the Chef and Child Foundation, the philanthropic arm of the American
Culinary Federation, to expand food-safety training for people serving
food to the needy at nonprofit feeding program sites, including soup
kitchens and shelters.
National Collaboration of Youth.--USDA signed a Memorandum of
Understanding with NCY, an umbrella group for such youth organizations
as the Boy and Girl Scouts, Big Brothers/Big Sisters, YMCA of America,
and the Boys and Girls Clubs. The agreement specifies how the over 40
million members of NCY organizations will be encouraged to volunteer to
recover food.
Federal Cafeterias, Schools, and Farmers' Markets.--In conjunction
with USDA efforts, the Washington cafeterias of the Department of
Justice, the Department of Energy, and the Office of Personnel
Management are donating excess food to the DC Central Kitchen in
Washington, DC. The DC Central Kitchen plans and distributes 3,000
meals per day, 7 days a week, to 95 charity outlets across the
Washington metropolitan area. The Kitchen is in part staffed by
homeless workers 48 per year who receive 3 months of on-the-job
training in food preparation and management from professional chefs who
volunteer their skills.
USDA is also helping school districts in both the Washington, DC,
and Wichita, KS, areas to involve students in community service
activities related to fighting hunger and recovering food. USDA is also
working with the nonprofit groups Rock & Wrap It Up! and FoodChain to
help students recover food from the School Lunch Program, restaurants,
and concerts.
In addition, USDA is helping to promote food recovery from farmers'
markets nationwide, including markets held at Federal agencies.
Public Service Announcements.--USDA worked with the Fox Television
Network to air a plot-related public service announcement on the
television show Party of Five that promoted food recovery and provided
viewers with the 1-800-GLEAN-IT telephone number to obtain the
Citizen's Guide and other information about gleaning and food rescue.
National Summit on Food Recovery.--USDA, the Congressional Hunger
Center, and the nonprofit groups Second Harvest and FoodChain will
cosponsor a National Summit on Food Recovery, which will be modeled on
President Clinton's Summit on America's Future. The Summit will bring
together leaders from State, county, and city governments, Indian
tribes, nonprofit organizations, religious groups, large corporations,
and small businesses. All attendees will be asked to make specific
commitments to increase food recovery prior to the event.
National Week of Food Recovery.--President Clinton will declare a
National Week of Food Recovery, during which food recovery volunteer
projects will occur nationally.
The Federal Government is not alone in its food recovery efforts.
Foodservice operators, retailers, nonprofit organizations, and
individual citizens are also involved.
FoodChain.--FoodChain is the Nation's largest network of prepared
and perishable food rescue programs. It opened its doors in 1992 with a
staff of one. Today, 116 member programs and 22 associate programs
participate in FoodChain, distributing nearly 100 million pounds of
food to some 7,000 social service agencies each year.
Foodservice.--Hundreds of nationwide and regional restaurant chains
of various sizes, along with individual foodservice outlets, are
channeling unsold food to local food recovery programs.
Second Harvest.--Second Harvest, the largest domestic hunger relief
organization, rescued 811.3 million pounds of food in 1995 from going
to waste by soliciting donations of food and grocery products from the
Nation's food industry.
Society of Saint Andrew (SoSA).--The SoSA Gleaning Network has
recovered more than 200 million pounds of fresh fruits and vegetables
since its founding in 1979, and distributed them to food pantries and
soup kitchens across the United States.
``Unsaleable'' Food Products.--The food industry has developed a
Joint Industry Task Force on Unsaleables to develop new strategies and
incentives to improve the condition of dented, bruised, or otherwise
damaged food products for food banks. These ``unsaleables'' are
channeled through Product Reclamation Centers, which help retailers
recover the food for organizations that assist the needy.
measuring food loss: about the estimates and the data
Food is lost at every stage of the U.S. marketing system. However,
due to the enormous size and diversity of the American food industry,
few studies estimate aggregate marketing losses across the entire food
sector. Typically, researchers report food losses as a percentage of
food servings, household food stocks, or retail inventories at specific
points in the marketing system, such as fresh fruit and vegetable
losses in supermarket produce departments, household plate waste, or
preparation and storage losses in foodservice operations.
In this study, food loss was estimated by applying these loss
factors, gleaned from published studies and discussions with commodity
experts, to the amount of food available for human consumption in the
United States in 1995. Losses at the retail, foodservice, and consumer
level were estimated for 260 individual foods, which were aggregated
into the food groups listed in table 1. However, preharvest, on-the-
farm, and farm-to-retail losses were not measured.
The amount of food available for human consumption was obtained
from national food supply and utilization data, collected and published
annually by USDA's Economic Research Service (ERS). These data measure
flows from production to end uses of several hundred commodities. ERS
commodity specialists construct supply and utilization data sets from a
wide variety of sources within the Government and food industry. Food
available for consumption is calculated as the difference between
available commodity supplies (the sum of production, beginning stocks,
and imports) and other uses (seed, feed, and industrial consumption,
and exports). These components are either directly measurable or
estimated by Government agencies using sampling and statistical
techniques.
In this study, the amount of food available for consumption was
estimated by adjusting these food supply estimates for the removal of
nonedible food parts--peels, skins, bones, pits, and seeds. These
adjustments were based on ERS conversion factors that account for
processing, trimming, and other weight reductions that occur as raw
agricultural commodities are made into semiprocessed and final food
products available for consumption at the retail, household, and
foodservice levels. These reductions ranged from 5 percent for fresh
fruit to more than 30 percent for meat, poultry, and processed
vegetables.
Limitations inherent in the food supply data suggest that the loss
estimates for the consumer, retail, and foodservice sectors presented
in table 1 understate total losses for most agricultural commodities.
For example, the food supply data for dairy products measure the
consumption of manufactured foods, such as ice cream, skim milk, and
mozzarella cheese. As a result, the loss estimate for this group
includes only the share of processed dairy foods lost to human use. It
does not include the loss of raw milk that occurs earlier in the
marketing system as the milk is shipped from the farm to the processing
plant and used in manufacturing.
Also, estimates of retail, foodservice, and consumer food losses
are likely understated due to limitations in the published studies on
which these estimates were based. Food loss, particularly at the
consumer level, is by nature difficult to measure accurately.
Participants in household surveys on food waste, for example, tend to
be highly ``reactive''--changing their behavior during the survey
period out of reluctance to acknowledge how much food they typically
discard. Also, archeological examinations of household garbage may
underestimate losses due to some food being fed to pets or being
discarded in drains and garbage disposals. In addition, only a very
limited number of studies, most of them conducted in school and
university cafeterias, have successfully measured plate waste at the
institutional and foodservice levels.
references
Fung, E.E., and W.L Rathje. ``How We Waste $31 Billion in Food a
Year,'' Yearbook of Agriculture, U.S. Department of Agriculture, 1982,
pp. 352-57.
Gallo, Anthony E. ``Consumer Food Waste in the United States,''
National Food Review, Fall 1980, pp. 13-16.
Mathews, Ryan. ``Is the Damage Done?'' Progressive Grocer, June
1994, pp. 35-38.
Sugarman, Carole. ``Exploding Portions: America Sizes Up,'' The
Washington Post, Food Section, Oct. 11, 1995.
U.S. Department of Agriculture, Economic Research Service, Food
Marketing Review, 1994-95. Agricultural Economics Report No. 743, Sept.
1996.
U.S. Department of Agriculture, Food Recovery and Gleaning
Initiative. A Citizen's Guide to Food Recovery, 1996.
U.S. Environmental Protection Agency. Municipal Solid Waste
Factbook Version 3.0. Municipal and Industrial Solid Waste Division,
Office of Solid Waste. http://www.epa.gov/epaoswer/nonhw/muncpl/
factbook.htm, Oct. 8, 1996.
U.S. Environmental Protection Agency. Pay-As-You-Throw. http://
www.epa.gov/epaoswer/nonhw/payt/index.htm, Dec. 11, 1996.
U.S. General Accounting Office. Food Waste: An Opportunity to
Improve Resource Use. Report to Congress by the Comptroller General of
the United States, Sept. 1977.
Van Garde, Shirley J., and Margy J. Woodburn. ``Food Discard
Practices of Householders,'' Journal of the American Dietetic
Association, Vol. 87, No.1, March 1987, pp. 322-29.
Zachary, Pascal G. ``Restaurant Computers Speed Up Soup to Nuts,''
The Wall Street Journal, Oct. 25, 1995, p. B6.
Transportation and Storage
Ms. Watkins. What we have done is that we have had
opportunity, since the food recovery and gleaning summit that
was held in September, to visit many gleaning centers and
operations around the country and listen to the concerns that
people are having. One of the things that we are finding is
that 27 percent and sometimes greater amounts of food are being
left in the fields and in other areas. Food banks and soup
kitchens are having difficulty with transportation. They need
some way to go in and recover those foods. Storage facilities
and bins are another issue, as well as how do you get the food
stored properly so it is safe and the handling done in the
appropriate manner for those foods that are being gleaned.
It is our opinion that if we are to facilitate the removal
of all of this food and make it so that it is accessible to
food banks and soup kitchens and to other entities in the
communities, that we provide seed money to communities to
actually provide the infrastructure that they need for food
recovery and gleaning.
We have heard people, even in the District, tell us that
they would love to go out and glean the food, but they have no
way to go out there to get it. They have no place to put it
once it is returned. If you are gleaning perishable products,
those products need to be stored in a safe and sanitary
environment so that we would not have foodborne illnesses from
food products that are recovered or gleaned.
Program and Financial Integrity
Senator Cochran. One other provision of the budget that
caught my attention is the proposal for appropriating a $1.45
million increase over this year's level for program and
financial integrity advancement. I noticed in your statement,
in your comments too, that a new initiative is underway to try
to crack down on abuse and fraud in the Food Stamp Program.
This is an important undertaking and I commend you for that. I
know that progress has been made in this area from meetings
with the inspector general and looking at GAO audit reports. I
think that is something we have to acknowledge and commend.
But my question is, what are you going to do with the
additional $1.45 million requested when the Inspector General's
Office is also proposing an increase for the same thing? What
is the Service going to do with this additional money?
Ms. Watkins. The Inspector General's Office makes
recommendations that we are to follow through on various
program integrity issues. We are unable to follow up on either
the inspector general or GAO's recommendations because of the
staffing situation.
We also have a need to provide technical assistance to both
State and local personnel who are operating these programs. We
need to make certain that we are providing people the
appropriate and necessary means in which to operate a business.
Mr. Chairman, I feel that we have a lot of work to do in that
area, and we have not been able to do that. If we are going to
maintain program integrity, it is critical that we help people
in States and weed out the bad actors so that these programs
are recognized as providing the benefits for those for whom
they are critically needed.
This is a big business and I do not take that lightly. I
think if we are operating almost a $40 billion operation, it
has to be operated as a nutrition business.
Participation in Food Stamps and School Breakfast
Senator Cochran. Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman.
Madam Secretary, let me ask you. You have a proposal to
expand food stamp benefits.
Well, first of all, the budget request assumes an
additional 572,000 food stamp participants. Now, the number of
participants has been declining, has it not?
Ms. Watkins. The number has been declining, Senator
Bumpers.
Senator Bumpers. The breakfasts in the school lunchrooms
has been increasing I understand.
Ms. Watkins. That has been increasing.
Senator Bumpers. Incidentally, what is the cause for that,
do you know? Just more kids going to school?
Ms. Watkins. The cause for the increase in the breakfast
program?
Senator Bumpers. Increase for breakfast.
Ms. Watkins. Well, we are working aggressively with our
State and local partners to increase those programs and
providing access to those programs. So, that is why you would
see an increase. We have seen an increase over the years in our
breakfast program. As people understand the real benefits of
the program, more and more school food authorities and
educators are looking at that program as a viable opportunity
for them to help children be ready to learn.
Senator Bumpers. If somebody gets kicked off welfare and
they go into a minimum wage job, their children are still
eligible for those things, are they not?
Ms. Watkins. They still are eligible for both the school
nutrition programs and the WIC Program.
Senator Bumpers. Now, Madam Secretary, the 572,000 increase
in food stamp recipients, is that mostly illegals?
Ms. Watkins. I am going to ask Yvette if she would answer
your question, Senator Bumpers.
Ms. Jackson. Illegal immigrants have never been eligible to
participate in the Food Stamp Program. The President's proposal
will not change that. Instead the President's proposal is to
restore food stamp eligibility to certain categories of legal
immigrants who lost eligibility as a result of----
Senator Bumpers. Of legal immigrants?
Ms. Jackson. Of legal immigrants.
Senator Bumpers. The illegals have never been eligible for
food stamps.
Ms. Jackson. Illegals have never been eligible for food
stamps. That is correct.
The category of legal immigrants that the President is
proposing to restore benefits for includes families with
children. We are anticipating that that would cover about
540,000 legal immigrants, also disabled and elderly immigrants
who had their SSI and Medicaid restored as part of the Balanced
Budget Act but not their food stamps. Also the proposal would
extend the exemption for refugees from 5 to 7 years. That would
affect an additional 105,000 legal immigrants.
So, the proposal is to restore benefits to certain
categories of legal immigrants who lost their eligibility as a
result of welfare reform.
Administrative Savings and Offsets
Senator Bumpers. Secretary Watkins, the administration
proposal, their new initiatives. You are asking for $2.5
billion to implement those. Is that correct?
Ms. Watkins. That is correct.
Senator Bumpers. My question is, You list offsets to make
up for that which are estimated at $1.2 to $1.4 billion. Staff
tells me they think those are the same offsets that have been
identified for funding of the agriculture research title. Is
that correct?
Ms. Watkins. Dennis?
Senator Bumpers. My question is, If that is correct and the
conferees to the research title use those savings for new
research programs, do you have any alternative plans for how
you are going to pick up that money? It looks to me like it is
kind of a race for jurisdiction here, whoever meets first and
uses those offsets. I think they are the same. Do you follow my
question?
The administration is asking for $2.5 billion. You are
saying that the savings required in other programs to achieve
this is going to come from certain administrative savings
totaling $1.2 to $1.4 billion. My question is, I think these
are the same savings that have been targeted for offset as a
part of the conference discussion in the agricultural research
title. We cannot use those offsets in two places obviously.
Ms. Watkins. I am going to ask Dennis Kaplan to address
that.
Senator Bumpers. He does not act like he wants to.
Ms. Watkins. I know it. [Laughter.]
That is the reason why I thought I would tell him.
Senator Burns. In fact, he wants to borrow your hardhat.
Mr. Kaplan. They are the same offsets. It is the
administration's position they ought to go to food stamps, and
if the research bill conference comes out first, we are going
to have to relook at the issue.
Senator Bumpers. You are going to be looking for something
else.
Mr. Kaplan. Yes, sir.
Senator Bumpers. Well, I thought that was the right answer.
Food Stamp Program and WIC Reserves
Madam Secretary, when was the last time we had a food stamp
reserve that was triggered? You are asking for $1 billion
reserve in the food stamp account, and my question is, When was
the last time we triggered the reserve account? Mr. Kaplan,
anybody?
Ms. Watkins. Late 1970's.
Senator Bumpers. Pardon?
Ms. Watkins. More recent than late 1970's? Mr. Chairman,
Senator Bumpers, let me get back to you on that.
Senator Bumpers. That might be a place to find some of
those offsets. I do not think you really need that reserve if
you have not used it since the 1970's.
Ms. Watkins. Let me get back with you. I am not sure that
that is the correct answer, and I want to make sure I am giving
you the right answer. I do not want to give you a wrong answer.
[The information follows:]
Fiscal year 1992 was the last time that the food stamp
reserve was triggered. At that time, $0.9 billion of a $1.5
billion reserve was used to cover increased program
participation.
Senator Bumpers. OK.
While we are on reserves, I wanted to ask you about the WIC
reserve. You are asking for what?
Ms. Watkins. $20 million.
Senator Bumpers. $75 to $100 million. How much are you
asking for--just a moment.
What kind of carryover did we have in the WIC fund last
year?
Ms. Watkins. We had $150 million approximately last year in
carryover/carryout.
Senator Bumpers. And what do you anticipate this year?
Ms. Watkins. $130 million.
Senator Bumpers. $130 million?
Ms. Watkins. Right.
Senator Bumpers. Why do we always have this big carryover
in the WIC Program?
Ms. Watkins. Well, that was one of the things that I tried
to explain in my oral presentation. One of the things that
happens is that the States try very carefully not to overspend.
At the same time it becomes very difficult for them, as they
move through the year, not knowing how many actual participants
they are going to have in that program. So, they try not to
overspend, and as a result they end up sometimes at the end of
the year with carryover money. These carryover funds can vary
because of a wide variety of issues in a State. For example,
they do not know what that food cost is going to be because of
the manner in which the coupons and the checks are redeemed.
As someone said to me, it is not an exact science. It is a
very, very cumbersome and a difficult process. So, they try not
to overspend, and we want to make certain that we have adequate
moneys in our carryover funding so that they serve the number
that we have. They have moneys, but they are bound not to
overspend. So, they are not going to overspend.
Senator Bumpers. But you are asking for a $20 million
reserve in the WIC.
Ms. Watkins. That is right.
Senator Bumpers. Senator Cochran and I are going to be
desperate, when we sit down to mark this thing up, trying to
find money because we are going to be way short, close to $1
billion.
Ms. Watkins. It is very difficult for us to get the exact
number in WIC State or local participants that we are going to
have each month. If you cut it back, we would not be able to
serve the 7.5 million that we estimate----
Senator Bumpers. My guess is if you ran short in the WIC
Program, we would have a second or a third supplemental in a
New York minute because it is a very popular----
Ms. Watkins. In a New York minute----
Senator Bumpers. I do not think we are ever going to let
WIC run out of money.
Ms. Watkins. Well, the only problem, Senator Bumpers, is
that sometimes we are criticized severely if we do not have the
exact numbers and come back and ask for a supplemental. So, we
take our bet on trying to have the money in advance, rather
than have to come back to you and ask for a supplemental.
Studies and Evaluation Transfer
Senator Bumpers. This next question is not the sexiest
question in the world. My staff insists I ask it, so I will.
[Laughter.]
In 1998 we transferred the studies and evaluation
activities of the Food and Nutrition Service to the Economic
Research Service. Now this year you are asking that it be
transferred back. Why?
Ms. Watkins. The administration asked that that money not
be transferred initially, and it was. We are requesting that
those funds be returned to FNS so that we can control the
surveys, the research, and the studies that are done for those
programs. They are program specific. ERS is an outstanding
organization that is in the economic research service area.
Their research expertise does not necessarily lie in the
nutrition research area.
So, we think it is critically important that that area be
returned back to FNS so that we also can request research and
thereby make adequate program decisions. It is a little
difficult for me to go to another mission area in another
agency to request a variety of research that I need done if I
am going to make solid management decisions. That is why the
administration is requesting that those funds be returned to
FNS.
Senator Bumpers. I do not have any objection to that.
Ms. Watkins. Thank you, Senator Bumpers.
Senator Bumpers. I have a couple of questions that I will
submit in writing, one probably on the WIC farmers' market,
another one on TEFAP, another one on the WIC immunization
program. That is something that I got started several years ago
and I have been trying to monitor it as closely as I could to
see how well it is working. When I go down and visit these
conferences where CDC and the WIC administrators--they do not
like each other very well or very much, but they have sort of
made a peace. I think that program is working reasonably well,
but I am still a little bit troubled about the role USDA has in
that compared to CDC and so on.
Electronic Benefit Transfer Cards and Fraud
But my final question to you this morning is on the EBT
cards. For years some of us have thought that was going to be a
panacea to fraud. Apparently you are still experiencing, in the
25 States that use EBT cards, close to a 10-percent fraud. Is
that correct?
Ms. Watkins. In that neighborhood, Senator Bumpers.
Senator Bumpers. How does most of that occur? Does somebody
just give their card to somebody else for money and they go in
and buy the groceries?
Ms. Watkins. Some of it. In some instances, that is the way
it happens. Yvette may want to elaborate more on that.
Senator Bumpers. Ms. Jackson?
Ms. Jackson. EBT does not eliminate fraud. It gives us, for
the very first time, an electronic tracking, a record, of every
single transaction so that we can go back and identify
suspicious or fraudulent activity that we never had the
capacity to identify in the past. What we are able to do with
EBT is to identify both the retailers who are committing fraud,
as well as for the very first time the recipients who are also
abusing their benefits. As a result, we are able to take swift
action that we were only able to do in the past through actual
onsite, undercover investigations. So, we think this is a
tremendous tool for us.
We also have implemented an automated tracking system that
provides us with profiles to help us identify suspicious
activity with the help of a vendor. That computer system is
available not only to the FNS staff, but it is also available
to the Office of the Inspector General and available to States
so that we can collectively work together in identifying and
prosecuting food stamp fraud. Certainly this is above the
capacity that we were able to do prior to EBT.
Senator Bumpers. Ms. Jackson, do you save anything
administratively? Do you save administrative expense with these
cards?
First of all, how often do you send out a card to a
recipient?
Ms. Jackson. Most States are issuing a card one time. They
do make replacements if the person should lose the card. One of
the benefits of the card is that if a person should misplace or
lose their card, it can be electronically deactivated
immediately with no more than a phone call from the recipient.
So, it is much more secure than the paper coupons.
We save Federal dollars because with EBT we are no longer
dealing with the cost of printing, distribution, storing, and
then the cost of ultimately destroying the coupons because they
only get used one time. So, we have savings to the Federal
Government in terms of the paper process.
We also reduce losses due to theft and loss of the coupons
because, again, the card is more secure. Of course, as I said,
it gives us a much, much better tool to identify and crack down
on fraud.
Senator Bumpers. Madam Secretary, you must be doing a good
job. This subcommittee has jurisdiction over $57 billion and 70
percent of it is yours, and there are only three Senators here
and not a single reporter. [Laughter.]
So, you must be doing OK.
Ms. Watkins. Senator Bumpers, my goal is to stay out of the
Washington Post. [Laughter.]
Senator Bumpers. Well, if you were in my position, you
would be trying to avoid subpoenas. [Laughter.]
I am the only person in Arkansas that has not been
subpoenaed so far. [Laughter.]
Senator Burns. We will see if we cannot take care of that
this afternoon.
Senator Bumpers. And I am knocking on wood.
Senator Cochran. Senator Burns.
Senator Burns. Thank you very much, Mr. Chairman.
I want to continue on with the EBT card. I was around when
we started that program, and I am very supportive of it.
I do not think you quite answered--went to length in
Senator Bumpers' question. How is fraud committed with these
cards?
Ms. Jackson. Generally it is committed at the retailer site
where there is collusion between the recipient who holds the
card and the retailer. So, the retailer will swipe the card and
input information that would indicate, for example, that they
sold 100 dollars' worth of food, when, in fact, what they did
was they gave $50 cash to the recipient and then came back, of
course, and got reimbursed as if they had actually sold 100
dollars' worth of food. So, it is collusion between the person
with the card and the retailer.
Senator Burns. On that card is there a picture of the
recipient, a personal picture just like a driver's license or
something like that?
Ms. Jackson. A photo is not required. It is allowed. Many
States do not include the photo on the card because of the
cost. However, the individual has to use the card in
conjunction with a personal identification number so that they
have to input that personal identification number in addition
to presenting the card.
Senator Burns. The only people that we had complaints from,
Senator Bumpers, when we put the card in is it cost some people
at the county courthouse because they did not have near as many
people counting out stamps and storing the darned things. I
just knew that it had to be a pretty fair program that needed
to be looked into. So, I appreciate its continuing.
I think you are right. It probably does give you a better
paper trail when fraud is committed when you have to identify
the retailer or the merchant and the recipient.
Also, I want to just pledge my support in my county when I
was commissioner in Yellowstone County, MT. My wife is a
schoolteacher and it is unbelievable to me--of course, I was
raised on a farm, so everything is unbelievable to me.
[Laughter.]
The number of young people that go to school in the morning
without breakfast. I will tell you in some schools in
Yellowstone County, when we started feeding kids breakfast, all
at once we have seen a different kind of student because I just
do not think hungry kids learn. I am a bigger supporter of the
breakfast than I am of lunch, to be right honest with you. I
think it does more for the young person. But I cannot believe
the amount of people that send their kids to school without
breakfast.
Of course, I have always been very supportive of the WIC
programs, and I believe in those a lot.
There are other areas I do not agree with you, but that
does not make any difference. You stay out of that Washington
Post and you will always be a hero to me. [Laughter.]
Thank you very much.
Is the card continuing to grow in acceptance in other
States? Now, you have it in place in 25 States. I remember the
pilot program started out in Baltimore and Cleveland and they
had some troubles at first, but then they really got ironed
out. So, you are doing a very good job.
Ms. Jackson. We anticipate, Senator, that by the end of
this calendar year over 50 percent of the food stamp caseload
will be receiving their benefits electronically, and we do not
anticipate any difficulty in States meeting the congressional
mandate to have EBT nationwide by the year 2002.
Senator Burns. Good enough.
I thank the chairman. I appreciate that very much.
Senator Cochran. Thank you, Senator Burns, for your
contribution to the hearing and your helping the work of this
committee. It is very important, and we appreciate it very
much.
WIC Full Participation
Madam Secretary, there is an indication in the budget that
we are trying to fund the WIC Program to achieve this level of
full participation. I have heard that every year. We use it,
and I try to convince Senators to support our appropriation
figure based on our effort to achieve this longstanding goal of
full participation.
Where do we get the 7.5 million we say is the full
participation level? Is there any evidence that you know of
that supports 7.5 million as the full participation level for
the WIC Program?
Ms. Watkins. Mr. Chairman, I am going to ask Ron Vogel to
explain that for you.
Mr. Vogel. Thank you. [Laughter.]
Senator, we believe, given the estimation methodologies
that we use, that there are approximately 9 million people,
women, infants, and children, in this country that are fully
eligible for the WIC Program. That means they are both income
eligible and demonstrate some form of nutritional risk. We
believe, that of that number, it is reasonable to assume that
about 7.5 million individuals on a monthly basis will avail
themselves of WIC services. So, when we say that 7.5 million
represents a fully funded program, we mean that is the number
of people that we expect in any given month that would need the
services of the program and seek those services.
Senator Cochran. That is good. I needed that because if I
get asked that question, I did not know what I was going to say
when I am managing the bill on the floor. So, I am fully armed
now with an answer. Thank you.
WIC Food Package Costs Reductions
Secretary Glickman in his prepared statement before the
committee said that efforts continue to reduce the overall cost
of WIC food packages, and he set that at 10 percent by 2002.
That is his goal. Could you describe for us what the Food and
Nutrition Service or your office is doing to achieve that goal?
When did that effort begin and what have we achieved up to this
date to cut the overall cost of the package?
Ms. Watkins. Mr. Chairman, one of the things that we are
doing is working with States on their bidding practices. We are
very proud of what States have done on the WIC food packages
and reducing those costs. Obviously, as they reduce their food
package cost, they are doing a variety of things at the State
and the local level to reduce those costs. I am going to ask
Ron to share some of the kinds of things that the agency has
done over the past several years that will give you the
indication of what those States have actually done in reducing
those costs. Ron?
Mr. Vogel. First of all, I would like to point out that
that is a goal, in terms of reducing the food package costs by
the year 2002 by 10 percent, that we have committed to and we
will be working with our States to achieve that.
The kinds of things that we intend to do to try to meet
that goal, Senator, is to continue to seek ways to reduce the
cost of infant formula in the program. States have done a
remarkable job to this point, but we believe there are still
some additional things that can be done. To that extent, we
intend to propose a rulemaking very shortly that we think will
increase the savings in this area.
Likewise, we are going to be working with our State
cooperators to improve vendor management. You are aware that,
depending on the vendors that participate in this store, the
food package costs can fluctuate significantly. So, we are
working with our State cooperators to improve vendor
management, and we will have two rulemakings that we are going
to be proposing this year that will help States improve vendor
management. We expect that that will also have an effect in
reducing food package costs.
Of course, we always encourage States to look at ways to
reduce the food package costs by emphasizing store brands and
economical package sizing. States are very aggressive in this
area, Senator, and given that the situation that confronts us
with a tight budget situation in the years ahead, States will
have to be more aggressive in looking at food package cost
savings if they intend to expand participation.
Senator Cochran. Is competitive bidding one of the
techniques?
Mr. Vogel. Competitive bidding with respect to infant
formula is required by law and all States are engaged in that
practice. There are other States that on their own have engaged
in competitive bidding for other foods, infant juices, infant
cereals, and the State of Delaware actually competes their
vendor positions on the program.
Senator Cochran. At the administration's request, we
remember including that language in the appropriations bill,
the legal authority to require the competitive bidding. I
notice that you suggest that we ought to make that permanent
law in our bill. There is a reauthorization bill coming down we
understand, but we do not know when it is coming and what it is
going to have in it.
Is that one of the things that you might consider putting
in your bill that will be proposed by the administration to
Congress?
Mr. Vogel. There is already a requirement in existing law
to competitively bid for infant formula. Our reauthorization
proposal will suggest no other extension of that practice in
maintaining WIC food package costs, but we will have a
rulemaking, as I indicated, so that we will regulatorily
enhance the effectiveness of the competitive bidding for infant
formula.
Senator Cochran. What is your expectation for presenting
the reauthorization bill to Congress?
Ms. Watkins. We would expect that you would have that
before the day is over.
Senator Cochran. Wow.
Ms. Watkins. We thought you were going to have it before I
got here this morning. I was just going to give it to you, but
we did not get the transmittal letter for the Secretary to sign
before I left the office. So, we will do that as soon as we get
back. You will have it before the day is over.
Senator Cochran. Could you tell us anything about what the
impact is going to be if Congress approves your reauthorization
request on the appropriations needs?
Ms. Watkins. It is a cost neutral reauthorization package.
Senator Cochran. That sounds good. That means it is not
going to cost any more than it would have if you had not asked
for reauthorization. It is just going to cost the same as
projected under current law.
Ms. Watkins. That is exactly right. There are some
differences in the out-year costs, but as balanced over the 5-
year period, it is going to be cost neutral.
WIC Electronic Transfer Program
Senator Cochran. Tell me how the electronic benefit
transfer program works in the WIC Program. I understand the
Food Stamp Program. But when I was reading my notes in
preparation for the hearing, I understand from your testimony
that FNS is engaging in activities that complement the Food
Stamp Program. I am not sure I understand what that means. ``To
advance electronic benefit transfer systems to improve program
benefit delivery and client services for the WIC program.'' I
did not know we had an EBT program for WIC.
Ms. Watkins. We do have some pilots going on now in EBT for
WIC that are very similar to the food stamp model. It will be
very similar to that program.
Senator Cochran. Are there funds being used in this fiscal
year's budget that we appropriate for this purpose, and have
you included a request for next fiscal year for that program?
Ms. Watkins. We have included funds for the 1999 budget in
this budget year's request. There are some funds in there for
States to implement the WIC EBT program, and we are working
with those States that are doing the pilot currently.
Senator Cochran. I understand in your budget notes that you
hope to increase the number of States to four that are going to
be participating in that program. What States are they, do you
know?
Ms. Watkins. Do you want to give the name of the States,
Ron?
Mr. Vogel. The only State right now, Senator, that has an
actual operative WIC EBT system is the State of Wyoming.
Senator Cochran. But there are not many WIC recipients out
there either.
Mr. Vogel. No, sir; there are not that many. But the
technological challenges, therefore, are probably a lot greater
for a State like Wyoming than they would be for a more populous
State. We are pleased with what Wyoming has managed to
accomplish here.
There are 10 other States, Maine, New Hampshire, Texas, New
Mexico among those, that are close to putting a pilot version
of WIC EBT into place. And that is really our goal, by the year
2002 is to have another three States join Wyoming in being able
to deliver WIC benefits through an EBT system.
Food Stamp Program Employment and Training
Senator Cochran. There were some questions I was going to
ask you that Senator Bumpers has already asked and there are
other questions that I intend to submit and ask you to respond
to for the record.
There is one question though that I do want to ask and that
is about a request for $6.7 million for employment and training
in the Food Stamp Program. I assume this means for recipients
rather than administrators. What kind of employment and
training program do you have going on that costs $6.7 million
or that you hope to have going on?
Ms. Watkins. Yvette is going to answer that for you.
Ms. Jackson. I was confused because I was not aware that we
were going after any additional money. It is just an inflation
adjustor for fiscal year 1998. Basically in the Food Stamp
Program, as part of the balanced budget agreement, additional
funds were added to the Food Stamp Employment and Training
Program to allow States to offer work slots to any able-bodied
adult who is subject to the work requirement. That means that
for anyone between the ages of 18 and 50 who is considered
able-bodied, they can only receive food stamps for 3 months out
of any 36-month period unless they are working 20 hours a week,
involved in a workfare program, or in an employment and
training program of 20 hours per week. So, we have a request
from the balanced budget agreement that extends over a 5-year
period to increase State employment and training funds to
guarantee that anyone who is willing to work is given that
opportunity in order to continue to be eligible for the food
stamp programs.
Senator Cochran. Who gets the money? Do you contract this
out or do the States contract it out? Do you manage the
program? How does it work?
Ms. Jackson. States use a combination. Many of them do
contract out. Many of them are using other governmental and
nonprofit organizations to act as work sites for workfare. We
anticipate that most States will be creating workfare slots to
offer work opportunities for their able-bodied adults.
Senator Cochran. You do not manage the program from here
though. You let the States manage the program.
Ms. Jackson. Yes; it is managed at the State level.
CNP Reauthorization
Senator Cochran. On the child nutrition programs, I
understand that the reauthorization there will be cost neutral
as well, improving operation and management, integrity of the
national school lunch and school breakfast programs, and the
child and adult care food programs. Is that going to be
included as a part of the overall package for reauthorization?
Ms. Watkins. Yes, sir; it is.
National Food Service Management Institute
Senator Cochran. What funding, if any, is included in the
budget request for next year for the National Food Service
Management Institute?
Ms. Watkins. We have included $2 million. Let me just be
sure that I have got that actual for you. We have asked for an
additional $1 million for the Institute. They started out and
they have had the same amount since its inception, and we asked
for an additional $1 million this year, in addition to over
$500,000 that we would provide to the Institute out of our team
nutrition funding stream. That would be provided to the
Institute.
In addition, we are looking at possibly using the Institute
to do the training for food safety for our food service
personnel in schools and child care facilities.
Senator Cochran. That sounds like a good idea to me, and I
hope that we are able to get the funding approved to meet that
request. This involves the handling and management of the food
stuffs so as to lessen the likelihood of contamination and
problems with respect to the school lunch programs and other
feeding programs run by the schools.
Ms. Watkins. That is exactly right, Mr. Chairman. One of
the things we did a couple of years ago was to begin the
process of developing food safety materials and food handling
materials for school nutrition personnel. We have completed
that handbook, but we did not have the resources in which to
offer the training for the staff, and that is what the $2
million is for. Obviously, we want to look at areas where there
are already instruments in place, people in place, facilities
in place to actually do that training, and we would not do it
from the Federal level. If we are going to do it, we think the
best place to do it is through the Institute and working with
States and local school nutrition staff.
Submitted Questions
Senator Cochran. As I indicated, there are additional
questions that we will submit for the record, and any
elaboration on questions that we have asked you that you feel
would be helpful to the committee, we encourage you to include
as additional statements with that submission when you respond
to our written questions.
[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
food and nutrition program research
Question. When signing the fiscal year 1998 Appropriations Act last
November, the President noted his concern about the provision in the
bill transferring funding for research on nutrition programs from the
Food and Nutrition Service to the Economic Research Service. The
President's fiscal year 1999 budget now proposes to restore this
funding to the Food and Nutrition Service.
Why does the Administration believe that the Food and Nutrition
Service can better oversee and administer these research funds?
Answer. The best place to house research responsibilities for food
assistance programs is with the agency, the Food and Nutrition Service
(FNS), that administers the programs. It is the proximity of research,
program, and policy staff that ensures a research program that is
practical and relevant to program operations and policy development.
Housing the research function within FNS achieves the critical balance
between independence and effective communication with the programs
served, taking advantage of FNS' ongoing, operational relationship with
State and local administrative agencies and other related Federal
agencies.
In addition, the range of issues surrounding FNS programs is very
broad. They demand techniques that go beyond typical economic analyses
if we are to reliably address the concerns of Congress and States. We
are often required to initiate new nationally representative data
collection efforts as well as complex demonstration activities (such as
those that established the viability of Electronic Benefit Transfer).
While the Economic Research Service (ERS) is a capable research
organization, the expertise to administer such activities has been
developed over the years in FNS.
FNS has managed one of the strongest applied policy research
programs in all of government with a proven track record of conducting
research relevant to program needs. The time it would take to replicate
this in ERS seems a poor use of government resources. Moreover, efforts
to coordinate between ERS and FNS and its program cooperators seems to
introduce an unnecessary complexity into USDA operational procedures.
Question. How has the Food and Nutrition Service been involved in
the food assistance and nutrition research program being carried out by
the Economic Research Service for fiscal year 1998?
Answer. The Food and Nutrition Service (FNS) entered into a working
relationship with the Economic Research Service (ERS) shortly after the
fiscal year 1998 appropriation was signed into law. Meetings to outline
the terms of this relationship took place between the FNS
Administrator, Associate Administrator, other senior FNS staff, and ERS
leadership. There have been extensive briefings between FNS research
and program staff and ERS research staff on FNS food assistance program
operations and the Agency's policy information needs. We gave ERS a
complete description of our research priorities for fiscal year 1998
and we have worked hard to respond to all of ERS' information needs. We
have also given ERS extensive background materials on our previous
research projects and the competitive contracting process, as well as
appropriate staff points of contact within FNS.
Question. Is the fiscal year 1998 food assistance and nutrition
research program reflective of the Food and Nutrition Service's
priorities?
Answer. To help the Economic Research Service (ERS) start off in
the right direction the Food and Nutrition Service (FNS) provided them
with a detailed description of FNS' information needs. ERS is now in
the final stages of preparing a plan of action. Indications are that
they will initiate research on many, but not all, of our priority
information needs.
It is too soon to tell whether the implementation of the research
will remain practical and relevant to FNS program operations and policy
development. When study funding and authority were located with FNS we
were able to make mid-course adjustments quickly so that studies were
able to reflect current FNS priorities while the effect on study
budgets was minor. While the need to coordinate across agencies is a
challenge, we expect to work closely with ERS to achieve the best
results possible.
Question. What is the Economic Research Service doing specifically
that the Food and Nutrition Service does not agree with or would do
differently?
Answer. The Economic Research Service (ERS) put a lot of hard work
into their response to our priorities and many aspects of it are good.
The most significant area of disagreement concerns whether ERS is
underinvesting in work of immediate relevance in favor of data
development efforts that will not require funds until future years.
Specifically:
1. Given the substantial policy interest in ensuring the success
and measuring the consequences of welfare reform, the Food and
Nutrition Service (FNS) would invest more in research aimed at helping
States overcome potential barriers in creating work opportunities for
persons subject to a three-month time limit on food stamp participation
and at determining outcomes for the two groups most affected by new
restrictions on eligibility for food stamps, legal immigrants and able-
bodied adults without children. We are concerned that the approach
taken by ERS as well as the funds budgeted may not be sufficient.
2. ERS' proposal was unable to pursue the full range of policy and
program issues contemplated in our proposed study of the Summer Food
Service Program. Recognizing that resource constraints often force
difficult decisions, we have suggested that further discussion of the
scope and scale of this study is warranted to ensure that it produces
information of greatest relevance to FNS. We are urging ERS to focus on
nutrient quality and the characteristics of program sponsors, sites and
beneficiaries. No previous work has examined the nutrient quality of
Summer Program meals; previous research efforts, albeit somewhat dated
now, have dealt with the issue ERS intends to pursue (the
characteristics of program sponsors and providers).
3. ERS proposed to allocate nearly twenty percent of their budget
to data development. While FNS understands and supports ERS' interest
in this area, we wonder if the resources proposed to expand survey
samples in the future for the Continuing Survey of Food Intake of
Individuals (where current plans call for the next round of data
collection no earlier than fiscal year 2000) and the National Health
and Nutrition Examination Survey might not be better used as described
above as well as to support relevant analyses of recently released data
from these surveys, which remain underutilized.
supplemental nutrition program for women, infants, and children (wic)
Question. The explanatory notes indicate that the Administration is
seeking an increase of $145.5 million for fiscal year 1999 to ``meet
the long-standing bi-partisan commitment to funding in the WIC Program
at a full participation level of 7.5 million.''
Please summarize the methodology used to estimate the 7.5 million
WIC ``full participation'' level.
Answer. The President's Budget proposes to fully fund the WIC
Program and serve 7.5 million women, infants, and children throughout
fiscal year 1999. The full funding participation level, providing
adequate funding to serve all eligible persons who would choose 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 the Food and
Nutrition Service's (FNS) full participation estimate produced in 1996
using 1994 WIC eligibles data.
Previous estimates of full participation have assumed that, on
average, approximately 80 percent of all persons fully-eligible for the
program would participate. We now know that higher participation rates
by the target population can be achieved. This is supported by the
experience of the Food Stamp Program, where participation rates for
families with children under 5 are over 90 percent, and the Aid to
Families with Dependent Children (AFDC) program, where participation
rates since 1990 have ranged from 82 percent to 86 percent.
Given that the estimated number of fully-eligible persons is 9
million, and that actual participation in WIC and other low-income
assistance programs serving children exceeds the 80 percent previously
assumed, a full funding participation target for fiscal year 1999 of
7.5 million remains reasonable and prudent.
The full participation estimate is based on the number of
individuals who are income-eligible for WIC. First, the number of
infants, and children income-eligible is taken directly from the most
recent Current Population Survey (CPS). The number of pregnant women is
estimated as 75 percent of the number of infants, taking into account
the fact that women are only pregnant for 9 months out of a year.
Postpartum and breastfeeding women are estimated as 37 percent and 17
percent, respectively, of income-eligible infants. These factors were
empirically derived from analyses of 1990 Census data, and the 1988
National Maternal and Infant Health Survey (NMIHS). The result is the
total number of women, infants, and children income-eligible for WIC.
We estimate, based on 1996 data, that 11.1 million persons are income-
eligible for the Program.
Second, the total number of women, infants and children income-
eligible for WIC is used to estimate the number who are also at
nutritional risk, and therefore fully eligible for WIC using factors
derived from the National Health and Nutrition Survey II (NHANES II).
Overall, we assume that approximately 4 out of 5 income-eligible
persons are also at nutritional risk, which indicates that 9 million
persons are fully eligible for the Program.
The third step is to estimate how many of those fully eligible
would actually participate in the Program, assuming no funding
constraints. As noted above, FNS previously arrived at an estimate of
7.5 million women, infants, and children, by combining the above
methodology with the assumption that, on average, 80 percent of those
fully eligible would choose to enroll in the Program. Since then, FNS
has learned that a participation rate of 80 percent is likely to be
low, based on the participation rates for comparable types of
individuals in the Food Stamp and AFDC Programs. Therefore, even though
the estimated fully eligible population has declined somewhat in recent
years, FNS has maintained constant its estimate of full participation
at 7.5 million to account for increasing participation rates among
those eligible. In the Food Stamp Program, the participation rate for
families with children under 5 is over 90 percent. In the AFDC program,
participation rates since 1990 have ranged from 82 percent to 86
percent.
A copy of USDA's most recent WIC eligibility update is provided for
the record.
[The information follows:]
Special Supplemental Nutrition Program for Women, Infants and Children
(WIC)
eligibility and coverage estimates 1996 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., $29,693 for a family of four as of July 1,
1997). In addition, individuals are automatically considered income-
eligible if they receive benefits under the Federal Medicaid, Aid to
Families with Dependent Children (AFDC),\1\ or the Food Stamp 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.
---------------------------------------------------------------------------
\1\ The Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (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.
---------------------------------------------------------------------------
(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.
1996 ESTIMATE OF WIC ELIGIBLE
[Numbers in thousands]
----------------------------------------------------------------------------------------------------------------
Postpartum
Pregnant and
women breastfeeding Infants Children Total
women
----------------------------------------------------------------------------------------------------------------
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
1996:
Income eligible................................ 1,262 903 1,697 7,235 11,097
Fully eligible................................. 1,148 822 1,612 5,426 9,009
Participation (CY)............................. 712 963 1,835 3,769 7,279
Coverage (CY) (percent)........................ 62 117 114 69 81
----------------------------------------------------------------------------------------------------------------
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 1997 Current Population Survey (CPS), FNS estimates
that 9 million women, infants and children were fully eligible for the
WIC Program in 1996, a 2 percent decrease from the number estimated
eligible in 1995. A total of about 11.1 million women, infants and
children fell below the WIC income eligibility limit in 1996, vs. an
estimated 11.3 million in 1995.
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 six percentage points, from 75 percent in 1995 to 81
percent in 1996. This coverage estimate does not factor in increases in
participation that have occurred since 1996.
Estimated coverage of pregnant women is approximately 62 percent
for 1996. 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 1996. 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. Recent Medicaid expansion and income
variability during pregnancy and the postpartum period may also be
important factors. Newly available and ongoing research sponsored by
USDA will provide additional information on these aspects of WIC
participation dynamics. However, these data do strongly suggest that
the program has likely achieved virtually full coverage of persons in
these categories at the national level. Estimated coverage of children
also rose substantially from 1995 to 1996, from 64 percent to 69
percent.
The estimate of 9 million WIC eligible persons in 1996 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 throughout fiscal year
1999. The full funding participation level, providing adequate funding
to serve all eligible persons who would choose 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 the Food and Nutrition Service's
(FNS) full participation estimate produced in 1996 using 1994 WIC
eligibles data.
Previous estimates of full participation have assumed that, on
average, approximately 80 percent of all persons fully-eligible for the
program would participate. We now know that higher participation rates
by the target population can be achieved. This is supported by the
experience of the Food Stamp Program, where participation rates for
families with children under 5 are over 90 percent, and the AFDC
program, where participation rates since 1990 have ranged from 82
percent to 86 percent.
Given that the estimated number of fully-eligible persons exceeds
7.5 million, and actual participation in WIC and other low-income
assistance programs serving children exceeds the 80 percent previously
assumed, a full funding participation target for fiscal year 1999 of
7.5 million remains reasonable and prudent.
Question. Is this the same methodology that was used for the full
participation estimates for each of the past 6 years (fiscal years 1993
through 1998)? If not, please describe the differences in the
methodology and set of assumptions for the WIC full participation
estimates used in each of these years and the reasons for those
differences.
Answer. No, it has been revised. We have changed our assumptions
about full participation in the absence of funding constraints.
In fiscal year 1993, the Food and Nutrition Service (FNS) estimated
that 8.6 million persons were fully eligible for the WIC Program in
1991. This estimate was based on data from the 1992 Current Population
Survey (CPS). While FNS did not specifically estimate a full
participation level that year, the participation target produced that
year for the fiscal year 1995 budget was 7.5 million participants. This
estimate was based in part on FNS' eligible analysis as well as a
separate analysis produced by the Congressional Budget Office (CBO).
No WIC eligible or participation estimates were released in fiscal
year 1994. In fiscal year 1995, FNS substantially revised its
methodology for estimating the WIC eligible population. The major
changes made were:
--To incorporate newly-released demographic data from the 1990 Census
(previous estimates used 1980 Census information)
--To include an adjustment for the 1990 Census undercount.
In addition, FNS developed an explicit estimate of the number of
persons who would participate if no funding constraints existed, i.e.,
if WIC were full-funded. This was based on an assumption that 80
percent of fully-eligible persons would participate.\1\ Using this
assumption, we estimated that 7.9 million persons would participate if
funds were available, based on a fully-eligible estimate of 10.1
million persons.
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\1\ It was also assumed that a small portion of these participants
would participate in the Commodity Supplemental Food Program (CSFP).
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In fiscal year 1996, using the same methodology as in fiscal year
1995, FNS estimated that 7.5 million persons would participate in a
fully funded program, based on an estimated fully-eligible population
of 9.4 million persons.
In fiscal year 1997, we estimated that the fully eligible
population was 9.2 million, using the same methodology as the two
previous fiscal years. However, we now know that participation rates
higher than 80 percent can be achieved by the target population. This
is supported by the experience of the Food Stamp Program, where
participation rates for families with children under 5 are over 90
percent, and the Aid to Families with Dependent Children program, where
participation rates since 1990 have ranged from 82 percent to 86
percent.
Our current estimate is that 9.0 million persons are fully eligible
for WIC, based on 1996 data. Given that the estimated number of fully-
eligible persons exceeds 7.5 million, and actual participation in WIC
and other low-income assistance programs serving children exceeds the
80 percent previously assumed, a full funding participation target for
fiscal year 1999 of 7.5 million remains reasonable and prudent. Thus,
FNS has supported a participation target of 7.5 million in fiscal year
1999 and continues to do so.
Question. What would be the full participation levels for each of
fiscal years 1998 and 1999 using the same methodology used for the
fiscal year 1994 full participation estimate?
Answer. FNS typically has used the most recent WIC eligibles data
to identify an appropriate participation target for the budget year.
The agency does not project this eligibles data for future years. Thus,
our 1999 budget target would be associated with 1996 eligibles data,
and no separate estimate for 1998 exists. Our most recent available
data indicate that 9 million women, infants, and children were fully
eligible for WIC in 1996. Using the same methodology used for fiscal
year 1994, including the assumption that 80 percent of fully eligible
women, infants, and children would choose to participate yields a full
participation estimate of 7.2 million for 1998 using 1996 income data.
However, we now know that this estimate is low.
The President's Budget proposes to fully fund the WIC Program and
serve 7.5 million women, infants, and children in fiscal year 1998 and
fiscal year 1999. The full funding participation level, providing
adequate funding to serve all eligible persons who would choose 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 the Food and
Nutrition Service's full participation estimate produced in 1996 using
1994 WIC eligibles data.
Previous estimates of full participation have assumed that, on
average, approximately 80 percent of all persons fully-eligible for the
program would participate. We now know that higher participation rates
by the target population can be achieved. This is supported by the
experience of the Food Stamp Program, where participation rates for
families with children under 5 are over 90 percent, and the AFDC
program, where participation rates since 1990 have ranged from 82
percent to 86 percent.
Given that the estimated number of fully-eligible persons exceeds
7.5 million, and actual participation in WIC and other low-income
assistance programs serving children exceeds the 80 percent previously
assumed, a full funding participation target for fiscal year 1999 of
7.5 million remains reasonable and prudent.
Question. Secretary Glickman indicated in his prepared testimony
before this Committee that efforts continue to reduce the overall cost
of WIC food package by 10 percent by 2002.
Please describe this effort. Are you seeking to reduce each part of
the package--food costs and administrative expenses--by 10 percent? If
no, why? When did this effort begin and what was the overall cost the
WIC food package at the time (please give separate breakout of food and
administrative cost portions of package). In other words, what are the
base WIC package food and administrative cost levels from which the 10
percent reduction you hope to achieve by 2002 will be measured?
Answer. The proposal to reduce the cost of the WIC food package by
10 percent was introduced in the Food and Nutrition Service (FNS)
submission to Congress regarding the Government Performance Review Act
(GPRA) in fiscal year 1997. Although this is a new initiative, it is
important to note that the fiscal year 1997 food package cost is just
0.5 percent higher than it was in fiscal year 1990 mainly due to the
cost containment achievements of infant formula rebate contracts.
During the same period inflation of the cost of the Thrifty Food Plan
for a family of four, which is based on actual average retail food
prices, was 21 percent.
FNS is in the process of preparing a WIC policy memorandum to State
agencies that will reiterate the GPRA initiative to reduce the WIC food
package by 10 percent by 2002. This correspondence will remind State
agencies of the various methods they can employ to reduce WIC food
costs without negatively impacting the nutritional integrity of the WIC
food packages. For example, in addition to continuing WIC infant
formula rebate contracts, State agencies could also enter into rebate
contracts with manufacturers of other WIC foods such as cereals and
juices. FNS has two rules in Departmental clearance now that will
provide further guidance for States agencies. One rule addresses
maximization of WIC infant formula rebate savings through use of
contract bid criteria which should yield the greatest savings. The
other rule addresses improvements in WIC vendor management which
emphasizes selection of low-risk vendors and vendor training and
monitoring methods useful in reducing fraud and loss prevention. In
addition, the Department has facilitated cost-containment discussion
sessions at several program management/integrity meetings and
conferences to encourage State agencies to explore and pursue various
methods of food cost containment. Most recently FNS co-sponsored with
the National Association of WIC Directors the Electronic Benefits
Transfer/Program Integrity Meeting in December 1997. This meeting
featured a spokesperson from the General Accounting Office (GAO) who
addressed GAO's recent study of how the WIC Program could lower its
costs.
As explained in FNS instruction 804-1, State agencies also have the
authority to make administrative adjustments in the WIC food packages
for the purpose of cost containment that would affect the brands, types
and forms, but not the prescribed quantities, of WIC foods. Quantities
of WIC foods prescribed may only be adjusted on a case by case basis
for nutritional reasons. For example, State agencies could limit WIC
food selections on the basis of the lowest cost brands or store brands
that generally cost less than national brands; lowest cost packaging of
WIC foods; and, the lowest cost forms or alternatives within WIC food
categories.
Question. Secretary Glickman also indicated in his testimony before
this Committee that the Department is working with states to expand
other promising cost control activities and is undertaking a series of
management reforms to improve WIC program integrity.
Would you summarize the cost control activities and management
reforms which have been implemented or are planned.
Answer. There are a number of measures that the Food and Nutrition
Service (FNS) encourages States to employ to reduce their operating
costs, and states continue to pursue others to the extent possible
given their unique circumstances. States have used, both individually
and in conjunction with other States, competitive bidding to attract
rebate contracts from manufacturer of infant formula and, more
recently, other WIC approved foods. Restrictions on the number of food
retailers permitted to participate in the program has also helped hold
costs in check for states. In addition, limiting authorized food
selections has contributed sizably to containing food package costs.
FNS will continue to actively promote among States the adoption and
expansion of any and all appropriate cost containment measures. One
recent example of our effort to promote and propagate the adoption of
various measures was the inclusion of several cost containment sessions
at the FNS/National Association of WIC Directors (NAWD) co-sponsored
National Program Integrity conference in December 1997. Specifically,
one such session featured a spokesperson from the General Accounting
Office (GAO) who addressed GAO's recent study of how the WIC Program
could lower its costs.
One management reform recommended in GAO's study was ensuring state
agencies are requiring participants to provide evidence that they
reside in the states where they receive WIC benefits and provide
identification when their eligibility is certified and when they
receive food or food vouchers. To this end, the Department has issued a
draft policy memorandum underscoring these state obligations and
emphasizing their significance for ensuring the program's integrity.
FNS has also issued draft policy which will make nutritional risk
eligibility assessments more consistent from state to state.
In addition to the aforementioned policy and/or procedural reforms,
the WIC Program has initiated the following program integrity assurance
efforts over the last year.
Program Integrity Conference.--In December 1997, FNS co-sponsored
with NAWD a national conference to focus States attention on the
program's potential vulnerability to participant and/or employee fraud
and abuse. State and local agency WIC staff were trained on ways to
detect and prevent such abuses.
Program Integrity Profile.--FNS recently compiled data from a
survey sent to states in 1997, requesting information on their
integrity assurance policies and procedures, for the purpose of
producing a National summary or profile of the many safeguards States
employ to ensure program integrity. Thirty-one State agencies responded
to the survey. FNS is currently seeking responses from the remaining
State agencies so that a National program integrity profile can be
produced.
Income Eligibility Assessment Study.--FNS has contracted for a WIC
Participant Characteristic study to be performed, a portion of which
will examine participant income levels to validate participant income
eligibility.
Integrity Reporting System.--After working with states on revising
their vendor data collection systems, the WIC Program expects to
produce a more detailed and informative National vendor integrity
monitoring profile in 1999. The annual profile report should better
reflects the many vendor management and monitoring efforts of state
agencies.
Infant Formula Rebate Rule.--This rule revises current regulations
by requiring States to utilize the lowest net wholesale cost bid
criteria, unless retail prices do not vary by more than 5 percent, as
mandated in fiscal year 1998 appropriations language. In addition, this
rule will ensure that infant formula rebate contracts are competitively
bid.
Question. The WIC program is up for reauthorization this year. The
prepared testimony indicates that the Administration will propose a
cost-neutral reauthorization bill.
When will this legislative proposal be submitted to the Congress
for consideration?
Answer. The legislative proposal was submitted on March 10, 1998.
Question. Would you please outline for the Committee the reforms/
changes that the Administration will propose be made in the WIC
program.
Answer. The Administration's proposal would:
--Eliminate authority allowing State agencies to spend forward food
funds. These funds would be returned to the Department on the
established schedule and then reallocated to those State
agencies which have indicated that they would be able to use
them by the end of the current fiscal year. These changes would
make unused funds available for allocation to State agencies
that can use them and would help reduce the level of program
funds that are carried over into subsequent fiscal years.
--Allow State agencies to spend forward an additional 4 percent of
unspent Nutrition Services and Administration (NSA) funds are
for developmental costs of Electronic Benefit Transfer (EBT)
with prior approval from the Food and Nutrition Service.
--Extend through fiscal year 2002 the authority to use unspent NSA
funds, up to $10 million, to support infrastructure--including
management information systems--breastfeeding promotion and
support projects, and special grants to State agencies for
projects with regional or national significance.
--Require State agencies to offer infant formula rebate contracts to
the bidder offering the lowest net price unless the State
agency demonstrates to the satisfaction of the Secretary that
the weighted average retail price for different brands of
formula in the State does not vary by more than five percent.
This provision would codify a limitation found in the WIC
appropriation in recent years.
--Require all applicants to present documentation of household income
or of participation in one of the adjunctive programs--
Medicaid, Food Stamps, or Temporary Assistance for Needy
Families--at the time of certification. This change would
strengthen and clarify the Department's authority to require
State agencies to review income documentation when making
initial income eligibility determinations and increase overall
program integrity and accountability. This provision would also
require the Secretary to promulgate regulations governing when
and how income verification would be required. State agencies
currently have the option to verify income eligibility
information. This proposal would not eliminate optional
verification in addition to the verification requirement by the
Secretary under this proposal.
--Require that individuals be physically present in order to be
certified for program benefits. Most State agencies already
require applicants to be present at certification. However, a
few States certify applicants, especially children, solely on
the basis of referral data presented by the parent/primary
caregiver without the child's presence at the time that the
application is made. This proposal would require that all
applicants appear in person to be certified for WIC
participation. While referral data can provide basic
information by which nutritional risk can be determined, the
competent professional authority should be able to observe the
applicant for critical health or developmental problems, or
situations of abuse not necessarily detectable exclusively
through referral data from a clinic or other health care
provider at the time of application. Physical presence can also
facilitate the immediate delivery of important referral
services--such as age-appropriate immunization--by the WIC
local agency. Finally, physical presence guards against
fraudulent certifications of nonexistent (``ghost'')
applicants, a problem identified by auditors in past years.
--Require permanent disqualification of WIC vendors who have been
convicted of trafficking in WIC food instruments. This proposal
would require State agencies to permanently disqualify, except
in hardship situations, WIC vendors who have been convicted of
trafficking in WIC food instruments, or of the sale of
firearms, ammunition, explosives, or controlled substances--as
defined in 21 U.S.C. 802--in exchange for WIC food instruments.
Such disqualification would become effective upon receipt of
the notice of disqualification. The vendor would not be
entitled to compensation for any revenues lost, even if the
disqualification is subsequently reversed through
administrative or judicial review. Whenever the State agency
identifies a hardship situation, the State agency would be
required to assess a civil money penalty in lieu of
disqualification. This proposal would ensure greater integrity
in WIC vendor management.
--Allow WIC-developed nutrition education and breastfeeding promotion
materials to be distributed at WIC expense to Commodity
Supplemental Food Program (CSFP) State agencies. This proposal
would allow nutrition education materials, including
breastfeeding promotion materials, developed with WIC Federal
funds to be provided in bulk quantity to State agencies
administering the CSFP at no cost to the CSFP. This sharing
would reduce duplication of effort, assure consistency of
nutrition messages to similar populations, and represent a more
cost-effective use of limited resources for the two programs.
Question. The WIC Directors Association recommends that USDA, in
consultation with States and the Association, establish a national
plan, including funding mechanisms, for WIC Management Information
Systems development, WIC Electronic Benefit Transfer (EBT) pilot
development, and for full implementation of these systems.
What is your view on the need for this plan?
Answer. The Department is planning a meeting with the National
Association of WIC Directors (NAWD) and State representatives in the
near future to further discuss Management Information Systems (MIS) and
Electronic Benefit Transfer (EBT) system development issues, cost
efficiencies, and funding support strategies. The Department is always
eager and prepared to work with States and the NAWD on any plans
affecting program performance.
Since 1990, the Food and Nutrition Service (FNS) has hosted four
National meetings devoted to technology, the most recent being a
meeting in December 1997 co-hosted with NAWD. In 1993, the Department
prepared a technology action plan which outlined three major goals as a
road map to development of MIS including, system foundation, systems
innovation, and system integrity. The Department has demonstrated its
commitment to the area of technology for many years and has assigned
MIS development a high priority when allocating regional discretionary
funds and infrastructure grants. Since 1995, States have spent an
average of approximately 45 percent of their infrastructure grants or a
total of $12,155,962 on automated information systems. As a result of
these initiatives and emphasis, all States and most Indian Tribal
Organizations are automated and many are in the process of upgrading
their systems. However, while we believe progress in this area has been
substantial, there is need for more consistency in MIS system
development across States.
In 1994 WIC issued an EBT vision statement jointly with the Food
Stamp Program, which begins with the pledge that WIC and the Food Stamp
Programs will work together to create user-friendly benefit delivery at
food retail stores using EBT systems which are cost effective and
efficient. WIC State agencies interested in pursuing EBT systems
development have had to rely on competitive grants to help support
development of pilot EBT projects. Since 1994, the WIC Program has had
only one State, Wyoming, pilot an EBT system, and this was in one
county of the State. Information gathered via this project has been
helpful to some six other WIC States which plan to pilot EBT systems
within the next 2 years. The WIC Program will be monitoring these
States during this period and developing its overall plan for EBT,
given the unique characteristics and requirements of the Program. To
date, $6.7 million in Federal funding has been provided by FNS to 11
State agencies for EBT systems design, development, pilot
implementation, and evaluation.
Question. Would you please summarize your current plans for the
delivery of WIC benefits using EBT, and what funds are being used in
fiscal year 1998 and included in your fiscal year 1999 budget for this
purpose and where they are found.
Answer. The Food and Nutrition Service's (FNS) plans for the
delivery of WIC benefits using Electronic Benefit Transfer (EBT),
reflects WIC States plans for system development and implementation. In
August 1997, FNS submitted four-year goals to the Vice President's
Reinvention Impact Center Initiative which included an increase in the
number of States issuing WIC electronic benefits from 1 in 1997, to 7
in 2000. Currently, there are at least seven States which are planning
to pilot EBT systems before the year 2000.
In fiscal year 1998, FNS has earmarked about $3,200,000 of multi-
purpose funds for EBT systems design and development. The Department
fiscal year 1999 legislative proposal included a $10,000,000 line item
for infrastructure funding, from which some support to States EBT
development efforts would be drawn. Additionally, the Department has
proposed legislation to permit States to spend up to 5 percent of their
NSA grant for EBT systems design and development costs.
Question. Please summarize what success we are experiencing in the
WIC program with (1) the promotion of breast feeding; (2) the delivery
of nutritional services to WIC clients; and (3) increasing immunization
services and coverage rates in conjunction with the Centers for Disease
Control.
Answer. The following describes the successes we are experiencing
in the WIC Program in these three areas:
Breastfeeding Promotion
WIC is making steady progress towards reaching the Surgeon
General's goal to increase to at least 75 percent the proportion of
mothers who breastfeed their babies in the early postpartum period, and
to maintain at least 50 percent the proportion who continue
breastfeeding until their babies are five to six months old.
Nationally, WIC State agencies reported spending approximately $50
million last year on breastfeeding. These efforts are showing a
positive trend in WIC breastfeeding rates.
The Department plans to begin gathering national data on actual
incidence and duration of breastfeeding in the WIC Program from WIC
State agencies in 1998. Past traditional sources of information have
been the WIC monthly Financial Management and Participation Report and
proprietary data from the Ross Laboratories Mothers Survey, the only
source and duration information available. Based on the WIC monthly
Financial Management and Participation Report, in 1996 an average of
292,273 breastfeeding women participated in the WIC Program each month,
or 36 percent of the postpartum women served by WIC. Data from the 1995
Ross Survey indicated that of infants participating in WIC whose
mothers responded to the survey, 46 percent were breastfed in the
hospital, and nearly 13 percent were breastfed at 5 to 6 months.
The Ross data as well as other information suggest that WIC
breastfeeding rates are growing, and are growing at a faster rate than
non-participants. For example, the Ross data showed that between 1989
and 1995, the percentage of WIC mothers breastfeeding in the hospital
increased by more than 36 percent, while the percentage of non-WIC
mothers breastfeeding in the hospital increased 12.9 percent. Duration
of breastfeeding among WIC participants is also increasing: the
percentage of WIC infants breastfeeding at 6 months of age increased by
51.2 percent between 1989 and 1995. During the same period, the percent
of non-WIC infants breastfeeding at 6 months increased 22.7 percent. We
believe the substantial efforts directed at improving breastfeeding
rates in WIC by Federal, State and local personnel are responsible for
this encouraging trend.
State and local WIC Programs have implemented several different
types of breastfeeding promotion initiatives that influence feeding
choices aimed at the different audiences (e.g. women, their doctors,
other health professionals, and family members). The major Federal
initiatives are:
A Breastfeeding Promotion Consortium.--A consortium representing
over 25 government, advocacy, and health professional organization that
meets regularly to exchange ideas on how the Federal government and
private health interests can work together to promote breastfeeding.
A National Breastfeeding Campaign.--A project being conducted by
USDA in cooperation with Best Start Social Marketing, Inc. to increase
the initiation and duration of breastfeeding among WIC participants
based on social marketing research. Forty WIC State agencies are
currently participating.
Physician Training.--Food and Nutrition Service (FNS) has
cooperated with the department of Health and Human Services to provide
training for physicians to increase their effectiveness in promoting
breastfeeding among their patients.
A Physician's Breastfeeding Promotion Kit.--FNS is cooperating with
Best Start and the Department of Health and Human Services to develop a
kit with patient education and outreach materials to assist physicians.
Delivery of Nutritional Services
The WIC Program has repeatedly demonstrated its effectiveness in
improving the nutritional status of low-income women, infants and
children. Improved pregnancy outcomes, such as increased full-term
gestations, higher birth weights and greater head circumferences in
newborns, have been directly linked to the decrease in infant mortality
in the United States. A recent study by Dr. Jean-Pierre Habicht of
Cornell University, released in early March, indicates that household
participation in the WIC Program has significant positive effects on
the nutrient intake of preschool-aged children. Of the 15 nutrients
examined in this study, WIC participation increased the intake of 10 of
them, most notably iron and zinc.
Immunization Services
--Because WIC is the largest single point of access to primary health
care services for low-income preschool children, there are many
immunization studies, evaluations, and demonstrations in WIC
clinics throughout the Nation. They range from the cost
effectiveness of immunization assessment in WIC to validating
the accuracy of manual versus automated immunization assessment
tools. All show that collaboration and resource sharing between
WIC and Immunization Programs improve the service delivery
capacity and quality of both programs.
--Studies about the WIC and immunization linkage have been conducted
by CDC in Chicago, Boston, and Chattanooga in 1995/96 (see
attached abstracts). Each of these studies showed increases in
immunization coverage rates among WIC participants. Increases
ranged from 17 to 26 percentage points over baseline within 12
months of program implementation. These findings were reported
by Walter Orenstein, MD, Director of CDC's National
Immunization Program before the Subcommittee on Public Health
and Safety of the Senate Committee on Labor and Human
Resources.
--CDC, in conjunction with WIC State agencies, conducted
demonstration projects in Chicago, New York, and San Antonio 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.
--In Oregon, the Department of public Health has teamed with
AmeriCorps VISTA's to provide assistance to the WIC and
immunization programs. This assistance has enabled both
programs to provide the best possible solutions to the
immunization barriers in their area. The percentage of fully
immunized children has risen dramatically in Oregon due to the
involvement of these volunteers in immunization promotion
activities in WIC.
--Outreach workers in Milwaukee make immunization reminder calls to
WIC participants and the child is followed until the completion
of the primary immunization series. In addition to outreach,
six WIC sites have a special program that places the family on
monthly food voucher pick-up if the WIC infant's immunizations
are incomplete. Coordination with other outreach programs in
Milwaukee decreases duplication of efforts and increases access
to other resources. The project has reduced the number of
children without immunization records up to 17 percent.
--In April 1996, seven Michigan WIC clinics pilot tested a WIC
automated immunization assessment system. These sites found
that the availability of an automated assessment system has
drastically increased the number of WIC infants and children
receiving an immunization assessment and referral for needed
vaccinations.
Question. The fiscal year 1999 budget proposes that permanent
authority be granted to State agencies through the Appropriations Act
to procure infant formula using competitive bidding systems based on
the lowest net price. At the Administration's request, this language
has been carried in the Appropriations Act for the past two years and
is now the practice of State agencies. Why are you proposing to make
this permanent law through the Appropriations Act rather than through
the WIC reauthorization bill or by regulation?
Answer. As the Committee on Appropriations requested in report
language, the Department is publishing a proposed regulation in April
of 1998 with a final rule to be published September 1998, that will
make permanent the requirement for State agencies to procure infant
formula using competitive bidding systems based on lowest net price. We
are also seeking permanent statutory authority in the reauthorization
bill.
Question. The Appropriations bill is also carrying language
requested by the Administration last year to grant the Secretary of
Agriculture the discretion to allocate WIC funds recovered from the
previous fiscal year outside the regulatory funding formula. The fiscal
year 1999 budget requests that the Appropriations Act language be
revised to allow the Secretary the discretion to provide a portion of
WIC food funds to states to meet inflation, and a portion to states
receiving less than their fair share of funds, unless the Secretary has
published a revised funding formula regulation prior to the allocation
of fiscal year 1999 funds.
Why isn't authority allowing the Secretary the discretion to
allocate WIC funds outside the current regulatory formula being sought
through the WIC reauthorization rather than the appropriations bill?
Answer. The Department is currently clearing a proposed regulation
revising both the food and nutrition services and administration
funding formulas. While we fully anticipate publishing a final rule
prior to the allocation of fiscal year 1999 funds, we wanted a
mechanism in place in the event the final rule is not published in time
to allow the Secretary discretion in allocating the funds.
The appropriations bill has been used in the past for providing
such discretion. We did not include this in our reauthorization bill
because we do not anticipate needing this authority on a continuing
basis once the funding formulas are revised.
Question. When does the Secretary plan to publish a new funding
formula regulation for the WIC program? Is there reason to believe that
this new regulation will be in force in time for use in the fiscal year
1999 funds allocation?
Answer. The Secretary anticipates publishing a proposed funding
formula regulation in the Spring of 1998 and the final rule prior to
the allocation of fiscal year 1999 funds.
Question. Can you tell us what revisions in the funding formula
will be proposed?
Answer. The proposed WIC food funding formula will help to ensure
food funds are allocated to States that can utilize the funds to
maintain current participation as well as to direct additional funds,
if available, to States that are serving a lesser proportion of their
WIC eligible population as compared to other States. The proposed
nutrition services and administration funding formula simplifies the
funding formula by deleting obsolete components and will update
existing components to more equitably distribute funding among WIC
State agencies.
Question. Did the Secretary use the flexibility granted to him by
the Appropriations Act to allocate fiscal year 1998 WIC funds to
States? If not, why? If yes, how were the funds allocated, and provide
a comparison of the amount each State received versus what the state
would have received under the provisions of the current regulations.
Answer. The Secretary has not used the flexibility granted to him
by the Appropriations Act. The Act provides the Secretary the authority
to allocate funds recovered from fiscal year 1997 first to States to
maintain stability funding levels, as defined by regulation, and then
to give first priority for the allocation of any remaining funds to
States whose funding is less than their fair share of funds, as defined
by regulations, in such a manner as he deems appropriate. The
allocation would be based on the State agency's ability to effectively
utilize and manage the funds. It is estimated that the total available
fiscal year 1998 funds will be adequate to bring States to stability
funding and only a very small amount to fund States that have received
less than their fair share of funds. Since there will be very little
money available for those States receiving less than their fair share
of funds, we do not anticipate that it will be necessary to utilize the
provision.
Question. What is the difference between States' spend-forward and
carryout?
Answer. State spend forward authority is authorized by law and
allows States to retain a specified percent of unspent food and
Nutrition Services and Administration (NSA) funds and utilize them in
the subsequent year. These funds remain at the State level and can not
be recovered by the Food and Nutrition Service. WIC carryout is the
term used to refer to unspent recoverable food and NSA funds. These
unspent funds are recovered from WIC State agencies and reallocated
through the funding formula to those States eligible to receive
additional funds.
Question. The participation estimates in the fiscal year 1999
budget assume that States will reduce their level of spend-forward in
fiscal year 1998 from $50 million to $30 million. What evidence is
there that this reduction in the projected spend-forward estimate will
occur?
Answer. The fiscal year 1998 appropriations language directed the
Department to recover fiscal year 1997 food spendforward funds for
reallocation to States in fiscal year 1998 for maintenance of
participation. Because these funds would be recovered and reallocated
in fiscal year 1998, we expect States to spend a greater proportion of
their total fiscal year 1998 funds to support participation in fiscal
year 1998, thus reducing spendforward into fiscal year 1999 by at least
$20 million.
Question. Please provide for the record for each of fiscal years
1989 through 1999 the actual/proposed WIC carryover and spend-forward
balances from the previous fiscal year.
Answer. The information is provided for the record.
[The information follows:]
UNITED STATES DEPARTMENT OF AGRICULTURE, FOOD AND NUTRITION SERVICE
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN
----------------------------------------------------------------------------------------------------------------
Proposed total Actual total
unspent unspent
recoverable Actual unspent Actual recoverable
Fiscal year and recoverable Spendforward and
spendforward funds funds spendforward
funds \1\ funds
----------------------------------------------------------------------------------------------------------------
1988-89......................................... .............. $9,252,000 $18,893,644 $28,145,644
1989-90......................................... .............. 25,608,000 24,997,867 50,605,867
1990-91......................................... .............. 28,072,000 26,646,077 54,718,077
1991-92......................................... .............. 73,382,000 27,429,625 100,811,625
1992-93......................................... .............. 66,232,294 34,662,544 100,894,838
1993-94......................................... .............. 97,256,535 35,658,673 132,915,208
1994-95......................................... .............. 136,766,131 39,498,515 176,264,646
1995-96......................................... $150,000,000 137,478,745 47,203,091 184,681,836
1996-97......................................... 245,000,000 121,623,106 63,411,766 185,034,872
1997-98 \2\..................................... 150,000,000 .............. .............. ..............
1998-99......................................... 130,000,000 .............. .............. ..............
----------------------------------------------------------------------------------------------------------------
\1\ Total unspent recoverable and spendforward estimates based on the President's Budget Requests. These amounts
are not available for fiscal years prior to 1995.
\2\ Based on information provided by WIC State agencies as of February 1998, the actual amount of unspent
recoverable and spendforward funds going from 1997 into 1998 will be $149,686,793.
Question. The fiscal year 1999 budget requests a $20 million WIC
contingency fund to avoid participation reductions from unexpected food
price increases. Last year, when a $100 million contingency fund was
proposed, the Committee was told that the Administration had ``not
established a fixed technical approach'' for determining the
circumstances under which contingency funds would be spent. Can you now
tell us under what circumstances contingency funds would be spent if
the proposed reserve is approved?
Answer. The Department would spend the requested contingency funds
to cover any unanticipated food price increases some State agencies may
experience which would jeopardize their ability to maintain their
caseload levels.
Question. Please provide detail on how the $10 million for WIC
infrastructure, special projects, and breast feeding promotion/support
is being used. Provide a list of specific projects funded and the
amount provided for each for each of fiscal years 1996, 1997, and 1998.
Answer. The breakout of expenditures for the multi-purpose grants
in fiscal years 1996, 1997, and 1998 is provided for the record.
[The information follows:]
fiscal year 1996 multi-purpose grants
The following table summarizes the breakout of expenditures for
multi-purpose grants in fiscal year 1996:
Infrastructure grants to State agencies................. $7,828,467
Special project grants to State agencies................ 1,811,533
Breastfeeding promotion and support and infrastructure.. 360,000
--------------------------------------------------------
____________________________________________________
Total............................................. 10,000,000
To date, the Department has allocated a total of $7,828,467 to WIC
State agencies for State-specific infrastructure grants to help support
the overall goal of reaching more participants and providing quality
program service. Each of our 7 regional offices received $1 million for
allocation to WIC State agencies in January 1996 and an additional
$828,467 was awarded in September 1996. A total of 45 WIC State
agencies received infrastructure grants that were awarded on a
competitive basis. The following table summarizes the breakout of the
categories of how the funds are being expended.
Total funds
Categories of infrastructure funds expenditures allocated
Automated management information and integrated data
sys-
tems................................................ $2,505,270
Electronic benefit transfer (EBT) projects.............. 1,629,237
Immunization data systems............................... 129,885
Breastfeeding promotion and support..................... 125,600
Management technologies and improvement of access to
services............................................ 1,043,351
Facility renovation and non-ADP purchase................ 2,395,124
--------------------------------------------------------
____________________________________________________
Total............................................. 7,828,467
The Food and Nutrition Service (FNS) awarded $1,766,324 to five
State agencies to support special state projects in fiscal year 1996.
These special state projects are of national or regional significance
and are relevant to current WIC policy issues, designed to produce a
demonstrable impact and be transferable to other WIC programs. The
projects also suggest innovative or creative approaches to improving
the delivery of WIC services. The following table summarizes fiscal
year 1996 special project grants.
Amount
State agency/project allocated \1\
Arkansas: Methods for defining local clinic costs....... $501,806
California: Evaluation of the effectiveness of nutrition
education methodology............................... 450,844
Minnesota: Develop/implement a store-based nutrition
education strategy for high-risk participants....... 254,129
Missouri: Develop/implement nutrition education strategy
for Farmer's Market Nutrition Program local agencies 256,706
Nebraska: Evaluation of integrated approach to grants
management at the service delivery level............ 302,839
--------------------------------------------------------
____________________________________________________
Total............................................. 1,766,324
\1\ Funds in the amount of $45,209, the balance of the $1,811,533
special project grant funds, were utilized for technical support to
State agencies for developing grant requests.
The final $360,000 of the $10 million total was used to support a
variety of efforts to promote and support breastfeeding and
infrastructure in the WIC Program. Several publications were developed
and produced and other promotional efforts have been conducted, as well
as coordination with and support of the Healthy Mothers/Healthy Babies
Coalition's breastfeeding efforts.
fiscal year 1997 multi-purpose grants
The following table summarizes the breakout of expenditures for
multi-purpose grants in fiscal year 1997:
Infrastructure grants to State agencies................. $7,000,000
Special project grant to State agencies................. 2,000,000
Breastfeeding promotion and support and infrastructure
projects............................................ 1,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 10,000,000
To date, the Department has allocated a total of $7 million to WIC
State agencies for state-specific infrastructure grants to help support
the overall goal of providing quality program service. Each of our 7
regional offices received $1 million for allocation to WIC State
agencies and grants were awarded to 33 State agencies on a competitive
basis. The following table summarizes the breakout of the categories of
how the funds will be expended.
Total funds
Categories of funds expenditures allocated
Automated management information and integrated data
sys-
tems................................................ $4,711,921
Electronic benefit transfer (EBT) projects.............. 772,951
Service integration, coordination and co-location....... 166,700
Breastfeeding promotion and support..................... 152,888
Management technologies and improvement of access to
services............................................ 312,612
Facility renovation and non-ADP purchase................ 882,928
--------------------------------------------------------
____________________________________________________
Total............................................. 7,000,000
FNS set aside $2.0 million to support special state projects in
fiscal year 1997. FNS funded six special state projects of national or
regional significance that are relevant to current WIC policy issues,
designed to produce a demonstrable impact, be transferable to other WIC
programs and suggest innovative or creative approaches to improving the
delivery of WIC services.
State agency/project Amount
Illinois: Feeding with Love: The Impact of Nutrition
Education on the Bottle Feeding Habits of WIC
Preschoolers........................................ $182,111
Mississippi: Breastfeeding promotion and support........ 399,745
Montana: WIC/IDEA: Integrated data for evaluation and
assessment.......................................... 600,000
New York: Effects of WIC participation on children's
growth and readiness to learn....................... 215,198
North Carolina: A model for evaluating and monitoring
the effectiveness of the WIC Program for children... 508,808
Virginia: Distance training on community-based nutrition
education for WIC professionals: Implementation and
evaluation.......................................... 94,133
--------------------------------------------------------
____________________________________________________
Total............................................. 1,999,995
The final $1.0 million of the $10 million total is being used to
support breastfeeding promotion and support activities and
infrastructure projects of national significance, including Electronic
Benefit Transfer projects. The utilization of these funds is being
monitored to insure that the agency's goals are effectively addressed.
fiscal year 1998 multi-purpose grants
The following table summarizes the breakout of expenditures for
multi-purpose grants in fiscal year 1998:
Infrastructure grants to State agencies................. $3,675,000
Special project grant to State agencies................. 2,000,000
Breastfeeding promotion and support and infrastructure
projects............................................ 1,125,000
EBT grants to State agencies............................ \1\ 3,200,000
--------------------------------------------------------
____________________________________________________
Total............................................. 10,000,000
\1\ Estimated.
To date, the Department has approved for allocation a total of
$3.675 million to WIC State agencies for state-specific infrastructure
grants to help support the overall goal of providing quality program
service. Each of our 7 regional offices received $525,000 for
allocation to WIC State agencies and grants were awarded to 26 State
agencies on a competitive basis. The following table summarizes the
---------------------------------------------------------------------------
breakout of the categories of how the funds will be expended.
Total funds
Categories of funds expenditures allocated
Automated management information and integrated data
sys-
tems................................................ $1,887,503
Electronic benefit transfer (EBT) projects.............. 475,735
Breastfeeding promotion and support..................... 352,833
Management technologies and improvement of access to
services............................................ 467,158
Facility renovation and non-ADP purchase................ 491,771
--------------------------------------------------------
____________________________________________________
Total............................................. 3,675,000
FNS has set aside $2.0 million to support special State projects in
fiscal year 1998. As in fiscal year 1997, FNS will fund special State
projects of National or Regional significance that are relevant to
current WIC policy issues, designed to produce a demonstrable impact
and be transferable to other WIC programs. The projects should also
suggest innovative or creative approaches to improving the delivery of
WIC services.
The final $4.325 million of the $10 million total will be used to
support breastfeeding promotion and support activities and
infrastructure projects of significance, including Electronic Benefit
Transfer (EBT) projects. At this time, we anticipate approximately $3.2
million will be used to fund State EBT projects.
Question. Please provide monthly WIC participation levels, and food
and administrative costs for fiscal year 1997 and for fiscal year 1998
to date.
Answer. Monthly WIC participation levels, and Food and Nutrition
Services and Administration (NSA) costs for fiscal year 1997 and for
fiscal year 1998 to date are provided for the record.
[The information follows:]
------------------------------------------------------------------------
Food cost NSA cost
Fiscal year/month Participation per per
person person
------------------------------------------------------------------------
1997:
October....................... 7,485,231 $32.12 $11.65
November...................... 7,419,915 31.54 9.02
December...................... 7,287,742 33.06 13.43
January....................... 7,500,710 32.23 9.61
February...................... 7,442,551 31.15 11.01
March......................... 7,448,023 31.69 12.28
April......................... 7,449,767 31.14 11.94
May........................... 7,385,190 30.77 9.46
June.......................... 7,367,474 30.45 8.24
July.......................... 7,378,422 30.68 13.10
August........................ 7,346,892 31.39 13.16
September \1\................. 7,370,476 33.49 13.17
1998:
October \1\................... 7,425,011 31.82 10.87
November \1\.................. 7,292,317 32.22 8.77
December \1\.................. 7,261,451 32.18 13.14
------------------------------------------------------------------------
\1\ Indicates these amounts are not yet final; obtained from preliminary
State reports for months in which financial activity is not closed-out
(verified and reconciled).
Question. Do you have any thoughts on how the WIC program could be
improved to increase the nutrition of at-risk mothers and children?
Answer. The last review of the WIC food packages was completed in
1992. The Department's Center for Nutrition Policy and Promotion is
conducting a current comprehensive review of the WIC food packages to
determine if all of the nutritional aspects of the packages are still
appropriate for the WIC population. This review will recommend
refinements, if needed, that would best serve WIC Program objectives.
The review will assure that the food packages are consistent with the
Dietary Guidelines for Americans jointly published by USDA and DHHS in
1995, subsequent to the last WIC food package review. This review is
expected to be completed by early summer. The Department is also
issuing a policy memorandum to allow WIC State agencies greater
flexibility in designing foods packages to that better accommodate food
preferences.
The Department has also recognized that nutrition education for
preschoolers has not been as prominent as that provided to women for
themselves and their infants. Therefore, the Department has recently
produced a nutrition educator's kit for children entitled Tickle Your
Appetite. The kit is designed to communicate key nutrition messages to
WIC preschool participants in WIC clinics, at home, and in communities.
The lively video segments, catch songs, engaging lessons, and
attractive handouts offer a variety of ways to effectively communicate
with children and their caregivers about nutrition. The Department is
also conducting a National Breastfeeding Campaign with Best Start
Social Marketing, Inc. to increase the initiation and duration of
breastfeeding among WIC participants. In addition, a new publication
has just been distributed entitled After You Deliver which contains
sections on good nutrition, role/sources of folic acid in the diets of
women of child-bearing age; and the benefits of breastfeeding to both
mother and infant.
The Department will continue to develop and promote initiatives to
educate WIC participants about nutrition and how it relates to their
overall good health. Since WIC is supplemental, WIC will continue its
efforts to refer participants to other nutrition sources such as the
Food Stamp Program, National School Lunch and Breakfast Programs,
Summer Food Service Program for Children, Child and Adult Care Food
Program, and the Farmers' Market Nutrition Program.
Question. Has there been any evidence that there has been a decline
in the amount of breakfast cereal consumed by WIC participants? Does
this have any impact on the program's ability to increase the nutrition
of at-risk mothers and children?
Answer. The Department does not collect data on cereal consumption
by WIC participants. However, we are aware that there are more than 80
WIC-eligible cereals. Numerous WIC agencies also have submitted letters
to USDA stating that the current number of cereals available to WIC
participants provide them an adequate selection to meet their
individual food preferences and nutritional needs. Therefore, there is
no reason to believe that WIC participants are not eating the cereals
they receive in their WIC food packages that deliver iron as one of the
target nutrients.
Question. Is there any evidence that indicates that women decline
to participate in the WIC program or that their consumption of
nutritious breakfast foods decreases if the food package does not
include branded products or preferred brands?
Answer. The Department does not have any data that addresses this
question. However, the current selection of WIC cereals and juices,
that includes both national brands and store brands, offers sufficient
variety to provide broad appeal to participants. If the selection of
WIC foods were severely restricted to only store brands, without
including some National brand types, this limitation may impact
participant usage. Like any other nutritious food, WIC foods can only
benefit participants if they consume them. The ability to include
several leading national brands as well as store brands helps to ensure
that the majority of participant food preferences will be met.
Question. Are states trying to expand enrollments and broaden the
definition of nutrition vulnerability while restricting food choices
for WIC participants? If so, do you think this is a good idea?
Answer. WIC State agencies work hard to serve as many eligible
applicants as possible within the funding levels that are allocated to
them each year. By law, States are required under cost containment
strategies to reduce food costs. At the same time, they must be mindful
that WIC food packages maintain their appeal to participants in order
to assure that they are consumed. While cost containment may result in
placing some limitation on the brands of WIC foods that participants
may obtain with their food instruments, the actual range of foods that
comprise the prescribed WIC food package must continue to be available.
For example, of the 80 cereals that meet Federal regulations, a
State might allow 10 of the less expensive yet still popular cereals
from which WIC participants might choose, based on personal preference.
All participants must have access to all food in the package--for
example, for a pregnant women: cereal, juice, eggs, peanut butter, or
beans, peas or lentils, milk, or cheese in lieu of some milk.
In addition, rather than broadening the definition of nutrition
risk, the Food and Nutrition Service (FNS) (working closely with the
National Association of WIC Directors) has just issued a draft WIC
policy memorandum which when final, will make the criteria used to
determine an applicant's nutrition risk status consistent from State to
State, and will eliminate from use any nutrition risk criteria that are
not supported by scientific documentation.
FNS will continue to initiate and support program improvements that
empower WIC State agencies to target WIC program benefits to those with
the greatest need, while making the most efficient use of available
funds to serve as many eligible women, infants and children as possible
without compromising the integrity or negatively impacting the
credibility of the WIC Program overall.
Question. Is there evidence that young children who eat nutritious,
healthy breakfasts continue these habits through their teenage years?
Answer. In order to determine that young children who eat
nutritious, healthy breakfasts continue these habits through their
teenage years data would have to be collected on the same group of
children from early childhood through their teenage years. The Food and
Nutrition Service (FNS) is not aware of any such longitudinal study
that has been conducted to date which focused particularly on
breakfast.
However, a 1994 article published in the American Journal of Public
Health does address general food choice behaviors in children. The
article titled Longitudinal Tracking of Adolescent Smoking, Physical
Activity, and Food Choice Behaviors was reviewed in Nutrition Education
for School-Aged Children: A Review of Research released by FNS in 1994.
According to FNS report the article concluded that ``the children that
are making poor food choices in early elementary grades are likely to
be the children that are making poor food choices in junior and senior
high.''
Data that compares the prevalence of eating breakfast for younger
students to that of older students is also available. The School
Nutrition Dietary Assessment Study (SNDA), released in October 1993,
found that younger students are more likely to eat breakfast than older
students. After controlling for other characteristics, SNDA found that
94 percent of 6- to 10-year-old students eat breakfast, compared with
87 percent of 11- to 14-year-olds students, and 77 percent of 15- to
18-year-old students.
It is important to note that the SNDA data is cross-sectional and
not longitudinal. The SNDA data did not track children's eating habits
over time, it compared the eating habits' of children in different age
groups at one point in time.
FNS is currently supporting a study of the National Center for
Education Statistics to examine the relationship between children's
nutritional status and their cognitive performance and school progress.
This study will also examine the possible links of participation in
school nutrition programs to learning in the early and middle
elementary school years. This study is longitudinal and will track the
same group of children's participation in the School Breakfast Program
from when they are in kindergarten to when they are in fifth grade.
Question. When determining which infant formula manufacturer offers
the lowest net price to the WIC program, FNS limits states to
considering only those rebates offered on the traditional milk-based
and soy-based formulas. This policy could discourage the use of
innovative formulas that would provide infants with optimal nutritional
value, and could impede the development and introduction of new
formulas that can be used to meet specific dietary needs.
Isn't it in the best long-term interest of WIC infants and the
program to encourage and properly account for any and all rebates paid
on formulas used in the program?
Answer. It has always been a priority in the WIC Program that
infants receive the infant formula that best meets their nutritional
needs. It is the Department's belief that the nutritional needs of the
vast majority of infants can be met by the infant formula product line
offered by each infant formula manufacturer. As a result of expanded
infant formula product lines, the Department is updating the current
rebate regulations to address these new products to ensure rebates are
maximized to the extent possible. The revised regulation will promote
competitively-bid infant formula rebate contracts which will ensure
contracts are awarded to the bidder with the lowest net price. This
regulation will also ensure that infants continue to receive the infant
formula that best meets their nutritional needs.
wic farmers market nutrition program
Question. Why does the fiscal year 1999 budget propose to fund the
WIC Farmers Market Nutrition Program through the Commodity Assistance
Program rather than the WIC program? Why not simply request a change in
the WIC account language to allow these funds to be allocated at the
beginning of the fiscal year?
Answer. As you know, recent Agriculture Appropriations Acts have
made FMNP funding available only if not needed to maintain WIC
caseloads. The Department believes the FMNP is a valuable program and
that its funding should not be contingent on maintenance of WIC
participation. As such, the FMNP was placed in the commodity account in
an effort to ensure that funding for the program is continued
uninterrupted, and to clearly disassociate its funding from that of the
WIC Program.
Question. Funding for the WIC Farmers Market Nutrition Program was
increased from $6.75 million to $12 million for fiscal year 1998. I
understand that this additional funding allowed five states to join the
program. How was the funding increase allocated to expand the number of
markets in States participating program versus bringing additional
States into the program? How many requests were not met?
Answer. In accordance with the authorizing law, all current State
agencies were first provided with a base grant amount equal to their
previous year's funding level which totaled $7,494,721. After base
amounts were satisfied, consistent with the law, remaining funds of
$4.5 million were divided in a ratio of 75 percent for current States
for expansion and 25 percent for new States that would like to begin a
program. These funds represent the level of opportunity for program
growth and expansion through which more persons and more markets are
able to participate in the program above last year's levels.
The amount of funds appropriated for the program was sufficient to
satisfy the full funding requests of the five new States that were
seeking to initiate the program. In addition, funding was sufficient to
immediately fully satisfy the requests of all State agencies that were
seeking expansion funding, except New York. New York requested almost
$1 million, a substantially higher amount than requests of other State
agencies. New York has been allocated $748,563 and will receive the
balance of its funding request once we have completed the close-out
process and recovered unspent funds from fiscal year 1997.
Question. Please provide detail for the record on how the
additional funds were allocated, by state, and the requests from states
which were not funded.
Answer. All State agencies received their full expansion requests
except New York which received $748,563 of its requested amount of
$930,668. A table showing Farmers' Market Nutrition Program Grants is
provided for the record.
[The information follows:]
FMNP FISCAL YEAR 1998 GRANT AMOUNTS
----------------------------------------------------------------------------------------------------------------
Fiscal year
Expansion 1998 base Expansion Total grant
State request grant allocated allocated
allocated
----------------------------------------------------------------------------------------------------------------
Alaska.......................................... .............. $106,050 .............. $106,050
Arkansas........................................ .............. 140,000 .............. 140,000
California...................................... $254,202 168,131 $254,202 422,333
Chickasaw, Ok................................... .............. 40,000 .............. 40,000
Connecticut..................................... 116,623 293,256 116,623 409,879
District of Columbia............................ 53,600 163,267 53,600 216,867
Florida......................................... .............. 129,759 .............. 129,759
Georgia......................................... .............. 65,858 .............. 65,858
Illinois........................................ 70,066 116,600 70,066 186,666
Indiana......................................... 107,968 32,897 107,968 140,865
Iowa............................................ 130,125 412,981 130,125 543,106
Kentucky........................................ 21,618 86,382 21,618 108,000
Maine........................................... .............. 103,686 .............. 103,686
Maryland........................................ 106,836 196,497 106,836 303,333
Massachusetts................................... 141,198 529,040 141,198 670,238
Michigan........................................ 188,407 303,783 188,407 492,190
Minnesota....................................... 244,631 205,367 244,631 449,998
Missouri........................................ 129,568 31,173 129,568 160,741
Mississippi..................................... .............. 55,767 .............. 55,767
MS Choctaw...................................... .............. 10,121 715 10,836
New Hampshire................................... .............. 95,213 .............. 95,213
New Jersey...................................... 63,940 153,149 63,940 217,089
New Mexico...................................... 67,985 83,462 67,985 151,447
New York........................................ 930,668 1,617,332 748,563 2,365,895
North Carolina.................................. 295,244 124,756 295,244 420,000
Ohio............................................ 92,565 107,062 92,565 199,627
Oregon.......................................... 84,886 55,114 84,886 140,000
Pennsylvania.................................... 357,194 758,192 357,194 1,115,386
Rhode Island.................................... 42,228 90,900 42,228 133,128
South Carolina.................................. .............. 111,762 .............. 111,762
Texas........................................... 600,611 1,049,389 600,611 1,650,000
Vermont......................................... .............. 74,676 .............. 74,676
Washington...................................... .............. 151,472 .............. 151,472
West Virginia................................... 1,985 68,015 1,985 70,000
Wisconsin....................................... 87,087 261,046 87,087 348,133
---------------------------------------------------------------
Total..................................... 4,189,235 7,746,105 4,007,845 12,000,000
----------------------------------------------------------------------------------------------------------------
Question. The fiscal year 1999 budget requests $15 million for the
WIC Farmers' Market Nutrition Program, a $3 million increase from the
fiscal year 1998 level. How will these additional funds be allocated?
Answer. In accordance with the authorizing law, we must first
provide all current State agencies with a base grant amount that is
equal to their previous year's funding level. After base amounts are
satisfied, the law provides for any remaining funds to be divided in a
ratio of 75 percent for current States for expansion and 25 percent for
new States that would like to begin a program.
Question. How many WIC participants, by state, are currently
receiving farmers market benefits through this program?
Answer. The information is submitted for the record.
[The information follows:]
Fiscal year 1997 WIC participants receiving farmers' market benefits
Alaska........................................................ ( \1\ )
Arkansas...................................................... ( \1\ )
California.................................................... 10,991
Chickasaw, OK................................................. 2,119
Connecticut................................................... 38,481
District of Columbia.......................................... 8,915
Florida....................................................... ( \1\ )
Georgia....................................................... ( \1\ )
Illinois...................................................... 16,908
Indiana....................................................... 12,842
Iowa.......................................................... 35,264
Kentucky...................................................... 11,301
Maine......................................................... 13,048
Maryland...................................................... 21,850
Massachusetts................................................. 86,725
Michigan...................................................... 20,884
Minnesota..................................................... 23,690
Missouri...................................................... 75,090
Mississippi................................................... ( \1\ )
Choctaw, MS................................................... 681
New Hampshire................................................. 15,623
New Jersey.................................................... 9,236
New Mexico.................................................... 5,949
New York...................................................... 232,930
North Carolina................................................ 13,832
Ohio.......................................................... 13,133
Oregon........................................................ 19,393
Pennsylvania.................................................. 95,834
Rhode Island.................................................. 9,946
South Carolina................................................ 14,262
Texas......................................................... 210,987
Vermont....................................................... 4,351
Washington.................................................... 26,058
West Virginia................................................. 4,985
Wisconsin..................................................... 55,557
--------------------------------------------------------------
____________________________________________________
Total................................................... 1,110,865
\1\ New State for fiscal year 1998.
Question. How many farmers markets, by state, have been established
through this program?
Answer. We do not know how many farmers' markets have been
established as a direct result of this program. We do know how many
farmers' markets are participating by State, in the program and that
information is provided for the record.
[The information follows:]
Fiscal year 1997 participating farmers' markets
Alaska...........................................................( \1\ )
Arkansas.........................................................( \1\ )
California........................................................ 51
Chickasaw, OK..................................................... 4
Connecticut....................................................... 45
District of Columbia.............................................. 2
Florida..........................................................( \1\ )
Georgia..........................................................( \1\ )
Illinois.......................................................... 6
Indiana........................................................... 13
Iowa.............................................................. 69
Kentucky.......................................................... 22
Maine............................................................. 53
Maryland.......................................................... 44
Massachusetts..................................................... 97
Michigan.......................................................... 78
Minnesota......................................................... 15
Missouri.......................................................... 3
Mississippi......................................................( \1\ )
Choctaw, MS....................................................... 1
New Hampshire..................................................... 29
New Jersey........................................................ 38
New Mexico........................................................ 8
New York.......................................................... 180
North Carolina.................................................... 19
Ohio.............................................................. 34
Oregon............................................................ 16
Pennsylvania...................................................... 300
Rhode Island...................................................... 7
South Carolina.................................................... 22
Texas............................................................. 40
Vermont........................................................... 27
Washington........................................................ 18
West Virginia..................................................... 10
Wisconsin......................................................... 15
-----------------------------------------------------------------
________________________________________________
Total....................................................... 1,266
\1\ New State for fiscal year 1998.
Question. What changes, if any, are you proposing be made in the
WIC Farmers' Market Nutrition Program as part of the WIC program
reauthorization?
Answer. We are proposing two changes as part of the
reauthorization. They are:
1. Elimination of criteria for ranking new State Plans. This
proposal would eliminate the legislatively-specified criteria for
ranking new State Plans. Current law requires the Secretary to
establish objective criteria for the approval and ranking of the
Farmers' Market Nutrition Program (FMNP) State plans. The law also
requires that certain factors, some of which are unclear and others
that have become outdated, be considered in the ranking process. This
proposal would continue to require the Secretary to establish objective
criteria for ranking new State Plans, but would eliminate the specific
factors currently stipulated for this process, thus enabling the
Department to use more appropriate measures of a State's potential
success in managing a program.
2. Revise the 30 percent match requirement to apply only to the
administrative portion of FMNP costs, rather than to the total cost of
the program. This proposal would revise the matching requirement for
participating FMNP State agencies (currently 30 percent for geographic
States and 10 percent for Indian Tribal Organizations (ITO's) with
demonstrable financial hardship) so that it is applied only to the
administrative portion of FMNP program costs, rather than to the total
cost of the program. This revision would result in a reduced match
amount for States and ITO's, and would be applied on a similar basis
with the match requirement for other programs, such as the Food Stamp
Program, that are administered by the Department through the Food and
Nutrition Service. It will also enable more States to participate in
the FMNP that have heretofore been unable to do so because they could
not meet the larger match requirement.
food recovery and gleaning
Question. Would you please explain the program you propose--what it
will achieve, who will be eligible for the funding and for what
purposes, whether it requires legislative authority, how the funds for
the program will be allocated, and how you will ensure these grants
will enhance efforts rather than replace existing funding for states,
local or nonprofit groups for existing efforts.
Answer. The basic idea of the program is provide a small amount of
Federal seed money to non-profit groups, as well as State, local, and
Tribal governments, to allow such entities to build the local
infrastructures needed to dramatically expand the amount of excess yet
wholesome food that is recovered and gleaned and distributed to
Americans in need. This assistance would allow entities to get new food
recovery programs off the ground, as well as to expand the successful
food recovery efforts that many organizations are already operating. We
intend to require non-Federal matching funds for any project to which
USDA provides Federal funds. We anticipate this Federal money will
leverage a great deal of matching funds from the private, non-profit,
and state and local governmental sectors. $20 million in Federal
spending has the ability to generate the eventual donation of hundreds
of millions of dollars worth of food. We are not seeking to create a
large-scale Federal bureaucracy, but rather to empower community-based
efforts and encourage community volunteerism.
In June of 1997, USDA released a study indicating that 96 billion
pounds--or 27 percent--of the 356 billion pounds of food produced in
this country each year is lost to human consumption at the retail and
food service levels. In response to the study, USDA joined with key
non-profit organizations in co-sponsoring the first-ever National
Summit on Food Recovery and Gleaning--at which we jointly set a
National goal of increasing the amount of food recovered by 33 percent
by the year 2000. This would provide an additional 500 million pounds
of food a year to feeding organizations. At a time when food banks
across the Nation are reporting increasing need but decreasing
donations, such a boost is vitally needed.
While community organizations are willing to bring significant
resources of their own to aid food recovery--and while volunteers will
provide much of the labor for such efforts--additional Federal
assistance is needed to help these entities pay for vital items such
as: vehicles and fuel to transport recovered and gleaned food; salaries
for volunteer coordinators and training programs for volunteers;
heating and refrigeration equipment to ensure food safety; printing for
handbooks and instructional materials; equipment to harvest, sort,
load, and process food; computer programs to match up donors to
recipients; offices from which to operate; containers to hold the food,
etc.
We anticipate that aid would be given out in the forms of grants,
cooperative, agreements, and technical assistance. We do not believe
that separate legislation is needed to give USDA authority to do so,
however it would be necessary for the fiscal year 1999 Agriculture
Appropriations Bill language to specifically state that USDA has the
authority to ``provide food recovery and gleaning-related grants,
cooperative agreements, technical assistance, and other assistance to
national and local non-profit groups, as well as State, local, and
Tribal government agencies.''
We are in the process of obtaining input from non-profit groups and
from states about the details of how the program should be structured .
We would also greatly welcome input from the Committee and other
Members of Congress on this matter.
center for nutrition policy and promotion
Question. The Administration transferred responsibilities of the
Human Nutrition Information Service from the Agricultural Research
Service to create the Center for Nutrition Policy and Promotion within
the Food and Nutrition Service in 1994. The prepared testimony
submitted to this Committee indicates that the Center is the ``focal
point'' within USDA to promote the health of all Americans.
Please provide examples of how the Center, since its creation, has
promoted good nutrition linking scientific research to the dietary
needs of participants in each of USDA's food assistance programs.
Answer. The U.S. Department of Agriculture (USDA) established the
Center for Nutrition Policy and Promotion to improve the nutritional
health of all Americans, including participants in USDA's food
assistance programs, by linking scientific research to the consumer.
The Center links scientific research with food assistance program
participants and other consumers in several ways. One basic way it
accomplishes this is by coordinating USDA's efforts to integrate
information from scientific research with the nutrition education
messages and implementation policies of the Center and other government
agencies. Center staff study key scientific reports and other
scientific literature, conduct consumer research in-house or by
contract, and use the findings to develop consumer-oriented guidance
materials. Some specific examples are described below.
The Center served as the lead within USDA to coordinate with HHS
the review of the Report of the Dietary Guidelines Advisory Committee
and the preparation of the 1995 Dietary Guidelines for Americans. Title
III of the National Nutrition Monitoring and Related Research Act of
1990 (Public Law 101-445) requires that USDA and HHS update the dietary
guidelines every five years. The Dietary Guidelines provide the best,
most current advice from health and nutrition experts, based on the
latest scientific research. They serve as the basis for Federal
nutrition policy, and are used in developing food and nutrition
standards for nearly all food assistance programs, including the
National School Lunch and Breakfast Programs; the Special Supplemental
Nutrition Program for Women, Infants, and Children (WIC); the Food
Stamp Program, and the Child and Adult Care Food Program (CACFP).
The 1995 Dietary Guidelines were the first to include the Food
Guide Pyramid graphic. The Food Guide Pyramid, released by USDA in
1992, is a tool that consumers can use to implement Dietary Guidelines
recommendations in their own diets. The Pyramid graphically illustrates
USDA's research-based food guidance system that translates nutrient
recommendations into recommendations on food intakes, and provides a
framework for selecting the kinds and amounts of foods to provide a
nutritionally adequate diet. The Center is updating the research that
supports the food guide to incorporate changes in food composition,
food consumption, nutrition recommendations, and food technologies that
have occurred since the original research was conducted. In addition,
the Center has initiated development of a food guide pyramid adapted
specifically for children from two to six years of age. As part of this
effort, the Center has analyzed children's current diets and compared
their food and nutrient intakes to Food Guide Pyramid recommendations.
CNPP has also sponsored qualitative research with children, parents,
and caregivers to obtain suggestions for prototype products and
materials that would be useful for this audience. This adaptation of
the Food Guide Pyramid for young children is anticipated to be widely
used by participants in USDA's CACFP and WIC Programs.
The Food Guide Pyramid has already been used extensively by Federal
agencies, including USDA, in nutrition education programs and
materials. Many food assistance programs have developed and/or utilize
materials that incorporate nutrition messages based on the Dietary
Guidelines and the Food Guide Pyramid. Programs include the National
School Lunch Program (through Team Nutrition and additional efforts),
WIC, and the CACFP.
Other examples of Center projects that promote the health of
participants in USDA's food assistance programs include the Healthy
Eating Index (HEI), an aggregate measure of overall diet quality
released by the Center in 1995. The HEI provides a picture of the foods
people are eating, the amount of variety in the diet, and their
compliance with specific dietary recommendations. The HEI report showed
that the diets of most Americans need improvement; the average score
was 64 of a possible 100 points. Follow-up analysis has shown that low-
income individuals are more likely to have poor HEI scores, as are
individuals from the teen years to middle adulthood. From this initial
research, the Center plans to expand the use of the HEI by creating a
``consumer-friendly'' version of the HEI that will allow consumers to
evaluate their own diets and identify behaviors that will improve their
dietary status. Access to a summary measure of healthful eating will
help consumers, particularly those participating in food assistance
programs, to adopt dietary practices that will meet recommendations of
the Dietary Guidelines for Americans and the Food Guide Pyramid. With
minor modifications, the consumer-friendly HEI could also be used by
States and localities to quickly monitor and assess the dietary status
of their populations.
The Center is also responsible for the development of USDA food
plans, including the Thrifty Food Plan (TFP) which serves as the
nutritional basis for food stamp benefit levels. Currently the Center
is updating the 1983 TFP to reflect current dietary guidance, including
the 1995 Dietary Guidelines for Americans and the Food Guide Pyramid.
Phase I of this update involves generating a market basket showing
amounts of foods in different food groups that food stamp households
can use to prepare a week's worth of nutritious, low-cost menus. Phase
II, which has been initiated under contract with the Pennsylvania State
University, involves testing sample menus based on the TFP market
basket for overall acceptability with food stamp households. Results of
this evaluation will provide valuable information that can be used in
developing nutrition education materials for food stamp program
participants and other low-income consumers.
Finally, the Center also conducts research and analysis related to
the Personal Responsibility and Work Opportunity Act of 1996 (Public
Law 104-193). Projects include:
study of the use of food stamps to purchase vitamins and minerals
The Center has a lead role in a study of the use of Food Stamps to
purchase vitamins and minerals. The Personal Responsibility and Work
Opportunity Act of 1996 (Public Law 104-193) directs the U.S.
Department of Agriculture to study the potential consequences of
allowing the use of food stamps to purchase vitamins and minerals in
consultation with the National Academy of Sciences, and the Center for
Disease Control and Prevention. Along with the Food and Nutrition
Service, the Center is participating in this study and taking the lead
in analyzing two major data sets: the Consumer Expenditure Survey of
the Bureau of Labor Statistics and the USDA Continuing Survey of Food
Intakes by Individuals to better understand the extent of purchases and
the effect of these purchases on food expenditures and nutritional
status. A third survey, NHANES III by the Centers for Disease Control
is also being analyzed.
estimated impacts of welfare reform on household food expenditures,
food consumption, and nutritional status
Two Center studies conducted within the past year built on the
economic and nutrition literature on the relationships among household
food expenditures, food consumption, and nutritional status in
different types of households to better understand the impact of
potential changes in household income, food stamp receipt, and labor
force participation. Representative households affected by welfare
reform provisions were identified, their sources of income, food
expenditures, and nutritional status as characterized by the Healthy
Eating Index explored, and estimated changes were assessed. Results
were disseminated in the form of two presentations and two papers at
the American Agricultural Economics Association, and the American
Statistical Association Annual Meetings. A third paper entitled
``Maintaining Food and Nutrition Security: The Role of the Food Stamp
Program and WIC'' was submitted for publication in the Center's peer
reviewed journal, the Family Economics and Nutrition Review.
welfare reform and child support
Two additional studies conducted by the Center explored current
policy relating to child support in the wake of Welfare Reform. The
Child Support Enforcement Amendments of 1984, as well as the Family
Support Act of 1988, emphasized the importance of enforcing child
support measures given the large percentage of non-custodial parents
who do not pay child support. Welfare reform continued and strengthened
this theme. The studies compared Center estimates of the costs of
raising children to state awards of child support and to actual child
support payments in order to better understand the relationship between
adequate awards and the poverty rate among single parent households
with children as well as their participation in welfare programs.
Results will be disseminated in two papers: ``Child Care and Welfare
Reform,'' and ``Do Child Support Awards Cover the Cost of Raising
Children?'' to be published in the Spring/Summer 1998 issue of the
Family Economics and Nutrition Review.
Question. Please provide examples of how the Center, since its
creation, has promoted the health of all Americans through good
nutrition linking scientific research to the dietary needs of the
consumer.
Answer. The U.S. Department of Agriculture (USDA) established the
Center for Nutrition Policy and Promotion (CNPP) in 1994 to provide a
mechanism for improving the nutritional health of all Americans by
linking nutrition research to the dietary needs of the consumer. Center
staff develop integrated nutrition education, promotion and research
programs for all consumers including, but not limited to, customers of
food and nutrition assistance programs. Some specific examples of how
the Center seeks to fulfill its mission are described below.
The Center is called upon by media, nutrition educators, and policy
makers to provide leadership in developing, interpreting, and promoting
Federal dietary and nutrition guidance. This guidance is currently
embodied in the Dietary Guidelines for Americans and the Food Guide
Pyramid. The Dietary Guidelines for Americans serve as the basis for
Federal nutrition policy. They provide nutrition guidance for the
general public, based on the preponderance of current scientific and
medical knowledge. Title III of the National Nutrition Monitoring and
Related Research Act of 1990 (Public Law 101-445) requires that USDA
and the Department of Health and Human Services (HHS) update the
dietary guidelines every five years. The Center served as the lead
within USDA to coordinate with HHS the review of the Report of the
Dietary Guidelines Advisory Committee and the preparation of the 1995
Dietary Guidelines for Americans.
In preparation for Dietary Guidelines 2000, the Center worked with
the Agricultural Research Service and HHS during 1997 to prepare the
charter to establish a Dietary Guidelines Advisory Committee. To assist
the Committee in its deliberations, the Center is also coordinating
production of a ``basebook'' of information analyzing current dietary
patterns in light of the most recent dietary guidance.
The Food Guide Pyramid, released by USDA in 1992, is a tool that
consumers can use to implement Dietary Guidelines recommendations in
their own diets. The Pyramid graphically illustrates USDA's research-
based food guidance system that translates nutrient recommendations
into recommendations on food intakes, and provides a framework for
selecting the kinds and amounts of foods to provide a nutritionally
adequate diet. Because the process of providing science-based dietary
guidance must be dynamic in order to stay current, the Center is
updating the research that supports the food guide to incorporate
changes in food composition, food consumption, nutrition
recommendations, and food technologies that have occurred since the
original research was conducted. In addition, in 1997 the Center
developed a decision-making framework for revising the Food Guide
Pyramid based on changes in dietary standards, using the newly released
Dietary Reference Intakes for calcium and related nutrients.
Building upon recommendations from a 1996 working session focusing
on the Dietary Guidelines and children, the Center has initiated
development of a food guide pyramid and Pyramid-based nutrition
messages specifically for children from two to six years of age. As
part of this effort, the Center has conducted a comprehensive analysis
to identify the target audience, and examined children's current food
and nutrient intakes in light of existing Pyramid recommendations. CNPP
has also held a series of discussions with leading nutrition educators
on key behavioral and developmental factors in feeding young children,
and sponsored qualitative research with children, parents, and
caregivers to obtain suggestions for prototype products and materials
that would be useful for this audience.
The Center vigorously promotes use of the Dietary Guidelines and
the Food Guide Pyramid in all nutrition education programs within USDA
and in the Federal and private sectors. The Dietary Guidelines Alliance
represents one such effort. CNPP acts as a USDA liaison to this
coalition of food industry, health, and government organizations that
strives to assist consumers in putting the Dietary Guidelines into
practice. In 1996, the Center participated in a presentation on the
Alliance's consumer research findings related to reaching consumers
with meaningful health messages. In 1997, the Center also initiated a
popular factsheet series, ``Nutrition Insights,'' to highlight dietary
guidance issues with health professionals who work with the media and
consumers. In addition, the Center has conducted a seminar series since
1995 to provide a forum for policy makers and professionals to discuss
current nutrition research and policy issues.
The Center also responds directly to requests from the public.
Specifically, during fiscal year 1997, the CNPP received 264 telephone
calls from reporters, editors, and fact checkers; approximately 50
calls from television and radio producers; 15 from news services; 32
from book authors and publishers; some 60 advertising agencies and food
companies; 70 professional nutrition and dietetic associations; 50
calls from universities/colleges; approximately 100 Federal and State
agencies; 48 congressional offices; 8 international calls (research and
government); and over 100 calls from the general public. The Center
also received over 5,000 calls on its Publications Hot Line for
publications. In addition, the Center's Internet website receives
approximately 20,000 hits per week or the equivalent of over 1 million
downloads per year.
Also, for the past three years since the Center for Nutrition
Policy and Promotion was formed, the Center has sponsored a seminar
series known as ``Nutrition Issues for the 21st Century.'' The theme
for last year's series was ``Improving the American Diet Through
Successful Nutrition Intervention.'' During the year the Center held
six seminars where some of the Nation's leading experts in nutrition,
diet, nutrition education and related fields spoke to a diverse
audience of nutrition professionals, food industry representatives,
Capitol Hill committee staff, advocacy organizations, and Federal
policy makers.
The Center publishes and contributes to the peer reviewed quarterly
journal, Family Economics and Nutrition Review, which is currently in
its 55th year of publication. Publication of the Journal further
contributes to the Center's mission to link research to the consumer by
mainly reaching information multipliers in the fields of Family
Economics, Extension, and Nutrition.
The Center participates in other Government efforts to improve the
nutritional status of the population. For example, the Center
contributed to the re-formulation of the Healthy People 2000
Objectives. It is also an active contributor to the Healthy People 2010
Objectives effort.
CNPP also provides leadership in research and analysis of food,
nutrition, and economic data critical to national policy decisions.
Projects include:
healthy eating index project
In 1995, CNPP released the Healthy Eating Index (HEI), an aggregate
measure of overall diet quality. This and follow-up activities are
responsive to the mandates of Public Law 101-445, The National
Nutrition Monitoring and Related Research Act (7 U.S.C. 5301 et seq.),
which directs the HHS and USDA to ``improve the methodologies and
technologies, including those suitable for use by States and
localities, available for the assessment of nutritional and dietary
status and trends;'' and to ``develop uniform standards and indicators
for the assessment and monitoring of nutritional and dietary status,
for relating food consumption patterns to nutritional and health
status, and for use in the evaluation of Federal food and nutrition
intervention programs;'' (7 U.S.C. 5313, Sec. 103(b)6-7). The HEI used
data from USDA's 1989-90 Continuing Survey of Food Intakes by
Individuals (CSFII) to provide a picture of the foods people are
eating, the degree of variety in the diet, and their compliance with
specific dietary recommendations. In a press release, the HEI was
hailed by the American Dietetic Association as ``the most accurate
measurement to date of how Americans eat.'' The HEI report showed that
the diets of most Americans need improvement; the average score was 64
of a possible 100 points. Follow-up analysis has shown that low-income
individuals are more likely to have poor HEI scores, as are individuals
from the teen years to middle adulthood. Because the HEI is based on
data from CSFII, updates are possible only when that data set becomes
available. USDA's Agricultural Research Service collected CSFII data
for 1994, 1995 and 1996. Center staff are in the process of producing
updates to the HEI for those three years.
project to determine expenditures on children by families
Since 1960, the U.S. Department of Agriculture has provided
estimates of food and other major expenditures (housing, clothing,
etc.) on children from birth through age 17 by husband-wife and single-
parent households. The expense estimates are provided by age of child,
family income, and region of residence. The most recent estimates are
based on the 1990-1992 Consumer Expenditures Survey updated to 1997
costs using the Consumer Price Index for various budgetary components.
The 1997 update of the average percentage of household expenditures
attributable to children in husband-wife households reflects a 2-3
percent increase. For the overall United States, child-rearing expense
estimates ranged between $8,060 and $9,170 per year for a child in a
two-child, married-couple family in the middle income group. The
report, Expenditures on Children By Families, is updated annually.
Results are used in developing State child support guidelines and
foster care payments to help ensure that children receive an adequate
standard of living. A survey by the American Public Welfare Association
found that approximately half the States in the U.S. used the results
in setting foster care payments.
project to maintain and update the national food supply database
management system and to publish updated nutrient content of the u.s.
food supply
The Center publishes periodically a report on food supply nutrient
per capita estimates, and is responsive to food supply activities
specified in the Ten Year Comprehensive Plan for the National Nutrition
Monitoring and Related Research Program of the National Nutrition
Monitoring and Related Research Act (7 U.S.C. 5301 et seq.). The newest
Update of the Nutrient Content of the U.S. Food Supply was published in
October 1997. Future work will involve updates of the food supply
fortification files to be more reflective of current fortification of
such commodities as cereal products, fruit juices and drinks, and milk-
based meal replacements. In addition, plans are to improve per capita
estimates of edible offals, and low-fat or fat reduced commodities.
Question. Please explain how the Center links scientific research,
including research conducted by federal agencies (e.g., Department of
Health and Human Services' agencies such as NIH and CDC, the FDA, and
USDA's research agencies, including the Human Nutrition Centers of the
Agricultural Research Service) to the dietary needs of the consumer and
uses that information to promote the health of all Americans. Please
explain how this information is transmitted directly to Americans.
Answer. The Center works with USDA's Agricultural Research Service
(ARS) and the Department of Health and Human Services (HHS) to produce
Nutrition and Your Health: Dietary Guidelines for Americans. Title III
of the National Nutrition Monitoring and Related Research Act of 1990
(7 U.S.C. 5341) requires the Secretaries of Agriculture and HHS to
jointly publish every five years a report entitled, Dietary Guidelines
for Americans. The Dietary Guidelines represent the Federal
Government's policy on nutrition. They provide nutritional and dietary
information and guidelines for the general public, based on the
preponderance of current scientific and medical knowledge, including
research originating from ARS and HHS. In 1997, the Center worked with
ARS to develop and finalize a Memorandum of Understanding with HHS to
provide a framework for cooperation between USDA and HHS for preparing
the fifth edition of Nutrition and Your Health: Dietary Guidelines for
Americans to be released in the year 2000. The Center vigorously
promotes use of the Dietary Guidelines in all nutrition education
programs within the Department and in the Federal and private sectors.
The Center has made copies of the bulletin Nutrition and Your Health:
Dietary Guidelines for Americans available to consumers via the
Consumer Information Center in Pueblo, Colorado and over the Internet.
The Center initiated a popular fact sheet series, Nutrition Insights,
targeted to nutrition and media professionals. The series is designed
to respond in a timely manner to consumer confusion over ``junk
science'' or other current issues, based on Federal dietary guidance.
Center staff also build Federal dietary guidance principles into
speeches, articles, and numerous interviews with the popular press on
Dietary Guidelines concepts.
The fourth edition of Nutrition and Your Health: Dietary Guidelines
for Americans, released in 1995, included the Food Guide Pyramid
graphic for the first time. The Food Guide Pyramid was developed by
USDA and released in 1992 as a tool that consumers can use to implement
Dietary Guidelines recommendations in their own diets. The Food Guide
Pyramid has been extensively used by Federal Agencies in nutrition
education programs and materials. The Food Guide Pyramid brochure is
available to consumers via the Government Printing Office and over the
Internet. A recent survey of consumers by the American Dietetic
Association found that about 70 percent of respondents are familiar
with the Food Guide Pyramid graphic. The Center is continually updating
the science base that supports the Food Guide Pyramid, to incorporate
significant changes in food composition, food consumption, and food
technology, as well as changes in nutrition recommendations such as the
new Dietary Reference Intakes being issued by the National Academy of
Sciences' Food and Nutrition Board.
The Center serves as Acting Chair of and provides staff for the
Dietary Guidance Working Group (DGWG) of the Human Nutrition
Coordinating Committee. The Center's leadership fulfills USDA's
responsibility to ensure that the Federal Government ``speaks with one
voice'' when issuing dietary guidance, as mandated by Title III of the
National Nutrition Monitoring and Related Research Act of 1990. The
DGWG reviews all USDA and HHS publications and materials that contain
dietary guidance for the general population to ensure consistency with
the Dietary Guidelines for Americans. In fiscal year 1997, fifteen
draft publications produced by USDA and DHHS Agencies were reviewed.
The Center is a liaison member of the Dietary Guidelines Alliance.
The Alliance is a coalition of food industry, health organizations, and
government agencies to help consumers implement the Dietary Guidelines.
The Alliance is an example of how the Center has been able to extend
its limited resources to promote the Dietary Guidelines. The Alliance
represents a unique public-private partnership to improve the dietary
behavior of Americans. The messages and materials developed through the
partnership will be used by health professionals, industry, and
government in education, counseling, and communications initiatives.
Question. The fiscal year 1999 budget requests an additional
$252,000 to support the Publication of the Dietary Guidelines for
Americans, which the law requires USDA and the Department of Health and
Human Services (HHS) to publish every five years. How does USDA and HHS
share this cost? And, which USDA agency was responsible for the cost of
publishing Dietary Guidelines for Americans in each of the past years
it was published (prior to the creation of the Center)?
Answer. The cost of publishing the Dietary Guidelines for Americans
can be broken down into two categories. The first category is the cost
of reviewing research and completing supporting documents for the
Dietary Guidelines Advisory Committee (DGAC) and publishing the
Committee's report. The DGAC is a panel of eleven nationally-recognized
experts in nutrition and health. Authority for the Committee is
provided by 42 U.S.C. 217A, Section 222, of the Public Service Act, as
amended. Committee members serve without pay, but do receive
reimbursement for travel and per diem. This cost has been shared
between USDA and HHS, with each Department alternating in taking the
lead responsibility for these expenses. For example, in 1995 HHS was
primarily responsible for these costs, and for the 2000 DGAC, USDA will
bear the primary responsibility for these costs.
The second category is the cost of publishing and distributing the
consumer bulletin, Nutrition and Your Health: Dietary Guidelines for
Americans. This cost has always been primarily borne by USDA, with HHS
contributing funds by riding the print order for the bulletin. In 1980,
1985, and 1990, USDA's Human Nutrition Information Service paid for
this cost. In 1995, the Center for Nutrition Policy and Promotion paid
for this cost, as it will do again in 2000.
In 1995, the costs for design and printing of the bulletin were
approximately $115,000. The Center is requesting $252,000 in additional
funds for fiscal year 1999 to support development and publication of
the Dietary Guidelines bulletin because additional consumer research is
essential before the next edition of the Dietary Guidelines is
released. There has been little research conducted to assess consumer
understanding and perceived usefulness of the Dietary Guidelines
bulletin since the mid-1980's. The 1995 DGAC specifically requested in
its report that the Departments gather information about consumer
understanding of the Dietary Guidelines messages prior to convening the
next DGAC. The Center has requested funds to conduct a comprehensive
study to focus on: (1) a thorough review of the available research data
and information on consumer understanding and use of the bulletin and
Dietary Guidelines concepts; (2) telephone interviews with nutrition
educators to assess uses of the Dietary Guidelines concepts and the
1995 bulletin; and (3) market research with consumers. Results of this
research will be made available to the next DGAC and will also be used
by the Center in its nutrition guidance efforts.
Question. Please explain the U.S. Action Plan on Food Security
which I understand is being developed by the Center for Nutrition
Policy and Promotion.
Answer. The domestic section of the U.S. Action Plan is being
jointly developed by Under Secretary for Food, Nutrition, and Consumer
Services, and the Assistant Secretary for Health of the Department of
Health and Human Services (HHS). A technical working group is co-
chaired by a USDA representative from the Center for Nutrition Policy
and Promotion and a HHS representative and includes representation from
the Department of Veterans Affairs, Bureau of Indian Affairs, Census
Bureau, Bureau of Labor Statistics, Administration on Aging,
Environmental Protection Agency and other agencies. The domestic
section of the Plan builds on the Center's September 1996 report,
Nutrition Action Themes for the United States, and the World Food
Summit's Declaration and Plan of Action adopted in Rome in November
1996. The papers in the Plan are for discussion purposes and draw views
from the Federal government, States, and private entities. The Action
Plan presents no new government commitments and is to be completed by
Spring, 1998.
Question. I understand that the Center for Nutrition Policy and
Promotion has been assigned the responsibility of redesigning the Food
Stamp Program Thrifty Food Plan. Please explain this effort and, if it
requires any funding, whether these costs are being borne by the Center
or the Food Stamp Program and why.
Answer. The Center is responsible for the development of the USDA
food plans, including the Thrifty Food Plan (TFP) which serves as the
nutritional basis for food stamp benefit levels. The TFP specifies
quantities of different types of food that households may use to
provide nutritious meals and snacks at relatively low cost. Currently,
the 1983 TFP Market Basket is used as the basis of the food stamp
allotment and its cost is updated each year for inflation. The Center
is updating the 1983 TFP to reflect current food in the market place
and current dietary guidance including dietary recommendations for
total fat, saturated fat, and cholesterol. An interagency working group
consists of representatives of the Center, the Food and Nutrition
Service (FNS), and the Economic Research Service (ERS) was convened and
met periodically to provide overall guidance.
Phase I of the revision uses a mathematical programming model and
incorporates current dietary guidance along with information on current
consumption patterns to generate, a market basket providing the foods
with which a low cost nutritious menu can be prepared.
Phase II utilizes these market basket foods to develop two weeks of
household menus. To this end, CNPP nutritionists and economists are
working with researchers from Penn State University to test whether it
is feasible to produce menus and recipes that meet the nutritional and
costs constraints of a revised TFP and, at the same time, are
acceptable to the intended audience. In particular, the researchers
have developed several recipes, tested them in a food laboratory for
sensory acceptability and incorporated them into one-week menus. The
menus and recipes for one week are currently being tested for overall
acceptability with 4 food stamp households. It is anticipated that
additional menus should be completed in the next few months at which
time they will also be field tested.
The TFP revision is scheduled for completion in fiscal year 1998.
Most costs are borne by the Center which (as its predecessors) has been
charged with this responsibility. Contract costs of $169,481 to support
the Penn State University work and a $50,000 transfer of funds to ERS
to develop a price data base needed for the update of the TFP were
borne by FNS, even though the Center directed these subprojects.
Question. Please provide a separate object class breakdown for each
of fiscal years 1997, 1998 and 1999 for the Food and Nutrition Service
food program administration account, and, separately, for the Center
for Nutrition Policy and Promotion.
Answer. The information is provided for the record.
[The information follows:]
FOOD AND NUTRITION SERVICE--CLASSIFICATION BY OBJECTS
[1997 and estimated 1998 and 1999]
------------------------------------------------------------------------
1997 1998 1999
------------------------------------------------------------------------
Personnel compensation:
11 Total personnel 76,341 76,939 79,278
compensation
12 Personnel benefits 14,805 14,923 15,371
13 Benefits for former 57 58 59
personnel
----------------------------------------
Total pers. comp. 91,203 91,920 94,708
and benefits
========================================
Other objects:
21 Travel 2,422 2,577 2,814
22 Transportation of 135 144 157
things
23.1 Rent payments to GSA ........... ........... ...........
23.2 Rental payments to 307 326 357
others
23.3 Communications, 1,828 1,945 2,123
utilities, and misc.
charges
24 Printing and 258 274 300
reproduction
25.1 Advisory and 2 2 2
assistance services
25.2 Other services 4,056 4,313 4,711
25.3 Purchase of goods and 1,044 1,111 1,212
services from
Government accounts
25.4 Operation and 295 314 342
maintenance of
facilities
25.5 Research and ........... ........... ...........
development contracts
25.7 Operation and 574 611 667
maintenance of equip
26 Supplies and materials 1,361 1,448 1,582
31 Equipment 2,409 2,563 2,797
41 Grants, subsidies and ........... ........... ...........
contributions
42 Insurance claims and 57 62 67
indemnities
43 Interest and dividends 8 9 9
----------------------------------------
Total other objects 14,756 15,699 17,140
========================================
Total direct 105,959 107,619 111,848
obligations
------------------------------------------------------------------------
CENTER FOR AND NUTRITION POLICY AND PROMOTION--CLASSIFICATION BY OBJECTS
[1997 and estimated 1998 and 1999]
------------------------------------------------------------------------
1997 1998 1999
------------------------------------------------------------------------
Personnel compensation:
11 Total personnel 1,648 1,648 1,685
compensation
12 Personnel benefits 379 379 385
13 Benefits for former ........... ........... ...........
personnel
----------------------------------------
Total pers. comp. 2,027 2,027 2,070
and benefits
========================================
Other objects:
21 Travel 20 20 20
22 Transportation of 2 2 2
things
23.1 Rent payments to GSA ........... ........... ...........
23.2 Rental payments to ........... ........... ...........
others
23.3 Communications, 8 8 8
utilities, and misc.
charges
24 Printing and 91 91 91
reproduction
25.1 Advisory and ........... ........... ...........
assistance services
25.2 Other services 36 36 317
25.3 Purchase of goods and ........... ........... ...........
services from
Government accounts
25.4 Operation and ........... ........... ...........
maintenance of
facilities
25.5 Research and ........... ........... ...........
development contracts
25.7 Operation and ........... ........... ...........
maintenance of
equipment
26 Supplies and materials 11 11 11
31 Equipment 23 23 23
41 Grants, subsidies and ........... ........... ...........
contributions
42 Insurance claims and ........... ........... ...........
indemnities
43 Interest and dividends ........... ........... ...........
----------------------------------------
Total other objects 191 191 472
========================================
Total direct 2,218 2,218 2,542
obligations
------------------------------------------------------------------------
food stamp program
Question. Would you please give us a summary report on the progress
we've made to date with the electronic benefits transfer (EBT) delivery
of Food Stamps--what we've achieved; what problems, if any, we've
encountered; and when you expect the rest of the states to implement
EBT Food Stamp delivery systems.
Answer. Currently, there are 30 States with operating Electronic
Benefit Transfer (EBT) systems and 16 of these systems are Statewide.
Approximately 43 percent of all Food Stamp Program benefits are now
delivered through EBT systems. If all State plans are met, we expect
there to be 41 States (including the District of Columbia) with
operating EBT systems by the end of fiscal year 1998. We also expect to
meet the legislative mandate to have all States operating EBT systems
by October 1, 2002.
As States move forward and implement their EBT systems, they have
benefited from those States that have gone before them, and
implementation has become more routine. Nevertheless, a substantial
effort is still required of any State to actually get these systems up
and running. Issues each State must continue to address include
achieving cost neutrality while providing satisfactory service to their
recipients, and entering into agreements with the food retailers in
their State that are mutually satisfactory to both the State and the
retailers.
Question. The fiscal year 1999 request for the Food Stamp Program
includes $6.7 million for employment and training. What success have we
had with Food Stamp Program employment and training activities?
Answer. The $6.7 million increase is to cover basic inflation that
State's Food Stamp Employment and Training (E&T) Programs will
experience in fiscal year 1999.
Federal E&T funding was fixed at $75 million a year through fiscal
year 1996. Funding in fiscal year 1997 increased to $79 million and
then in fiscal year 1998 to $212 million to meet the challenges of the
Balanced Budget Act. States have generally chosen to serve as many
recipients as possible through the relatively low cost job search
component. Annually, this has resulted in over 1 million recipients
being asked to take responsibility in seeking employment in order to
participate in the Food Stamp Program.
Question. In each of the past three fiscal years, and in fiscal
year 1998 to date, how many Food Stamp recipients have been trained and
employed? What has been the cost per participant of these activities?
Answer. A table is provided for the record that depicts the number
of mandatory and volunteer participants placed into Food Stamp
Employment and Training (E&T) Program activities. The cost per
participant figure represents total Federal 100 percent E&T grant
expenditures, plus total Federal and State administrative expenditures
over and above the 100 percent grant, divided by the number of
participants. The fiscal year 1998 numbers are taken from preliminary
first quarter data (October, November, December 1997).
[The information follows:]
------------------------------------------------------------------------
Cost per
Fiscal year Participants participant
------------------------------------------------------------------------
1995....................................... 1,474,796 $143
1996....................................... 1,377,148 163
1997....................................... 1,221,219 164
1998....................................... 252,825 154
------------------------------------------------------------------------
While most of the above E&T participation includes job search, the
Food and Nutrition Service does not collect information on the outcome
of the job search activity.
Question. The prepared testimony indicates that the Administration
will submit a proposal to reclassify claims against food stamp
recipients for erroneous benefit issuances as State debt rather than
Federal debt. You indicate that this proposal will be cost-neutral in
the immediate future but, if States respond to proposed incentives,
collections may be substantially increased in the long run. What
response would be necessary from the States and what level of
collections could be achieved in the out-years?
Answer. We are working on the details of a proposal to enhance
state incentives to collect food stamp claims. The proposed incentives
allow certain States to retain an increased share of collected claims.
Some States would be rewarded for improved claims collections. Other
States with exceptionally high claims collection rates would also be
rewarded. It is reasonable to expect that States will respond to the
opportunity to retain a higher share of collections by increasing their
claims collections efforts.
However, at this point the incentive plan is structured so that
incentives are paid only if total collections increase from the base
year. Thus, there is no risk to the Federal government if claims
collection increases fail to materialize. On the other hand, if States
do increase their claims collection efforts and successfully collect a
higher share of their overissuance, both the States and the Federal
government share in the increased collections.
This proposal is still under development within the Administration
so some of its features may change as additional discussion takes
place.
child nutrition programs
Question. Secretary Watkins, you indicate that you will be
submitting cost-neutral legislation to reauthorize the Child Nutrition
programs, which will include proposals to improve the operation,
management and integrity of the National School Lunch and School
Breakfast Programs, and the Child and Adult Care Food Programs. Please
summarize your major proposals to improve the operation, management and
integrity of these programs.
Answer. The Department's reauthorization legislation submitted to
the Congress on March 10, 1998 contains a number of proposals which
would improve the management and integrity of these programs. First,
State agencies would be given the authority to retain up to one-half of
the funds recovered in State conducted audits or reviews to be used for
program improvements under the Child Nutrition Programs. This proposal
is being made in conjunction with one under which the current authority
for funding of State audits under the Child and Adult Care Food Program
(CACFP) would be removed. The CACFP is the only Child Nutrition Program
in which separate funding for audits is available and it has been the
Department's experience that numerous States have not been able to use
this funding effectively and as much as 30 percent has not been used at
all. We believe that these two proposals combined will result in
improved program oversight and increased management effectiveness at
the State level.
The Department is also proposing to remove beginning in fiscal year
2001 the requirement in current law that the Department directly
administer local level Child Nutrition Programs. States would be
required to assume administration of these programs if they wished to
have them available within their States. The Department believes that
local level program operators and program beneficiaries would be better
served by State agencies that are closer to and more knowledgeable
about the organizations and individuals participating in these
programs.
With regard to State Administrative Expense (SAE) funding, the
proposals would eliminate the ten percent transfer limitation which
unnecessarily ties the hands of State agencies and, if removed, would
allow States to determine where such funds can be best utilized.
With regard to the National School Lunch and School Breakfast
Programs, the Department is proposing to require that all schools
participating in the National School Lunch and School Breakfast
Programs obtain twice yearly health and safety inspections covering
their food service operations. This is intended to help ensure that
meals provided to school children are prepared and served in the most
suitable environment, consistent with State or local standards.
In the CACFP, the Department is proposing that categorical
eligibility for free meals for Even Start participants be reinstated to
avoid duplicative eligibility determinations; timeframes for State
approval of institution applications be relaxed somewhat to allow for
better State-level evaluations of applications; timeframes for
participation by institutions ``moving towards tax exempt status'' be
revised to enhance State oversight of participation by such
institutions; and the Department be authorized to reserve a small
amount of funds each year to help ensure proper implementation of the
family day care home tiering requirements and to provide for overall
improved program quality and integrity.
Question. What funding is included in the fiscal year 1999 request
for the National Food Service Management Institute (NSFMI)?
Answer. The budget includes two million dollars for the NSFMI in
1999.
Question. The National Food Service Management Institute (NFSMI)
has played an important role in the school meals initiative. Please
describe the cooperative agreements with NSFMI funded with the $500,000
provided for this purpose for fiscal year 1998.
Answer. The cooperative agreements funded with the $500,000
provided in fiscal year 1998 are continuations of two ongoing projects:
the Hands On Team and the Customer Service Help Desk. The Hands on Team
is a two year pilot project which supports the implementation of the
nutrition goals of the School Meals Initiative for Healthy Children by
providing a cadre of consultants who will assist school food
authorities with technical assistance in all areas of food service,
including menu planning, nutrient analysis, standardized recipes, food
preparation, food storage, food purchasing, equipment, action plans,
merchandising ideas and nutrition education. Site visits began in the
Fall of 1997 and preliminary evaluations show overwhelming interest
from school food authorities. Funding of this pilot project included
100 site visits, and as of October 31, 1997 requests for assistance had
exceeded this number. Since a number of these requests for assistance
had to be declined, 1998 funds will be used to fund site visits to some
of those schools beyond the 100 initially included in the pilot project
who had requested assistance.
The Customer Service Help Desk project, which provides technical
assistance and materials via a toll free telephone number and Internet
site, is entering its fourth year. Currently the Help Desk averages 250
questions per month.
Question. Of the $10 million requested for the school meals
initiative for fiscal year 1999, how much is for cooperative agreements
with the NSFMI and what work is planned for fiscal year 1999?
Answer. While the specific amount which will be available in fiscal
year 1999 has not been determined, we anticipate an additional $500,000
in funds for cooperative agreements with the National Food Service
Management Institute (NFSMI). Several projects have been identified for
possible funding. It is anticipated that the Customer Service Help Desk
would continue through 1999, although the level of funding may be
reassessed based on service levels. The NFSMI, in cooperation with the
Food and Nutrition Service (FNS), is expanding their current
publications role to include the distribution on a cost recovery basis,
of a number of FNS publications. One of the publications which will be
turned over to the NFSMI for distribution is Serving It Safe, an
extremely popular food safety guide. There is a need for this
publication to be updated regularly in order for the food safety
guidance to remain current, and the NFSMI has agreed to assume this
task. Distance based training in the area of cooperative purchasing,
with concurrent Internet chat rooms are also being considered. In
addition, the NFSMI is currently working on some financial management
materials for school food service, which could be adopted by State
agencies. These would be instructional materials which would provide
standardization of documentation and consistency in reporting and
record keeping at the local level.
The NFSMI and FNS work together with the NFSMI's National Advisory
Committee to determine major projects and priority needs. The National
Advisory Committee is comprised of representatives from State agencies,
local programs, professional organizations, universities, food
industries and Federal agencies. The yearly meeting of the committee is
scheduled for March 27-29, 1998.
Question. Please provide a detailed accounting on how the funds
made available for the school meals initiative have been used in each
of fiscal years 1996, 1997 and 1998, and what is proposed for fiscal
year 1999. Identify and include the use of any unobligated balances
from funds provided in previous fiscal years.
Answer. The following information is submitted for the record.
Table 1 identifies spending categories by year in which the funds were
appropriated. The fiscal year 1998 allocations represent the current
spending plan and the fiscal year 1999 allocations are projected. Table
2 provides a breakdown of funds obligated in the year in which
appropriated and funds carried over into the next fiscal year.
[The information follows:]
TABLE 1.--SCHOOL MEAL INITIATIVE: SPENDING BY CATEGORY
----------------------------------------------------------------------------------------------------------------
Fiscal year--
---------------------------------------------------------------
1998 1999
1996 1997 (estimate) (estimate)
----------------------------------------------------------------------------------------------------------------
I. Food service training and technical
assistance:
Technical assistance materials.............. $1,914,756 $1,105,027 $1,682,192 $3,200,000
Print and electronic food service resource 97,755 385,200 400,000 400,000
systems....................................
NFSMI cooperative agreement for food service 250,000 800,000 500,000 500,000
II. Children's education resources: In-school 3,640,958 1,163,500 868,913 \1\ 1,300,000
education materials and community education
materials......................................
III. Food service training grants to States..... 1,965,703 4,000,000 4,000,000 4,000,000
\2\ 1,629,278 \2\ 2,120,722 .............. ..............
IV. USDA/FCS direct training and education...... 12,663 360,200 27,050 50,000
V. Children's communications and technology..... 91,600 5,000 .............. ..............
VI. Team nutrition partnership support: 168,080 54,475 15,525 50,000
Resources for team nutrition schools and
partnership network support....................
VII. Evaluation and administration.............. 685,451 5,876 506,320 500,000
---------------------------------------------------------------
Total..................................... 10,456,244 10,000,000 8,000,000 \3\ 10,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Includes resources for the Child and Adult Care Food Program (CACFP) and Summer Food Service Program (SFSP).
\2\ $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. Both fiscal year 1996
Carryover funds and fiscal year 1997 Current year funds were used.
\3\ Includes $2 million to fund School Food Service Systems Improvement Initiative to improve business practices
in school food service.
TABLE 2
------------------------------------------------------------------------
Funds carried
Funds over and
Fiscal year appropriated obligated in obligated in
year the next
appropriated fiscal year
------------------------------------------------------------------------
1996.................................... $4,794,060 $5,662,184
1997.................................... 7,955,722 2,044,278
1998.................................... 8,000,000 ..............
1999.................................... 10,000,000 ..............
------------------------------------------------------------------------
Question. The budget proposes a decrease of $4 million reflecting
expiration of the Kentucky/Iowa demonstration projects. Why? What
impact will this have on those now being served through each of these
projects?
Answer. The Department's budget submission for the Child Nutrition
Programs was a ``current services'' proposal. However, the Department's
reauthorization bill for the Child Nutrition Programs, which was
submitted to the Congress after the budget request, proposes that the
Kentucky/Iowa demonstration projects be made a permanent part of the
Child and Adult Care Food Program (CACFP) in those two States. If this
proposal is approved, the benefits currently available to children in
Kentucky and Iowa under the demonstration project would continue to be
available under the CACFP.
Question. For each of fiscal years 1997 and 1998, please provide
detail on the food service training grants awarded to states,
identifying the state, the amount of the grant award, a brief
description of the project. For each of these years, please list the
projects which have been awarded food service training grants.
Answer. The information is submitted for the record.
[The information follows:]
1997 team nutrition (tn) training grant summaries
Arizona, $162,780
Arizona Department of Education in collaboration with a training
coordinator will develop a three-day train-the-trainer module that will
include principles of adult learning, development and implementation of
school-based comprehensive health and nutrition programs, overview and
practical application of recommended nutrition education curriculum and
instructional strategies for classroom and food service staff to
support the classroom to cafeteria link of nutrition education and
healthy food choices. They will also establish a cadre of trainers/
mentors to provide a minimum of two additional TN Training workshops
and technical assistance to school districts developing comprehensive
school health programs to promote lifelong healthy eating habits in
children and adolescents. They also plan to provide Local Level TN
Training Grants to a minimum of 15 school districts with the majority
of their schools enrolled as Team Nutrition Schools for the development
of model comprehensive school health programs to promote lifelong
healthy eating habits in children and adolescents.
California, $270,400
The California Department of Education will utilize funding for
three separate projects: Local TN Training Grants; a CD-ROM Development
for Nutrient Standard Menu Planning (NSMP) Training; and a Portable
Computer Lab for NSMP Training. The Local TN Training Grants will be
designed to provide comprehensive, action-oriented delivery of training
programs at the district and school level to provide training for
teachers on the use of Team Nutrition curriculum; develop garden-
enhanced nutrition education projects; and provide professional
development opportunities for school nutrition staff. Development of a
NSMP Course on CD-ROM will facilitate hands-on computer experience and
will improve the status of the school meals by training school
nutrition directors and menu planners to comply with the School Meals
Initiative for Healthy Children and meet the goals identified by the
USDA. California will also establish a cost-effective portable computer
lab to enable the Department of Education, Nutrition Education and
Training (NET) Program to significantly increase its ability to offer
NSMP Training in support of the School Meals Initiative for Healthy
Children.
Illinois, $168,520
The Illinois Team Nutrition Training Grant involves three distinct
activities aimed at assisting Illinois schools in adopting a school
wide approach to promoting healthy eating. The first activity, the
comprehensive healthy education project, will be a collaborative effort
between Illinois NET and the Illinois Department of Public Health.
School staff will be provided with essential information on how to
develop and implement a school health program that promotes healthy
eating through two training workshops. NET will also provide
competitive local grants to 10 school districts in order to enable them
to plan and implement health programs that will serve as models for all
schools. The second activity will provide Illinois elementary and
junior high schools with access to fun, interactive, educational
exhibits through the use of mobile education units. The third activity,
development of a NET web site, will increase the access of educators
and food service staff to NET resources, information and services. The
web site will also contain up-to-date information on Team Nutrition
activities and grant opportunities in Illinois.
Iowa, $299,000
Iowa's proposal seeks to expand the availability of training
opportunities as well as the number of trainers. The project will
accomplish these goals by applying the energy, resources and broad
connections of a Statewide coalition of public sector agencies and the
resources of the State NET Program to develop and provide the food
service training/coalition building capacity of an existing,
sustainable framework, i.e., Area Education Agencies (AEA's). Three
strategies will be used in this grant. First, the NET Coordinator and
Iowa Nutrition Education Network staff will develop and implement a
competitive grant program for AEA's. Six AEA's will be chosen to assist
at least five school districts in their area to implement TEAM
Nutrition. A second strategy will be to provide direct training to food
service staff in the 30 school districts that implement TEAM Nutrition
as part of this grant. They will contract with the National Food
Service Institute to conduct the master trainer workshop. The Iowa
School Food Service Association has agreed to organize a cadre of 30
members who will also complete this training and conduct ten hands-on
training sessions around the State. The third strategy will be to seek
private funding to develop a Statewide media campaign that will build
on and feature the TEAM Nutrition concepts being developed at the
local, Regional and National levels.
Kansas, $192,260
Kansas is implementing activities to enhance and expand Team
Nutrition and the Kansas Comprehensive Training System (KCTS) for
School Nutrition Professional Development. These activities will
include: (1) developing a standardized, comprehensive, job-category-
based framework for Kansas' formal training program; (2) forming a
State organization of Team Nutrition Supporters to provide a
comprehensive directory of resources and an annual Team Nutrition Event
packet; (3) implementing and supporting 10 model programs to
demonstrate healthy school meals based upon the ``Keys to Excellence:
Standards of Practice for Nutrition Integrity''; and (4) providing
incentives to 200 additional Kansas schools to implement nutrition
education which supports the cafeteria-classroom link.
Maine, $94,562
The Maine Department of Education will coordinate with the Maine
Technical College System to enhance the delivery of a sustainable
training program for school nutrition personnel Statewide and offer
expanded training opportunities. The program will offer three levels of
training. The first level of basic instruction will be expanded to
include an orientation to school food service course. The second level
of skill development will use 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. Level three, continuing
education, will be expanded to recognize the expanded skill training
courses in the tri-annual certificate renewal process. Maine will also
provide Local TN Training Grants to eight school systems to develop a
team approach to implementing the Team Nutrition Schools principles in
their educational programs. Also, Maine will continue their partnership
with the Maine Nutrition Network and expand their efforts targeted to
low income schools by providing parallel resources to any Team
Nutrition Schools.
Maryland, $300,000
The Maryland Team Nutrition Training Project will develop a
Statewide cadre of trained resource professionals to assist schools to
conduct effective nutrition education activities. At least 50
Cooperative Extension and school food and nutrition service
professionals will be trained to assist Team Nutrition schools in five
geographic regions of the State. Other project objectives include:
increasing the number of Team Nutrition schools in Maryland to 40
percent of all public schools; conducting comprehensive training in
nutrition education, food safety and the School Meals Initiative;
developing a sustainable relationship with the Maryland Cooperative
Extension Service in order to increase available technical assistance
to schools and awarding a minimum of eight competitive training mini-
grants to both local educational agencies and community organizations.
Michigan, $299,952
The Michigan Department of Education in collaboration with Michigan
State University Extension (MSUE) and the Michigan Team Nutrition
Steering Committee has integrated a two component strategy of peer
mentor/coaching to assist and support school food service directors
train their staff (on-site) with the Healthy Cuisine for Kids (HCK)
curriculum; and comprehensive multi-dimensional support for Michigan
Team Nutrition Schools. This grant project is designed to increase the
number of Team Nutrition schools, and further assist enrolled Team
Nutrition schools build strong partnerships with communities, as they
continue to actualize Team Nutrition. They plan on accomplishing this
by training peer mentor/coaches in HCK, training 420 food service teams
in a one day train-the-trainer workshop, offering on-site technical
support, using newsletters to train and sustain Team Nutrition
Partners, offering five school districts Demonstration Training Mini-
Grants, enhancing Team Nutrition through Partnering and Support with
MSUE, and developing and using a World Wide Web for Team Nutrition
sustainability.
Minnesota, $292,220
The purpose of this grant is to address a wide range of local
training needs in order to implement the Healthy School Meals
Initiative. The project consists of three parts. First, the development
and provision of effective, local-use training resources, which
includes the development of a videotape training resource packet, and
conducting 20 statewide workshops for school food service managers,
supervisors and directors on the requirements and successful
implementation of Food Based Menus and NuMenus. Second, development of
improved resource materials and services using new technologies,
including a website to provide access to digital versions of the
materials developed. Third, through a competitive grant process,
provide four to six local Team Nutrition Training grants to school
districts to develop and implement model district-wide training plans
and nutrition education programs.
New Hampshire, $107,143
The New Hampshire Department of Education plans to provide between
2 and 20 grants to local school districts for innovative district-wide
training programs which meet Team Nutrition Training Grants criteria.
They also plan to establish a partnership with the New Hampshire
Dietetic Association and provide a training session for dietitians
regarding the School Meals Initiative and encourage their involvement
in assisting schools with nutrition committees, developing nutrition
policies and Team Nutrition projects. Other projects include expanding
services which began through a partnership with the Vermont Department
of Education by providing a management seminar for New Hampshire and
Vermont food service directors and managers. The partnership with the
New Hampshire School Food Service Association will be strengthened by
having them provide the management seminar and provide the materials
and training for ``Meeting the Challenge'' to school food service
staff. In addition, New Hampshire plans on contracting with the
National Food Service Management Institute for three additional
components of a NET needs assessment to expand the information
available to the NET Coordinator when planning future training efforts.
New Jersey, $189,640
The New Jersey proposal is a joint venture involving two major
partners: the Nutrition Education and Training Program and the Bureau
of Child Nutrition. A number of secondary partners including the
Academy of Professional Development, the Dairy Council, the American
Cancer Society, the New Jersey Parent Teacher Association and the New
Jersey School Food Service Association are also involved. The proposal
has three goals: strengthen the State's training capacity, establish
classroom-cafeteria link, and improve project management techniques.
The building training capacity objectives are: expanding the New Jersey
Professional Development and Training Cadre; conducting statewide
training for school food service personnel; establishing and
maintaining three regional computer assistance menu analysis sites and
USDA Internet site access; developing and disseminating a quarterly
newsletter; conducting statewide and regional school food service
institutes; and developing and disseminating user-friendly handbook for
Food Based Menu Planning Options. The classroom-cafeteria link will
involve expanding the Power 3 Club Manual and developing quarterly
newsletters and linking parents to Power 3 Club by regional Super
Saturdays and TN Calendars and academic activities.
North Dakota, $77,144
The training project designed by the North Dakota Department of
Public Instruction will utilize several approaches which will allow the
agency to continue and enhance the sustainable training infrastructure
initiated with funding received under the 1995 Team Nutrition Training
Grant. The training activities proposed in the grant proposals are: (1)
conduct focused technical assistance/training meetings for school
nutrition personnel; (2) conduct enhanced training for cadre members;
(3) conduct culinary skills workshops for school nutrition personnel;
and (4) develop and broadcast a third satellite training seminar. In
addition, provide funds to assist in providing nutrition information to
students.
Oregon, $129,020
Oregon's TN Training Grant proposes to conduct train-the-trainer
workshops to strengthen the NETPRO Oregon training cadre in order to
provide a series of three comprehensive, interrelated School Meals
Initiative (SMI) training and technical assistance events for Oregon's
school food authorities. The first event is Healthy School Meals
Workshop which is an eight hour train-the-trainer workshop for food
service directors/managers and key food service staff to improve
knowledge and skills in the areas of resources, nutrition, culinary
skills, and menu planning. The second event is Mission: Nutrition!
which is a day long nutrition extravaganza involving the entire school
community. The goal is to create a nutrition awareness culture
throughout the school community which supports the production of
quality meals meeting USDA nutrition requirements and promotes
nutrition education for students. The third event is a school food
authorities SMI review which focuses on each school food authorities
progress towards meeting SMI regulations.
Rhode Island, $299,886
The Rhode Island grant project will expand on the current Team
Nutrition Training Program by launching the TNT Institute. The
Institute will be a resource for school districts to use for food
service training and the development of nutrition education activities
in the classroom. It will be able to address the training needs of
school food authorities. The Institute will also be responsible for
increasing the involvement and empowerment of parents and community
members to play an active role in improving the diet of children
through schools.
South Carolina, $300,000
The South Carolina grant will expand and refine the training
infrastructure to support systematic and consistent training and
technical assistance by establishing 12 training centers to provide
training for directors, operators and managers for continuous
improvement of meal quality and service to students and coordination of
technical assistance. The project is also designed to establish
community-based allowances to advocate for community and media support
for Healthy School Meals through training school food service directors
in social marketing and social learning techniques. It will also
establish a demonstration program in four middle schools for building
collaborate program and partnerships that support healthy school meals
to serve as models to be replicated by other middle schools. Also, they
will deliver Target Your Market training to assist directors and
managers in marketing school nutrition programs.
South Dakota, $299,886
The South Dakota Department of Educational and Cultural Affairs
proposes a three-pronged program to meet the intended purpose of the
Team Nutrition Training Grant for Healthy School Meals. The Program
design includes: (1) a ``Summer Institute'' experiential training
program offering academic credit for school-based teams to receive
comprehensive training in team-based nutrition education with a
continued follow-along technical assistance component to assist teams
to carry out school-based programs; (2) a supplemental grants program
for the selected team schools in South Dakota to develop and implement
their team-based solutions for nutrition education; and (3)
comprehensive enhancement of nutrition education activities for Food
Service Certification Programs.
Utah, $275,520
This project--Going for the Gold in School Nutrition--aims at
creating long-range training plans for the State and for each
individual school district. Training will be geared towards kitchen
managers, and it will focus on implementing the School Meals
Initiative, particularly NuMenus. Some of the topics to be covered
include standardization of recipes, nutrient analysis, menu planning,
and food preparation techniques. The project is divided into four
levels. The first level is the Olympic Organizing Committee, which will
set up a five year integrated delivery plan to reach all levels of the
school nutrition programs. The Bronze Medal Level, the second level,
will develop a district wide training program for school food service
personnel. The third level, Silver Medal Level, will support training
at the local level, while the fourth level, Gold Medal Level, will
create a one week high-level manager training program at a local
college.
Vermont, $94,471
The goal of this proposal is to increase support for the School
Meals Initiative by drawing educators and school leaders into the
project while continuing to enhance the capacity of managers to operate
high quality school meal programs. Six major activities are planned,
including a series of seminars for managers of school food authorities
comprised of single schools serving grades K through 12; a management
conference to provide concrete management skills for food service
managers and directors; a 5-A-Day-Project designed to provide schools
with training and materials to conduct classroom hands-on activities
with fruits and vegetables; awarding Local TN Training Grants to
schools to implement action plans to strengthen comprehensive health
programs in their schools; create a Team Nutrition Schools Network to
increase awareness of the School Meals Initiative; and hold a School
Leaders Conference to attract school administrators and school board
members to learn about their roles in operating a high quality
nutrition program.
West Virginia, $155,803
The West Virginia Department of Education project aims at providing
training to enable site managers and head cooks to implement changes in
their schools' nutrition programs to reflect healthy meal standards.
Five 10-hour regional workshops covering all 55 school districts will
be conducted throughout the state. The proposal also aims at expanding
the state's training infrastructure by identifying Health Meals Mentors
and developing their abilities to transfer knowledge and skills to
other cooks. Twenty class participants will be selected as mentors/
trainers. The Department will also maintain a network of local trainers
to support the development and delivery of project training and
monitoring activities.
1998 team nutrition training grants
On January 5, 1998, 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 the Food and Nutrition
Service April 1, 1998, and grant awards will be announced on July 10,
1998.
Question. For each of fiscal years 1997 and 1998, please provide
detail on how the Nutrition Education Training funds are being spent,
including the amount awarded to each state under the program, and a
list of the projects/activities being funded by each respective state,
including the cost of each project/activity.
Answer. In fiscal year 1997 each State Nutrition, Education and
Training (NET) program was awarded $66,951 out of the Team Nutrition
appropriation since no funds were appropriated for NET in 1997. In
fiscal year 1998 State NET programs received apportioned NET funding
based on the State student enrollment. Funding levels for all 50 States
and the U.S. territories is submitted for the record.
The Food and Nutrition Service (FNS) does not gather information on
specific projects/activities funded by NET on a yearly basis. At the
State level, the NET program is not a centralized bureaucratic program.
A high proportion of the grant funds, and most of the programmatic
activity is conducted by a variety of educational institutions,
consultants, local authorities and professional associations. Less than
40 percent of NET funds are used for program administration and
coordination. The remainder of NET funds is generally used for service
delivery including mini-grants to local schools, program activities and
program products. Program activities include teacher training,
provision of classroom resource materials, evaluations and needs
assessments. Program products include curriculums, print and other
media materials, training materials, promotional materials, and
education program materials.
[The information follows:]
State 1998 funds
Alabama....................................................... $50,000
Alaska........................................................ 50,000
American Samoa................................................ 50,000
Arizona....................................................... 50,000
Arkansas...................................................... 50,000
California.................................................... 313,804
CNMI.......................................................... 50,000
Colorado...................................................... 46,271
Connecticut................................................... 50,000
Delaware...................................................... 50,000
District of Columbia.......................................... 50,000
Florida....................................................... 28,405
Georgia....................................................... 73,569
Guam.......................................................... 50,000
Hawaii........................................................ 50,000
Idaho......................................................... 50,000
Illinois...................................................... 118,097
Indiana....................................................... 55,399
Iowa.......................................................... 50,000
Kansas........................................................ 50,000
Kentucky...................................................... 50,000
Louisiana..................................................... 50,000
Maine......................................................... 50,000
Maryland...................................................... 50,000
Massachusetts................................................. 55,879
Michigan...................................................... 94,909
Minnesota..................................................... 50,000
Mississippi................................................... 50,000
Missouri...................................................... 51,465
Montana....................................................... 50,000
Nebraska...................................................... 50,000
Nevada........................................................ 50,000
New Hampshire................................................. 50,000
New Jersey.................................................... 73,166
New Mexico.................................................... 50,000
New York...................................................... 169,544
North Carolina................................................ 67,035
North Dakota.................................................. 50,000
Ohio.......................................................... 111,986
Oregon........................................................ 50,000
Pennsylvania.................................................. 110,239
Puerto Rico................................................... 50,000
Rhode Island.................................................. 50,000
South Carolina................................................ 44,678
South Dakota.................................................. 50,000
Tennessee..................................................... 50,404
Texas......................................................... 209,628
Utah.......................................................... 50,000
Virgin Islands................................................ 50,000
Virginia...................................................... 60,527
Washington.................................................... 53,539
West Virginia................................................. 50,000
Wisconsin..................................................... 52,415
Wyoming....................................................... 50,000
Note: $50,000 is the minimum grant amount for States set in the
authorizing statute.
---------------------------------------------------------------------------
commodity supplemental food program
Question. As we achieve full participation in the WIC program,
there should be a corresponding decline in WIC-type participation in
the Commodity Supplemental Food Program (CSFP). You indicated that the
number of WIC participants in the program decreased in fiscal years
1995 and 1996. What was the decrease in CSFP WIC-type participation in
fiscal year 1997 and what decreases are projected in each of fiscal
years 1998 and 1999?
Answer. The decrease in participation in WIC-type participation in
the Commodity Supplemental Food Program in fiscal year 1997 was
approximately 8 percent. The Department is not projecting a decrease in
participation for fiscal year 1998 or 1999. The Department is expecting
a small increase of 6 percent in participation in fiscal year 1998 and,
as in the WIC program, no increase in fiscal year 1999.
Question. What growth have we witnessed in elderly participation in
the Commodity Supplemental Food Program in each of the past two fiscal
years? What participation levels are projected for each of fiscal years
1998 and 1999? Please provide for each of these years (1996-1998) the
number of elderly participating in the program who also were eligible
for Food Stamp Program assistance.
Answer. In fiscal year 1996 there was an increase in participation
in elderly participation in the Commodity Supplemental Food Program
(CSFP) of approximately 10 percent. In fiscal year 1997 the increase
was approximately 11 percent. The Department is projecting an increase
of 11 percent in fiscal year 1998 and a decrease of 2 percent in fiscal
year 1999. The income eligibility standard for the elderly for the Food
Stamp Program is 100 percent of net income, which is considered to be
less stringent than 130 percent of gross income. The standard for the
CSFP is 130 percent of income as defined for local benefit programs.
Therefore, most elderly persons participating in the CSFP are likely to
be eligible for the Food Stamp Program. However, we do not have any
data reflecting the percentage of CSFP participants who also
participate in the Food Stamp Program. In 1995, 199 thousand elderly
persons participated in the CSFP, in 1996 and 1997, 219 and 243
thousand, respectively, participated.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. The agency's strategic goals are those goals that the
agency plans to achieve incrementally by the year 2002. The annual
performance goals are those goals and activities for fiscal year 1999
that the agency believes will lead to the achievement of the year 2002
goals. The plan also specifies the fiscal, capital and human resources
required to achieve these goals and ongoing program obligations. As a
result, the fiscal year 1999 budget request is linked directly to
agency's goals for that fiscal year.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. The Food and Nutrition Service (FNS) Annual Performance
Plan (APP) identifies the strategic and annual performance goals and
management initiatives the agency plans to achieve in fiscal year 1999.
The fiscal, capital and human resources required to achieve these goals
and initiatives are provided in the APP at the strategic goal level.
Using a matrix format, FNS linked these resources directly to the major
program activities in the Program and Financing Schedules. This
crosswalk provides a clear picture of how the FNS budget and program
activities relate to and support achievement of the strategic
performance goals and initiatives.
In terms of difficulties encountered, the effort to resource load
the specific annual performance goals is a difficult one. Insofar as
the FNS budget structure is not presently aligned with the Strategic
Plan/APP, the resource loading of annual performance goals will, of
necessity, have to be done in an ``off-line'' manner.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. The Food and Nutrition Service (FNS) Annual Performance
Plan measures are indirectly linked to the budget. Currently, the
fiscal year 1999 FNS budget is linked to the strategic plan goals and
objectives. The annual plans goals and measures are derived directly
from the strategic plan. Thus, while the performance plan linkage to
the budget is not perfect, it does cover a major portion of program
activity accounts.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The Food and Nutrition Service (FNS) Annual Performance
Plan structure differs slightly from the account and activity structure
in the budget justifications in that it reflects strategic and annual
goals that may span more than one program account. However, the basic
structure is similar. We are prepared to discuss these slight
differences with Committee staff.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. At this time, the Food and Nutrition Service (FNS) is
exploring ways of achieving an ever closer alignment between
performance planning and the budget account structure. Insofar as
fiscal year 1999 was the first year of performance planning, FNS has
yet to gain full understanding of all of the implications of annual and
strategic planning relative to the budget account structure and to the
eventual achievement of our objectives and goals. We believe that the
congruence between the two will occur as the agency gains more
experience with strategic and annual planning.
Question. How were performance measures chosen?
Answer. The Food and Nutrition Service (FNS) developed or chose
performance measures based on two criteria. First, the measures had to
be direct, that is, to the extent possible, the agency chose measures
that assessed program outcomes directly and, to the extent possible,
avoided proxy measures. Second, the measures had to be feasible, i.e.,
data were already available or could be collected at a reasonable cost.
Following the Government Performance and Results Act guidelines, FNS
chose or developed measures that were both outcome-based and
quantitative for all its strategic objectives.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. The agency plans to use outside data sources for the
verification of the Food and Nutrition Service (FNS) performance data.
For example, these sources include state monitoring reports.
Consequently, there will likely be no cost to the agency to obtain this
data. The agency plans to use several approaches in obtaining the
needed original performance data. First, FNS plans to use data already
collected by other federal agencies, when appropriate. With this
approach, FNS obtains the data it requires with minimal cost.
Second, the agency originally planned to use its existing research
funds to collect data that cannot be obtained through other agencies.
This approach would have allowed the agency to collect needed
performance data using existing funds. However, the shifting of food
assistance program study funding to the Economic Research Service (ERS)
for fiscal year 1998 has caused us to adjust our plans. We are working
with ERS to meet some of our annual performance plan needs, and look
forward to restoration of funding to FNS in fiscal year 1999 (as
requested in the fiscal year 1999 FNS budget) to continue information
development for the Annual Performance Plan as had been envisioned.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. The Food and Nutrition Service (FNS) will have reasonably
reliable data for most of the performance measures contained in the
fiscal year 1999 Annual Performance Plan. The agency does, however,
need to develop data sources for some measures, particularly for the
Child and Adult Care Feeding Program and Special Supplemental Nutrition
Program for Women, Infants, and Children (WIC). The agency originally
planned to develop some of these data sources through its research and
evaluation activities. However, the shifting of food assistance program
study funding to the Economic Research Service (ERS) for fiscal year
1998 has caused us to adjust our plans. We are working with ERS to meet
some of our annual performance plan needs, and look forward to
restoration of funding to FNS in fiscal year 1999 (as requested in the
fiscal year 1999 FNS budget) to continue information development for
the Annual Performance Plan as had been envisioned.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. In writing the agency's Annual Performance Plan, the Food
and Nutrition Service (FNS) went through a careful, extensive,
comprehensive process involving the entire agency, to develop
appropriate performance goals. The agency believes that the goals in
the final plan accurately reflect the priorities of the agency for
fiscal year 1999 and that achievement of these goals will assist the
FNS in accomplishing its strategic goals. Therefore, FNS believes that
all of the goals in the plan are important and that individual goals
cannot be singled out as more important than others.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. The majority of the annual performance goals in the
agency's fiscal year 1999 Annual Performance Plan are stated as
outcomes. The Food and Nutrition Service (FNS) chose measures that will
directly measure these goals and, as a result, the measures are also
outcome-oriented. For the limited number of annual performance goals
that are process-or output-oriented, the agency chose or developed
appropriate output measures. For example, for its Food Distribution
Program, FNS plans to conduct a customer satisfaction survey in fiscal
year 2000. In fiscal year 1999, our goal is to develop and test the
survey instrument and procedures (an output goal). The performance
measure for this goal is an output measure.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Yes, the Food and Nutrition Service (FNS) believes that
program managers understand the difference between output and outcome
goals. In writing the Annual Performance Plan, FNS involved all of the
agency's program managers in developing the annual goals. Program
managers were assisted in this process by staff with expertise and
experience using different types of performance measurement, including
output and outcome measures. As a result of this process, FNS believes
that all managers involved, understand the difference between workload
and effectiveness goals.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. The Food and Nutrition Service (FNS) plans to survey its
external customers regarding their satisfaction with the agency's
performance in a variety of areas including service provision,
responsiveness to inquiries, timeliness of food deliveries, and program
streamlining and simplification. Internally, FNS will query
satisfaction with the budgeting process and availability of program and
financial data.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The measurable strategic and annual performance goals
provided in the fiscal year 1999 Annual Performance Plan represent some
portion of the priorities the Food and Nutrition Service (FNS) plans to
achieve in the various FNS program areas. The fiscal year 1999 budget
information, fiscal, capital and human resources, reflected in the plan
justification identifies the resources needed (1) to achieve both the
annual performance goals and (2) to achieve all other program
activities that are not applicable to any specific annual performance
goal.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Because the individual resource loading of any particular
annual performance goal would be accomplished apart from the budget
account structure, the Food and Nutrition Service would have to assess
the impact (of any budget level change) to a particular annual
performance goal off-line from the budget structure.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. The Food and Nutrition Service (FNS) plans to obtain
performance data from several sources. First, the agency intends to use
data already collected by other federal agencies, where appropriate.
Obtaining this data will not be affected by FNS' technological
capability. Second, FNS originally planned to use its existing research
funds to obtain data that could only be obtained through large data
collection efforts. Obtaining performance data using this method also
would not have been affected by FNS' technological capability. Because
these funds were eliminated for FNS and transferred to the Economic
Research Service (ERS) for fiscal year 1998, FNS is working with ERS to
address some of the FNS Annual Performance Plan information needs. The
fiscal year 1999 FNS budget proposed restoring of these research funds.
Third, FNS planned to use the agency's existing administrative data
where appropriate. For most performance data, FNS' current
technological capability is adequate to obtain this data.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget.
Many agencies have indicated that their present budget account
structure makes it difficult to link dollars to results in a clear and
meaningful way.
Have you faced such difficulty?
Answer. Yes. The Food and Nutrition Service (FNS) does recognize
this as a problem. It is true that the present budget structure does
not directly align with the annual performance goals and results. In
developing its Government Performance and Results Act plans, FNS
aligned the budget with the strategic plan goals. FNS then derived the
annual plan goals directly from the strategic goals. Although the
annual goals were derived from the strategic goals, they are not the
same. Since the results are based on annual performance goals, the
linkage between the budget and the results is similar.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. The Food and Nutrition Service is currently exploring ways
of how to achieve an ever clearer linkage between the budget account
structure and performance results although they are similar. We believe
that as the agency gains more experience in strategic and performance
planning, ways will be found to improve the alignment between
performance results and the budget account structure.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. As indicated in response to a previous question, the Food
and Nutrition Service (FNS) is exploring ways to achieve an improved
linkage between the budget account structure and performance results.
Should our efforts to do so prove less than satisfactory, then FNS may
wish to consider some changes to our overall strategic planning/annual
planning/budget process, including possible modifications to the budget
structure.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. At this time, the Food and Nutrition Service has no
definitive plan in modifying the present budget structure and therefore
is not in a position to predict how any modification would strengthen
accountability in program performance.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. Following instructions received on preparing Annual
Performance Plans, the Food and Nutrition Service did not identify any
external factors that could influence goal achievement. These factors
are, however, included in the agency's strategic plan.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. While the agency has not included the influence of external
factors in its annual performance plan, we have taken them into account
elsewhere (i.e., the strategic plan) and have identified some steps to
deal with them should they arise.
Question. What impact might external factors have on your resource
estimates?
Answer. Changes in the economy, unemployment, number of persons in
poverty, and changes in food cost are all external factors that
significantly could change program finance needs. However, the Food and
Nutrition Service does not anticipate that external factors will have
significant effects on our resource estimates.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. In developing the both the strategic plan and the
Performance Plan, the Food and Nutrition Service (FNS) has identified
areas where FNS' achievement of its goals is dependent upon the
activities and cooperation of other programs. For example, one of FNS'
annual goals is to increase the availability of nutrition and
nutrition-related information for low-income households. The Food Stamp
Program encourages States to provide nutrition messages and information
to low-income households. FNS cooperates with the USDA Extension
Service and others in the development, production and distribution of
these nutrition education materials. This needed cooperation, as well
as other areas where cooperation is needed, is identified in the
Performance Plan.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that:
To what extent are your performance measures sufficiently mature to
allow for these kinds of uses?
Answer. The majority of our performance measures are sufficiently
mature to assess the level of achievement in our fiscal year 1999
Annual Performance Plan. In the majority of cases we have identified
baseline and target measures that will allow the agency to assess
annual goal achievement as well as progress toward meeting its
strategic goals and objectives.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. The Food and Nutrition Service (FNS) believes that it has
sufficient experience to make reasonable accurate resource estimates.
It will be, however, constrained in making the estimates largely
because of the unavailability of timely and reliable data on some of
the measures identified for the strategic and annual performance plans.
A significant portion of the latter will be due to the elimination of
funding for the agency's research and evaluation activities for fiscal
year 1998. FNS planned to use some of these resources to collect data
directly related to the measurement of achievement of annual and
strategic objectives.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. The Food and Nutrition Service (FNS) believes that its
strategic plan is a flexible, evolving document. As such, FNS is
prepared to revise its plan in the future if the need arises. However,
having just completed writing the fiscal year 1999 performance plan,
and not yet implementing it, it is too early for FNS to tell what form
any future revisions might take.
______
Questions Submitted by Senator Bumpers
food stamps
participation levels
Question. The budget request includes an increase of 572,000 Food
Stamp participants. However, economic indicators suggest Food Stamp
roles should continue to decline.
Please explain why Food Stamp participation should increase during
a period of economic improvement?
Answer. The primary indicator of Food Stamp Program participation
is unemployment level or the actual number of people who are unemployed
at any time. The unemployment level varies with unemployment rate and
with the number of people in the work force. During periods of stable
unemployment rates, unemployment level will still rise as population
rises. The Office of Management and Budget currently forecasts that the
unemployment rate and the total number of unemployed persons will
increase in fiscal year 1999--thereby increasing the number of
eligibles and consequent participation in the Food Stamp Program.
proposed program expansion legislation
Question. The Administration is proposing legislation to expand
eligibility of Food Stamp benefits to certain populations. It is
suggested the legislative proposal would cost an additional $2.5
billion over five years. The savings required in other programs to
achieve this expansion is identified as coming from certain
administrative savings (estimated at $1.2 to $1.4 billion).
Are these savings not the very same savings now targeted for
offsets as part of the conference discussion on the Agricultural
Research Title legislation?
Answer. Yes. The President's proposal and the Agricultural Research
Title legislation both seek to recapture a possible windfall to States
as a result of switching from a primary to benefiting method of State
administrative cost allocation between the Temporary Assistance to
Needy Families, Food Stamp and Medicaid Programs.
Question. If the conferees to the Research Title use these savings
for new research programs, does the Administration have plans for
alternative savings for Food Stamps.
Answer. It is a priority of the Administration to restore
eligibility to many of the legal immigrants made ineligible for food
stamps due to welfare reform. The cost of the Administration's proposal
is included in the President's balanced budget for fiscal year 1999.
The budget funds these initiatives by continued cuts in government
programs, by closing unwarranted tax loopholes, and from the passage of
tobacco legislation. The Administration understands that as Congress
reviews the submitted budget, a certain level of give and take will be
necessary. We look forward to working with Congress on this subject.
Question. If the savings estimates are correct (not to exceed $1.4
billion) what other offsets have been identified to achieve the full
$2.5 billion cost?
Answer. The Administration has submitted a balanced budget for
fiscal year 1999--the first time in 30 years that such a budget has
been proposed. Within tight constraints, the budget proposes major
initiatives that will continue the President's investments in high
priority areas--from helping working families with child care expenses
to allowing Americans age 55 to 65 to buy Medicare. These initiatives
include restoring eligibility to many of the legal immigrants made
ineligible for food stamps by welfare reform. The budget funds these
initiatives by continued cuts in government programs, by closing
unwarranted tax loopholes, and from the passage of tobacco legislation.
program reserve
Question. The budget proposes a $1 billion reserve for the Food
Stamp account.
When was the last time a Food Stamp reserve was triggered and what
was the cause?
Answer. Fiscal year 1992 was the last time any of the reserve funds
were used. The President's fiscal year 1992 Budget Request estimated
the average program participation would be 22.4 million persons per
month. However, during the course of the fiscal year, participation in
the program was greater than anticipated and averaged 25.4 million
persons per month for the fiscal year. In fiscal year 1992 $900 million
of $1.5 billion was actually needed and used in fiscal year 1992 to
cover increased program participation. Thus, the President's 1993
Budget included a formal request for $1.5 billion appropriated subject
to such a specific request for fiscal year 1992.
Question. What projections for fiscal year 1999 suggest a reserve
is needed now?
Answer. The reserve would be used to cover the costs of any
unforeseen economic or other circumstances that cause an increase in
required program payments. The reserve is important given the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA). Over one-third of all food stamp households received Aid to
Families with Dependent Children (AFDC), which PRWORA replaced with
Temporary Assistance for Needy Families (TANF), receive over one half
of all food stamp benefits. As these households encounter time limits
on their TANF eligibility, and with the effects of welfare reform still
largely unknown, it becomes increasingly difficult to anticipate the
future course of food stamp costs.
Question. If the purpose of the reserve is to meet changing
conditions resulting from Welfare Reform, what ``changes'' have been
identified since passage of that legislation?
Answer. A benefit reserve is important given the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(``welfare reform''). Welfare reform has given States broad new
authority under the TANF block grant. The choices States continue to
make about the level and form of benefits provided can affect Food
Stamp Program costs dramatically. Over one-third of all food stamp
households receive AFDC--which welfare reform replaced with Temporary
Assistance for Needy Families (TANF)--and they also receive over half
of all food stamp benefits. In addition, as these households encounter
time limits on their TANF eligibility, it becomes increasingly
difficult to anticipate the effect on food stamp costs. To the extent
that they replace lost welfare benefits with increased earnings, food
stamp benefits may fall. But to the extent that they remain
sufficiently poor to retain food stamps while losing TANF, food stamp
costs may increase.
savings from enforcement
Question. For several years, the Food Stamp program has been moving
toward EBT cards to protect program integrity and to promote program
efficiency. Also, efforts such as ``Operation Talon'' have been
reported as being successful in stopping Food Stamp fraud. It is also
stated that during fiscal year 1997, 1200 suspect stores were
investigated of which approximately 550 were found to have committed
violations.
What program savings have been achieved due to these efforts?
Answer. Operation Talon is a law enforcement initiative in which
information of law enforcement agencies is matched with food stamp
caseload data to detect and apprehend individuals who are fleeing
felons or parole/probation violators. The Food and Nutrition Service
(FNS) has supported this initiative by encouraging State cooperation
with the USDA Office of Inspector General (OIG) and local law
enforcement agencies. Further, we are continuing to work with OIG and
are providing program guidance to the State agencies regarding follow-
up to the identification of fleeing felons as it affects program
eligibility, claim establishment, fair hearings and appropriate
disqualification action. While the results of Operation Talon collected
by OIG show the initiative is successful, FNS does not have specific
program data about savings resulting from Operation Talon.
State agencies are required by law to operate Electronic Benefit
Transfer (EBT) systems in a cost-neutral manner. That is, in a way that
the Federal cost of issuing benefits in the State using an EBT system
does not exceed the Federal cost of delivering coupon benefits under
the previous coupon issuance system. Based on measurements of cost
neutrality among State agencies currently operating EBT systems, the
Department expects that program costs will decrease with the
implementation of EBT Nationwide.
There is no dollar cost to the Program when retailers commit
violations. Food stamp benefits have already been issued to the
recipients who then choose to violate the program by dealing with a
retailer who will violate program regulations. However, retailers
removed from the program as a result of an investigation are no longer
able to provide an avenue to divert funds from the intended purpose of
the program. Removing violating retailers from the program also impacts
on other retailers who may be considering violating and improves
program image.
Question. What savings are projected for the coming fiscal year?
Answer. The major thrust of Operation Talon is to use Food Stamp
Program data to allow law enforcement agencies to identify, locate, and
arrest fugitives from justice. The results of Operation Talon collected
by OIG show this initiative is successful. State agencies are not
required to report specific program data about savings resulting from
Operation Talon. Therefore, while information available to the
Department indicates that program savings do occur. FNS has not
projected reductions in program for the coming fiscal year.
State agencies are required by law to operate EBT systems in a
cost-neutral manner. That is, in a way that the Federal cost of issuing
benefits in the State using an EBT system does not exceed the Federal
cost of delivering coupon benefits under the previous coupon issuance
system. Based on measurements of cost neutrality among State agencies
currently operating EBT systems, the Department expects that program
costs will decrease with the implementation of EBT nationwide. Food
stamp printing, shipping and processing costs are projected to decrease
by $19 million in fiscal year 1999. Most of the decreases are
attributed to EBT implementation.
Question. Have these efforts and their resulting efficiencies
provided any reductions in program costs as reflected in appropriations
requests? If not, why?
Answer. No, because the savings either can not be projected or do
not occur. The exception is food stamp printing, shipping and
processing costs which are projected to decrease by $19 million in
fiscal year 1999, as reflected in our appropriation request. Most of
the decreases are attributed to EBT implementation.
Question. What information led to the 1200 stores being deemed
``suspect'' and does the high rate of violations among those stores
indicate a much larger problem nation-wide?
Answer. In fiscal year 1997, the Food and Nutrition Service (FNS)
conducted 4,627 investigations of retailers authorized to accept food
stamp benefits, 2,084 of which were found to have committed program
violations. Retailer investigations conducted by FNS are based on
specific information that indicates potential fraud and are not
selected as part of a random sample. Various statistical information,
automated analyses, complaints from the public and leads developed by
investigators from sources outside of the agency are used to target
suspect retailers for investigation. Therefore, to take a high rate of
violation among a group of specifically selected retailers and project
it nationwide would be inappropriate. Retailers that redeem the
majority of food stamp benefits have not proven to be a problem.
other effects of welfare reform
Question. In certain states and local jurisdictions, ``cash-out''
benefits have been provided in lieu of Food Stamp coupons or EBT cards.
This effort has been largely underway as experiments in Welfare Reform
as ways to make welfare recipients more responsible for their actions.
What effect have these changes had on USDA programs?
Answer. Cash-out projects have been very limited and, therefore, we
have not seen a significant effect on the administration of USDA
programs. We see EBT as the preferred means of providing food stamp
assistance. However, wage supplementation programs, a form of cash-out
in which the cash value of the food stamp allotment is provided to a
private employer to subsidize the food stamp recipient's wages, may be
more difficult to administer than other forms of cash-out. This
distinct form of cash-out is not a matter of simply providing a
household with cash instead of coupons, but rather an opportunity to
move recipients into actual employment. In a wage supplementation
program, the State agency must work with the employer to track the cash
paid to the employer, and the amount of wages paid to the food stamp
recipient in order to ensure that the wage subsidy is used properly.
Question. Have ``cash-out'' benefits had an effect on levels of
nutrition or health generally within the population of traditional Food
Stamp beneficiaries?
Answer. In the early 1990's the Food and Nutrition Service
conducted scientifically rigorous evaluations of the effects of cashing
out food stamps on the food expenditures and/or the nutrients available
to households in four demonstration sites.
The findings of these studies suggest that cash-out reduces
household food expenditures. The ``slippage effect'', the amount by
which retail food spending will decrease when the same level of
assistance is provided as cash rather than as food stamp coupons, is
between 15 to 30 percent of every dollar of benefits. At the benefit
levels in the President's 1999 Budget Request this is a $3 to $6
billion reduction in food expenditures with no reduction in program
costs.
During the demonstrations there was some evidence that cash-out
reduced the availability of some nutrients. For many nutrients the
average nutrient availability remained above the Recommended Dietary
Allowances for both cash and coupon recipients. The demonstrations were
not designed to assess the long-term nutritional consequences of cash-
out. The substantial reduction in food expenditures coupled with the
evidence that cash-out reduced some nutrient availability during the
demonstration suggest that cash-out may increase nutritional risk over
time, at least for some households. Electronic Benefit Transfer offers
a superior alternative, for it maintains the linkage to food while
reducing stigma for participants.
child nutrition programs
net
Question. Prior to Welfare Reform the Nutrition, Education and
Training Program (NET) was included in mandatory spending at $10
million annually. Since the conversion of these programs to
discretionary spending, the funding levels have fallen.
What is the current status of the NET program?
Answer. Historically the Nutrition Education and Training Program
(NET) has delivered quality and cost-effective nutrition education,
training and technical assistance as a component of the Child Nutrition
Programs. The NET infrastructure offers an effective and cost efficient
vehicle for reaching the 94,000 schools across the Nation. State and
local school food authorities use the established NET infrastructure to
deliver nutrition education to students, educators, and parents as well
as food service training in schools and child care centers. NET's
infrastructure and quality standards also assist local schools in
providing nutritious meals and improving the health and nutrition
behavior of our Nation's children. Recently, State and local NET
cooperators have been responsible for much of the local success of the
Team Nutrition effort that Food and Nutrition Service launched to
support its Schools Meals Initiative.
The NET infrastructure consists of:
1. Established program structures that allow for maximum State
flexibility in meeting the diverse needs of their target audiences;
2. Five year NET Strategic Plan which established a National
framework;
3. State action plans based on assessed local needs;
4. Program monitoring and evaluation component;
5. Local resource centers which efficiently disseminate
instructional materials; and
6. Cadre of nutrition education and food service training
professionals.
The reduction in NET funding levels over the past two years has
hampered NET's efforts to fully support the infrastructure that it
created and provide the level of quality services that had previously
been offered. However, State NET Coordinators have continued their
successful long-term working relationships with local school districts,
parent-teacher organizations, public health agencies, county extension,
local head start agencies, community colleges and the private sector.
The extent of NET's local, State, and Federal support was demonstrated
in 1997 by the more than 400 letters received by USDA from teachers,
food service personnel, nurses, principals, and public health officials
at the local, State, and Federal levels in support of continued funding
for NET at the $10 million level.
Question. What problems, if any, have resulted from the lower
funding levels?
Answer. The reduced level of funding of $3.75 million that occurred
in fiscal year 1997 and fiscal year 1998 has had a negative impact on
State agencies' ability to maintain the valuable infrastructure which
delivers technical assistance, education and training services required
to support the implementation of the School Meals Initiative. Some
States have suffered loss of qualified and experienced trainers and
resources that provided teacher training and support nutrition
education instruction for children in local schools. Unless funding is
restored to the $10 million level this trend will continue with fewer
State and local NET cooperators available to support School Meals
Initiative and the local successes of the Team Nutrition effort.
Question. Is the Administration doing anything to try and restore
NET as a mandatory item?
Answer. The Administration is confident that Nutrition, Education
and Training (NET) can continue its excellent record of service as a
discretionary program if it receives the requested level of funding.
Therefore, the Administration is not seeking to restore NET as a
mandatory item.
food safety technical assistance
Question. The budget request includes $2 million to provide
technical assistance to state and local school cooperators to promote
and enhance safe food handling.
Are these activities being coordinated as part of the
Administration's Food Safety Initiative?
Answer. Yes. The current request for funds will be used for
training and technical assistance to the School Food Authorities to
assist them in expanding and reinforcing the safe food handling
practices of school food service production staff. The form this
training takes will be coordinated with projects under development by
the Food Safety Training and Education Alliance (FSTEA), of which the
Food and Nutrition Service is a member. FSTEA is a group made up of
members from Federal, State and local governments, from trade
associations and from professional organizations. FSTEA is currently
identifying existing training and education materials, including multi-
lingual materials, and combining them with the USDA/Food and Drug
Administration Foodborne Illness Education Information Center.
Question. If not, what efforts are being taken to avoid any
duplication of effort?
Answer. Duplication is being avoided because the Food and Nutrition
Service (FNS) food safety technical assistance is being coordinated as
part of the Administration's Food Safety Initiative. FNS previously
developed and distributed Serving It Safe, a comprehensive training
package covering food service sanitation and safety, to 23,000 School
Food Authorities. This publication was based on the Food Code developed
by the Food and Drug Administration. The current request for funds will
be used for training and technical assistance to the School Food
Authorities to assist them in expanding and reinforcing the safe food
handling practices of school food service production staff.
wic
wic carryover
Question. Much of the debate of the WIC program in recent years has
been the size of the carryover of funds from one fiscal year to the
next. Better management of the program is important to reduce the size
of the carryover as a means of achieving better program efficiency and
making better use of limited Committee resources.
What is the expected WIC carryover for the current fiscal year?
Answer. It is estimated there will be $100 million in recoverable
funds and $30 million in spend forward funds at the end of fiscal year
1998.
Question. What is the projected WIC carryover for the coming fiscal
year?
Answer. It is estimated there will be $100 million in recoverable
funds and $30 million in spend forward funds at the end of fiscal year
1999.
Question. What steps are being taken to better manage the size of
the carryover?
Answer. The Food and Nutrition Service (FNS) has submitted a
participation and expenditure monitoring plan to the Office of
Management and Budget and to its Regional offices. The plan
incorporates the continuation of monitoring/guidance which is a routine
part of FNS' oversight activities including close review of monthly
participant and expenditure data. Any State reflecting a significant
increase or decrease in participation will have its situation reviewed
and appropriate action will be taken, if necessary.
The agency has drafted proposed regulations revising both the food
and nutrition services and administration funding formulas to better
allocate WIC Program funds in a more stable funding environment. The
revised food funding formulas should help ensure food funds are
allocated to States that can utilize the funds to maintain current
participation as well as to direct additional funds, if available, to
States that are serving a lesser proportion of their WIC eligible
population as compared to other States. The proposed rule is in the
clearance process.
FNS is also proposing legislation to limit the spendforward
authority for food funds. The elimination of food funds spendforward
would make additional funds available for allocation to State agencies.
In turn, this should reduce the amount of unspent funds.
Question. Since eight states and the District of Columbia provide
their own funds to supplement federal WIC appropriations, do those
states have large carryover amounts?
Answer. The information providing carryover amounts for WIC State
agencies which received State funding in fiscal years 1996 and 1997 is
provided for the record.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
---------------------------------------------------------------
State agency 1996 State 1996 carryover 1997 State 1997 carryover
Appropriation \1\ Appropriation \1\
----------------------------------------------------------------------------------------------------------------
Alaska.......................................... $26,000 $660,383 $26,600 $363,510
Wash., DC....................................... .............. 513,222 452,000 519,067
Indiana......................................... 190,000 2,687,946 .............. 3,955,339
Maryland........................................ .............. 2,391,383 40,000 1,137,881
Massachusetts................................... 16,200,000 1,354,529 13,783,217 2,742,793
Minnesota....................................... 2,950,000 .............. 2,950,000 303,337
Nebraska........................................ 24,985 35,177 16,760 2,205,642
New Mexico...................................... 1,431,600 68,493 1,379,600 963,795
New York........................................ 21,000,000 2,530,092 21,000,000 2,623,557
North Carolina.................................. 1,200,000 3,306,536 1,350,000 2,990,252
Pennsylvania.................................... 4,884,000 5,800,374 2,000,000 6,478,993
Texas........................................... .............. 17,015,684 1,540,094 17,098,204
Washington...................................... 3,438,911 8,767,714 2,161,089 6,117,054
----------------------------------------------------------------------------------------------------------------
\1\ Includes unspent recoverable and spendforward funds.
Question. If more states provided funds of their own, would that
reduce the fear of states running out of federal funds and, thereby,
reduce the annual program carryover?
Answer. Generally, States provided with significant amounts of
State appropriated funds for the WIC Program, such as New York and
Massachusetts, had little or no Federal funds available for recovery.
They do, however, spend forward Federal funds. For other States there
appears to be no correlation between the provision of State funds and
the level of Federal carryover.
wic reserve
Question. Similar to the Food Stamp request, the budget proposes a
reserve for WIC. However, the WIC program continues to hold carryover
funds from one fiscal year to the next. It is understood that the
nature of the WIC program requires there will always be a
``structural'' carryover between $75 and $100 million.
Why would an additional reserve be necessary when carryover
continue to exceed $75 to $100 million?
Answer. The Department has requested the contingency reserve to
cover any unanticipated food expenditures some State agencies may
experience which would jeopardize their ability to maintain their
caseload levels. As the Department expects food cost inflation to
generally remain modest, it is believed that a $20 million reserve is
sufficient to resolve any special situations that might occur in fiscal
year 1998.
The $75 to $100 million carryover amounts are unspent funds that
are identified at closeout and recovered and reallocated through the
funding formula the year after appropriated. These funds are part of
the overall budget process and are used to support participation
estimates. The contingency fund, however, would be additional funds
made available to support current WIC caseload when appropriated food
funds are insufficient to support participants already receiving WIC
benefits due to unexpected events such as sudden increases in food
costs or natural disasters.
wic immunization
Question. Promoting childhood immunization is a purpose of the WIC
program. A provision of the Labor-HHS appropriations act requires that
15 percent of CDC grants to states (approximately $21 million) for
immunization activities should be directed through the WIC program. The
budget justification materials indicate that only $950,000 was
transferred to the WIC program in fiscal year 1997 and no funds are to
be transferred in fiscal year 1998 or fiscal year 1999.
What is the status of WIC immunization activities?
Answer. The Food and Nutrition Service (FNS), the Centers for
Disease Control and Prevention (CDC), the Department of Health and
Human Services (DHHS), the National Association of WIC Directors
(NAWD), the Association of State and Territorial Health Officials
(ASTHO) and the American Academy of Pediatrics (AAP) have an ongoing
cooperative effort to increase immunization rates among preschool-aged
participants in the WIC Program. Through a strong partnership, these
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 WIC Program has regulatory responsibility to coordinate with
immunization services and the degree of coordination is
dictated by the priorities of State and local WIC agencies.
Many WIC local agencies are located on site with health care
services where immunizations are available. Other local
agencies refer participants to health care services in the
community.
--FNS, CDC, NAWD, ASTHO and AAP are developing a National Strategic
Plan as a general guideline for States to consider 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 and evaluations 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.
--FNS 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. FNS 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 WIC and other food assistance programs, FNS cooperates with
CDC and many other national organizations to actively promote
the annual National Infant Immunization Week.
--NAWD, ASTHO, CDC, and FNS co-hosted a WIC immunization promotion
conference, entitled ``Working Together for Healthier
Children,'' on 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.
--FNS, 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 strategies that improve
vaccination coverage rates among WIC participants.
--The Administration's Childhood Immunization Initiative has provided
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 WIC
State agencies use the funds to extend clinic hours, hire more
staff, increase education efforts, and help create a national
tracking system.
--During 1995, the Senate Committee on Appropriations, submitted the
following in a report to accompany the 1996 DHHS Appropriation
Bill: 1) The Committee directs 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; 2) Immunization
grantees must use the funds for WIC linkage unless the grantee
can document that assessment and referral are taking place in
WIC sites without the need for specific funds.
--FNS 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
FNS 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.
--During 1997, the 31st National Immunization Conference, held in
Detroit, Michigan, the WIC Program was a prominent point of
discussion. Representatives from FNS and State and local WIC
staff presented workshops and poster sessions. The conference
provided 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. It also provided an
opportunity to further showcase WIC as the most important
program to coordinate with to raise immunization coverage
rates.
--FNS has developed a new publication, entitled ``After You Deliver--
Health Tips for Moms,'' which has just come off press in March,
1998. It contains a section ``Immunize Against Disease'' which
emphasizes that shots are needed from birth through adulthood;
why they are needed; and where they may be obtained. This
publication is being distributed to all WIC State and local
agencies for use in educating participants about the importance
of age-appropriate immunizations.
Question. What level of funds are being transferred to WIC state
agencies that are not reflected in the USDA budget justification
materials?
Answer. In fiscal year 1996, approximately $1 million in funding
was provided from the Center for Disease Control (CDC) 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 levels. No additional funds were designated
to be transferred from CDC in fiscal years 1997, 1998, and 1999.
Although CDC was not able to provide these specific resources in
these years, it is important to note that WIC nutrition services and
administrative funds may be expended on a wide range of immunization
activities for WIC participants. Such expenditures are allowable WIC
expenditure because they enhance WIC's role as an adjunct to health
care, and immunization is certainly one such example of the kind of
health service to which WIC refers on a routine basis. Such efforts
range from comprehensive immunization screening and referral procedures
and media campaigns to sending immunization reminders to clients to
reimbursable activities an example of this is the actual administration
of shots to WIC children, for which WIC receives compensation from
immunization resources. The WIC regulations do not set standards on the
level of effort that must be expended by WIC agencies. Instead, the
type and intensity of immunization activities being carried out is at
the discretion of individual WIC State agencies and other offices
within State Health Departments based on their priorities and
resources.
Question. Would it be advisable to transfer funds directly from CDC
to USDA rather than to the states? If so, why?
Answer. In fiscal year 1996, approximately $1 million in funding
from the Center for Disease Control (CDC) 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 levels. No additional funds were designated
to be transferred from CDC in fiscal years 1997, 1998, or 1999.
CDC considers the WIC Program one of its most important allies in
raising and maintaining immunizations coverage rates among children at
risk of vaccine-preventable disease. As such, a well coordinated
ongoing cooperative effort has been developed between CDC and WIC at
the Federal, State and local level. Since CDC has the primary
responsibility for and is the leading expert on immunizations, and has
an established working relationship with the Food and Nutrition
Service, it would be desirable to maintain any available funding
pertaining to immunizations under the direct management of CDC.
wic program management
Question. As we approach full funding for WIC, it becomes more
difficult to provide fine-tuned management for the program. Among the
larger challenges for the program is bringing states with low
participation rates (the so-called low ``Fair Share'' states) up to the
same level with states (so-called ``Stability Grant states) that
maintain high, if not full, participation rates.
What is USDA doing to help Fair Share states increase their
participation rates?
Answer. The proposed regulation revising the funding formulas will
contain a provision that will direct additional funds, if available, to
States that are serving a lesser proportion of their WIC eligible
population as compared to other States--under fair share States. Over
time, under fair share States will receive additional funding so that
they have the opportunity to add participants to bring them closer to
the level of service provided by State agencies that have received
allocations above their fair share--the stability grant States.
Question. What are the budget implications of these activities?
Answer. There are no budget implications associated with the
provision in the proposed funding formula regulation that would
allocate additional funds, if available, to the under fair share
States. The President's Budget Request for the WIC Program for fiscal
year 1999 continues to support a full participation level of 7.5
million. The revised funding formula has no impact on the requested
budget amount or the estimated number of participants to be served by
the WIC Program.
Question. If more funds are directed to Fair Share states as a
percentage of total funding, what steps will USDA take to protect the
levels of Stability Grant states?
Answer. The proposed funding formula will continue to retain the
stability component as part of the food funding formula. Stability will
be defined as the prior year grant, and adjustments for inflation will
occur if funds are available. In a stable funding environment, the vast
majority of available funds will be allocated as stability funding,
which will allow for consistent participation levels from year to year
for most State agencies.
wic farmers market
Question. The budget request proposes an increase and to move the
WIC Farmers Market program to the Commodity Assistance Program account.
Will the increase allow program expansion to new states or will it
be used to increase activities in states already part of the program?
Answer. In accordance with the authorizing law, we must first
provide all current State agencies with a base grant amount that is
equal to their previous year's funding level. After base amounts are
satisfied, the law provides for any remaining funds to be divided in a
ratio of 75 percent for current States for expansion and 25 percent for
new States that would like to begin a program. This split guarantees
that a quarter of any funds available for program expansion will always
be reserved for new State agencies.
commodity assistance programs
temporary emergency food assistance program (tefap) donations/food
gleaning
Question. USDA continues to provide funding for food and
administrative costs of food donations. At the same time, the
Department is actively supporting food gleaning activities. In fiscal
year 1997, TEFAP food purchase activities totals $130.2 million for 268
million pounds of food. That same year, the donated food only accounted
for $29.5 million for 49.7 million pounds.
Is USDA's Gleaning Initiative expected to increase the amount of
bonus commodities available through TEFAP?
Answer. No. Given that the USDA Food Recovery and Gleaning
Initiative focuses on the free donation of excess food, it will not
have any direct impact on the purchase of food through the bonus
commodities program. However, it is important to note that much of the
food provided to food banks, food pantries, food rescue groups, and
other emergency feeding organizations through the Food Recovery and
Gleaning Initiative will often be very similar to the types of food
provided through bonus commodity purchases.
Question. What factors determine state allocations for TEFAP?
Answer. Section 214(a) of the Emergency Food Assistance Act of 1983
(EFAA) mandates the allocation of TEFAP commodities to States through a
formula based 60 percent on the number of persons in the State with
incomes below the poverty line, relative to national figures, and 40
percent on the average monthly number of unemployed persons in the
State, again relative to national figures. Section 204(a)(1) of the
EFAA in turn mandates that TEFAP administrative funds be allocated
among the States on the same basis.
Question. What are the projections for food donations in fiscal
year 1998?
Answer. While we cannot provide an accurate projection of foods to
be donated to the Emergency Food Assistance Program (TEFAP) given that
bonus purchases depend on rapidly changing market conditions, thus far
in fiscal year 1998, the Department has donated to TEFAP $16.6 million
in bonus canned salmon, frozen turkey, dry beans, dried fruit, and
instant nonfat dry milk. In addition, purchases for food donations to
TEFAP estimated at $5 million are currently in progress for fresh and
frozen fruits and additional dry beans. Further, the Department has
authorized up to $30 million to procure pork products to be donated
primarily through TEFAP. Additional substantial purchases for food
donations are currently under consideration.
Question. To what extent will the Gleaning Initiative play a part
of TEFAP donations in fiscal year 1998?
Answer. The Food Recovery and Gleaning Initiative donations will
have no direct impact upon the distribution of TEFAP commodities
because they will be distinctly different programs with different
focuses. The Food Recovery and Gleaning Initiative will focus on aiding
community-based efforts to distribute food that is donated from the
private sector for free directly to emergency feeding organizations,
while the TEFAP program will continue to focus on purchasing
commodities that are distributed through state agencies. However, it is
important to note that many of the emergency feeding agencies that will
be the ultimate recipients of food distributed through the Food
Recovery and Gleaning Initiative will be the same emergency feeding
organizations that ultimately receive TEFAP commodities.
Question. If the Gleaning Initiative is to become part of TEFAP,
will there need to be an increase in the funds appropriated for TEFAP
administrative costs?
Answer. We do not intend to make the Food Recovery and Gleaning
Initiative a formal part of TEFAP, but rather to treat it an
independent effort. We intend to ensure that the grants, cooperative
agreements, technical assistance, and other assistance provided through
the $20 million requested are utilized, in part, to cover some costs
that are often handled by TEFAP Administrative funds, such as
transportation, processing, packaging, sort, heating and refrigeration,
and distribution of gleaned and recovered food. Thus, state TEFAP
should not need additional funds--other than any funds they might
receive from the $20 million--to benefit from this Initiative.
Question. Is it anticipated that the Gleaning Initiative will ever
supplant or reduce the level of funding needed for USDA food assistance
programs?
Answer. No. The Food Recovery and Gleaning Initiative is intended
as a cost-effective supplement to, not a replacement for, existing
Federal nutrition assistance programs. While USDA firmly believes that
the bedrock Federal nutrition assistance programs, such as Food Stamps,
WIC, and the National School Lunch and Breakfast programs, will
continue to be the first line of defense for Americans facing hunger.
There is so much potential for gleaned and recovered food to provide
nutritious additions to the diets of millions of low-income Americans.
We see a terrific opportunity that we should capitalize on. We expect
this relatively small investment to make a big difference in food
recoveries and improve nutritional intakes of the needy far beyond its
modest cost. Recovered food, like TEFAP food, helps needy families
through temporary hard times, supplementing Food Stamps for some, and
providing necessary sustenance on an occasional basis for others.
food program administration
studies and evaluations
Question. The fiscal year 1998 Appropriations Act transferred the
studies and evaluations activities of the Food and Nutrition Service to
the Economic Research Service (ERS). The request for fiscal year 1999
would return them as prior to fiscal year 1998.
What has been the effect of not having these programs housed with
the Food and Nutrition Service?
Answer. It is too soon to tell. Food and Nutrition Service (FNS)
provided Economic Research Service (ERS) with a detailed description of
FNS' information needs. They are now in the final stages of preparing a
plan of action. Indications are that they will initiate research on
many, but not all, of our priority information needs. It is also likely
that ERS will pursue some lines of inquiry that are of lesser
importance and relevance to the FNS.
It is also too soon to tell whether the implementation of the
research will remain practical and relevant to FNS program operations
and policy development. When study funding and authority were located
with FNS we were able to make mid-course adjustments quickly so that
studies were able to reflect current FNS priorities while the effect on
study budgets was minor. While the need to coordinate across agencies
is a challenge, we expect to work closely with ERS to achieve the best
results possible.
Question. How many studies or evaluations have been conducted by
ERS?
Answer. Economic Research Service (ERS) has not had time to
complete any studies or evaluations funded in fiscal year 1998. On
January 29, 1998 the General Accounting Office (GAO) released a report
listing food assistance-related research projects conducted by the Food
and Nutrition Service (FNS) and ERS during the past 3 fiscal years
(``Food Assistance: Information on USDA's Research Activities,'' GAO/
RCED-98-56R). After meeting with FNS and ERS officials to discuss their
research activities during this period, the GAO identified 23 nutrition
and food assistance projects conducted by ERS during the past 3 fiscal
years.
Question. How many studies or evaluations did the Food and
Nutrition Service conduct in fiscal year 1997?
Answer. The Food and Nutrition Service (FNS) started 9 studies
during fiscal year 1997. On October 1, 1997 FNS had a total of 57
ongoing and new research projects underway.
Question. Please explain your reasons for returning these programs
to the Food and Nutrition Service.
Answer. The best place to house research responsibilities for food
assistance programs is with the agency, the Food and Nutrition Service
(FNS), that administers the programs. It is the proximity of research,
program, and policy staff that ensures a research program that is
practical and relevant to program operations and policy development.
Housing the research function within FNS achieves the critical balance
between independence and effective communication with the programs
served, taking advantage of FNS' ongoing, operational relationship with
State and local administrative agencies and other related Federal
agencies.
In addition, the range of issues surrounding FNS programs is very
broad. They demand techniques that go beyond typical economic analyses
if we are to reliably address the concerns of Congress and States. We
are often required to initiate new nationally representative data
collection efforts as well as complex demonstration activities (such as
those that established the viability of Electronic Benefit Transfer).
While the Economic Research Service (ERS) is a capable research
organization, the expertise to administer such activities has been
developed over the years in FNS.
FNS has managed one of the strongest applied policy research
programs in all of government with a proven track record of conducting
research relevant to program needs. The time it would take to replicate
this in ERS seems a poor use of government resources. Moreover, efforts
to coordinate between ERS and FNS and its program cooperators seems to
introduce an unnecessary complexity into USDA operational procedures.
funding levels
Question. The budget request includes an increase in Food Program
Administration funding over the fiscal year 1998 amount. In fiscal year
1998, an increase was provided above fiscal year 1997 after having been
kept level for several years.
What additional activities in Food Program Administration did the
increase in fiscal year 1998 provide?
Answer. The fiscal year 1998 appropriation provided an additional
$1,591,000 for the Food Program Administration account above fiscal
year 1997 levels. This increase was designated for funding 50 percent
of the combined anticipated fiscal year 1998 pay raise and the
annualization of the fiscal year 1997 pay raise.
Even with the $1.6 million increase, the agency was forced to
further reduce staff by 27 staff years to cover the remaining 50
percent of the pay raise. The Food and Nutrition Service (FNS) cannot
sustain additional cutbacks in staff without serious impediment to its
mission. For example, activities that ensure program integrity, such as
payment accuracy, store investigations, and on-site reviews, are labor-
intensive, require a great deal of staff attention and travel funding,
and are critical to our agency's mission in both the Food Stamp and
Special Nutrition Programs. Keeping error rates low, which saves the
government millions of dollars, can only be accomplished with staff
attention. Changing program needs and new legislation have imposed
significant, new, and ongoing administrative responsibilities at the
same time that the agency has been called to improve the nutrition of
program recipients, strengthen program integrity, and implement EBT
nationwide. The agency also requires staff to take advantage of the new
data analysis tools, EBT and new authorities in Welfare Reform that
have provided a tremendous opportunity to increase program integrity
among food stamp retailers.
The budget request is necessary to maintain staffing levels. It is
imperative that FNS preserve a steady work force to ensure adequate
oversight for fiscal and program integrity, reduce fraud and abuse,
keep pace with changing legislation and program needs, progress towards
improving the nutrition of program recipients, and still accomplish its
mission.
Question. What other activities would you perform if the fiscal
year 1999 request was provided?
Answer. The request budget increase of $4,150,000 will provide
support for the Food and Nutrition Service (FNS) food assistance
programs.
After providing for mandatory personnel costs, such as the pay
raise, the requested increase will allow the agency to implement
several important initiatives. FNS will implement an agency-wide Civil
Rights Program Complaint Prevention Program, manage the agency's
diversity effort, and fund reasonable accommodations for disabled
individuals. FNS will also be able to support the publication of the
Dietary Guidelines for Americans. With a very modest request of $1.45
million for the Program and Financial Integrity Advancement Initiative,
the agency can work towards improving integrity in both the program and
financial areas. These areas are essential to preserving billions of
taxpayer dollars and have been under increased scrutiny from both the
General Accounting Office and the Office of Inspector General. The
focus on program integrity would concentrate on meal claiming and
participant eligibility in both the Child and Adult Care Food Program
and the National School Lunch Program; improved integrity of the Food
Stamp Quality Control System; and vendor management and strengthening
eligibility determination procedures within the Women, Infants and
Children Program. Funding for financial integrity will allow the agency
to enhance information and financial systems, as well as program
oversight of State agencies. FNS would perform reviews of State
agencies to prevent improper Federal charging and claims for
reimbursement; examine expenditure validation; oversee special program
activities; ensure consistent and efficient implementation of program
policy; and train State agency personnel.
Subcommittee Recess
Senator Cochran. This concludes today's hearing, and I
appreciate very much the cooperation of all witnesses.
The next hearing we will have will be on Tuesday, March 17,
at 10:30 a.m. in this room, 138 of the Dirksen Senate Office
Building.
We will hear from the Department witnesses on the budget
request for the food safety, marketing, and regulatory programs
of the Department of Agriculture.
Until then, we stand in recess.
[Whereupon, at 11:16 a.m., Tuesday, March 10, the
subcommittee was recessed, to reconvene at 11:22 a.m., Tuesday,
March 17.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, MARCH 17, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 11:22 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran and Bumpers.
DEPARTMENT OF AGRICULTURE
STATEMENTS OF:
CATHERINE WOTEKI, PH.D., R.D., UNDER SECRETARY, FOOD
SAFETY
MICHAEL DUNN, ASSISTANT SECRETARY OF AGRICULTURE, MARKETING AND
REGULATORY PROGRAMS
ACCOMPANIED BY DENNIS KAPLAN, BUDGET OFFICER
Food Safety and Inspection Service
STATEMENT OF THOMAS J. BILLY, ADMINISTRATOR
Animal and Plant Health Inspection Service
STATEMENT OF TERRY L. MEDLEY, ADMINISTRATOR
Agricultural Marketing Service
STATEMENT OF ENRIQUE FIGUEROA, ADMINISTRATOR
Grain Inspection, Packers and Stockyards Administration
STATEMENT OF JAMES R. BAKER, ADMINISTRATOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
I apologize to all of our witnesses and those who are here
for the subcommittee hearing about our conflict this morning
with the markup of the supplemental appropriations bill which
we have undertaken to address.
We have statements from all of our witnesses, and I am very
pleased with your attendance at our hearing and the furnishing
of the statements for our review.
Our hearing focuses specifically this morning on the
request submitted by the President for funding of programs and
activities of the Department of Agriculture's Food Safety and
Inspection Service and Marketing and Regulatory Programs. We
are pleased that Under Secretary for the Food Safety and
Inspection Service, Catherine Woteki, and the Assistant
Secretary for Marketing and Regulatory Programs, Michael Dunn,
are here to lead our discussion of this budget request. There
are others who accompany them. We appreciate the attendance of
all witnesses.
Because we have the statements, we will print them in the
record. I have questions which I will submit for your attention
and review and timely response. We will print that all in the
record, but because of the shortage of time and the
encroachment on our schedule of the full committee's
activities, we will not undertake a full discussion of all of
these issues. I hope you agree that this is appropriate. There
are other things on the schedule later this morning that
require witnesses' attention and also Senators'.
Senator Bumpers, the ranking minority member of the
subcommittee, sends his regrets. He is still at the full
committee markup. I escaped so I could come here and give this
subject our attention for the time that we do have available.
User Fee Proposal
So, I am going to stop talking except to make one
observation about the budget submission, and that is my very
serious disappointment with the continued insistence by the
administration to submit a budget request for activities under
the jurisdiction of these witnesses and assume that Congress is
going to enact massive new user fees to fund the budget
request.
Just to give you an example of the seriousness of this
situation as it affects the budget of the Food Safety and
Inspection Service, the budget request is for $150 million.
That is $440 million below the current fiscal year appropriated
level. When you look at the other sections of the bill, for
example, the Agriculture Marketing Service, or Grain
Inspection, Packers and Stockyards Administration, we have a
$31 million shortfall in the budget for those activities
because of the proposal from the administration assuming that
user fees will be enacted to recover those needed funds, to
operate the programs, to do the things that are required by law
under the statutes by these agencies.
So, if you add all that together, what you have got here is
a budget request that is over $600 million short of the
necessary level to do the work required by these agencies.
We start out in our appropriations process without the
authorizing legislation even being proposed by the
administration, and we know it is not going to be enacted. It
has been proposed in the past and has not been enacted, but it
is proposed again with a straight face that this is a
legitimate budget process. Of course, it is a disgrace to put
the committee in that kind of position at the outset.
What if the committee just said, OK, we will appropriate
the request submitted by the President for these activities and
we presume the administration will present legislation to
correct the shortfall and lobby the Congress effectively
between now and the beginning of the fiscal year to enact the
legislation, impose the user fees on whomever and at whatever
cost to pay these fees and expenses for these activities? That
is one option. This is the most irresponsible option and we
will not do that.
So, we will take from other programs either in the
administration's budget request and provide funds from those
other programs or come up with funds from programs that other
members of the committee might suggest that we cut to provide
the funds needed here.
These are important areas. Food safety is something that is
important to every American citizen, not just those who are in
the business of processing meat and poultry, marketing those
products or growing those products. It is important to
everybody, and we are not going to put in jeopardy the lives
and the safety of American citizens by being irresponsible with
the way we deal with this challenge.
But having said that, I am going to stop and let the
witnesses make whatever comments they would like to make about
the subject at issue and make whatever comments you think would
be helpful to the committee as we approach this interesting
challenge.
Prepared Statements
We have prepared statements from Senators Bumpers and Burns
which will be made part of the hearing record. Shall we start
with Ms. Woteki?
[The statements follow:]
Prepared Statement of Senator Bumpers
I would like to thank Secretary Woteki and Secretary Dunn for
appearing before our subcommittee. I also want to extend a welcome to
the other USDA officials here today representing the various agency
missions under the larger umbrella of food safety, marketing, and
regulatory functions. I would also be remiss if I did not give special
recognition to fellow Arkansan, Jim Baker, who is with us today as head
of the Grain Inspection, Packers and Stockyards Administration (GIPSA).
Welcome to you all.
Last week we heard from the USDA agencies charged with protecting
our people from the tragedy of hunger. Their budget request, by the
represents the single largest segment of this subcommittee's annual
appropriations bill. However, unless the food they make available by
their efforts is safe, their entire mission fails as do those of us
all. Ensuring a safe food supply for the American people is one of the
most important responsibilities of the federal government and of this
subcommittee.
Our commitment to food safety has come a long way since that day,
almost a century ago, when President Teddy Roosevelt read Sinclair
Lewis' description of food processing and reportedly threw his
breakfast out a White House window. Along with our commitment has come
technology and through the combination of these two driving forces we
are able to maintain strong consumer confidence and the ability to lay
claim to the fact that the United States has the safest food supply in
the world.
In fact, we are now engaged in a new technological breakthrough in
the realm of food safety. For years, the primary tools of FSIS
inspectors were their very senses, literally. The system of food safety
inspection on which we have relied for decades, the organoleptic
system, is based on the simple perceptions of sight, smell and touch.
While tests based on these senses can reveal much, there is certainly
much that remains hidden. To replace this antiquated system we now have
in place the Hazard Analysis at Critical Control Points (HACCP) system
which, finally, brings the arbiter of science to the task.
The HACCP system was implemented two months ago for the 300 largest
meat and poultry operations in the nation. Over the next two years, the
small and very small operations are to be brought into HACCP as well.
Once complete, the entire U.S. meat and poultry supply will reach
consumers only after being submitted through a process based on
scientific method and which should achieve the highest levels of safety
reasonably attainable.
That is not to say that this new system will not be wrought with a
series of growing pains as the old system is replaced by the new. I
and, I am sure, many of my colleagues have already heard of problems
with the new system and the costs associated with them. I am told that
if these problems in program administration are not worked out before
HACCP is mandated for the smaller companies, there are many small firms
that won't survive the business disruptions that will befall them. I
fully expect Secretary Woteki, Mr. Billy, and others associated with
implementing HACCP to see the process is handled properly and fairly.
In my view, the key to the new system is sound science. The
capability of HACCP in protecting our food supply is only as good as
the science used in its process. As highly as I expect USDA to ensure
fairness in administering HACCP, I am adamant about the use of the best
science available in the program's implementation. Not long ago, a food
safety issue was raised in my state and I quickly learned that various
federal and state agencies all had different views on what had been and
would be considered safe levels for human consumption. That is
unacceptable. By finally bringing all parties to the table we were able
to achieve a consensus, but science should be the final arbiter when it
comes to food safety and we must settle for only the best.
Currently, the Senate is considering regulatory reform legislation.
I intend to closely examine that bill as it comes to the Senate floor
and I may offer an amendment better to ensure that regulatory actions
related to science are tied to sound science. For example, if we were
to ask the regulated community and the regulators to comment on the
science now employed in the HACCP system, we might very well get two
different views. If that is the case, it may be appropriate to assign
certain decisions to a more objective analysis. A story in the
Washington Post last week noted that a recent EPA brochure on
``Pesticides on Food: Consumer Information'' was considered
``alarmist'' by the grocery industry and ``milquetoast'' by
environmental and consumer groups. There may be times when taking
action that pleases no one may be evidence you have done your best.
When it comes to science, we must always ask why not the best?
In previous hearings, this subcommittee has made pretty clear it's
collective views on the various user fee assumptions in the fiscal year
1999 budget. By far, the largest single user fee proposal is that of
FSIS to cover the costs of all inspection activities, a proposal that
goes beyond any similar proposal previously submitted. It has been
suggested that opposition to FSIS users fees is some indication of
caving to the interests of the meat and poultry companies. I wish to
set the record straight.
Regardless of the economic importance of the meat and poultry
industries to a state like mine, which is substantial, there are issues
tied to the user fee proposals that go far beyond the imposition of
higher production costs for the hundreds of companies around the
country. The programs of FSIS maintain the basic protections of food
safety for all Americans. Although the President's budget this year
seems lush with various user fee proposals, I don't see anyone rushing
forward to propose user fees for basic police or fire protection. There
are certain functions of government that should be borne by the public
they serve. Food safety is and must remain at the top of that list.
That is a matter of policy that must always transcend economics.
But if we want to talk about the economics of the user fee
proposal, lets at least be honest about it. With all due respect to
USDA, I find the analogy of the user fees to an almost unmeasurable
price increase at the consumer level disingenuous. The meat and poultry
industries are highly competitive, especially at the consumer level. To
pretend that the companies are going to pass on the cost of user fees
to consumers is ludicrous. The meat case in your local grocery store is
the last place you are going to pay for FSIS user fees. Therefore,
let's stop pretending that the ``public'' is still going to pay for the
costs of inspection.
It is equally unrealistic to assume that the companies themselves
are going to absorb these costs as long as they have someone else on
which to pass them. Enter the producer. Of all federal agencies, USDA
should be familiar with the long-held view that the agricultural
producer is the one member of our economy who always buys his inputs at
retail and sells his products at wholesale. Due to the nature and
structure of the farm economy, anyone who is honest will quickly
acknowledge that this user fee proposal will not be borne by the
consumer or the companies. It will be borne, as always, by the sector
of the economy least capable of absorbing it, the farmer. In fact, I
have been told that some poultry grower contracts contain provisions
that will adjust downward the price paid to the grower in the event
these fees are enacted. I am not willing to tell the beef producer or
contract poultry grower in my state to brace themselves for another
economic hit in the name of ``public policy''.
As our marketplaces become more and more ``global'', we must be
ever vigilant about the health and safety of the products that cross
our borders. In my own state and across much of the South, the Imported
Fire Ant is showing us how damaging newly introduced species to this
country can become. In fact, the Fire Ant came to this country many
years before the age of supersonic jets that can now carry bacteria,
disease, and pests across the planet in a matter of hours.
The Fire Ant is only one example. The people of Hawaii are
constantly on guard against the introduction of Brown Tree Snakes which
have already, by accident, taken over the island of Guam. Imported, as
well as native, pests and diseases continue to be a threat to our
agricultural base as well as human health and safety.
We have seen some success. Brucelosis in cattle is nearly
eradicated from the country. In many states, the boll weevil has been
eliminated. But even with these goals in sight, we must stay vigilant.
Until a disease is truly eliminated or a pest is eradicated completely,
we remain at risk from reintroduction or resurgence. We can easily
recognize the economic and public health benefits of these efforts and
they must continue.
Just as our markets must be safe from pestilence and disease, they
must also be made fair and equitable. As suggested in my earlier
comment regarding user fees and the producer, the American farmer does
not always fit into the classic model of American economics. The
American consumer profits from the affordability and availability of a
variety of foods that would not even be imaginable a generation ago.
There is much at stake for the producer and consumer alike. Whether we
ever stop to recognize it, every one of us fits into at least one of
those two categories.
There are some items with the budget proposal of the agencies
before us with which I find strong disagreement. However, I believe our
goals are the same. I look forward to the testimony today and to engage
in a productive dialogue in which all views can be aired in order for
us to proceed with the task before us.
______
Prepared Statement of Senator Burns
Thank you, Mr. Chairman. I appreciate you calling this hearing this
morning. As we look at the budget for the Department of Agriculture I
see this as one of the more important hearings on the calendar. Both
the Food Safety Inspection Service and the Agencies within Marketing
and Regulatory Programs represented here today have a great deal to do
with the way the people in the state of Montana go about their daily
business.
As with most of the agencies which we have seen come before this
committee, I am again concerned with the way that these agencies
budgeting for the coming fiscal year. We once again see additional fees
tacked onto services provided by these agencies in the form of user
fees. Fees which this committee, has in the past, and appears will
again this year look unfavorably upon.
As I look upon this budget for this year, I am concerned with the
way the funds have once more been directed by the Department of
Agriculture. I see funding cuts in areas where we have restored funds
in past years. I also see programs continually proposed which this
committee and Congress have told the Department that they are not
inclined to agree with the Administration.
Last year, Assistant Secretary Dunn came before this committee with
a proposal to move to a cooperative arrangement in states with large
predator problems to pay an additional share of the costs associated
with predator control. States like Montana where a large portion of the
predator problem is placed on the state by actions of the Federal
government. Unfortunately we see this proposal brought before the
Committee once again.
In the area of Wildlife Services, we continue to see large cuts
made in the budget. Yet in many of our rural states we see the
population of predators on the rise. I have heard time and again, that
the people who receive the services of the agencies involved in this
program should pay additional funds to take care of the problem of
predator control. A problem which has been placed on them by this
government.
I have a number of producers of both sheep and cattle who have told
me of the losses they experience to both coyotes and wolves in Montana.
Yet under your plan they would be forced to expend additional dollars
to protect their private property from animals forced on them by this
government. I have also been informed that the Wildlife Services Agency
in Montana will effectively be out of money for predator control before
the end of the current fiscal year. Well wolves and coyotes don't
understand high finance of this particular nature, and they will
continue to feed on the livestock in the field.
Mr. Dunn, simple math will tell you that as wolf populations
increase, damage to livestock will also increase. Wolves killed 70 head
of livestock (both sheep and cattle) in Montana, Idaho and Wyoming in
1996. By 1997, livestock kills increased to 140. Doesn't seem like a
lot, unless of course you own one or two of those animals. Wildlife
Services has $200,000 available in the fiscal year 1998 for wolf
management, and I understand, anticipates a shortfall of about $70,000.
In fiscal year 1999, $535,000 will be needed to address the escalating
cost of livestock losses, a shortfall of over $200,000 from current
program levels. With math like that it is not difficult to understand
why the people on the ground don't trust the management of agencies
within not only the Department of Agriculture but also the Department
of the Interior.
This past year, the Animal Plant Health Inspection Service (APHIS),
developed certain protocols to provide for additional trade in
livestock with our neighbors to the north in Canada. However, they set
forth their protocols before our neighbors did so and now we are faced
with a program that shows little potential for future development. This
does not assist our producers in meeting the needs that they have on
the ground, or that were explained to them in the development of this
trade process.
I have to tell you also Mr. Secretary, that I am more than a little
concerned about what is happening with the funds that this Committee
provided for the construction and operation of a bison quarantine
facility in Montana last year. I have heard little or nothing about
what has been done with the state to facilitate the construction and
operation of the pens in Montana. I will be interested in hearing what
has been going on and what APHIS plans for this facility.
On the ground in states like Montana, our producers are looking for
some means of finding what the market is like on fatten cattle.
Producers have come to you for a number of years providing options for
you to choose, yet today we have no more of an idea of what is
happening in the market than we did several years ago. Proposals have
been put forward, and this past month the National Cattlemen's Beef
Association supported a resolution on providing transparency in the
cattle market. I will be interested in hearing what is being done to
address these concerns.
On the issue of Food Safety. Well I guess we had better start
spending our funds in that area of concern. It appears that this
Administration is driving this country on a course where we will be
required to purchase our food and fiber from foreign countries. I just
don't know if the rest of the world takes as much care and concern in
the commodities that they produce, as the American farmer and rancher
does in producing the same commodities here in the United States.
As a result I joined with several Senators in introducing a bill
that would require that all meat be labeled as to the Country of
Origin. After much debate within the livestock industry and with other
industries associated with meat sales we have developed another
proposal which we will unveil soon. However, throughout this entire
process I have heard nothing from the Department on what their position
on this would be.
Overall, Mr. Chairman, I am supportive of the work and the mission
of the Agencies before the Committee today. I am a vocal supporter of
the work that APHIS provides. I will commit myself to working with both
you and the ranking member of this Committee to find a way to provide
the funding necessary for these agencies.
Thank you, Mr. Chairman.
Statement of Catherine Woteki
Dr. Woteki. Thank you, Mr. Chairman. I appreciate your
introducing my statement and Mr. Billy's statement into the
record. What I would propose to do is to just very briefly
summarize some key information relevant to some of the points
that you have just made.
Mr. Billy is sitting to my immediate left and to his left
is Mr. Dennis Kaplan from our Office of Budget and Policy
Analysis.
Fiscal Year 1999 Budget Request
The budget that we have proposed for fiscal year 1999 is a
program level of $709 million, which reflects a net increase of
$34 million over our 1998 current estimate.
We are proposing in fiscal year 1999 to conduct our meat
and poultry and egg inspection activities using our current
level of staffing.
The programmatic increases that are contained in our
request would continue the implementation of our new regulatory
approach based on hazard analysis and critical control points.
It also contains funds that would be used for a variety of
different purposes under the President's interagency food
safety initiative.
Collectively these increases would be used to continue
implementation of HACCP, to extend HACCP training to the egg
processing inspectors, to help to acquire some additional tools
that would improve inspectors' ability to evaluate the product
they are inspecting and also to facilitate the redeployment of
inspectors to strengthen our compliance efforts.
Food Safety Initiative
Overall the President's budget includes a $101 million
request for an interagency food safety initiative. Of this sum,
$11 million would come to the Food Safety and Inspection
Service. The initiative identifies a number of very high
priority food safety activities that provide a very integrated
approach to reducing foodborne illnesses. In addition, these
funds would help FSIS to facilitate the transformation of State
programs to hazard analysis and critical control point systems
by fiscal year 2000.
Funds also requested under the President's food safety
initiative would focus on expanding consumer education, helping
to develop voluntary measures to reduce the risk of pathogenic
contamination that could occur on the farm or on the ranch.
User Fee Proposal
In the near future, the administration will be transmitting
to you, to the Congress, the legislation necessary to support
our fiscal year 1999 budget proposal to recover the full cost
of the Federal meat, poultry, and egg products inspection
through user fees. We do believe that the user fee proposal is
important to ensure that we have sufficient resources to
provide for the mandatory inspection services needed to meet
the increasing demand from industry. The proposal will have an
overall effect on prices, to the extent that we have been able
to estimate, that will amount to less than 1 cent per pound of
meat, poultry, and egg products. We also believe that
implementation of a user fee should be designed and must be
designed to be fair and equitable to promote accountability and
efficiency and also to minimize the impact on the competitive
balance among the affected industries.
Approximately $150 million of appropriated funds are
requested to convert the Federal program to user fees and also
to continue our obligations to States to help them in
maintaining their State inspection programs.
We thank you for the opportunity to appear before you and I
would also like in closing to thank you and the committee for
your favorable actions this year on our budget request.
Prepared Statements
Senator Cochran. Thank you, Dr. Woteki. Mr. Billy and Mr.
Kaplan, we appreciate your presence as well. We will insert the
complete statements of Dr. Woteki and Mr. Billy in the hearing
record.
[The statements follow:]
Prepared Statement of Catherine E. Woteki
Mr. Chairman and Members of the Subcommittee, I am pleased to
appear before you today to discuss the President's fiscal year 1999
budget for the Food Safety and Inspection Service. With me are Deputy
Under Secretary for Food Safety Caren Wilcox, FSIS Administrator Thomas
Billy, USDA Budget Director Stephen Dewhurst, and representatives from
the FSIS budget office. Before I begin, I would like to thank you for
looking favorably on our fiscal year 1998 budget request. This funding
has helped us make progress in fulfilling our Federal responsibilities
of maintaining a safe food supply while we make improvements in the
inspection program.
broader food safety challenges
I would like to start by commenting briefly on our broad food
safety agenda. As Congress pointed out in report language that
accompanied the Department of Agriculture Reorganization Act of 1994,
one of USDA's basic missions is to ensure the safety and quality of the
Nation's food supply. The increasing importance of food safety issues
to the future of agriculture led Congress to create this separate
Subcabinet office to lead the effort to reform our food safety
programs. It is my goal that the Under Secretary's office focus on
long-term planning and policy development, on our legislative program
required to ensure food safety, on oversight of the Food Safety and
Inspection Service, and on providing general assistance and advice
regarding food safety issues, as requested by the Secretary.
My office also has broader responsibilities related to our critical
mission, and the inspection of meat, poultry and egg products. One
example of our involvement in food safety activities that provide
support to our inspection activities is our leadership in the
international Codex Alimentarius Commission. Coordinating the United
States' position on international food safety issues has required that
my office develop expertise across agency and commodity lines. Although
we also must take into account trade issues and the international
community's interest in those trade issues, these issues are secondary
to Codex's public health orientation and mission.
Secretary Glickman has also asked me to assume a leadership and
coordination role consistent with our basic mission in such food safety
areas as the President's Food Safety Initiative, which, among other
things, includes the President's directive to develop and carry out a
plan to ensure the safety of domestic and imported fruits and
vegetables. We are working closely on these efforts with the Department
of Health and Human Services, the Environmental Protection Agency, and
other USDA agencies.
farm to table strategy
Our central responsibility of safeguarding the nation's meat,
poultry, and egg supply provides us with a broad perspective on the
problem of ensuring food safety. We recognize that not all
contamination of meat and poultry and egg products occurs in the
slaughter and processing plants we regulate. It can occur during animal
production, during storage and transportation, and in distribution. It
can occur in the grocery store and in restaurants. And, of course, it
can occur in the home. This is the basis for our farm to table food
safety strategy.
As you know, the President's 1998 and 1999 Food Safety Initiative
embraces the farm to table philosophy of addressing food safety
problems. Increased funding for research on microbial pathogen
detection and prevention and agricultural production practices and for
education and training of food handlers at home and in the commercial
sector--as well as for surveillance, risk assessment, inspection, and
strategic planning--is essential to making further improvements in food
safety.
For example, while many consumers have a good foundation of food
safety knowledge, there are some persistent misconceptions as well as
confusion about specific food handling practices. Because we believe
education is key to changing risky behaviors, the Federal government
has used funds provided in fiscal year 1998 to launch the ``Fight BAC''
campaign to reduce the incidence of foodborne illness by educating
Americans about safe food handling practices. ``BAC,'' which is short
for bacteria, is a green, slimy-looking character, and the result of a
private-public partnership consisting of industry, consumer groups, and
government. The ``BAC'' character puts a face on foodborne bacteria,
which we believe will help Americans remember that they have the power
to control bacteria in their home kitchens. Because ``BAC'' is a
cartoon character, children are naturally attentive to him. We hope
that ``BAC'' will be a carrier of food safety messages to consumers at
a young age.
research
Because of our experience with meat, poultry and egg products, we
are positioned, I believe, to make recommendations on food safety
research priorities and to develop effective consumer and industry
education programs. Because FSIS is not a research agency, we must
reach out to research agencies within the Federal government and to the
private sector to meet our research needs. For that reason, FSIS has
developed a Food Safety Research Agenda as one means of communicating
with those outside of FSIS about our recommended priorities in food
safety research.
inspection responsibilities
I would like to talk now about our critical inspection
responsibilities. I want to emphasize my commitment to fulfilling our
basic mission--ensuring the safety of the nation's meat, poultry, and
egg supply. Protection of the public health is our mandate, and that is
what guides all that we do.
Of course, our primary vehicle for meeting our responsibilities is
our inplant inspection and oversight of the products we regulate. While
no country in the world can boast of an absolutely safe food supply,
I--along with many others--believe the United States has the world's
safest food, including meat, poultry, and egg products.
importance of haccp implementation
I am pleased to say that we have begun the first phase of our new
meat and poultry inspection system. There are some 300 plants that were
required to implement HACCP as of January 26 of this year. These plants
account for about 75 percent of the meat and poultry slaughtered in the
United States. I am also pleased to report that HACCP implementation in
these plants is going well. However, HACCP implementation is an ongoing
process that will need fine tuning in the weeks and months ahead. This
is to be expected with such a complex change. FSIS has already
requested some changes from a few plants, and all of these companies
have responded positively and have adjusted their HACCP plans to
prevent future problems before they occur. I can assure you that the
Agency is committed to working out any problems as they arise and to a
common sense approach to problem solving.
Over the next two years, we will continue to work with all plants
to make HACCP as effective as possible. We recognize that
implementation of HACCP by smaller plants presents its own set of
unique preparation problems. However, the Agency is ready. For example,
approximately 380 small plants have participated in our HACCP small
plant demonstration workshops. We also have available, technical
guidance and materials consisting of software, videos, and written
materials designed to assist the small plant owner or operator with
developing their own HACCP plans. We are committed to improving food
safety through HACCP. That commitment and follow-through will continue.
other items of note
Government Performance and Results Act
The strategic plan we have developed is consistent with the
Government Performance and Results Act, which calls on all Federal
agencies and departments to coordinate their activities to be more
effective, efficient and to avoid duplication. To this end, FSIS has
communicated with agencies, both within and external to USDA, about
common issues and interests in food safety. Our goal, as stated in our
``Strategic Plan 1997-2002,'' is to enhance public health by minimizing
foodborne illness from meat, poultry, and egg products. Our goal is a
25 percent reduction in the number of foodborne illnesses associated
with meat, poultry, and egg products by the year 2000. This goal will
be achieved by accomplishing all the daily tasks necessary to satisfy
objectives in pathogen reduction, implementing the President's Food
Safety Initiative, implementing our farm to table food safety strategy,
fostering Agency cultural change, and cooperating with international
groups on food safety matters.
Year 2000
FSIS, as with others in both the public and private sectors, is
faced with a major technical challenge known as the ``Year 2000
Problem.'' This refers to the possibility some computer systems in
government and business may malfunction or cease to function as the
year changes from 1999 to 2000. FSIS began working in 1997 to ensure
that its systems are prepared to support the inspection program
successfully into the year 2000 and beyond. For example, FSIS has
designated eight of its automated information systems as mission
critical. FSIS is making these systems ``Year 2000 Compliant'' using
existing resources. A project plan is in place to carry out four major
phases--assessment, renovation, validation and implementation--covering
the period 1997 through 1999. We expect to finish all systems
validation in 1998, and will complete implementation of systems by
March 1999.
budget highlights
For 1999, the budget proposes a program level of $709 million, a
net increase of $34 million over the 1998 current estimate. In 1999,
FSIS will continue the process of transforming the inspection process
with current staffing levels. In fiscal year 1999, the budget includes
programmatic increases to build on the investments begun with the
implementation of the Pathogen Reduction and HACCP systems rule and the
President's Interagency Food Safety Initiative. Approximately $2
million is requested to improve the Federal inspection system by
providing HACCP training to egg processing inspectors, acquiring tools
that will improve an inspector's ability to evaluate product, and
facilitating the redeployment of inspectors to strengthen compliance
efforts.
The President's 1999 budget includes an increase of $101 million
for the Interagency Food Safety Initiative, which includes $11 million
for FSIS. The initiative identifies a number of high priority food
safety activities that provide an integrated approach to reducing
foodborne illness. With the additional funds, FSIS will facilitate the
transformation of State programs to Hazard Analysis and Critical
Control Point systems by fiscal year 2000, work cooperatively with
other Federal agencies to expand consumer education, and develop
voluntary measures to reduce the risk of pathogenic contamination of
animals on the farm. These new activities would build on the successes
and fill the gaps identified in the President's 1998 Food Safety
Initiative.
In the near future, the Administration will be transmitting to
Congress the legislation necessary to support the 1999 budget proposal
to recover the full cost of providing Federal meat, poultry, and egg
products inspection through user fees. Requiring the payment of user
fees for Federal inspection services would ensure that sufficient
resources are available to provide the mandatory inspection services
needed to meet increasing industry demand. The overall impact on prices
as a result of these fees has been estimated to be less than one cent
per pound of meat, poultry, and egg products production. The
implementation of the user fee authority would be designed to be fair
and equitable, promote accountability and efficiency, and minimize the
impact on the competitive balance among affected industries.
Approximately $150 million in appropriated funds are requested to
convert the Federal program to user fees and for maintaining State
inspection programs.
conclusion
These are a few of the issues I wanted to bring to your attention
today. I believe we are on the right path to an even safer food supply.
We have a good framework in place for making significant food safety
improvements. I look forward to working with you to build the best food
safety system we can.
Thank you again for the opportunity to appear here and discuss our
goals to enhance food safety and the progress we have made. I will be
happy to answer any questions you or other Members of the Subcommittee
may have.
______
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 1999
budget request for the Food Safety and Inspection Service, FSIS.
Having worked to promote food safety for most of my career in
public service, I recognize the importance of working toward an
essential and clearly defined goal. Our goal in food safety is to
achieve the greatest possible reduction in the risk of foodborne
illness associated with the consumption of meat, poultry, and egg
products, consistent with available science and technology. Toward that
end, we are applying resources in a prudent manner to make fundamental
changes in inspection and build on our partnerships with other Federal
agencies, the States, industry, academia, our employee organizations,
consumer groups, and other interested segments of the public.
These are exciting times in food safety and it is because of your
support that we are making real progress in improving food safety. Now,
I would like to tell you how we are fulfilling our responsibilities and
about our initiatives for better ensuring the safety of meat, poultry,
and egg products.
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 6,000 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 fiscal year 1997, our domestic inspectors examined approximately
72.9 billion pounds, dressed weight, of meat and poultry and 3.2
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:
oversight and reinspection. In order to ensure that exporting countries
have government controls equivalent to those of the United States, FSIS
conducts a rigorous review of such before they can become eligible to
export product to the United States. Additionally, periodic in-country
reviews, including on-site plant audits, are carried out to maintain
such eligibility.
Reinspection of meat and poultry products that enter the United
States is based on statistical sampling and verifies that the country's
inspection system is working. Approximately 70 import inspectors
covering some 124 active import inspection locations carry out this
reinspection. In 1997, FSIS passed 2.5 billion pounds of imported meat
and poultry products for entry into the U.S.
Another part of the FSIS food safety program involves our
laboratories, which provide scientific and technical support to
inspection personnel through laboratory testing for microbiological
contamination, chemical and antibiotic residues, 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 1997,
over 141,000 residue, chemical and microbiological analyses were
performed on meat, poultry, and egg product samples by federally
operated laboratories.
FSIS also 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 1997, 26,142 compliance reviews were conducted. As a
result of these reviews and other compliance activities, more than 44
million pounds of meat, poultry, and egg products were detained for
noncompliance with the respective laws. Fifty recalls were conducted
involving almost 27.9 million pounds of product. In addition, 22
convictions were obtained against firms and individuals for violations
of the meat and poultry inspection laws.
changes underway in fsis
In 1997, FSIS began implementing a comprehensive food safety
strategy. This included implementation of the requirements for
sanitation SOP's and microbial testing for generic E. coli at
slaughter. In addition, we began implementation of a major agency
reorganization which will be completed by fiscal year 1999. I'd like to
discuss these key changes further and changes under our food safety
strategy that continue in 1998 and are planned for 1999.
pathogen reduction and haccp
On July 25, 1996, FSIS published the final rule on Pathogen
Reduction and the Hazard Analysis and Critical Control Point system,
known as HACCP. This rule addresses the limitations of the traditional
organoleptic inspection system in dealing adequately with the problem
of pathogenic microorganisms--harmful bacteria--on raw meat and poultry
products, which contribute significantly to foodborne illness in the
United States. HACCP's objective is to directly target and
systematically reduce harmful bacteria on raw products, as well as
other likely hazards, thereby reducing the risk of foodborne illness.
As required by the HACCP rule, on January 27, 1997, all plants had
to implement plant-specific Sanitation Standard Operating Procedures,
SSOP's, to ensure that they are meeting their responsibility for proper
sanitation of facilities, equipment, and operations. The written SSOP's
must describe the specific measures plant management will put in place
to prevent direct product contamination. Follow-up reviews indicate
that SSOP's are effective in the vast majority of plants; however, in
about 14 instances, we have had to move into an enforcement mode to
stimulate companies to correct their sanitation systems.
In addition, all slaughter plants began testing their products for
generic E. coli as an indicator of process control effectiveness for
preventing fecal contamination, the primary pathway for pathogenic
bacteria. Both of these measures were in preparation for full HACCP
implementation, which began January 26 of this year in federally
inspected large plants.
Overall, some 300 large plants have moved to improve the safety of
meat and poultry products by implementing their HACCP plans, which are
based on the seven principles established by the National Advisory
Committee on Microbiological Criteria for Foods. These HACCP plans are
designed to meet performance standards for Salmonella that went into
effect at the same time as the HACCP requirements.
From the very beginning of the process of developing the HACCP
rule, we have held frequent public meetings to receive input from our
constituencies and to provide assistance to plants required to
implement the provisions of the HACCP rule. Consistent with our
emphasis on communication and assistance, in December and January, we
held HACCP implementation meetings around the country to brief the
management of large plants on how the agency would conduct inspection
subsequent to the January 26 deadline. We found these meetings, held in
Washington, DC, Des Moines, Iowa, Denver, Colorado, and Memphis,
Tennessee, to be very useful in aiding a smooth transition to the new
regulations.
HACCP implementation will continue to be phased in according to
plant size. Large plants with 500 or more employees implemented their
plans on January 26. Small plants with 10 to 499 employees must have a
plan in place by January 25, 1999, and very small plants, with fewer
than 10 employees or annual sales of less than $2.5 million must have a
plan in place by January 25, 2000.
HACCP remains a work in progress that will need fine-tuning in the
weeks and months to come. This is to be expected with such a complex
change, and I assure you that we are committed to working out any
problems as they arise. In recognizing the special difficulties that
all plants, especially small plants, will face, we have initiated an
aggressive program to provide assistance to these plants. We are
providing technical assistance and recently held a round of meetings
targeted to the communication needs of small and very small plants.
FSIS district managers are on call 24 hours a day, 7 days a week, to
make rapid decisions and respond to emergencies. In addition, the
Technical Services Center is operating a HACCP Hotline with four lines
open between 6 a.m. and 6 p.m. Central Time, Monday through Friday, and
an electronic message and paging service 24 hours a day, seven days a
week. As a result of questions we have received regarding
implementation, we have published a number of documents in the Federal
Register clarifying certain aspects of the HACCP regulations, including
offering an option for early HACCP implementation, to small and very
small plants.
By January 25, 2000, all provisions of the final rule will be
implemented. The final rule sets an important framework for performing
our food safety mission, but it is not the culmination of our strategy
for change. We will continue pursuing our goal of reducing the risk of
foodborne illness and additional opportunities to improve the way we
carry out inspection activities, to promote both food safety and the
efficient use of resources.
Our nation's meat and poultry is far and away the safest and
highest quality in the world. However, the HACCP final rule assures
consistency between meat and poultry inspection across the country and
will help us move toward a seamless national food safety program. There
will be greater consistency in both Federal and State inspection, as
well, based on a common, consistent regulatory framework.
inspection changes
HACCP is permitting us to make improvements in the inspection
process and will permit us to redeploy some of our current in-plant
inspection work force to HACCP verification tasks, and to new tasks
outside of traditional in-plant settings in furtherance of our farm-to-
table strategy. Our budget request includes a proposal to increase
support for these efforts, especially for travel to multiple
destinations to perform monitoring and reviews.
We are making progress on addressing food safety risks to products
once they leave Federally inspected plants by working closely with
other government agencies, professional groups, academia, and industry.
At the transportation level, we are working with FDA to develop
guidelines covering the safety of foods during distribution. We are
placing particular emphasis on time and temperature control as a means
of minimizing the growth of pathogenic microorganisms. At the retail
level, we are working again with FDA and with State officials to ensure
the adoption of science-based standards and to foster HACCP-type
preventative approaches--largely through the Food Code process.
federal-state cooperation in food safety
In FSIS, we have a long history of working with State-administered
meat and poultry inspection programs, and we are now in the process of
taking steps to strengthen, and hopefully expand these programs. We
consider them an integral part of the national regulatory system for
ensuring the safety, quality, and accuracy of labeling of the Nation's
meat and poultry supply.
Describing the State programs as part of the national system is an
extremely important concept, because we cannot look at the Federal and
State programs as separate entities. On the contrary, they must be
considered as parts of a whole, and any initiatives we undertake must
be carried out with that perspective in mind. That is why we have
worked closely with the States throughout the rulemaking and
implementation process as a means of ensuring that the provisions in
the HACCP rule are appropriate for State, as well as Federal, plants.
This intergovernmental cooperation is the basis for our budget request
for special assistance with HACCP implementation in the State programs.
changes in the fsis organization
To help reach our strategic goal of reducing the risk of foodborne
illness, we began implementing a major reorganization of the agency in
1996, which was needed to optimize the management structure and
allocation of our resources in performing our regulatory
responsibilities. Originally, we expected the reorganization to be
fully implemented by fiscal year 1999, but we exceeded our own
expectations and much of the reorganization was completed in 1997. The
change in organizational structure was designed to make the best
possible use of agency resources so that FSIS could meet the future
food safety and consumer protection challenges. The reorganization is
based on a top-to-bottom review of the Agency's regulatory roles,
resource allocations, and organizational needs.
We have flattened and streamlined management structures both at
headquarters and in the field, recognizing that the Agency needs fewer
non-frontline staff. As we continue streamlining the organization, we
will continue to 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 have reduced the number of headquarters
units reporting to the Administrator by nearly half, from thirteen to
seven, eliminated one layer of management, and reduced the number of
supervisory positions. In fiscal year 1997, we reduced the number of
field management offices from 46 field offices to 18 district offices
and four field support offices. The 18 new district offices have
already demonstrated that they will make supervisory spans of control
more manageable and better balance the workload. In addition,
administrative services provided to field locations were consolidated
with the opening of the Financial Processing Center in Des Moines,
Iowa, and assumption of further personnel support in the existing
Personnel Operations Branch in Minneapolis, Minnesota.
A new Technical Services Center opened in Omaha, Nebraska, in June
1997. Center employees provide technical expertise and guidance to
inspection personnel on the interpretation, enforcement, and
application of domestic and import regulations, policies, and systems.
The Center is also available to industry and enables FSIS to provide
much quicker and more consistent technical assistance in inspection
across the country. An example of this assistance is the newly
operating HACCP Hotline that I mentioned earlier.
emphasis on public health in performance
Our strategic goal is to reduce to the greatest possible extent the
risk of foodborne illness associated with eating meat, poultry, and egg
products. In short, we want food to be safer so that fewer people will
get sick. As you know, the Government Performance and Results Act of
1993, known as GPRA, 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.
Within our Strategic Plan and Annual Performance Plan, our goal is
supported by six objectives, which incorporate strategies for enhancing
the public health by minimizing foodborne illness. These objectives are
to:
--Reduce pathogens on raw products by continuing the implementation
of the Pathogen Reduction/HACCP rule;
--Collaborate with other public health agencies and stakeholders to
implement the near term program objectives contained in the
President's National Food Safety Initiative;
--Develop a comprehensive strategy for promoting food safety from
farm-to-table;
--Continue the necessary cultural changes to support HACCP and HACCP
related food safety initiatives by training the work force to
carry out the re-defined regulatory procedures, and by ensuring
industry and State programs understand their new roles and
responsibilities;
--Assure HACCP equivalent systems for imported products; and
--Streamline and improve the effectiveness, efficiency, and diversity
of administrative and human resources support functions.
In order to obtain much needed baseline data on the incidence of
foodborne illness in the U.S. that is attributable to consumption of
meat, poultry, and egg products, FSIS began working with the Centers
for Disease Control and Prevention, CDC, and the FDA in 1995, to
monitor seven foodborne illness ``sentinel sites'' through the FoodNet
system. The sites include Northern California, Oregon, the Minneapolis/
St. Paul metropolitan area, the Atlanta metropolitan area, Connecticut,
several counties in upstate New York, and counties around Baltimore,
Maryland. The data from FoodNet will enable us 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. FoodNet
information will assist in reviewing the impact of HACCP programs and
will trigger changes, where appropriate, to prevent future outbreaks of
foodborne illness. This information is critical to improving the
overall performance of our food safety mission because it will
demonstrate the effectiveness of present and new strategies and greatly
assist efforts to reduce the risk of foodborne illness.
As you know, we were directed by you in the fiscal year 1998
Committee Report to report on the incidence of foodborne illness in
cooperation with CDC. Data for 1997 will be finalized by the end of
March, and we will be able to provide the report in April.
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 take the
necessary action to further reduce risks.
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 were well equipped to
fulfill our food safety responsibilities in the 1997 product recalls.
We demonstrated that we are able to address immediate public health
problems, as well as adjust our regulatory policies and procedures as
necessary.
president's national food safety initiative
The President's Food Safety Initiative is an integrated, multi-
agency plan for improving the safety of the Nation's food supply.
Building on the 1998 initiative, the FSIS budget proposal will support
efforts to reduce the risk of foodborne illness from the farm to the
table. Addressing the need for increased efforts to address food safety
on the farm, the initiative supports development of voluntary measures
that producers can utilize to reduce pathogenic contamination of
animals before they reach the slaughterhouse. In addition, to move
toward a seamless national food safety program, FSIS proposes to
increase the share of Federal funding to assist State programs with
HACCP implementation. Mindful of our responsibilities to consumers, we
also propose an expansion of food safety education. These proposals
will work in tandem with complementary proposals within USDA and in
other Federal programs to reduce the risk of foodborne illness.
regulatory reform
FSIS is making steady progress in reforming its existing
regulations and is delivering on the commitment we made in December
1995 when we described our regulatory reform strategy in an advanced
notice of proposed rulemaking. FSIS has already ended the prior
approval requirements for facility blueprints and equipment, and most
partial quality control programs through a final regulation that was
published in August 1997.
The Agency continues working to convert command and control
regulations into performance standards in an effort to achieve
consistency with the HACCP final rule. We have published a proposal to
change all of the detailed sanitation requirements into performance
standards. We have also published a proposed regulation on one uniform
set of rules of practice. We are in the final stages of clearing a
final rule to establish a performance standard for certain cooked meat
and poultry products that will be the model for a series of product
food safety performance standards, which will eventually encompass all
categories of products. Whenever possible, FSIS has replaced the
separate meat and poultry provisions with a single regulatory
requirement that takes differing characteristics of meat and poultry
into account.
To supplement these planned regulatory reform activities, we have
developed guidance material to assist the industry in meeting HACCP
requirements, as mentioned earlier. The materials include guidance on
how to collect the required samples for generic E. coli testing of both
livestock and poultry carcasses; how to develop HACCP plans; how to
identify food safety hazards associated with processes at inspected
establishments; and thirteen generic HACCP models. We have printed
these materials in quantity and we distribute them without charge.
Public meetings that I discussed as part of HACCP implementation have
facilitated useful communications with various segments of the industry
and have assisted implementation of regulatory reform. In addition,
FSIS has completed implementing Directives for the HACCP final rule and
revision of the automated system, which schedules inspection procedures
to accommodate HACCP implementation in large establishments. Finally,
the Agency has published the first of a series of policy notices
designed to clarify its expectations about certain aspects of HACCP
implementation, which address misunderstandings that the industry has
communicated informally.
egg safety
I'd like to now address our strategy for egg products. As you well
know, USDA has the responsibility to regulate the safety of egg
products, while FDA has the responsibility to regulate the safety of
shell eggs. This shared jurisdiction necessitates that USDA and FDA
work closely together to develop a food safety strategy for these
products, and that is exactly what we are doing.
The HACCP final rule that is now being implemented does not address
egg safety, but egg safety is certainly part of our agenda. FSIS and
FDA firmly believe that a farm-to-table food safety strategy must
include eggs, be science-based, and address the entire farm-to-table
chain. FSIS' 1999 budget request proposes implementation of HACCP in
the Egg Products Inspection program and calls for establishment of a
microbiological baseline and training for the egg products inspection
work force.
Egg safety is of particular concern to us because of the prevalence
of foodborne illnesses caused by the pathogen Salmonella enteriditis,
or SE, through the consumption of eggs and egg products. Data from CDC
indicate that SE is one of the most commonly reported causes of
foodborne illness in the United States and has been increasing since
1976. Contaminated eggs have been the most commonly identified food
source for outbreaks of SE, therefore we must take a comprehensive
approach to improve the safety of both shell eggs and egg products.
USDA, FDA, CDC, and academia are continuing to conduct a
quantitative risk assessment for SE in eggs and egg products to help
ensure that any actions taken will address the human risks identified.
The risk assessment will give us a more definitive understanding of the
risks from shell eggs and egg products, and it will help us evaluate
the alternative ways in which the risks might be reduced. It will also
tell us what additional data are needed and help us to prioritize data
collection efforts; and to focus our risk/benefit analysis.
To address these broad and complex issues, we are continuing to
work jointly with FDA to develop an advanced notice of proposed
rulemaking, or ANPR, that meets our farm-to-table and science-based
criteria. The ANPR will look at eggs during production, packing,
processing, labeling, distribution, retail, and preparation. We are
seeking a rational and comprehensive approach to addressing the safety
of eggs and egg products. We are mindful of the requirement in the 1998
Appropriations Act to promulgate a final rule requiring a 45 degrees
Fahrenheit ambient air temperature for the transportation and storage
of eggs. While we believe this ANPR is the appropriate way to proceed,
we will promulgate the required final rule if we cannot publish a more
comprehensive regulation within the required time.
information technology
Through the Field Automation and Information Management project, or
FAIM, which you have supported, we are able to reinforce both the
Agency's field reorganization and HACCP implementation by equipping our
inspection personnel with information technology. All large HACCP
plants are now covered by FAIM as of January 1998, the effective date
of the HACCP rule for these plants.
With FAIM implementation and new automation capability, lab results
are available for immediate overnight distribution. Our work force has
direct access to necessary regulations and directives, and can
communicate and keep in contact with other inspection personnel via e-
mail. FAIM also enables inspectors to receive on-site training in such
areas as HACCP, beef and poultry slaughter techniques, and import
inspection.
In October 1997, the Industry Advisory Council and Chief
Information Officers Council jointly published a report titled ``Best
IT Practices in the Federal Government.'' In that publication, FAIM was
cited as one of the top twenty Information Technology Programs in the
Federal Government.
international changes
FSIS remains committed to working through the Codex Alimentarius
Commission to continue to stress the role of science in international
standard setting and to actively participate in the process. Over the
past year, the FSIS Office of Codex has accomplished a great deal. A
U.S. Codex site on the FSIS web site was established, a Codex Strategic
Planning document was published as a notice in the Federal Register,
and a public meeting on Codex strategic planning was held here in
Washington, DC. Also, FSIS published a notice in the Federal Register
informing the public of the sanitary and phyto-sanitary standard
setting activities of the Commission, and a public meeting was held to
take comment on the U.S. positions on issues to be considered by the
Codex Alimentarius Commission and its Executive Committee.
Significant achievements were made at the June 22, 1997 meeting of
the Commission. At that meeting, the Commission adopted three vitally
important food safety standards through documents forwarded from the
Food Hygiene Committee. One document outlines the basic principles of
good hygiene as applied throughout the food chain by governments, food
producers, and consumers, alike. The second document provides guidance
to countries on the application of HACCP. The third document provides a
framework to address the occurrence of microbial organisms including
important pathogens such as E. coli O157:H7 and Salmonella in food.
The Commission endorsed the inclusion of the four science
principles in the Codex Procedural Manual, approved the inclusion of
principles of risk assessment, and began work on the elaboration of
principles of risk management. The incorporation of these important
human health factors and a scientific and systematic approach to their
application in the Codex process will facilitate future Codex work.
Major progress was achieved by adopting the Codex General Standard
on Food Additives (GSFA). This standard has been a prime goal of the
Commission, and one sought by the U.S. for some time. It is tailored
after the U.S. approach.
The Commission also adopted standards for 170 food additives, which
can be used in any food, within the constraints of Good Manufacturing
Practices. This list of additives comprises a substantial fraction of
the food additives currently in use in international trade. These
standards were urgently needed to remove one of the principal barriers
to trade in value-added processed foods, which had been subject to
differing national food additive standards.
I am also pleased to report that I was selected to be a Vice-
Chairman of the Codex Alimentarius Commission at the 22nd Session of
the Commission. I will serve as Vice-Chairman through the 23rd Session
of the Commission, scheduled to be held in Rome in June 1999.
1999 budget request
We welcome the increased emphasis being placed on food safety
throughout USDA and other Federal programs and support the initiatives
included in the President's Food Safety Initiative.
To continue making food safety improvements and to accomplish our
goals, the 1999 budget proposes a program level of $709 million--an
increase of $33.6 million over the amount provided for 1998. To
continue transformation of the Federal inspection program, this
proposal includes a net increase of $20.7 million, of which $18.4
million will support the current Federal inspection work force through
mandatory pay increases and non-salary costs increases and $2.3 million
will support new initiatives. In addition, the request includes $11.3
million for the President's Food Safety Initiative and $1.6 million in
State program-related initiatives.
In fiscal year 1999, FSIS will again continue the process of
transforming the inspection process within the current staffing
ceiling, a commitment we made in the 1997 budget. We are maintaining
the same inspection staffing levels in 1999 that we have in 1998, and
are equipping our work force to perform in-plant inspection under HACCP
requirements while planning to utilize other redeployed personnel to
assure the safety of inspected meat, poultry, and egg products in-
distribution. Widening inspection coverage to both the in-plant setting
and in-distribution as we implement HACCP is critical to implementing
our farm-to-table food safety strategy.
In fiscal year 1999, FSIS proposes to build on the changes and
investments we have begun during the last few 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.
1999 budget initiatives
I spoke earlier of the importance of the President's Food Safety
Initiative and for fiscal year 1999, our request will strengthen our
partnerships with consumers, producers, and the State programs to
improve overall food safety. We are requesting $0.5 million for food
safety education of consumers and those who prepare food, which will
focus on food handling behaviors and improving the food safety
awareness of children and youth. An increase of $3.0 million is
requested to provide producers with the information they need to
implement voluntary measures to reduce pathogen contamination of
animals before slaughter. Of this amount, we will use $1.0 million to
conduct risk assessments that will lead to the development of
appropriate voluntary control strategies for application by producers.
The remaining $2.0 million will be used for producer education. This
education is necessary to ensure that producers understand the changes
that are occurring in the industry due to the implementation of HACCP,
and to inform them of the ways in which risk mitigation strategies can
assist them in meeting these new challenges. We do not, nor are we
seeking authority to, mandate on-farm practices. We have been working
with producers to develop voluntary animal management practices to
improve food safety and more can be done to assist them in their
efforts to improve food safety from farm-to-table.
The Initiative also includes a $7.8 million increase in special
assistance to facilitate the adoption of HACCP by State Inspection
Programs that is short-term enhanced funding for HACCP implementation.
Successful implementation of HACCP by States is critical to ensuring
that their requirements are ``equal to'' Federal requirements.
Specifically, $5.8 million of the increase is needed to extend the FAIM
project to the State inspection programs. This funding will ensure that
State programs have the necessary automated infrastructure support in
time to fully implement the provisions of the HACCP final rule. The
FAIM project will save FSIS and the States developmental costs, and
provide for consistency in food safety data and information nationwide.
A $1.3 million increase in special assistance is needed for equipment
to assist States in meeting HACCP requirements for extensive laboratory
testing for pathogens. An additional $0.7 million is needed to develop
and deliver HACCP training so that State inspection personnel will be
able to perform in the same manner as their Federal counterparts. To
assist the States on a short-term basis through the transition to
HACCP, the budget includes new appropriations language that will
increase the Federal share of funding for these initiatives from 50
percent to 75 percent.
Redeployment of inspection personnel to perform new inspection work
within the plant and in-distribution enables FSIS to operate within
existing staffing levels, but requires increased operating support to
assure peak performance. We are proposing an increase of $2.3 million
for upgraded HACCP inspection technology within the plant,
implementation of HACCP in the Egg Products Inspection program, and
specialized equipment and increased travel for in-distribution
compliance activity.
As I have stated, the State inspection programs perform a key role
in ensuring a safe and wholesome, nationwide food supply. We are
requesting a net increase of $1.6 million in support of State
inspection programs. About half of the increase will provide the
federal share of increased State inspection costs, and the balance will
enable FSIS to perform intensified audits of all 25 State inspection
programs in 1999, which is needed to assure that their requirements are
``equal to'' the Federal program. These comprehensive reviews will
enable FSIS to assist and monitor efforts in managing the extensive
changes required by both the industry and State inspection programs as
a result of mandatory HACCP provisions.
user fees
The budget assumes enactment of legislation to recover a total of
$573.4 million in new user fees to cover the full cost of the Federal
inspection program. For 1999, we are requesting an appropriation of
$149.6 million for the Grants to States program, special assistance for
State programs, and leave liability and start-up costs for the new user
fee program. 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.
We are currently evaluating a user fee plan to assess inspection
fees based on pounds of inspected product by industry segment,
including slaughter, processing, egg products, and import inspection.
The overall impact on consumer prices as a result of these fees would
be less than one cent per pound of meat and poultry production.
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 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 and speak to the Subcommittee on how FSIS is
meeting its responsibilities in working with Congress and other
partners 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.
______
Biographical Sketches
catherine woteki
Dr. Catherine Woteki is Under Secretary for Food Safety for the
U.S. Department of Agriculture. In this position, she is USDA's top
food safety official, overseeing implementation of the new science-
based inspection system for meat and poultry.
Prior to being sworn in to her present position on July 31, 1997,
she served as Acting Under Secretary for Research, Education, and
Economics. From 1994 to 1995, she was Deputy to the Associate Director
of Science of the Office of Science and Technology Policy. From 1990 to
1994, she was Director of the Food and Nutrition Board, Institute of
Medicine, National Academy of Sciences.
Dr. Woteki was born in Fort Leavenworth, Kansas. 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, Blacksburg, Virginia, and received a
Ph.D. in human nutrition. She is a registered dietitian.
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 has published 48 articles and numerous technical reports
and books on food and nutrition policy and nutrition monitoring. During
her tenure as Director of the Food and Nutrition Board, she directed
studies that resulted in 20 publications by the Institute of Medicine.
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 received the Elijah White Award from the National Center
for Health Statistics, the Special Recognition Award from the U.S.
Public Health Service, and the Staff Achievement Award from 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 also presented the 1997 Lenna Frances
Cooper Memorial Lecture at the annual meeting and exhibition of the
American Dietetic Association. She and her husband, Tom, reside in
Washington, D.C.
______
caren a. wilcox
Caren A. Wilcox is Deputy Under Secretary for Food Safety of the
U.S. Department of Agriculture. Her position is part of the
restructuring of USDA's 1994 reorganization plan. Her key
responsibilities include working with the Under Secretary and the
Administrator of FSIS on the implementation of the Hazard Analysis and
Critical Control Points [HACCP] system, a science-based process control
system to improve the safety of American meat and poultry. She also
works on many of the President's initiatives as they impact food safety
mission responsibilities. Wilcox oversees certain areas of
responsibility for the Under Secretary including assignments in
strategic and communications planning regarding the Office of the Under
Secretary.
Prior to her present appointment, which began November 18, 1997,
she was with the U.S. Small Business Administration where she was
regional advocate for the mid-Atlantic states and the District of
Columbia. In this position, she worked to enhance the growth of small
businesses in the region. She also served as executive vice president
of the National Association of Women Business Owners [NAWBO].
At USDA, Wilcox combines her experience in the small business
community with almost 20 years in the food industry, having served as
manager, then director of government relations for Hershey Foods
Corporation. While with the corporation, she was involved in the
establishment of voluntary HACCP programs in its plants, and sat on the
corporate oversight committee which reviewed food safety and quality
issues. She also planned, organized, and managed public policy
development and legislative representation of the corporation at all
levels of government.
In 1993 and 1994 she aided the Clinton administration by working
with the business community on such issues as the President's economic
programs, health care, school-to-work, GATT, and the Summit of the
Americas. She served as Deputy Director for Business in the Political
Department in the Clinton/Gore Campaign in 1992 in Little Rock.
Ms. Wilcox, a longtime resident of Pennsylvania, graduated from
Wellesley College in Massachusetts and received her master of arts in
international relations from the University of Pennsylvania in
Philadelphia. She also served as assistant dean of the College of
Liberal Arts for Women at the university. Early in her career, Ms.
Wilcox was involved in international educational programs and worked at
Institut IMEDE in Lausanne, Switzerland.
Ms. Wilcox has received many awards for her outstanding leadership
at senior levels of business, government, academia, and public affairs
management. She presently resides in Washington, DC.
Statement of Michael Dunn
Senator Cochran. Mr. Dunn, Mr. Secretary, you may proceed.
Mr. Dunn. Thank you, Mr. Chairman. I appreciate the
opportunity.
With me here today is Mr. Baker, who is the Administrator
of the Grain Inspection, Packers and Stockyards Administration;
Dr. Figueroa, who is the Administrator of the Agricultural
Marketing Service; and Mr. Medley, who is the Administrator of
the Animal and Plant Health and Inspection Service. These three
Administrators make up the marketing and regulatory programs.
Beneficiaries of program services, as well as taxpayers,
provide for the funds needed to operate marketing and
regulatory program activities. In total, the appropriations and
user fee resources are proposed to carry out $804 million of
program level activities. Beneficiaries of these services pay
over $397 million. Currently marketing and regulatory programs
administer over 50 percent of the Department's user fee
programs. These programs have been market tested and continue
to meet the demand of the market's challenges.
In fiscal year 1999, the budget request proposes to
appropriate $11.8 million for the Grain Inspection, Packers and
Stockyards Administration, $59.7 million for the Agricultural
Marketing Service, and $423 million for the Animal and Plant
Health Inspection Service.
We will, as you pointed out, be submitting legislation for
$31 million more in user fees. The budget assumes that these
would be passed.
Grain Inspection, Packers and Stockyards
The 1999 budget proposes an increase of $795,000 for
monitoring and analyzing packer competition and industry
structure, $750,000 to broaden the size and scope of poultry
compliance investigation, and $225,000 to establish electronic
filing procedures.
In addition, the budget requests $3 million to reorganize
the 11 packers and stockyards field offices in order to
implement the Office of Inspector General's recommendations for
improving packers and stockyards' investigative capabilities.
Marketing and Regulatory Programs
Legislation required us to publish two pieces of proposed
rules this year, one for national standards for organic
production, and the other for milk marketing order reform. Both
of these rules have made extensive use of the Internet. For the
organic standards alone, we have received over 17,000 comments.
We are requesting $10.5 million for three efforts to expand
the Pesticide Data Program for the Agricultural Marketing
Service.
First, we request an additional $2.5 million to restore the
funding to the level available in 1996.
Second, we need $1.7 million to protect American
agriculture from unnecessary losses in pesticide registration.
Third, we are requesting $6.3 million to begin
microbiological testing of fruits and vegetables as part of the
President's food safety initiative.
The budget includes an increase of $300,000 to expand
International Market News reporting.
The budget also includes a request of $500,000 for the
National Organic Standards Program to be started up. These
funds will be recouped through user fees and deposited in the
Treasury.
APHIS
The 1999 budget request is an example of good government.
They are proposing to do more with less. The 1999 APHIS request
for salary and expense is $9.9 million below that of 1998. Even
so, APHIS proposes to spend $13 million more on high-priority
efforts such as the $4.6 million increase for the National
Animal Health Monitoring System.
Prepared Statements
Mr. Chairman, I appreciate the opportunity to come before
the committee, and we will submit the written testimony of
myself and the Administrators.
Senator Cochran. Thank you very much.
[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 1999 budget proposals.
With me today are Terry Medley, Administrator of the Animal and
Plant Health Inspection Service, Enrique Figueroa, 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.
strategic goals
Our goals contribute to the Department's three strategic goals that
support the rural economy, assure food safety and sensibly manage the
natural resources. Specifically, the MRP goals include: enhancing
consumer access to safe, affordable, and quality products and to assure
producer access to competitive markets; and facilitating the global
marketing of U.S. agricultural products.
funding sources
The Marketing and Regulatory Program activities are funded by both
the taxpayers and beneficiaries of program services. In total, the
appropriations and user fee resources are proposed to carry-out $804
million of program level activity.
On the appropriation side, we are requesting $417.8 million for
salaries and expenses and $5.2 million for buildings and facilities for
the Animal and Plant Health Inspection Service; $58.5 million for
Marketing Services and $1.2 million for the Federal-State Marketing
Improvement Program for the Agricultural Marketing Service; and $11.8
million for the Grain Inspection, Packers and Stockyards
Administration. Legislation will be submitted to recover $31 million
more in user fees and the budget assumes that this legislation will be
enacted. The budget also assumes enactment of legislation authorizing
new license fees to recover the cost of administering the Packers and
Stockyards Act (P&S Act), additional fees for selected APHIS
activities, and additional fees for developing grain standards and
methods to improve techniques for grain inspection. I will use the
remainder of my time to highlight the Department's budget requests for
the Marketing and Regulatory Programs.
grain inspection, packers and stockyards administration
GIPSA's 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
two goals in the strategic plan that will guide them through the
upcoming years include: ensuring a fair, open, and competitive
marketing environment for livestock, meat, and poultry; and promoting
and protecting the integrity of the domestic and global marketing of
U.S. grain for the benefit of American agriculture.
Program Plan and Accomplishments
During 1997, GIPSA's Packers and Stockyards Program had 1,335
stockyards; 6,900 market agencies/dealers; and 2,125 packer buyers
registered 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 210
poultry firms subject to the P&S Act.
In fiscal year 1997, 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 1,800 investigations, disclosing 515 violations
of the Packers and Stockyards (P&S) Act. During fiscal year 1997, 46
formal cases were resolved and 29 new court cases were filed to bring
subject firms into compliance with the provisions of the P&S Act. These
complaints alleged violations of the P&S Act, including failure to
compete in the purchase of livestock, paying livestock sellers on the
basis of false and inaccurate weights, failure to pay and failure to
pay promptly for livestock, operating without bond coverage, and
delayed weighing of live poultry.
In February 1997, the USDA Office of the Inspector General (OIG)
issued an evaluation report which concluded that the P&S program needed
to reorganize its national and regional offices. They found that the 11
regional offices did not provide enough staff to perform the full range
of investigations, including complex anticompetitive practice
investigations, and that P&S needed to incorporate economic,
statistical, and legal expertise in its field offices. The National
Commission on Small Farms came to the same conclusion. GIPSA has
Departmental approval to restructure its P&S Programs that consolidates
2 operating divisions and 6 branches into a single policy/litigation
support office at headquarters. This office will focus on the core
responsibilities under the P&S Act--competition, fair trade practices,
and payment protection. The 11 field offices will be consolidated at 3
regional locations. Another 35 resident agents will operate out of
their homes or a few small suboffices. Resident agents will handle the
most basic services and routine investigations in outlying areas.
GIPSA's Federal grain inspection 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 (8) delegated States provide
service 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 1997, this unique mix
of Federal, State, and private inspection agencies provided 2.1 million
inspections on over 225 million metric tons of grains and oilseeds;
weighed over 97 million metric tons of grain; and issued over 87,000
official weight certificates.
For an average cost of 27 cents per metric ton of grain in fiscal
year 1997, exporters received USDA export certificates from GIPSA.
These certificates facilitate the marketing of over $20 billion worth
of grains and oilseeds. Likewise, here at home, buyers and handlers
requested over 1.9 million inspections that facilitated the trading of
124 million metric tons of cereals and oilseeds destined for domestic
use.
In fiscal year 1997, GIPSA continued to work closely with the U.S.
grain handling industry on Electronic Data Interchange (EDI), an
industry-driven electronic commerce initiative that is designed to
automate the exchange of financial transaction documents among
businesses. GIPSA established the standardized electronic file format
that will be used for the EDI system and by official inspection
providers.
GIPSA believes that America's producers are entitled to a market
that treats them fairly and honestly. In fiscal year 1997, GIPSA
completed a long-term investigation of charges against ConAgra, Inc.,
one of the Nation's largest food companies. In March 1997, ConAgra paid
an $8.3 million penalty after pleading guilty to Federal charges of
adulteration, improper grading, and improper weighing of grain by the
company's grain division, Peavey Grain. GIPSA continues to enforce its
1995 enactment of a prohibition on adding water to grain, which remains
an enduring legacy of GIPSA's commitment to ensuring the integrity of
the American grain marketing system and to safeguarding the rights and
well-being of America's producers.
gipsa's 1999 budget request
To fund these important initiatives and to enable GIPSA to remain a
valuable part of American agriculture, GIPSA's total program level
request for fiscal year 1999 is $71.6 million, of which $11.8 million
represents appropriations. The remaining $59.8 million represents
continuing user fee authority for inspection and weighing services, and
the implementation of new user fees for standardization and methods
development activities in the grain program, and license fees to fund
the Packers and Stockyards' (P&S) program.
For fiscal year 1999, the President's budget proposes a total
program level for grain inspection of $53.6 million, with $4.6 million
appropriated for compliance activities. The fiscal year 1999 budget
also assumes enactment of legislation to authorize the collection of
$3.6 million in new user fees to cover the costs of grain
standardization activities and $2.8 million for methods development
activities.
The budget proposes an increase 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; an increase of $795,000 for activities in the packer competition
and industry structure areas; an increase of $750,000 for poultry
compliance activities; and $3 million for the one-time costs of
reorganizing P&S' headquarters and field structures.
Finally, the fiscal year 1999 budget assumes enactment of
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. The $225,000 cost to implement this
provision would be recouped through license fees.
agricultural marketing service
The strategic goals for AMS include: facilitating the strategic
marketing of U.S. agricultural products in domestic and international
markets, and ensuring fair and competitive agricultural marketing
through marketing tools and regulations.
AMS' activities include the dissemination of market information,
development of grade standards that are used in the voluntary grading
programs funded by user fees, protection of producers from unfair
marketing practices, statistically reliable testing of commodities for
pesticide residues, oversight of industry funded programs to promote
agricultural products, and 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
AMS published the proposed rule on Federal Milk Marketing Order
reform in late January with a comment period that has been extended
until April 30, 1998. To draft the proposed rule, we solicited comments
from all sectors of the public and industry. AMS received nearly 3,700
comments and participated in 250 meetings with over 22,000 people.
During the comment period we are holding listening sessions to continue
the national dialogue.
AMS was successful in advancing U.S. interests in international
commodity standards through active participation at the Economic
Commission for Europe (ECE) and Codex. For example, ECE work was
completed on pork cut specifications and begun on beef cut
specifications that will result in standards that closely mirror
existing U.S. standards being adopted throughout Europe. To facilitate
international trade, AMS held several seminars for small business
exporters to better acquaint them with import requirements in several
key markets. In a cooperative effort between AMS and other government
representatives from Canada and Mexico, the NAFTA Advisory Committee on
Private Commercial Disputes Regarding Agricultural Goods developed a
consensus recommendation to establish an industry-driven mechanism for
the resolution of private commercial disputes involving fresh fruit and
vegetable commerce between the 3 countries. AMS also worked with Mexico
and Canada to conduct a series of seminars for fruit and vegetable
shippers regarding import requirements for each country.
On December 16, 1997, AMS published the proposed rule for the
National Organic Standards Program. Public meetings have been scheduled
for February and March to provide USDA an opportunity to present the
public an overview of the rule, respond to questions, and obtain public
comment. The final rule will facilitate the movement of organic
products domestically and internationally by assuring consumers of the
validity and integrity of the organic label for the quality of product
they are looking for in the marketplace.
AMS expanded the use of the Internet for program delivery to
improve customer service. Daily market new reports will be made fully
available through the Internet and we have placed the proposed rule for
the Organic Standards Program on the Internet to facilitate public
discussion and comment.
AMS Funding
For 1999, we are requesting a budget of $58.5 million for the
Marketing Services Program and $1.2 million for the Federal-State
Marketing Improvement Program. AMS will continue to improve ongoing
program activities while achieving management efficiencies. For 1999,
we are requesting program increases of $11.8 million and a $1 million
decrease for Market Development and Assistance due to completion of
marketing assistance to Alaska.
An increase of $0.3 million is needed to expand international
market news reporting. Agricultural exports are playing an increasingly
important role in the U.S. agricultural economy. In 1998, agricultural
exports are expected to increase by $1.2 billion to a total of $58.5
billion. Market surveys conducted by AMS have indicated a stronger
demand for export market information by the industry as they seek
opportunities for increased international trade in the post-GATT and
NAFTA economy. With the additional resources requested, AMS will be
able to develop or obtain reports from major export markets and
incorporate them into existing market news reporting. Improving AMS'
ability to gather time-sensitive overseas market information will have
a significant positive impact on the ability of U.S. products to take
advantage of timely placement in the international marketplace.
In support of the recommendations made by the Secretary's Advisory
Committee on Agricultural Concentration, AMS' 1999 budget request
includes an increase of $0.5 million to expand reporting of livestock
and poultry markets to help ensure fair competition. AMS will improve
market coverage and provide more detailed market information through:
(1) increased reporting on terms of contract sales or captive supply
transactions, (2) expanded reporting that includes value-based pricing
indicators, (3) reporting share of slaughter by grade and yield, (4)
reporting daily live cattle and hog crossings from Canada and Mexico,
(5) increasing the reported volumes of forward sales of boxed beef, (6)
expanding producer reported hog marketing information, and (7)
reporting regional and national marketing of the direct feeder pig
trade.
With the publication of the final rule for the National Organic
Standards Program expected in early fiscal year 1999, AMS will require
an additional $0.5 million to ensure effective national implementation
of the program. Additional personnel will be needed to review
applications, develop and distribute manuals, and provide accreditation
of certifiers. Once the program is established, growers and handlers
will be assessed a certification fee and certification agents will be
assessed fees for USDA accreditation to recover program costs. The user
fees collected will be deposited into the Treasury rather than serving
to offset the appropriation. As a result, we need additional
appropriations authority in order to meet the anticipated expenses to
implement the program.
For 1999, the budget includes an increase of $10.5 million for the
Pesticide Data Program (PDP). The requested increase includes $2.5
million to maintain the sampling levels necessary for statistical
reliability. For 1996 the PDP operated with a budget of $11.6 million.
In 1997, the funding was shifted to the Environmental Protection Agency
(EPA) and the program had an operating budget of $10.6 million, with
spending at $8.8 million. The program was shifted back to AMS for 1998
with a budget of $8 million, plus $1.8 million provided to AMS from
carryover from EPA. With the additional funds requested for 1999, AMS
will be able to maintain statistically reliable sampling, upgrade the
program's laboratory capability to test a broader range of commodities
and to conduct more specific analyses of greater use to EPA. At the
current $8 million level of funding, the program would have to drop up
to 4 States from the program or reduce sampling rates by 13 percent.
These actions would destroy the statistical sampling infrastructure of
the program.
The budget request for PDP also includes an increase of $1.7
million to establish a rapid response capability necessary to support
risk assessment analysis for minor use pesticides. With the
implementation of the Food Quality Protection Act, there is an
increased demand for providing the EPA pesticide residue data for
minor-use pesticides on a rapid basis. EPA will need the data to
conduct dietary risk assessment reviews for over 9,000 tolerances over
the next 10 years as required by the Food Quality Protection Act
(FQPA). Without the data, EPA will be required to make conservative
assumptions about pesticide levels that could result in overestimation
of risk and loss of pesticide registrations. The increased funds will
permit increased sampling of specific commodities at a faster rate.
In support of the President's Food Safety Initiative, the AMS
budget includes an increase of $6.3 million to establish a
microbiological data program. Utilizing the existing programmatic
infrastructure of the PDP program, AMS will establish a statistically
reliable estimate of microbiological contamination on domestic and
imported fruits and vegetables. This information will be used by other
agencies to assess the risk of contamination and will assist in the
development of appropriate intervention strategies for ensuring the
safety of these commodities.
animal and plant health inspection service
The APHIS Strategic Plan was developed to guide the agency into the
next century and to help ensure that its programs and services remain
relevant to our customers and American agriculture. The Agency has
identified 5 strategic goals to achieve its expanded role. They
include: safeguarding U.S. plant and animal resources from foreign
pests and diseases; quickly detecting and responding to outbreaks of
foreign agricultural pests and diseases; effectively managing domestic
plant and animal pests and diseases and wildlife damage; ensuring the
humane care and treatment of animals; and facilitating the development
of safe and effective scientific pest and disease control methods.
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 and facilitates their movement in the global marketplace.
Global trade has changed the responsibilities of APHIS. A significant
new commercial protection role has fallen to APHIS--to respond to other
countries' animal and plant health import requirements and to negotiate
science-based standards that ensure America's agricultural exports are
protected from unjustified trade restrictions. The development of new
``rules'' of trade through World Trade Organization (WTO), GATT, and
other agreements now must address sanitary and phytosanitary barriers
based upon risk assessment procedures, regionalization and equivalence.
APHIS is ready to meet the opportunity and challenge to develop new
partnerships with States, industry, and the public through prevention,
monitoring systems and response actions.
Program Plan and Accomplishments
One of the most visible jobs performed by APHIS is the Agricultural
Quarantine Inspection (AQI) program which works to protect American
agriculture and enhance trade. This is the Agency's first line of
defense in protecting American agriculture from exotic pests and
diseases and helps facilitate the entry of U.S. agricultural products
into international markets. In 1997, APHIS inspected approximately 77
million passengers from international arrivals. The predeparture and
preclearance programs intercepted 65,000 pests. Without these measures
to mitigate the spread of pests and diseases via imports of
contaminated commodities, U.S. exporters would face a challenge of
meeting another country's Sanitary and Phytosanitary measures (SPS)
requirements would increase dramatically.
Recently, APHIS' SPS was involved with the resolution of trade
barrier issues worth nearly $7 billion in exports of U.S. agricultural
commodities. This represents about 12 percent of the total $60 billion
of U.S. agricultural exports in fiscal year 1996. Three issues: (1)
wheat exports threatened by karnal bunt, (2) poultry meat to Russia,
and (3) poultry meat to China--were worth a total of $6.6 billion, or
about 95 percent of the total value of APHIS' SPS accomplishments. All
three issues were related to legitimate concerns about plant or animal
health for countries importing U.S. products.
The Animal Health Monitoring and Surveillance program maintains the
capability of consistent disease surveillance and detection, emergency
disease preparedness and response, animal health monitoring, and
epidemiological delivery. It enables APHIS to rapidly eliminate
outbreaks of foreign animal diseases, to assess the risk of new and
emerging domestic animal health issues, and to support APHIS' control
and eradication programs. In 1997, APHIS conducted 316 investigations
for suspected foreign animal diseases. APHIS' proactive animal health
monitoring and disease surveillance program produced and interpreted
scientifically valid information used by policy makers, producers, and
consumers.
On the plant side, APHIS took quick action to address pest and
disease outbreaks. Medflies were detected in the Tampa, Florida area in
late May, posing a serious threat to Florida's $6 billion agricultural
market. In response to these captures, APHIS and the State of Florida
were able to rapidly start a cooperative Medfly emergency program. The
sterile fly release area covered more than 313 square miles. No wild
Medflies have been detected in Florida since late August 1997; the
emergency program is expected to be completed in fiscal year 1998.
APHIS used its contingency funds to implement the citrus canker
emergency project in the Palmetto, Florida area where an outbreak was
detected in June 1997. If citrus canker spread to commercial groves and
nurseries, it would be very disruptive to commercial production of
grapefruit, which is Florida's leading fresh market produce.
Recently, we have seen a surge of foreign animal diseases in Europe
and elsewhere. Hog cholera has been diagnosed in Belgium, Germany,
Spain and several other countries. As a result, we have implemented
science based import restrictions. Hog cholera has also been confirmed
in the Dominican Republic, following the outbreak of a highly virulent
strain in neighboring Haiti a year earlier. APHIS is providing
officials in the Dominican Republic with technical and laboratory
assistance in diagnosing and managing the outbreak and has increased
its agricultural quarantine inspection and monitoring efforts at ports
of entry.
Another foreign animal disease we are monitoring closely is bovine
spongiform encephalopathy (BSE), better known as ``Mad Cow disease.''
Since 1989, the Department has severely restricted the importation of
cattle, other ruminants, and ruminant products from Great Britain and
other countries where BSE exists. APHIS has also educated veterinary
practitioners, laboratory diagnosticians, and producers on the clinical
signs and pathology of the disease. In addition, the Agency conducted a
comprehensive program for BSE surveillance, which involves laboratory
examination of brain tissue from high-risk cattle. As of October 31,
1997, we have examined more than 6,508 cattle brains from throughout
this country and found no evidence of the disease.
To make meat and poultry more plentiful and affordable, APHIS is
continuing to make headway in several domestic animal health programs.
Currently, the cooperative State-Federal bovine tuberculosis
eradication program has only three infected cattle herds under
quarantine, all in Texas' El Paso Milkshed area. In July 1997, APHIS
detected and quarantined an infected beef herd on the Hawaiian Island
of Molokai. This herd has been depopulated. Nationwide eradication is
projected by the end of 1999.
With California's recent advancement to brucellosis-free status, we
have now eradicated the disease in 40 States as well as the U.S. Virgin
Islands and Puerto Rico. Another 6 States are in the qualifying period
for brucellosis-free status and have no known infection. Nationwide, as
of February 12, only 11 cattle herds in Texas and 1 domestic bison herd
in South Dakota are known to be infected. This compares to 39 herds
under quarantine a year earlier. Eradication in cattle herds is still
on track for the end of 1998.
We are also making strides in reaching a long-term solution to the
Yellowstone bison problem. In June, APHIS, the Forest Service, the
National Park Service, and Montana officials announced agreement on a
long-term approach for managing brucellosis in the Yellowstone bison
population. This interim plan meets the primary goals of maintaining a
wild, free-ranging population of bison and also addressing the risk of
brucellosis for livestock interests in the area.
Successes in the boll weevil eradication program utilizing the Farm
Service Agency loans allow for a reduced appropriations request. This
mostly grower-funded and managed program needs 100 percent
participation and is mandated by State law following a positive grower
referendum. The program funded at least 70 percent by non-federal
cooperators, has been extremely successful in improving cotton yields
and reducing production costs on over 4 million acres in the eradicated
areas. The rate of return on funds invested in boll weevil eradication
is estimated to be $12 for every $1 in program cost. 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 at least $30 per acre, and land value increases of $14 per
acre. The goal of eradicating this pest is by 2003.
This past year, the Animal Damage Control program underwent a name
change to Wildlife Services (WS) which more accurately reflects its
program operations. Cooperative efforts allow us to make the best use
of our funds. In fiscal year 1997, the WS budget for field operations
was almost $23 million. For that same period, the cooperative funds
provided by States, industry and private individuals totaled
approximately $24 million--reflecting a projected increase of about $1
million from the previous year. The willingness of many States to
provide more than a dollar-for-dollar match shows commitment and a
large measure of customer satisfaction. We are working toward the goal
of having, within the next 2-3 years, cooperators in States with large
direct control efforts to pay for at least 50 percent of the program
benefits they receive.
APHIS recently shifted its strategy to conduct more in-depth Animal
Welfare Act inspections, particularly of those licensees and
registrants with historical compliance problems. This approach resulted
in a slight decrease in the overall number of inspections, but a
significant increase in the amount of time spent inspecting facilities.
Similarly, we redirected our enforcement efforts away from a rigid,
``one size fits all'' philosophy to a flexible approach that evaluates
cases on their individual merits.
The Agency continued its efforts to trace back dogs and cats sold
by class B dealers to research facilities. In fiscal year 1997, we were
able to trace back about 95.5 percent of animals sold to research to
their original source--up from approximately 40 percent in fiscal year
1993. We believe all these and many other efforts are leading to one
positive end: Improved welfare for all animals protected under the AWA.
APHIS continued developing a strategic plan for the horse
protection program that would provide for more effective use of
resources and gain increased compliance with the Horse Protection Act.
This plan has been developed jointly with horse industry organizations
and APHIS veterinarians. This partnership will place increased
regulatory authority and enforcement responsibilities on USDA--
certified organizations.
Future challenges to the environment cannot be ignored. As the
world population increases, we must develop methods to ensure that our
agricultural production keeps pace with growing food demands while
remaining stewards of the earth, water, and air. APHIS is well
positioned to see that many of the necessary solutions are coming by
way of agricultural biotechnology.
As part of its regulatory mission, APHIS oversees the field testing
of genetically engineered plant varieties to ensure that they pose no
significant impact on the environment or agriculture. Since the first
field trial under our regulations in 1987, they have evaluated more
than 3,600 field trials at more than 14,000 sites throughout the United
States.
APHIS also makes decisions about whether to deregulate new plant
varieties, thus clearing the way for their commercialization. These new
plant varieties may hold the key to meeting our biggest future
challenges in agriculture--those of feeding a growing world population
while sustaining our environmental resources. In 1997, a corn hybrid
engineered for resistance to the European corn borer averaged 15 more
bushels per acre than other corn hybrids, without the use of additional
pesticides.
With the benefits of increased international trade, come new
scientific responsibilities and the essential need for trading partners
to exchange information. In this regard, a great challenge for APHIS is
the need to educate our trading partners about the safety and benefits
of these new, genetically enhanced plant products. In addition to
ensuring that genetically engineered plants pose no danger to
agriculture or the environment, we need to help governments and
consumers across the world understand that they are safe. Increased
understanding of the benefits of these products, as well as the extent
to which they are tested, is critical to their acceptance and success
in the international marketplace.
On August 4, 1997, the Denver Wildlife Research Center in Lakewood,
Colorado officially closed and the National Wildlife Research Center
(NWRC) in Fort Collins, Colorado opened. As of that date, all NWRC
headquarters' personnel began working out of a combination of permanent
and GSA leased facilities in Fort Collins. Work on the new headquarters
office/laboratory building on 43 acres on the foothills research campus
of Colorado State University was initiated shortly thereafter.
Occupancy of the 82,000 square foot building is expected to begin in
late 1998, at which time all personnel will be located at one site
after about four years in transition.
The Integrated Systems Acquisition Project (ISAP) is an APHIS
strategic initiative to replace aging, obsolete, and non-integrated
Information Technology platforms. The ISAP initiative will result in an
integrated hardware and software platform across the entire Agency to
provide information and data sharing at all levels of the organization.
The Agency will fully redeploy in-house and contractor resources to
comply with Year 2000 requirements.
aphis' 1999 budget request
The budget request proposes $417.8 million for salaries and
expenses. The fiscal year 1999 budget proposes a redirection of $12
million from APHIS' appropriations for the cotton growers share of boll
weevil eradication to a USDA loan program. The redirection from boll
weevil eradication results without a reduction in program operations by
relying on the foundations to borrow cost sharing funds from CCC. The
program successes in brucellosis allow an $8 million redirection to
higher priority activities which help the Agency comply with
international trade agreements. The budget assumes increased cost
sharing from beneficiaries of Wildlife Services activities. Also, this
budget supports activities to significantly increase agricultural
exports. 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 and
Disease Exclusion activities such as Agricultural Quarantine Inspection
at the borders. APHIS will likely inspect upwards of 85 million
passengers potentially carrying banned agricultural products into the
United States.
The budget also assumes enactment of legislation 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 $5.2 million is proposed for general
maintenance and to support continued modernization of APHIS facilities
in 1999 and to complement the Agricultural Research Service's request
to continue modernization of the Plum Island Animal Disease Center.
This concludes my statement. I am looking forward to working with
the Committee on the 1999 budget for the Marketing and Regulatory
Programs. We believe the proposed funding amounts and sources of
funding will provide the level of service desired by our customers--the
farmers and ranchers, the agricultural marketing industry, consumers,
as well as the taxpayers who desire a balanced budget. We are happy to
answer any questions.
______
Prepared Statement of Terry L. Medley
Mr. Chairman and members of the Committee, I am pleased to report
on our accomplishments and the challenges facing APHIS as we work to
help ensure a wholesome, affordable food supply while stimulating
global economies, safeguarding agricultural resources, and protecting
ecological systems.
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 and to
ensure abundant agricultural products and services for U.S. customers.
our focus
Over the past 25 years, APHIS has played a key operational role in
USDA's efforts to protect America's animal and plant resources from
agricultural pests and diseases. The continued profitability and
viability of U.S. agriculture, however, now also depends on the ability
of U.S. producers to be competitive in a world market. In recent years,
APHIS expanded beyond just regulating the imports of agricultural
products in the U.S. to reduce the risk of exotic pests and diseases.
Aggressively promoting U.S. exports will continue to be a dominant USDA
focus for stimulating domestic farm employment and income. A
significant new commercial protection role has fallen to APHIS--to
respond to other countries' animal and plant health import requirements
and to negotiate science-based standards that ensure America's
agricultural exports are protected from unjustified trade restrictions.
APHIS' protection role has also expanded over the years to include
important functions related to the welfare of animals and to
interactions with America's wildlife.
The Agency has identified five strategic goals to help us achieve
our expanded role. I would like to address each of those goals and our
accomplishments toward fulfilling them.
goal 1
Safeguard U.S. plant and animal resources against introductions of
foreign pests and diseases while meeting international trade
obligations
Exports climbed to $59.8 billion in 1996; the U.S. share of global
agricultural trade has also increased. Today we are the world's leading
exporter of agricultural products, commanding a 23 percent share of
world agricultural trade--up from 17 percent a decade ago. Our
agricultural trade surplus totaled $27 billion in 1996--the largest in
history--making the agricultural sector the largest positive
contributor to the U.S. balance of trade.
Consider for a moment APHIS' work to protect American agriculture
and enhance trade. The Agricultural Quarantine Inspection (AQI) program
is the Agency's first line of defense in protecting American
agriculture from exotic pests and diseases and helps facilitate the
entry of U.S. agricultural products into international markets. In
1997, APHIS inspected approximately 77 million passengers from
international arrivals, and the predeparture and preclearance programs
and intercepted 65,000 pests. For 1999, total inspections are expected
to reach 85 million--48 million funded through user fees and the
remainder through appropriated funds. These efforts protect domestic
producers and industries. But without these measures in place to
mitigate the spread of pests and diseases via imports of contaminated
commodities, the challenge U.S. exporters would face in terms of
meeting another country's Sanitary and Phytosanitary measures (SPS)
requirements would increase dramatically. APHIS personnel have made and
continue to make major contributions in resolving issues related to the
World Trade Organization (WTO) Agreement on the Application of SPS
Measures.
Export Issues
Recently, APHIS' SPS accomplishments included assisting in the
resolution of trade barrier issues worth nearly $7 billion in exports
of U.S. agricultural commodities. This represents about 12 percent of
the total $60 billion of U.S. agricultural exports in fiscal year 1996.
The $7 billion of unjustified trade restrictions on U.S. exports
involved a wide variety of issues with a total of 16 countries. The
value of export markets enhanced by these efforts ranged from a low of
$400,000 for an individual issue (export access for goats to Taiwan;
swine to Vietnam) to a high of $4.9 billion (worldwide wheat export
markets retained after a threatened cutoff due to Karnal bunt in the
United States). The median value of the SPS issues was $5 million.
Recently, APHIS' efforts to retain markets threatened by SPS
concerned nearly $6 billion of exports. The retention of U.S. wheat
export markets threatened by the discovery of Karnal bunt in some areas
of the United States was the largest contributing issue ($4.9 billion).
Another large market retained in fiscal year 1996 was the $700 million
Russian poultry meat market which was threatened by Russian concerns
about sanitary controls of the U.S. poultry industry. A third major SPS
accomplishment, expansion of poultry meat exports to China, was worth
an estimated $1 billion.
These three issues--(1) wheat exports threatened by Karnal bunt,
(2) poultry meat to Russia, and (3) poultry meat to China--were worth a
total of $6.6 billion, or about 95 percent of the total value of APHIS'
SPS accomplishments. All three issues were related to legitimate
concerns about plant or animal health for countries importing U.S.
products. The issues were resolved in the United States' favor because
APHIS scientists were able to demonstrate that the commodities involved
posed negligible risks to the importing countries.
Import Issues
In fiscal year 1996, consistent with its obligations under the SPS
Agreement, APHIS enabled the importation of several previously
prohibited commodities into the United States. Examples are citrus from
South Africa and fruit trees from France. Through the use of risk
assessments, APHIS determined that these commodities, worth almost $16
million in increased exports for the countries involved, did not pose a
threat to U.S. animal and plant health. These import issues are
considered APHIS SPS accomplishments, because prohibiting the
importation of these commodities might have been considered an
unjustified SPS trade barrier. By actively heading off potential
challenges, APHIS was able to show its commitment to the SPS Agreement
while still maintaining adequate safeguards for U.S. agriculture. In
agriculture, the U.S. is likely to be the clear winner when SPS
standards are science-based and fair.
One of the most significant concepts introduced under the SPS
agreements is regionalization--the idea that, for trade purposes, we
can recognize pest and disease free zones or areas of low pest or
disease incidences. Under these agreements, countries are committed to
adapting their import requirements to the health conditions of the
specific zone or area from which a plant or animal commodity
originates. The concept of regionalization recognizes that health
conditions vary tremendously across a country as a result of
ecological, environmental, and quarantine differences. The burden of
demonstrating a free or low prevalence area is on the exporting
country.
Under NAFTA and GATT, we are working to ensure opportunities for
trade occur. As with any commodity, once the opportunity to trade is
negotiated, a lot of work has to be done to make sure the pest and
disease requirements are met and maintained. A crucial part of fair and
free trade is establishing a process for resolving commercial trade
disputes. Under NAFTA, a trilateral advisory committee of Mexico, the
United States, and Canada are working to develop such a process. In
addition, we have and will continue to use the trade dispute settlement
process under the World Trade Organization to challenge countries who
are not living up to their commitments under the free trade agreements.
For its part, Mexico recently permitted the importation of U.S.
sweet cherries from Washington, Oregon, and California in accordance
with an approach designed to prevent the introduction of pests of
concern. Just last September, Mexico officials recognized Arizona's
citrus production areas as free of Mediterranean and Mexican fruit
flies, removing any phytosanitary barriers to the export of those
fruits. We also continue to discuss the possibility of permitting
Florida citrus exports to Mexico. With every such decision rooted
firmly in scientific information, we move much closer to fully
actualizing the principles and agreements to which we have committed.
goal 2
Quickly detect and respond to introductions of foreign agricultural
pests and diseases or other emerging agricultural health
threats, to minimize production losses and export market
disruptions
APHIS' domestic programs which monitor, survey, impose Federal
quarantines, and conduct eradication programs, is the force that
permits U.S. agricultural commodities to be as widely accepted
throughout the world as they are today. Without the maintenance of a
strong domestic program, APHIS' ability to certify to the SPS
requirements of other countries would be marginal.
Our Animal Health Monitoring and Surveillance program maintains the
capability of consistent disease surveillance and detection, emergency
disease preparedness and response, animal health monitoring, and
epidemiological delivery. It enables APHIS to rapidly eliminate
outbreaks of foreign animal diseases, to assess the risk of new and
emerging domestic animal health issues, and to support APHIS' control
and eradication programs. In 1997, APHIS conducted 316 investigations
for suspected foreign animal diseases. APHIS' proactive animal health
monitoring and disease surveillance program produced and interpreted
scientifically valid information used by policy makers, producers, and
consumers. This program delivered objective information addressing
animal health as it pertains to U.S. trade, agricultural productivity,
public health, and on-farm quality assurance. Through effective
partnerships with animal commodity producer groups--and with State
governments, university researchers and other Federal Agencies--the
program met producers' and the U.S. Public's information demands in a
cost-effective, collaborative manner minimizing duplication of effort.
On the plant side, APHIS took quick action to address pest and
disease outbreaks. Medflies were detected in the Tampa, Florida, area
in late May, posing a serious threat to Florida's $6 billion
agricultural market. In response to these detections, APHIS and the
State of Florida were able to rapidly start a cooperative Medfly
emergency program. The sterile fly release area covered more than 313
square miles. No wild Medflies have been detected in Florida since late
August 1997; the emergency program is expected to be completed in
fiscal year 1998.
APHIS funded efforts for the citrus canker emergency project in the
Palmetto, Florida, area where an outbreak was detected in June 1997. To
effectively prevent the spread of citrus canker in Palmetto, APHIS and
the State of Florida established a quarantine zone of 34 square miles
and in Miami, the quarantine zone was more than 361 square miles. If
citrus canker spread to commercial groves and nurseries, it would be
very disruptive to commercial production of grapefruit, which is
Florida's leading fresh market produce.
Also in 1997, APHIS used contingency funds to battle an Asian
longhorned beetle (ALB) emergency control project in New York State.
The program consists of tree removal, detection and delimiting surveys,
and education efforts. During fiscal year 1997, the program achieved
drastic reductions of ALB populations in areas that had been heavily
infested. If ALB spreads, it would threaten trees nationwide and pose
problems for the sugar maple industry in upstate New York and its
surrounding areas.
In addition to these eradication programs, APHIS closely monitored
two other animal disease situations. The first is the outbreak of
vesicular stomatitis in the Western States. In response to this disease
situation, Canada and the European Union have prohibited the
importation of horses, ruminants, and swine from these States. APHIS
continues to work with the affected States to closely monitor the
situation and help producers meet trade requirements.
The second disease situation is a low pathogenic strain of H7N2
avian influenza that has been detected in 14 commercial poultry flocks
near Lancaster County, Pennsylvania, last year. At the State's request,
we have authorized the production and storage of an H7N2 vaccine for
possible emergency use. APHIS will utilize the avian influenza vaccine
as a tool only in the unlikely event of an outbreak of the highly
pathogenic form of the disease.
Our commitment to preventing the entry of foreign agricultural
diseases and pests remains as strong as ever. We recognize that our
initiatives to prevent the entry of agricultural diseases and pests
have taken on increasing importance in this era of growing
international trade and travel. Now more than ever, export
opportunities hinge on a country's ability to prevent the entry of
agricultural diseases, to document scientifically the health of its
agricultural industry, and to respond quickly and decisively to disease
and pest emergencies in the event prevention strategies are breached.
To improve its emergency management strategy even further, APHIS
has streamlined its Regional Emergency Animal Disease Eradication
Organization to improve Departmental responsiveness to animal disease
emergencies. Now, two highly prepared and trained regional teams can be
dispatched immediately at the first indication of foreign livestock or
poultry disease, such as in 1996 when exotic Newcastle disease was
detected at a pet bird facility in Missouri and vesicular stomatitis
was diagnosed in horses and cattle in Arizona, New Mexico, Colorado,
and Utah.
Recently, we have seen a resurgence of foreign animal diseases in
Europe and elsewhere. Hog cholera has been diagnosed in Belgium,
Bulgaria, Croatia, the Czech Republic, Germany, Italy, the Netherlands,
and Spain. As a result, we have implemented appropriate import
restrictions. Hog cholera has also been confirmed in the Dominican
Republic, following the outbreak of a highly virulent strain in
neighboring Haiti a year earlier. APHIS is providing officials in the
Dominican Republic with technical and laboratory assistance in
diagnosing and managing the outbreak and has increased its agricultural
quarantine inspection and monitoring efforts at ports of entry.
Another foreign animal disease we are monitoring closely is bovine
spongiform encephalopathy (BSE). Since 1989, we have severely
restricted the importation of cattle, other ruminants, and ruminant
products from Great Britain and other countries where BSE exists. We
have also educated veterinary practitioners, laboratory diagnosticians,
and producers on the clinical signs and pathology of the disease. In
addition, we conduct a comprehensive program for BSE surveillance,
which involves laboratory examination of brain tissue from high-risk
cattle. As of October 31, 1997, we have examined more than 6,508 cattle
brains from throughout this country and found no evidence of the
disease.
goal 3
Effectively manage plant and animal pests and diseases and wildlife
damage which pose risks to agriculture, natural resources, or
public health
U.S. livestock and poultry producers provide households throughout
the Nation--and the world--with high quality, affordable products.
Because of their efforts, Americans are eating more meat and poultry
than ever before. Estimates indicate that the average American adult
eats more than 160 pounds of meat and poultry a year. Per person,
that's 1.5 pounds more meat and poultry consumed per year than 10 years
ago.
To make meat and poultry more plentiful and affordable, APHIS is
continuing to make headway in several domestic animal health programs.
Currently, the cooperative State-Federal bovine tuberculosis
eradication program has only three infected cattle herds under
quarantine, all in Texas' El Paso Milkshed area. In July 1997, APHIS
detected and quarantined an infected beef herd on the Hawaiian Island
of Molokai. This herd has been depopulated. We are still aiming for
nationwide eradication by the end of 2000.
In regard to pseudorabies, with the addition of Tennessee in August
and the U.S. Virgin Islands this month, 26 States and two U.S.
Territories--including Puerto Rico--are currently free of the disease.
Since 1992, the number in infected herds has dropped from approximately
8,000 to nearly 2,000. Nationwide eradication of this disease is also
set for the end of 2000.
With California's recent advancement to brucellosis-free status, we
have now eradicated the disease in 40 States as well as the U.S. Virgin
Islands and Puerto Rico. Another six States are in the qualifying
period for brucellosis-free status and have no known infection. The
number of herds under quarantine has declined from 959 herds in fiscal
year 1991 to 11 cattle herds as of February 12, 1998. The number of
newly infected herds has also declined, from 400 in fiscal year 1991 to
64 in fiscal year 1997.
We are also making strides in reaching a long-term solution to the
Yellowstone bison problem. In June, APHIS, the Forest Service, the
National Park Service, and Montana officials announced agreement on a
long-term approach to manage brucellosis and the Yellowstone bison
population. This plan meets the primary goals of maintaining a wild,
free-ranging population of bison and also addressing the risk of
brucellosis for livestock interests in the area.
While livestock and poultry producers face many challenges in their
efforts to meet the rising demand for their products at home and
abroad, they can be reassured that they do not face these challenges
alone. APHIS is working hard to protect the health of U.S. livestock
and poultry and to facilitate agricultural trade based on fair,
science-based standards.
The cooperative boll weevil program uses judicious application of
pesticides based on the extensive and timely use of pheromone traps to
reach the goal of eradicating the pest by 2003. This mostly grower-
funded and managed program needs 100 percent participation and is
mandated by State law following a positive grower referendum. The
program, funded at least 70 percent by non-federal cooperators, has
been extremely successful in improving cotton yields and reducing
production costs on over 4 million acres in the eradicated areas. The
rate of return on funds invested in boll weevil eradication is
estimated to be $12 for every $1 in program cost. 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 at least $30 per acre, and land value increases of $14 per
acre.
Clearly, success in APHIS' active control programs such as
brucellosis and boll weevil will require less funding as the pests and
diseases are eradicated. This will allow APHIS to strategically focus
on prevention by increased monitoring and surveillance, using the
latest diagnostic techniques.
This past year, we changed the name of the Animal Damage Control
Program to Wildlife Services (WS) to more accurately reflect what we
do. Besides protecting agricultural resources, WS continued its efforts
to protect public health and safety, property and threatened and
endangered species. WS also continued its interagency agreement with
the National Agricultural Statistics Service (NASS) to determine the
magnitude and extent of wildlife damage to various agricultural
resources. In January 1997, NASS surveyed approximately 1,500 catfish
producers. Sixty-eight percent of the respondents indicated they had
spent some effort to avoid wildlife caused losses to their catfish
crops. The overall cost of preventing losses and damage were projected
to have cost catfish producers about $17 million during 1996.
In 1998, the WS program is partnering with the Federal Aviation
Administration (FAA) and the Department of Defense (DOD) on the
National Performance Review's Reinvention Impact Center Initiative to
increase airline safety and reduce economic losses to aircraft.
Partnering with FAA and DOD will allow for greater levering of
resources to provide a safer environment for the flying public and
military personnel both domestically and internationally. Approximately
10,000 civilian aircraft and 3,000 military aircraft collide with
wildlife in the United States each year. These strikes have resulted in
the loss of human life and economic damage to aircraft of approximately
$300 million annually.
During fiscal year 1997 and fiscal year 1998, WS personnel assisted
Texas Department of Health officials distribute over 5 million oral
rabies vaccine baits to stop the canine strain of rabies in coyotes and
foxes in south and central portions of Texas. To date, the vaccines
have been successful in stopping the spread of this disease. WS
personnel also assisted with either oral rabies vaccine bait
distributions, monitoring, or surveillance activities in Vermont, Ohio,
and New York to stop the spread of the Mid-Atlantic strain of rabies in
the raccoon population in those States.
The wolf management programs in Idaho, Montana, Wyoming, and
Minnesota continues to accelerate as the number of wolves increase and
disperse into previously wolf-free areas. The rapidly expanding wolf
population and resulting requests for assistance, continues to present
a challenge for WS. In March 1998, the Fish and Wildlife Service (FWS)
plans to reintroduce Mexican wolves into Arizona. With funding from the
FWS, WS has placed a wolf management specialist in that State. Two
other Wolf Management Specialists are presently located in Minnesota
and Montana where they work closely with officials from the FWS,
National Park Service, and livestock producers.
It is gratifying to see the support for WS from Congress and the
States where we provide service. Cooperative efforts allow us to make
the best use of our funds. In fiscal year 1997, WS' budget for field
operations was almost $23 million. For that same period, the
cooperative funds provided by States, industry and private individuals
totaled approximately $24 million--reflecting a projected increase of
about $1 million from the previous year. Their overall nationwide
dollar-for-dollar match commitment is the ultimate measure of customer
satisfaction.
goal 4
Ensure the humane care and treatment of animals covered under the
Animal Welfare Act and the Horse Protection Act
After 30 years of focusing almost entirely on conducting as many
inspections as possible, we shifted our strategy to conducting more in-
depth inspections, particularly of those licensees and registrants who
historically had compliance problems. This approach resulted in a
slight decrease in the overall number of inspections, but a significant
increase in the amount of time spent inspecting facilities. We used
this time to take a closer look at licensees' and registrants' animals,
facilities, and records. Similarly, we redirected our enforcement
efforts away from a rigid, ``one size fits all'' philosophy to a
flexible approach that evaluates cases on their individual merits. This
approach enables us to work with individuals who recognize their errant
ways and want to improve the welfare of their animals. At the same
time, it allows us to impose stringent sanctions on licensees and
registrants who continue to show little or no effort to provide better
care or housing for their animals. The success of this approach is
becoming evident in two ways. First, there is an increasing number of
facilities found in full compliance upon inspection; currently about 56
percent. Additionally, we have taken prompt and severe action when the
violations were egregious or normal efforts to achieve compliance
failed. During the year, 43 Animal Welfare Act licenses were suspended
or revoked, or unlicensed operators disqualified from having a license.
A record sanction of $175,000 was also assessed from a dog dealer whose
license was permanently revoked. During 1997, we were able to reduce a
backlog of AWA cases that developed over the past several years by
about 25 percent.
Under our umbrella strategic direction initiative, we also began
preparing our Animal Care (AC) program for the 21st Century. This
change initiative involves employees from all levels of the program and
is aimed at making AC a recognized leader in the field of animal
welfare.
In fiscal year 1997, we advanced the initiative in many ways, such
as equipping all AC field personnel with laptop computers on which they
now generate inspection reports and developing a formal risk-based
inspection system that will eventually enable us to direct our limited
inspection resources where they are needed most.
Complementing this initiative were numerous special projects. These
projects included our increased emphasis on public outreach, which
resulted in a quarterly report to the program's stakeholders. They also
included AC's efforts to partner with another APHIS unit in inspecting
animal handlers at airports.
Perhaps most impressively, however, were our ongoing efforts to
trace back dogs and cats sold by class B dealers to research
facilities. In fiscal year 1997, we were able to trace back an
impressive 95.5 percent of animals sold to research to their original
source--up from approximately 40 percent in fiscal year 1993. We
believe all these and many other efforts are leading to one positive
end: improved welfare for all animals protected under the AWA.
APHIS continued developing a strategic plan for the horse
protection program that would provide for more effective use of
resources and gain increased compliance with the HPA. This plan has
been developed jointly with horse industry organizations and APHIS
veterinarians. This partnership will place increased regulatory
authority and enforcement responsibilities on USDA-certified
organizations.
goal 5
Facilitate the development of safe and effective veterinary biologics,
biotechnology-derived products, and other scientific methods
for the benefit of agricultural producers and consumers and to
protect the health of American agriculture
Of course, the future also holds other challenges and hard
realities that cannot be ignored. For example, as the world population
increases, we must develop methods to ensure that our agricultural
production keeps pace with growing food demands. Moreover, as we do so,
we must remain sensitive to the toll we take upon the environment. We
cannot afford to sacrifice our natural resources. Fortunately, these
challenges are already prompting new ways of thinking, leading to the
development of new solutions. APHIS is well positioned to see that many
of these solutions are coming by way of agricultural biotechnology.
As part of our regulatory mission, APHIS oversees the field testing
of genetically engineered plant varieties to ensure that they pose no
significant impact on the environment or agriculture. Since the first
field trial under our regulations in 1987, we have evaluated more than
3,600 field trials at more than 14,000 sites throughout the United
States.
Overall, derivatives of 48 different plant species have been field
tested to date, including species as diverse as sugar cane, poplar
trees, turfgrass, rice, and sunflowers. Derivatives of most major U.S.
crops--corn, soybeans, potatoes, tomatoes, cotton, and tobacco--have
each had a large number of trials.
APHIS also makes decisions about whether to deregulate new plant
varieties, thus clearing the way for their commercialization. In 1992,
Calgene's delayed-ripening tomato, the Flavr Savr, became the first
genetically modified crop approved for deregulation. Since then, we
have deregulated nearly 30 more products--including varieties of virus-
resistant squash and papayas; insect-resistant cotton, corn, and
potatoes; herbicide-tolerant corn and soybeans; high-laureate canola;
and delayed-softening tomatoes. The wave of new products shows no sign
of slowing. These new plant varieties may hold the key to meeting our
biggest future challenges in agriculture--those of feeding a growing
world population while sustaining our environmental resources. For
example, herbicide tolerant plants like the Roundup Ready soybeans
enable farmers to reduce herbicide applications drastically. Insect-
resistant crops like Bt cotton and corn can result in increased yields
and substantial deceases in pesticide use. For example, in 1997, a corn
hybrid engineered for resistance to the European corn borer averaged 15
more bushels per acre than other corn hybrids, without the use of
additional pesticides.
In addition to these developments, plants like the papaya and the
potato are being genetically engineered for resistance to viral
diseases. We estimate that viral disease and damage cause about 20
percent of all vegetable crop loss. Scientists are also working on
crops with additional nutritional or medicinal properties, as well as
plants that can tolerate a variety of adverse environmental conditions,
such as soil salinity and drought.
With the benefits of increased international trade, come new
scientific responsibilities and the essential need for trading partners
to exchange information. In this regard, a great challenge for APHIS is
the need to educate our trading partners about the safety and benefits
of these new, genetically enhanced plant products. In addition to
ensuring that genetically engineered plants pose no danger to
agriculture or the environment, we need to help governments and
consumers across the world understand that they are safe. Increased
understanding of the benefits of these products, as well as the extent
to which they are tested, is critical to their acceptance and success
in the international marketplace. If we can meet this challenge, the
rewards for the environment and people around the world will be
considerable.
On August 4, 1997, the Denver Wildlife Research Center in Lakewood,
Colorado officially closed and the National Wildlife Research Center
(NWRC) in Fort Collins, Colorado opened. As of that date, all NWRC
headquarters' personnel began working out of a combination of permanent
and GSA leased facilities in Fort Collins. Work on the new headquarters
office/laboratory building on 43 acres on the foothills research campus
of Colorado State University was initiated shortly thereafter.
Occupancy of the 82,000 square foot building, which is being
constructed by GSA, is expected to begin in late 1998, at which time
all personnel will finally be located at one site after about four
years in transition.
During 1997, WS methods development established new or continued
work on existing cooperative agreements which enhance the Center's
research program. One example is the agreement with the DOD to continue
research into the development of chemical control methods for brown
tree snake control on Guam. The NWRC has 20 identified research
projects that seek to address the research needs of its stakeholders.
These projects are between 3-5 years in duration and are developed
around nationwide research needs assessments conducted in 1989 and
1996. Two examples of projects regarding coyote studies include a study
to determine the effectiveness of using llamas as livestock guarding
animals, and a project to evaluate the effectiveness of chemical
reproductive control on coyotes. Another ongoing research project is
the management and analysis of the FAA's National Database on bird and
other wildlife strikes with aircraft, which can be a serious economic
and safety problem for civilian aircraft in the United States. Pilots
and others report strikes to the FAA. Biologists now have over 17,000
strike reports from 1989 through 1997 edited and accurately entered
into a National Wildlife Strike Database. This database already is
proving to be invaluable in providing biologists, aeronautical
engineers, and airport managers with specific information on strike
histories.
The Integrated Systems Acquisition Project (ISAP) is an APHIS
strategic initiative to replace aging, obsolete, and non-integrated
Information Technology platforms. The ISAP initiative will result in an
integrated hardware and software platform across the entire Agency to
provide information and data sharing at all levels of the organization.
The Agency will fully redeploy in-house and contractor resources to
comply with year 2000 (Y2K) requirements. Of the 145 applications in
APHIS, 21 have been identified as mission critical and are scheduled
for Y2K remediation. All 21 mission critical applications will be made
Y2K compliant by September 1998 with implementation no later than March
1999.
fiscal year 1999 budget request
The 1999 Budget proposes an appropriation level of $417.8 million
for Salaries and Expenses, a $9.9 million decrease below the 1998
current estimate. A critical part of this request is pay and retirement
costs of almost $8.6 million. This funding is crucial to maintaining
our existing infrastructure to carry out all Agency programs.
The Agricultural Quarantine Inspection (AQI) program is the
Nation's frontline defense against the introduction of dangerous
agricultural pests and diseases from other countries. The 1996 FAIR Act
set up the funding mechanism for the AQI--User Fees program which
inspects international passengers, aircraft, ships, railcars, and
trucks. Essentially, there are three funding parts--Congressional
appropriation; the reserve amount at the end of 1996; and collections
over $100 million. An appropriation of less than $100 million means
either that more funding must come from the reserve available at the
end of 1996 which is rapidly becoming depleted, or that fees to the
public will have to be increased unnecessarily to offset funds that
have already been collected, but cannot be used until 2003. With the
$100 million appropriation, we can address increased traffic of Asian
and European agricultural products into the United States. This has
created the need for increased inspections to reduce the risk of
introducing exotic agricultural pests into the U.S. APHIS will likely
make over 85 million inspections to intercept banned agricultural
products from entering the United States.
Animal Health Monitoring and Surveillance is the corner stone of
our animal health infrastructure and is key to preserving and enhancing
America's animal health. Without this program, we could not quickly
detect and respond to introductions of foreign agricultural disease
that may cause production losses and export market disruptions. The
budget requests a $4.6 million increase from fiscal year 1998. We
intend to expand the National Animal Health Monitoring System to
routinely identify diseases and death loss trends in sentinel feedlot
and dairy cattle and swine. The Agency would enhance its emergency
preparedness and response capabilities by upgrading its Foreign Animal
Diseases Reporting and Networking System and developing and training on
biological terrorism and other emerging disease issues. Finally, we
would also work cooperatively with State and Federal wildlife agencies
to investigate, study, and evaluate disease conditions in wildlife.
The budget proposes an increase of $259 thousand for pest detection
activities, which would be contributed toward cooperative research
agreements to improve responses to plant pest and disease outbreaks and
infestations, such as Karnal Bunt. Beyond the increase in fiscal year
1999, APHIS also plans to devote $1 million to develop a strong fruit
fly trapping and detection program to prevent the recurrence of fruit
flies in Florida, which the state is expected to match. By detecting
intrusions quickly, we will be able to control them within available
funds and avoid the need for large, expensive emergency programs. These
measures would reassure our international trading partners of APHIS'
commitment to fruit fly control and deter them from prohibiting the
entry of U.S. citrus and other agricultural products. At the same time,
this would enable APHIS to cooperate with Florida on a similar basis as
will California, providing an equal safeguarding level of this
country's two largest citrus exporting states.
The budget provides a program increase of $0.7 million to
strengthen fruit fly exclusion and detection activities. The agency
will carry out Environmental Protection Agency recommendations to
minimize the use of pesticides by strengthening domestic fruit fly
detection and control by increasing detection surveys in expanding
urban areas where introduction is most likely. The increased funding
will assure U.S. trading partners of our commitment to fruit fly
control and ease entry of U.S. produce into foreign countries. The
budget also requests a program increase of $0.6 million for
international programs. APHIS would open new offices in Southeast Asia
and Brazil to direct APHIS Sanitary/Phytosanitary (SPS) activities. The
Agency has taken on greater responsibility for resolving SPS conflicts
since the signing of the World Trade Organization agreement. Further,
funds would be used to resolve SPS standards requirements for U.S.
agricultural trade. Such funding would help meet the Secretary's goal
to double agricultural exports over the next several years.
The 1999 request for screwworm proposes a $1.4 million program
reduction. Active eradication efforts will focus on Costa Rica and
Panama where the total land mass is less than in Nicaragua and
eradication costs can be reduced. The Agency will begin sterile fly
releases into Panama, the last country before the barrier is
established in the Isthmus of Panama. The program expects to begin
planning for the new Panama facility in fiscal year 1999 with an
architectural and engineering study.
The budget proposes an $8.5 million program reduction in
brucellosis eradication expenditures. APHIS has 9 States in the final
stages of eradication and anticipates that all 50 States will be in
Class ``Free'' Status by the end of 1999. The budget proposes a program
reduction for boll weevil of $12.2 million below the 1998 current
level. The Agency is gradually transferring full operational
responsibility for program activities where the boll weevil no longer
exists to grower organizations. APHIS would continue to oversee and
provide technical support to boll weevil detection and control
activities in eradicated and non-infested areas. Growers can pay a
greater share of program costs due to loans made available from USDA's
Farm Service Agency. Therefore, funding above the Administration's
request for both the brucellosis and boll weevil programs is not needed
in fiscal year 1999 and can be used for other priority needs.
The 1999 budget proposes a program reduction of $3.4 million (for a
net reduction of $2.5 million) for Wildlife Services (WS) which
represents a total increase of $2.3 million, or 10 percent above the
Administration's proposal for fiscal year 1998, as a result of several
changes that we have made. Subject to the overall funding level, the
proposal still calls for a reasonable (minimum 50 percent) match for
all States, to reduce the significant disparity among States. The
proposal allows States from two to three years to reach that goal. In
addition, the basic infrastructure of each State will be funded by the
Federal government, regardless of that States's contribution. Finally,
funds have been set aside for needs that may cross State boundaries,
and therefore may not be the responsibility of any single State. These
changes address concerns that were raised with last year's proposal.
However, behind the proposals in both years is the Administration's
belief that cooperators in States that receive benefits should pay a
reasonable portion of the government's costs of providing these
benefits, and that the current significant disparity among States
forces States and taxpayers to make up the difference.
For buildings and facilities, we proposed $2 million for general
maintenance. The Agency has not received general maintenance funding
for the past two years making additional funding necessary to maintain
existing facilities. APHIS controls and operates a broad range of
facilities throughout the United States and overseas in support of our
mission. These facilities include veterinary laboratories, animal
quarantine and holding facilities, quarantine greenhouses, sterile
insect rearing and production facilities, plant and soil analysis
laboratories, and biological control laboratories and have a value of
approximately $186 million. Many of these facilities are over 20 years
old. As the controlling Agency, APHIS is responsible for maintaining
these facilities in a good state of repair and complying with national,
State, and local building codes, the Life Safety Code, the National
Fire Code, Occupational Safety and Health Administration regulations,
and the Environmental Protection Agency regulations. The budget also
proposes $3.2 million to support continued modernization of Plum Island
Animal Disease Center.
The proposed budget assumes passage of legislation to collect fees
for animal welfare inspection, veterinary biologics, biotechnology,
pink bollworm, and Swine Health Protection Act inspection activities.
In total, the fees would make up $9.9 million.
final thoughts
Much has been said about the primary mission of APHIS--whether it
is to protect American agriculture from foreign diseases and pests, or
to facilitate the export of American food and fiber products by helping
our farmers and producers meet the animal and plant health standards of
importing countries. Without question, APHIS' role as a domestic
regulatory agency is still key. However, because of our role in
developing and enforcing import requirements, as well as in providing
key services to facilitate exports, APHIS must also focus its resources
on issues relating to international trade. In fact, the two roles are
inseparable.
To succeed in the 21st century--and by that I mean to feed our
populations, sustain our environment, and encourage economic growth
through healthy agricultural trade--we will need to be effective in
both roles by using all of the tools within our reach. We will need to
explore and use the technologies available to better our crops and our
production. In addition, we will need to build trust in trade with
science-based decisions. In this global trade environment, where our
actions and livelihoods are increasingly interdependent, it is crucial
that we strive to make those decisions that will help ensure our mutual
benefit.
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 Enrique E. Figueroa
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 1999 budget proposals.
Although I am new to the Agricultural Marketing Service, or AMS, I
am familiar with the economic and trading challenges faced by U.S.
agriculture in domestic and international markets. Before coming to
AMS, I was an associate professor at Cornell University's Department of
Agricultural, Resource and Managerial Economics. At Cornell, my work
was focused on horticultural product marketing issues. While at
Cornell, I also served as a member of Secretary Glickman's NAFTA
Advisory Committee on Private Commercial Disputes Regarding
Agricultural Goods. Several years ago, I worked as a staff assistant
for the House Committee on Agriculture, and spent four years with the
California Conservation Corps. Since coming to AMS in November, I have
been able to put my agricultural background to use for this agency and
the customers we serve.
mission, goals, and programs
I would like to take a few moments at the outset to review the
agency's mission and strategic goals before I present our budget
proposals.
Our mission in 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 producers, traders, and
consumers of U.S. food and fiber products. AMS' two major strategic
goals are: (1) to facilitate the strategic marketing of U.S.
agricultural products in domestic and international markets, and (2) to
ensure fair and competitive agricultural marketing through marketing
tools and regulations.
Our first goal aims to enhance the efficiency of agricultural
marketing, which will allow producers to maximize returns while
reducing overall marketing costs, resulting in better values to
consumers. AMS programs related to this goal include Market News,
Quality Standards, Organic Certification, Pesticide Data, Wholesale
Market Development, Transportation Services, Commodity Purchase
Services, Grading and Certification, and Commodity Research and
Promotion programs. Our Market News program provides timely, accurate,
and unbiased market buying, selling, and pricing information on
numerous agricultural commodities. Commodity standards provide a common
language of quality for buyers and sellers in the U.S. and abroad. AMS
user-funded grading and certification services provide an impartial
evaluation of product quality so that purchasers can buy commodities
without having to personally inspect them. 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 and integrity of the label.
The program will accredit agents who will certify organic products to
facilitate trading between the states and abroad. Our Pesticide Data
Program develops and communicates comprehensive, statistically-reliable
information on pesticide residues in food for use in Government dietary
risk assessments and policy decisions. Since 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. AMS purchases selected
meats, fish, poultry, fruits and vegetables to remove excess supplies
from markets while providing a dependable supply of agricultural
commodities for the National School Lunch and other domestic feeding
programs. Research and promotion programs are used by agricultural
producers to broaden and enhance national and international markets for
various commodities. These AMS programs are directly related to USDA's
strategic goal to open, expand, and maintain global market
opportunities for agricultural producers.
The aim of AMS' second goal is to ensure fair and competitive
trading in agricultural markets for the benefit of producers and
consumers of agricultural commodities. AMS programs that accomplish
this important goal include Shell Egg Surveillance, Federal Seed,
Pesticide Recordkeeping, Marketing Agreements and Orders, Plant Variety
Protection, and the Perishable Agricultural Commodities Act, or PACA
program. The Shell Egg Surveillance program promotes fair competition
in the sale of consumer grade shell eggs by monitoring the proper
disposition of certain undergrade and restricted eggs through regular
inspections of shell egg handling operations. Marketing orders and
agreements also help serve this goal by facilitating orderly marketing,
and assuring equitable returns to producers and a dependable,
reasonably-priced supply of products to consumers. The PACA program
protects producers, shippers and distributors from loss due to unfair
and fraudulent practices in the marketing of perishable agricultural
commodities. These activities also help serve USDA's first strategic
goal, and some serve USDA's second goal--to ensure a safe, affordable,
nutritious, and accessible food supply.
funding sources
The wide range of activities provided by AMS are funded from a
variety of sources. AMS is uniquely entrepreneurial among governmental
organizations. For the vast majority of our programs, our ability to
``stay in business'' depends on the earnings generated from customers
who are under no obligation to buy our services, and who request those
services only if they believe the service adds a proven value to their
products in the marketplace. Nearly 75 percent of AMS funding is
revenues generated from services provided to satisfied customers. This
entrepreneurial climate drives us to be customer service-oriented,
cost-conscious, committed to performance that will satisfy our
customers, and innovative in service delivery. Customers pay for our
services in grading, inspection and certification, and industry-
generated self-help programs like research and promotion reimburse us
for our oversight assistance to ensure that the programs comply with
legislative intent and provisions. AMS also administers activities to
protect and promote a level playing field in trade. Licenses and fees
fully finance these programs. Finally, some of our activities provide a
public good for millions of beneficiaries--such as issuing daily market
reports and procuring food for Federal feeding programs. These
activities are appropriations funded.
current issues and accomplishments
I would like to review a few current issues and accomplishments of
the past year.
Federal Milk Marketing Order Reform
AMS has completed drafting the proposed rule on Federal Milk Order
reform in accordance with the mandate of the 1996 Farm Bill. To reach
that goal, we engaged academics, solicited public comments, and
released proposals and other documents to spark national debate and
lead to a reform package. In preparation for the proposed rule, AMS
received nearly 3,700 comments and participated in 250 meetings with
over 22,000 people. The proposed rule was published on January 20. The
initial 60-day comment period was recently extended until April 30.
During the comment period, we anticipate holding listening sessions to
continue as broad a national dialogue as possible.
Rail and Other Transportation Issues
U.S. agriculture faces increased reliance on market forces and
export markets at a time when the performance and integrity of the
transportation infrastructure is becoming an issue. Rail car shortages,
crumbling locks, and old roads can result in bottlenecks that impede
the most efficient movement of agricultural commodities. With a
responsibility to monitor and represent the interests of agricultural
shippers, Assistant Secretary Dunn has announced that AMS will take the
lead in conducting a broadly based study to examine the transportation
needs of U.S. agriculture.
In October and December, AMS represented agricultural interests
when rail car congestion problems at the Union Pacific/Southern
Pacific's Houston rail hub spread throughout the western states. USDA
filed written comments, and testified at emergency meetings of the
Surface Transportation Board, or STB, to recommend alternatives that
would quickly improve service to grain shippers. The STB issued orders
that addressed USDA's requests and recent data from the railroads
indicate that progress is being made to alleviate the rail car
shortages and improve performance for shippers.
International Activities and Issues
In the international arena, AMS continues to be successful in
advancing U.S. interests in international commodity standards, through
active participation at the Economic Commission for Europe, or ECE, as
well as Codex. For example, last March, ECE work was completed on pork
cut specifications and progressed on beef cut specifications that will
be adopted throughout Europe and should closely mirror existing U.S.
standards. AMS has increased price reporting data from foreign markets
and made contacts for future international market reporting. We also
held several seminars for small business exporters to better acquaint
them with import requirements in key international markets. In
cooperation with government representatives from Canada and Mexico and
under AMS leadership, the NAFTA Advisory Committee on Private
Commercial Disputes Regarding Agricultural Goods developed a consensus
recommendation to establish an industry-driven mechanism for the
resolution of private commercial disputes involving fresh fruit and
vegetable commerce between the three countries. AMS also worked closely
with the Canadian and Mexican governments to conduct a series of
seminars for fruit and vegetable shippers regarding import requirements
for each country.
Voluntary HACCP for Fruits and Vegetables
AMS has been piloting a voluntary HACCP program for fresh-cut
fruits and vegetables. This Quality Through Verification, or QTV,
program encompassed five fresh cut fruit and vegetable firms during its
pilot phase. The program was reviewed by FDA, which has regulatory
responsibility for the safety of produce, and received that agency's
support as an important component of FDA's overall effort to enhance
the safety of produce. This year, we expect to complete a memorandum of
understanding with FDA outlining the respective responsibilities of
each agency in the program's operation. Several dozen additional firms
are awaiting acceptance into the program, and we expect to extend QTV
service to many of those firms.
Expanded Use of Internet
Another improvement in service to our customers is our expanded use
of the Internet to enhance program delivery. In 1998, all of our daily
market news reports will be available through the Internet, and we are
exploring additional opportunities to use the Internet to make proposed
rules available for public comment. In addition, we will expand the
amount and depth of information on such topics as commodity procurement
actions through our web site, following up on the recent business
process re-engineering we undertook for our Commodity Procurement
program.
fiscal year 1999 budget requests
Let me turn now to our budget requests for fiscal year 1999. We are
requesting a net increase in Marketing Services funds of $11.9 million
which would cover the following activities: $320,000 for international
market reporting, $500,000 to expand market reporting to address the
potential effects of market concentration, $505,000 to expedite
nationwide development of the Organic Certification Program, $2.5
million to maintain statistically reliable sampling and testing in
cooperation with all ten participating states in the Pesticide Data
Program, $1.7 million to initiate a rapid response capability in the
Pesticide Data Program to meet requirements of the Food Quality
Protection Act of 1996, $6.3 million for the Microbiology Data Program
(part of the Administration's Food Safety Initiative), $770,000 for pay
costs, and $329,000 for added retirement costs. Our budget request also
reflects a decrease of $1 million that was provided in fiscal year 1998
for salmon marketing. This request will assure our goals of
facilitating the strategic marketing of U.S. agricultural products in
domestic and international markets while ensuring fair and competitive
markets for the benefit of producers and consumers. Let me explain
these program requests in more detail.
International Market News
To effectively compete in foreign as well as domestic markets, U.S.
agriculture must have ready access to consistent, accurate, timely, and
reliable information on international prices. With an increasing share
of agriculture's income dependent on market expansion and export
growth, USDA's role is to protect and expand the position of American
agricultural products in foreign markets. Tariff reductions, resulting
from international agreements, and rising incomes in many countries
have continued to drive demand for U.S. agricultural products and
expand our export markets. But international marketing challenges
continue, and we want to ensure that a lack of market information is
not a barrier to market access and, therefore, an impediment to the
continued growth of U.S. agricultural exports.
AMS is currently collecting limited international market
information, but more in-depth information from a wider array of
markets is needed. In a recent AMS customer service survey, respondents
requested market information from 23 countries in Europe, North and
South America, and the Pacific Rim for all fresh fruits, vegetables,
and tree nuts. Various poultry and egg industry associations--the
National Broiler Council, National Turkey Federation, United Egg
Producers, United States Egg Marketers, National Poultry and Food
Distributors Association, and USA Poultry and Egg Export Council--have
also requested additional international market information. Our poultry
market news program receives between 50 and 60 inquiries per week from
various sources requesting information on international markets.
Comments from customer surveys also indicate a strong need for more
information regarding international market conditions. Our dairy market
news program has concentrated on covering the dairy product markets of
the U.S.' major international trade competitors, but now there is a
growing need for dairy product information in those areas that are
potential markets for U.S. dairy products such as Mexico, South
America, and the Pacific Rim countries. The U.S. Dairy Export Council,
a private organization consisting of dairy product processors,
exporters, producers, and suppliers, has specifically requested market
news for the Pacific Rim.
We firmly subscribe to the principle that market information makes
markets more efficient and contributes to the competitiveness of U.S.
agriculture. In order to facilitate the development of international
market news within available resources, AMS reporters have been working
to establish contacts with private companies and government sources in
foreign markets to collect and exchange market information. Industry
has been so keenly interested in foreign market information that demand
exceeds AMS resources. Additional personnel and increased automation
would allow us to develop or obtain additional reports from major
export markets and incorporate them into AMS' market news reports to
the benefit of U.S. trade. Improving the availability of information on
overseas markets should have a significant positive impact on the
continued ability of U.S. products to compete successfully in the
international marketplace.
Domestic Market Reporting to Address Agricultural Concentration
In domestic markets as well, we must also ensure that the lack of
information is not a barrier or impediment to marketing opportunities
for our producers. Increasing concentration within the meat and poultry
industries has raised concerns over potential non-competitive behavior.
Although there are some positive effects of concentration on the
marketplace, the concern for potential non-competitive behavior by
large companies leads to distrust and suspicion by many growers and
smaller segments of the industry. A lack of complete market information
only worsens the situation, fueling mistrust and suspicions of unfair
market practices. The Secretary's Advisory Committee on Agricultural
Concentration recommended that price discovery and reporting be
enhanced wherever possible to ensure fair competition. Although AMS has
developed several new reports in response to the advisory committee
recommendations, such as export reporting, our resources are not
sufficient to meet our commitments to agriculture in this critical
area. Producers need all the information they can get to successfully
compete in today's markets. New and expanded market reports will
provide broader coverage of market information and a more in-depth look
at market activity. Although a lack of resources limits our ability to
be fully responsive, we have taken some initial steps to address these
information needs. However, to realize their full potential, these
initiatives will require additional AMS reporters covering more markets
and improved information technology.
Organic Certification
Sales of organic foods are estimated at more than $3.5 billion and
growing at a rate of 22 percent a year. With this growth has come
multiple definitions of what constitutes an organic product, resulting
in confusion among buyers and consumers. The Organic Foods Production
Act of 1990 required the Secretary to establish an organic
certification program for producers and handlers of agricultural
products that are produced using organic methods. With recommendations
from the National Organic Standards Board, or NOSB, 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.
In fiscal 1997, AMS focused on completing and clearing the proposed
organic rule. The rule was published in the Federal Register on
December 16, 1997. For the first time, AMS is providing one of the most
open and accessible public rulemakings in Federal experience--a fully
electronic public rulemaking via the Internet. Four public information
meetings to discuss the proposed rule were scheduled for February and
March in various locations across the country, and these meetings will
provide an opportunity for USDA to present an overview of the proposed
rule, respond to questions, and expand the public dialogue on this
important program.
There are now approximately 28 states with some type of organic
legislation in place, ranging from labeling laws to full-scale
certification programs. Of these, only 11 states have certification
programs in operation. Some are planning to adopt the national program
and possibly implement certification programs; some states have
established requirements for organic producers, but leave certification
to private organizations; and others with existing programs likely will
revise their organic programs when the Federal program goes into
effect.
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, nomenclature and
standards for organic production will facilitate international
marketing of U.S. organic products. After the final rule is
implemented, we will work to harmonize the eventual program standards
with those of existing and developing international organic programs.
AMS needs additional resources to expedite nationwide development
of the program, ensure labeling integrity, and facilitate global trade
of our country's organic products. Once the program is fully
established, we will charge fees to certifying agents for USDA
accreditation, as authorized by current legislation. Fees collected
will be deposited into the U.S. Treasury.
Pesticide Data Program
Pesticide residue data are a critical component of the Food Quality
Protection Act, or FQPA, of 1996. The Act requires the Secretary of
Agriculture to ensure the improved collection of pesticide residue data
and the increased sampling of foods most likely consumed by children.
AMS' statistically reliable procedures are designed to make unbiased
estimates of residues in products collected in the ten cooperating
states that represent almost half of the U.S. population. The
pesticides targeted for data collection are selected by the
Environmental Protection Agency, or EPA, in consultation with AMS. The
commodities chosen for testing are among those most prevalently
consumed by the American public.
The fiscal year 1998 Appropriations Act provided $8 million in
funding to AMS for the Pesticide Data Program, or PDP--a lower funding
level than was made available for the program in previous years; in
fact, about 30 percent less than the fiscal year 1996 level. With the
additional funding requested for PDP program operations, we will be
able to maintain statistical reliability of the data and provide the
level of sampling and testing that will meet the needs of the EPA and
other government agencies in responding to public health concerns.
In addition to the FQPA, our pesticide residue testing has served
the Department in several other important areas. AMS residue testing
results have been used to confront barriers to international trade of
U.S. agricultural commodities and are useful in the establishment of
international standards. USDA's Foreign Agricultural Service, or FAS,
uses data from the program to convince foreign governments that our
food is safe. Pesticide data also have been used in the development of
international standards by international organizations such as the
Codex Alimentarius Commission and the World Health Organization.
Rapid Response Initiative
Title III, Section 301(c) of the FQPA directs the Secretary to
ensure improved sampling and collection of pesticide residue data. To
further respond to the requirements of the FQPA, AMS proposes to
initiate a rapid response capability for pesticide residue testing. In
the next ten years, EPA is required to review more than 9,000
tolerances to ensure compliance with the more stringent safety
standards of the FQPA. Under FQPA, EPA needs to complete risk
assessment evaluations for pesticides with common toxic mechanisms and
using aggregate exposure models. Up to date pesticide residue data
generated by the Pesticide Data Program will allow the EPA to conduct
realistic dietary risk assessments. A rapid response capability will
increase productivity, especially for a commodity where PDP has
collected data for other commodities in the same class, and for acute
pesticide toxicity studies requiring single serving size surveys. PDP
would add these commodities at a special sampling rate that provides a
rapid response while maintaining statistical reliability. Without up to
date and accurate residue data, EPA will be forced to make more
conservative assumptions about residue levels that could potentially
overestimate risk.
Microbiology Data Program
As part of the President's Food Safety Initiative, AMS proposes to
initiate the Microbiology Data Program. The program is designed to
address increasing public concerns about microorganisms in the U.S.
food supply by helping to determine the incidence, number, and type of
important foodborne microorganisms in domestically-produced and
imported products with statistical reliability. With the data
collected, a national database can be established identifying the
incidence of key microorganisms in fruits and vegetables. The data will
be used to establish ``benchmarks'' that can be used to evaluate the
effectiveness of procedures to reduce or eliminate harmful foodborne
microorganisms. The program also will provide Federal public health
agencies with statistically reliable microbiological data to assess the
impact of various regulations and agricultural practices. The produce
industry and regulatory health agencies will benefit from data that
enables them to assess processing and handling techniques from the farm
almost to the grocery store, and identify the most effective
modifications to the food distribution system. As a result, both the
quality and the wholesomeness of the food supply will be improved.
Stakeholders--including state agencies, consumers, growers, processors,
retail stores, food handlers, food transporters, medical institutions,
academia, global traders, and international organizations setting
international standards--will benefit from this valuable data that will
be available for study and decision making.
To minimize the cost of this initiative, AMS proposes to use the
existing infrastructure of the Pesticide Data Program for
statistically-reliable sampling, including the laboratory capacity of
participating State and Federal laboratories, and the electronic data
reporting capabilities already in place with PDP. The 10 states
currently participating in the PDP--California, Colorado, Florida,
Maryland, Michigan, New York, Ohio, Texas, Washington, and Wisconsin--
will be asked to also participate in the microbiology program.
Initially, fresh fruit and vegetables will be sampled; other products
could be included later. Organisms initially under consideration are E.
coli, Listeria monocytogenes, Salmonella, and Shigella. Fruit and
vegetable samples will be obtained at food terminal markets and chain
store distribution centers.
The proposed microbiological program offers a unique and innovative
approach to identifying foodborne pathogens and focusing on those
hazards in the food distribution system that present the greatest
risks. No similar program exists at either the State or Federal level.
AMS will coordinate our activities with other agencies within USDA,
including ARS, NASS, ERS, and FSIS, as well as the FDA, and the Centers
for Disease Control and Prevention, or CDC. CDC's primary
responsibility is surveillance and tracking of foodborne illness; FDA
notifies CDC of findings related to regulatory and laboratory
investigations; and State and local health departments report foodborne
illness cases after their investigations. Outbreaks involving
restaurants or institutions are more likely to be recognized than those
involving foods prepared in the home. Fruits and vegetables can become
contaminated with pathogenic and spoilage microorganisms while growing,
or during harvesting, processing, and distribution. Two earlier CDC
reviews of foodborne illness revealed that fruits and vegetables can
act as a vehicle in transmitting foodborne illness. Questionable
practices in food production and handling, mass preparation of prepared
meals, the trend toward greater consumption of meals away from home,
the emphasis on increasing fresh fruits and vegetables in the diet, and
product distribution logistics can all raise the risks of foodborne
illnesses. The proposed program will help to gain important insight on
the presence of pathogens in our food supply.
budget request summary
In total, our 1999 budget request includes $58.5 million in
appropriated funding for our marketing services programs and $1.2
million for Payments to States and Possessions. In addition, we are
requesting $11 million for formulation and administration of marketing
agreements and orders and $6.3 million for administration of commodity
purchase services from Section 32 funds.
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 1999 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 major segments of American
agriculture. GIPSA's Packers and Stockyards Programs (P&S) ensure open
and competitive markets for livestock, meat, and poultry. The Agency's
Federal Grain Inspection Service (FGIS) provides the U.S. grain market
with Federal quality standards and a uniform system for applying them.
GIPSA has both service and regulatory roles. The Agency provides
financial protection to livestock producers and ensures fair and
competitive markets. It also provides impartial, accurate measurements
of grain quality to create an environment that promotes fairness and
efficiency in the U.S. grain marketing system.
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 livestock, meat, and poultry, and grain and related
products.
organization
GIPSA is comprised of approximately 800 personnel, including full-
time, temporary, and intermittent employees. GIPSA personnel are
situated in field locations across the country to serve our customers.
Of GIPSA's Packers and Stockyards Program's 180 allotted staff
years, approximately 28 percent are located at headquarters. Following
the planned reorganization of this program, the total staff located at
headquarters will be reduced to no more than 20 percent of total staff
years. During fiscal year 1997, GIPSA concentrated P&S program
resources on providing financial protection and promoting fair business
practices and a competitive marketing environment for livestock, meat,
and poultry. The Agency conducted over 1,800 investigations, disclosing
515 violations of the Packers and Stockyards (P&S) Act. Most violations
are corrected on a voluntary basis with several resulting in livestock
and poultry producers receiving additional funds for the sale of their
product. During fiscal year 1997, 46 formal cases were resolved and 29
new cases were filed to bring subject firms into compliance with the
provisions of the P&S Act. These complaints alleged violations of the
P&S Act, including failure to compete in the purchase of livestock,
paying livestock sellers on the basis of false and inaccurate weights,
failure to pay and failure to pay promptly for livestock, operating
without bond coverage, and delayed weighing of live poultry. GIPSA is
appealing an adverse decision in the IBP, Inc., case which alleged that
the packer had given undue or unreasonable preference to a select group
of feedlots.
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 service 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 1997, this unique mix of Federal,
State, and private inspection agencies provided 2.1 million inspections
on over 225 million metric tons of grains and oilseeds; weighed over 97
million metric tons of grain; and issued over 87,000 official weight
certificates.
This, of course, is only a brief summary of our accomplishments.
I'd like to now provide some more in-depth information about our
programs and their activities.
gipsa's packers and stockyards programs (p&s)
GIPSA Strategic Goal No. 1.--Ensure a fair, open and competitive
marketing environment for livestock, meat, and poultry.
GIPSA's P&S program provides financial protection and promotes 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 $105 billion. At the
close of fiscal year 1997, there were 1,335 stockyards; 6,900 market
agencies/dealers; and 2,125 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 210 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 1997 resulted in $1.9
million being restored to custodial accounts established and maintained
for the benefit of livestock sellers. Packer and poultry trust
activities also returned $264,000 to livestock sellers and $10,000 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 1997, 186 insolvent
dealers and market agencies corrected or reduced their insolvencies by
$34.4 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.
During fiscal year 1997, GIPSA issued an administrative complaint
against two dealers alleging they failed to conduct their buying
operations in competition with and independently of one another. The
complaint alleged the dealers entered into arrangements for the purpose
and with the effect of restricting competition and thereby controlling
the prices for slaughter cows at auction markets. Another investigation
is underway to determine if other livestock dealers and packers in the
Northwest region of the United States have entered into similar types
of arrangements to restrict competition.
GIPSA is currently conducting a broad investigation of fed steer
and heifer procurement in the Texas Panhandle. The investigation was
initiated in the summer of 1996 and includes 16 months of procurement
data, over 37,000 transactions, and over 6 million head of cattle.
Transaction data from packers has been collected, processed, and
documented. Preliminary descriptive and graphical analyses have been
completed and portions have been reported to the industry. Purchase and
slaughter patterns over the period of investigation have been examined
to identify potential occurrences of aberrant or unusual procurement
practices. While the analyses conducted thus far have not disclosed
obvious violations of the P&S Act, econometric and statistical analyses
of the data are still being documented to identify relationships
between spot market prices and non-spot purchases, and to reveal
relationships that may not be apparent in the descriptive and graphical
analysis. Completion of the investigation will depend on the findings
of the econometric analysis. Two university researchers are
collaborating on the econometric and statistical analyses.
An investigation of slaughter hog procurement in the central United
States also is underway. The investigation includes analysis of
contractual arrangements between packers and hog producers, and will
analyze price relationships between various procurement arrangements.
The data also are being analyzed to ensure that firms are actively
competing and to gain a better understanding of each firm's procurement
operations. The investigation involves procurement data from a dozen
major hog slaughter plants in the western Corn Belt. These plants
slaughtered approximately one-third of the Nation's slaughter hogs in
1996. Descriptive and graphical analyses should be completed and
available by late spring 1998. Econometric and statistical analyses are
underway with the cooperation of personnel from USDA's Economic
Research Service and National Agricultural Statistics Service. While
these analyses will take several months, they should be completed by
late this year.
Other major investigations underway include an investigation of
slaughter lamb procurement in the Western United States and two poultry
investigations. The slaughter lamb procurement investigation is
focussing on evaluating competition and the use of supply contracts.
One of the poultry investigations currently being conducted focuses on
alleged discriminatory treatment of contract growers by a major poultry
firm. The investigation involves analyzing settlements of nearly 1,000
growers over a 2-year period. The other poultry investigation is being
conducted to determine whether contract settlements that base payment
on grower cost comparisons contain unfair elements. Data collection for
both of the poultry investigations has been completed and analysis of
the data is currently underway.
Also in fiscal year 1997, GIPSA published an Advanced Notice of
Proposed Rulemaking in the Federal Register seeking comments on the
need for additional rules to protect contract poultry growers regarding
(1) grower payment based on performance compared with other growers for
a specified time period (usually all growers whose birds are killed
within a 1- or 2-week period); (2) the accuracy of feed weights and
feed delivery and pickup procedures; and (3) procedures for weighing
live birds picked up for slaughter and the accuracy of the weights. We
are concerned that contract poultry growers are in an unequal
bargaining position with the integrated poultry companies and is
considering the need to issue substantive regulations to provide
growers with assurance that their settlements will be equitable. A
review committee analyzed over 3,400 comments received in response to
the notice. Recommendations of the committee and an analysis of grower
comparison settlements by major poultry companies currently are being
reviewed to determine the need for further regulation to ensure fair
grower settlements.
In order to create a forum for public discussion, the Department of
Agriculture published a petition requesting rulemaking to restrict
certain procurement practices regarding forward contracting and packer
feeding. The petition was submitted by the Western Organization of
Resource Councils. USDA received over 1,700 comments on the Federal
Register notice by the April 14, 1997, closing date. A USDA team with
economic, legal, and industry expertise was established to review and
analyze the comments received. USDA is continuing to move forward on
this matter and a decision regarding the petition is anticipated in the
near future.
Finally, in fiscal year 1997, GIPSA took preliminary steps to
restructure its P&S program. The headquarters and field office
structures of the P&S program were put in place in 1963. Since that
time, there have been minor adjustments to both the field and
headquarters structures, but the basic framework has remained
unchanged. The field structure, which currently includes 11 regional
offices, was designed to provide area coverage. The headquarters
structure divides the enforcement activities into two program division
with six branches based on the major titles in the P&S Act--a Packer
and Poultry Division, which covers the responsibilities under Title II
of the Act, and a livestock Marketing Division, which covers the
activities under Title III.
Major structural changes and most of the concentration in the
livestock and meat packing industries have taken place since the
current P&S structure was established. As the industry structure has
changed, the lines between Titles II and III enforcement activities
have become increasingly blurred. In addition, livestock and poultry
production and slaughter has become concentrated in relatively narrow
geographic areas.
In an Evaluation Report released in February 1997, the USDA Office
of the Inspector General (OIG) concluded that the P&S program needed to
reorganize its national and regional offices, because its 11 regional
offices do not provide enough staff to perform the full range of
investigations, including complex anticompetitive practice
investigations, and that P&S needed to incorporate economic,
statistical, and legal expertise in its field offices.
GIPSA recognizes the need to restructure its P&S program to enhance
its ability to address competitive issues. The Agency's restructuring
plan is consistent with OIG's recommendations.
At headquarters, two operating divisions and six branches will be
consolidated into a single policy/litigation support office with three
branches that focus on the core responsibilities under the P&S Act--
competition, fair trade practices, and payment protection. The 11 field
offices will be consolidated into 3 regional offices with approximately
35 resident agents operating either out of their homes or 1 of 3
suboffices. Resident agents will handle the most basic services and
routine investigations in outlying areas.
One-time costs associated with consolidating the field offices and
relocating displaced employees are projected at $3 million. The
appropriation needed to fund the reorganization is included in the
Department's fiscal year 1999 budget request as a one-time increase.
While the Administration continues to seek additional resources to
address competitive issues in the livestock, meat, and poultry
industries, the restructuring itself will be budget neutral except for
the one-time cost.
The restructuring of the P&S program is vital to meeting the
Department's responsibility, and industry's concerns, relating to
competitive behavior in the livestock, meat, and poultry industries.
While the restructuring plan is budget neutral in the out years, it
represents a unique opportunity to strengthen P&S' ability to
investigate anticompetitive practices and provide greater flexibility
and efficiency in Agency operations.
gipsa's federal grain inspection service
GIPSA Strategic Goal No. 2.--Promote and protect the integrity of
the domestic and global marketing of U.S. grain for the benefit of
American agriculture.
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 international
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.
For an average cost of 27 cents per metric ton of grain in fiscal
year 1997, exporters received USDA export certificates from GIPSA on
which they relied to facilitate the marketing of over $20 billion worth
of cereals and oilseeds. Likewise, here at home, buyers and handlers
requested over 1.9 million inspections that facilitated the trading of
124 million metric tons of cereals and oilseeds destined for domestic
use.
While current services are effective and efficient, GIPSA
recognizes that to remain relevant in today's marketplace, continuous
service improvement is essential and ongoing.
In fiscal year 1997, GIPSA continued to work closely with the U.S.
grain handling industry on Electronic Data Interchange (EDI), an
industry-driven electronic commerce initiative that is designed to
automate the exchange of financial transaction documents among
businesses. GIPSA established the standardized electronic file format
that will be used for the EDI system and by official inspection
providers.
GIPSA also continues to assist major export elevators in their
ongoing efforts to integrate automation into official weighing and
grain handling operations. Five fully automated weighing systems have
been approved; five systems are being installed or debugged; and one
system is in the proposal preparation stage. GIPSA continues to respond
to inquiries from other elevators regarding automation initiatives. In
addition, GIPSA has established a team of experts to develop, in
partnership with the grain industry, an automated grain inspection
system that will improve the efficiency and productivity of U.S. grain
handling facilities, thereby making them more competitive in today's
global marketplace.
Also in fiscal year 1997, GIPSA began implementing an enhanced
quality assurance and quality control program to ensure the quality and
accuracy of official inspection results nationwide. The program
balances national and localized monitoring, and emphasizes proactive
actions to prevent problems from occurring. The new program will
greatly improve GIPSA's efforts to provide our customers with the
accurate and timely information they need to market America's grain.
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
1997, another grain moisture meter model was certified as conforming to
NTEP requirements, bringing to seven the number of NTEP-certified
models. The calibration data collected by GIPSA during fiscal years
1995, 1996, and part of 1997 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
limited to technological applications to service delivery. In fiscal
year 1997, to further GIPSA's commitment to providing market-oriented
inspection and weighing services, the Agency initiated a nationwide
program to encourage and facilitate GIPSA field-level outreach to the
U.S. agricultural community. Agency representatives conducted group and
private meetings with field managers, producers, handlers, and
processors throughout the United States to educate our customers about
the official system, demonstrate the Department's commitment to U.S.
agriculture, and explore better ways to serve the industry. This effort
has resulted in GIPSA's undertaking creative and innovative initiatives
to meet our customers' needs.
For example, a farmers' cooperative in Iowa recently approached
GIPSA for an innovative inspection and weighing approach to help them
take advantage of railroad incentives, avoid demurrage, and improve
their overall efficiency. The cooperative needed to improve their
ability to manage grain inventories and increase railcar loading
efficiency; to get onsite grade results to maximize their blending
capabilities and stay within contract limits; and a training process to
improve the quality assurance/control skills of the cooperative's
employees. To meet the cooperative needs, GIPSA had to take a new
approach to providing official services. The solution was an innovative
cooperative agreement among three official agencies to provide
inspection service to the cooperative. Using three mobile inspection
labs, official inbound truck and bin inspections are provided at ten
rail loading sites. This arrangement has allowed the cooperative to
handle greater volumes of grain more quickly and efficiently. Further,
the sampling and grading seminars that are routinely conducted for
cooperative employees by official inspectors has increased the use of
uniform sampling and grading techniques, thereby providing the
cooperative's managers with an accurate assessment of the quality of
their grain inventory.
As an integral part of America's grain handling infrastructure--a
superior infrastructure of storage facilities, rail lines, and
waterways that makes American agriculture preeminently successful in
the global marketplace--GIPSA will continue to provide all members of
the U.S. grain handling system with the innovative, high-quality
official inspection services they need to efficiently and effectively
meet the challenges of a changing marketing environment.
Our commitment to reaching our customers does not end at our
borders. Exporters, importers, and end users of U.S. grains and
oilseeds, as well as other USDA agencies, USDA cooperator
organizations, and other governments, frequently ask GIPSA personnel to
travel overseas to represent USDA at grain marketing and grading
seminars, meet with foreign governments and grain industry
representatives to resolve grain quality and weight discrepancies, help
other countries develop domestic grain and commodity standards and
marketing infrastructures, assist importers with quality
specifications, and train local inspectors in U.S. inspection methods
and procedures. At home, GIPSA regularly holds seminars and meetings to
educate our worldwide customers about the quality and value of U.S.
grain exports. In fiscal year 1997, GIPSA representatives met in the
United States with 81 teams from 38 countries to provide information,
technical guidance, and educational seminars. These international
outreach efforts help promote greater harmony between U.S. and
international standards. This, in turn, facilitates the export of U.S.
agricultural products by reducing the risk of new barriers in today's
open and freer global marketplace.
GIPSA believes that America's producers are entitled to a market
that treats them fairly and honestly. In fiscal year 1997, GIPSA's
commitment to this tenet was exemplified as a long-term GIPSA
investigation came to fruition in a legal action against ConAgra, Inc.,
one of the nation's largest food companies. In March 1997, ConAgra
agreed to pay $8.3 million in penalties after pleading guilty to
federal charges of adulteration, misgrading, and misweighing of grain
by the company's grain division, Peavey Grain. The settlement
culminated a 4-year investigation conducted by GIPSA, USDA's Office of
the Inspector General, and the Farm Service Agency. Central to the case
was the work of GIPSA investigators, who documented ConAgra's
widespread practice of adding water to grain to increase its weight.
GIPSA determined that the addition of water to grain could degrade
American agriculture's reputation for quality and excellence, and
defraud buyers of U.S. grain. The conclusion of the ConAgra case
complimented GIPSA's 1995 enactment of a prohibition on adding water to
grain, which remains an enduring legacy of GIPSA's commitment to
ensuring the integrity of the American grain marketing system and to
safeguarding the rights and well-being of America's producers.
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 1998 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 1998, our
commitment to improved efficiency and effectiveness will continue to
serve American agriculture well, as U.S. agricultural exports are
expected to total over $56 billion (``Outlook for U.S. Agricultural
Exports,'' February 1998).
GIPSA accomplished a great deal in fiscal year 1997 and much is
planned for fiscal year 1998. Our efforts to continuously improve our
programs and services were further guided by the Agency's Strategic
Plan, developed under the provisions of the Government Performance and
Results Act.
year 2000
A great deal of planning and action also is underway to ensure that
all GIPSA systems are Year 2000 (Y2K) compliant. GIPSA's Y2K efforts
are of the highest priority and are focussed on addressing three basic
areas of compliance: information technology, vulnerable systems, and
telecommunications.
GIPSA recognizes that disruption of our automated systems--
including database reporting systems--would be extremely disruptive to
the U.S. agricultural markets we serve. For example, GIPSA maintains an
Export Grain Information System (EGIS), a comprehensive database of
inspection and weighing information for all export grain that receives
official services. It contains data on the number of carriers, volume
of grain, number of lots and volume of lots at various grade levels.
The database represents 90 percent or more of the grain exported from
the United States (the remaining portion is exported under official
inspection waiver provisions and is not, therefore, included in the
system). Overall, EGIS provides the critically important information on
the amount of specific grains available for export from the United
States at a given time.
This data on grain availability influences trading prices. Each
week, EGIS reports are released to the public at precisely 11:00 AM
Eastern Standard Time on Monday mornings. This time was established in
cooperation with the Chicago Board of Trade to allow traders on the
floor of the exchange to make bids prior to the close of the Market on
Monday afternoons. Weekly updated EGIS data also is provided to USDA's
Economic Research Service, Foreign Agricultural Service, and
Agricultural Marketing Service, as well as to external customers such
as Bluewater Shipping, Cargill, Columbia Grain, Continental, Koch
Agriculture, and Sparks Commodities who rely on the data to support
their critical grain trading functions.
GIPSA is committed to ensuring that all needed resources are
available for this effort--our success is of utmost importance to
agency operations and to ensuring that there is no service disruption
to our customers in America's cereal, oilseed, livestock, poultry, and
meat markets.
civil rights
In addition to improving our services and programs in fiscal year
1997, GIPSA also accomplished a great deal in the area of civil rights.
The Secretary of Agriculture's goal is that each employee and customer
of the Department of Agriculture be treated fairly and equitably, and
with dignity and respect. The Secretary appointed a Civil Rights Action
Team (CRAT) to develop recommendations to address institutional and
underlying problems and ways to implement actions to ensure
accountability and follow up on civil rights issues. The team's report
laid the groundwork for many initiatives undertaken to address civil
rights in USDA.
In keeping with the CRAT report and in support of the Secretary's
goal, GIPSA took a number of actions in fiscal year 1997. We
established the agency's first Office of Civil Rights; adopted, by
policy, the Secretary's policy of zero tolerance for reprisal;
established a civil rights performance standard for managers and
supervisors; implemented mandatory civil rights training for all
employees; resolved many Title VII employment discrimination complaint
cases at the lowest level; broadened Title VI reviews to ensure that
GIPSA maintains its record of zero complaints of discrimination in
service delivery; provided continuous support, resources, and funding
for programs at 1890 land grant and other minority institutions; and
established an outreach liaison to insure that all employees and
customers are treated with dignity and respect.
These are only some of the steps taken by GIPSA to support civil
rights improvement in USDA. Like the Secretary, GIPSA has and will
continue to make Civil Rights a part of our everyday work and an
abiding priority.
fiscal year 1999 budget request
To fund these important initiatives and to enable GIPSA to remain a
valuable part of American agriculture, GIPSA's budget request for
fiscal year 1999 is $11.8 million for appropriations and a limitation
of $42.6 million in our revolving fund. GIPSA also proposes to collect
$21.5 million in new user and license fees in fiscal year 1999.
For fiscal year 1999, the President's budget proposes an
appropriation request for grain inspection of $4.6 million for
compliance activities. The fiscal year 1999 budget also assumes
legislation to authorize the collection of $3.6 million in new user
fees to cover the costs of grain standardization activities and $2.8
million for methods development activities.
The budget also assumes legislation to authorize the collection of
$15.1 million in new user fees to cover the cost of the P&S Program.
There are proposed 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; $795,000
for activities in the packer competition and industry structure areas;
and $750,000 for poultry compliance activities; and $3,000,000 for the
one-time costs of reorganizing P&S' headquarters and field structures.
GIPSA's fiscal year 1999 budget request includes an increase of
$4,200,000 in one-time start-up costs to convert to new user fees and
license fee status, and to maintain an adequate reserve. It is
anticipated that $3,000,000 would be used for P&S activities and
$1,200,000 would be used for standardization and methods development
activities. Therefore, to summarize, the fiscal year 1999 request of
$11.8 million consists of ongoing expenses of $4.6 million for grain
compliance activities, a one-time increase of $3.0 million for
relocation expenses, and a one-time request of $4.2 million for up-
front costs for the transition to user-fee financing.
The increase of $225,000 will allow GIPSA's P&S Programs to
implement the requirements of the Paperwork Reduction Act that call for
developing simpler reporting requirements for businesses and to provide
for electronic submission of reports. Sustained low prices for beef and
pork at the farm level have resulted in increased concern about
concentration in the meat packing industry. Packer use of captive
supplies, formula pricing, and other procurement initiatives require
P&S to collect extensive data from packers for extended periods of
time. Providing for the electronic submission of this data would reduce
the cost to packers, improve the timeliness and increase the volume of
data collection, and create a better understanding of the data on a
real-time basis.
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 ability 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. Additional resources are critical to expanding the
Agency's capability to monitor and investigate the competitive
implications of structural changes and behavioral practices in the meat
packing industry, and will enhance our capability to support legal
actions that require complex economic and statistical analyses.
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 of $795,000 for packer competition and
industry structure 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 $750,000 increase for poultry compliance activities will allow
GIPSA to better ensure that contract poultry growers are treated fairly
when dealing with large, integrated poultry companies, and protect them
from unfair and discriminatory practices, as recommended by the
Advisory Committee on Agricultural Concentration. Specifically, 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. Additional funding 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.
A one-time appropriation of $3,000,000 will allow GIPSA to take the
steps needed to strengthen its overall ability to investigate
anticompetitive practices, and to provide greater flexibility and
efficiency in enforcing all of the trade practice and payment
protection provisions of the Packers and Stockyards Act. Without
restructuring the field operations to provide for fewer offices with
larger staffs, it will not be possible to incorporate the level of
expertise needed to address the increasingly complex competitive issues
facing the livestock, meat, and poultry industries.
A request is included to provide for 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 request is enacted, the cost of
administering this provision would be recovered through license fees.
Finally, concerning our proposal for new user fees, we realize that
in the past, the Congress has not approved these requests. However,
please consider this in terms of a service being provided that
primarily benefits an industry or individual. Should taxpayers as a
whole pay or should those who benefit? As with the current fees for
inspection and weighing services, we believe that those who primarily
benefit should pay.
conclusion
Mr. Chairman, this concludes my statement. I appreciate the
opportunity to testify on behalf of the Grain Inspection, Packers and
Stockyards Administration (GIPSA). I will be happy to answer any
questions the Committee may have.
______
Biographical Sketch
enrique e. figueroa
Dr. Enrique E. Figueroa comes to USDA from Cornell University where
he was an associate professor in the Department of Agricultural,
Resource and Managerial Economics since November 1992. His initial
appointment began in November 1986 as an assistant professor.
Throughout his stay at Cornell, Dr. Figueroa's work focused on
horticultural product marketing issues. Prior to that he was a post-
graduate research agricultural economist and a research assistant in
the Department of Agricultural Economics at the University of
California at Davis.
His experience also includes work as a staff assistant to the House
Committee on Agriculture for the U.S. Congress in 1982 and 1984. He
spent four years with the California Conservation Corps from 1976 to
1980. He has an M.S. and Ph.D. in agricultural economics from the
University of California at Davis, along with a M.S. in horticulture.
His B.S. degree in agricultural education is from California State
University in Fresno.
Dr. Figueroa has extensive experience in both research, extension,
and teaching. He has worked on a number of projects in many parts of
the world and has trained a number of graduate students.
Inspection Changes Due to HACCP
Senator Cochran. With respect to the Food Safety and
Inspection Service, I know that one of the centerpiece programs
now is the HACCP Program, this Hazard Analysis and Critical
Control Point Program. How about that? [Laughter.]
It was designed to be based on science, to be more
efficient to find things that the old way of inspecting carcass
by carcass with the naked eye could not possibly detect, and to
provide information to those who were processing the carcasses
so that problems could be corrected and the food products be
safer.
My question is, What changes, if any, can you tell us have
been made in these plants with the introduction of this new
procedure? What has been discarded that used to be done? What
is being done under the new program?
Dr. Woteki. Well, there are very substantial changes that
have resulted as HACCP has been implemented over this last year
plus. Our implementation began last year with sanitation
standard operating procedures, as well as the beginning of
testing for generic E. coli. Under that first step in
implementation, our plants have essentially taken the
responsibilities for having and following sanitation plans
themselves. Our inspectors' role changed too. Instead of
mandating the sanitation, they are overseeing the companies and
the implementation of their standard operating procedures for
sanitation.
Then in the 300 of the largest plants that began operations
in January of this year under the HACCP rule, we have also seen
companies taking additional responsibilities for the ultimate
safety of the product that they are producing and meeting the
performance standards that are required under the rule for
Salmonella.
In addition, our inspectors' role has changed very
substantially. The number of tasks have been reduced and
systematized, and the role that they play within the plant in
overseeing the companies' implementation of their HACCP plans
has been another very substantial change.
It has been a cultural change as well as a change to meet
the requirements of performance standards in this science-based
inspection approach.
Senator Cochran. If you could for the record--I know this
may be too difficult to do in an oral response to my question--
list the tasks that were performed by the inspectors under the
old system that are no longer being performed. That would be
nice to see.
Dr. Woteki. Yes; we can very easily submit that for the
record.
[The information follows:]
For the record, we are providing the Inspection System Guide
contained in FSIS Directive 5400.1, which contains tasks that
inspection program personnel are no longer required to perform in
establishments that are subject to the HACCP system regulations. In
addition, we are providing Inspection System Procedures contained in
FSIS Directive 5400.5 that replace the Inspection System Guide.
FSIS Directive 5400.5
inspection system activities
I. Purpose
FSIS is modernizing its approach to inspection to rely less on
after-the-fact detection of problems and more on verifying the
effectiveness of establishment processes and process controls. The
Agency established the basic regulatory framework for this approach
when it issued the Pathogen Reduction-Hazard Analysis and Critical
Control Point (HACCP) Systems final rule (July 1996), which amended the
regulations to require official establishments to take preventive and
corrective measures at each stage of the food production process where
food safety hazards occur.
A modernized approach to inspection requires changes in the
performance-based inspection system (PBIS) and the activities FSIS has
conducted under that system--in particular, the tasks in the Inspection
System Guide (ISG). Therefore, for establishments that are subject to
the HACCP system regulations, FSIS is replacing the ISG and portions of
the PBIS directives with this directive and its attachments. Inspection
program personnel are to follow the instructions in this directive in
every establishment that is subject to the HACCP system regulations.
II. [Reserved]
III. Reason for Issuance
FSIS is issuing this directive to provide procedures, forms, and
instructions that are appropriate for use in a modernized inspection
system.
In an official establishment, inspection program personnel are to
follow the instructions in this directive (along with its attachments)
if the establishment is subject to the HACCP system regulations.
Senator Cochran. One of the suspicions out there, I will
have to tell you, is that nothing has changed. We have got more
and new things to be done under HACCP, but the old ways have
not been abandoned and the activities of the inspectors are
pretty much the same as they have been, except with new
requirements on the part of the plan operators. That is a
suspicion.
Brucellosis
On the other side of the table, let me get a status report
on the brucellosis program. From what I hear, it has been a
tremendous success and you have every right to be proud of the
accomplishments there. Are we at a point where brucellosis is
no longer a problem?
Mr. Dunn. At this time, Mr. Chairman, we have nine States
yet to achieve brucellosis-free status. We intend to complete
that operation by calendar year 1999.
Senator Cochran. Well, I congratulate you on a very
successful program, and the States have been actively involved
in helping make that a success too. I know in my State of
Mississippi, former Commissioner of Agriculture Jim Buck Ross
used to send me a letter up here every year telling me that
status and where we were and what was needed in order to
continue to make progress.
Mr. Dunn. Mr. Chairman, it has been a true partnership
between the States, the Federal Government, but also the
producers as well.
Sanitary/Phytosanitary Standards
Senator Cochran. There are a lot of inspection points now
because of importing more fruits and vegetables and other food
stuffs. Particularly under NAFTA, the freedom to import and
export has increased the requirements for inspections and sites
of inspections have increased, as I understand it.
With this added workload, how are you going to do all the
things you have to do in this global economy and still assure
the U.S. consumers that things that are being imported are
safe, wholesome, and not contaminated?
Mr. Dunn. Mr. Chairman, we have been working very
diligently with our trading partners to ensure that we can
establish sanitary and phytosanitary procedures that are based
on science and fact. APHIS, through its international services,
has been working in country with these individual countries to
ensure that we have equivalencies and verification of those
equivalency programs for protection. I will ask the
Administrator, Mr. Medley, to elaborate.
Mr. Medley. Mr. Chairman, our 1999 budget requests
increases in two areas. One is in our animal health monitoring
and surveillance program. The other is in the pest detection
program. These program increases are directly related to your
question about the need to enhance our domestic infrastructure
and to enhance our surveillance systems to certify the health
status of American agricultural products.
We also conduct inspections at the first point of entry.
Under our agricultural quarantine inspection program, we are
increasing the number of detector dogs used to identify
prohibited agricultural products. We are using more
sophisticated x-ray technology in the identification process as
well. We are also shifting to a more risk-based inspection
approach. With the enhanced value of agricultural exports to
our economy, these safeguard measures provide protection for
our domestic agricultural producers from exotic pests and
diseases.
Single Food Safety Agency
Senator Cochran. The National Academy of Sciences, as I
understand it, is coming out with a proposal that there be one
agency in the Federal Government that would be the food safety
agency. Now, the Food and Drug Administration has
responsibilities under current law, and the Department of
Agriculture has separate responsibilities under current law.
Dr. Woteki, what is your reaction to this proposal and how
is the administration planning to respond to that proposal?
Dr. Woteki. Well, we are very interested in what the report
is going to say. I think the committee is going to be holding
its first meeting later this month and begin considering this
question of how should the Federal Government be organized to
improve the safety of the food that is made available to our
public.
You may recall that the administration did consider this
question early on during the National Performance Review,
during the first year of that activity. They essentially came
to the conclusion that we were going to better coordinate our
activities. The President's food safety initiative and the
budget request that we have submitted is a good example of how
we have been working together to make the various parts of the
Department of Health and Human Services, the EPA, as well as
the various agencies within USDA that have a role to play in
improving food safety, work better together.
Irradiation
Senator Cochran. One of the new technologies that some are
arguing ought to be used more in the food industries to help
protect the consuming public is irradiation as a way to kill
bacteria and other contaminants in food.
What is the reaction of your office to this suggestion and
what can be done by the administration to encourage more
irradiation of foodstuffs, if this is a correct approach?
Dr. Woteki. Well, as you are probably well aware, the Food
and Drug Administration considered the question of whether
irradiation should be approved for use in red meat and decided
the safety question with respect to red meat in December.
Senator Cochran. They decided that it was safe.
Dr. Woteki. That it was safe, exactly.
Our role now within the Food Safety and Inspection Service
is to develop a proposed rule that we will put out for public
comment later this summer about how that technology should be
used and applied within meat slaughter and processing
establishments and also how that product then should be
labeled.
Redeployment of Inspectors
Senator Cochran. Let me ask you this. With the advent of
the new technologies for analyzing food as it is being
processed for sale in our country, is it necessary that we have
the inspectors doing a carcass-by-carcass inspection any
longer? Is that a waste of money?
Dr. Woteki. Well, we are definitely giving a lot of
consideration to how, within a HACCP environment, our
inspection resources should be used. We are working with
industry to develop some pilot projects to consider how those
inspection resources, the inspectors' time, can be better used
to focus on food safety concerns and to free up their time so
that it can be used and redeployed into other areas, again with
the primary emphasis on improving the safety of the product.
Senator Cochran. As I mentioned when we started, we
apologize again for the short period of time we have for oral
questions. I have a number of questions that I intend to submit
to you and I hope you will be able to respond to those in a
timely fashion on a wide range of subjects. I do not want to
leave anybody out. I hope you do not feel bad that I may not
have asked you something that you wanted me to ask during this
abbreviated hearing.
My good friend, the distinguished Senator from Arkansas, is
here. As I pointed out, he was over in the full committee
markup on the supplemental appropriation. I am going to have to
leave for another commitment that I made, and I am going to do
something to show you how we get along up here occasionally. I
am going to turn the gavel over to a Democrat and let him ask
whatever questions he wants to ask and then adjourn the
hearing.
I do want to say that we will continue our hearings on the
budget request for the Department of Agriculture on March 24 in
this room. We will have witnesses from the Department's Farm
and Foreign Agriculture Service programs.
I am going to yield the floor to my good friend and thank
you again for your cooperation with our committee. Thanks very
much. Senator Bumpers.
HACCP Implementation
Senator Bumpers [presiding]. Thank you, Mr. Chairman. You
could not have picked a worse time to turn the gavel over to
me. I have been so busy with the supplemental appropriation, I
really have not had a chance to prepare for this hearing, as I
would like.
But there is one thing that is still a little bit of a
thorn in my throat.
I wanted to ask you, Ms. Woteki, about the HACCP Program,
first of all. How do you rate the effectiveness and success of
that program?
Dr. Woteki. We have been at the full implementation of
HACCP in about 300 plants just since January of this year. Our
overall assessment of that first stage of implementation is
good. It has gone relatively well. There have been some
problems that have arisen of the type that we expected would
occur with changes as large in magnitude as this is, both for
the plants as well as for our inspectors.
When there have been problems that have arisen over this
last month and a half, our analysis of the situation has been
that plants have reacted very quickly and very positively. Our
inspectors have at times required some additional clarification
of their roles and responsibilities, which we have been swift
in providing to them. So, I think for a change as big as this
one has been, our assessment of implementation is it is going
pretty well.
User Fee Proposal
Senator Bumpers. How quickly could you start collecting
these user fees that you are requesting?
Dr. Woteki. Well, we have included in our request
approximately $100 million that will enable us to start up that
program in the first quarter.
Senator Bumpers. In 1998?
Dr. Woteki. In fiscal year 1999.
Senator Bumpers. In 1999, $100 million?
Dr. Woteki. Correct.
Senator Bumpers. And how much, say, in the year 2000?
Dr. Woteki. At that point the program would be in full
implementation.
Senator Bumpers. And would produce how much revenue?
Dr. Woteki. We anticipate that it would produce the revenue
that would fully cover the cost of Federal inspection
activities.
Senator Bumpers. And how much would that be if it were in,
say, 1998 or 1999?
Dr. Woteki. It will be approximately $570 million.
Senator Bumpers. Do you think the meat and poultry
processors would pass that cost on to their consumers?
Dr. Woteki. The economists that we have consulted in the
development of this proposal have told us, yes, they believe
the costs will be passed on to the consumers and those costs
will amount to less than a penny per pound of product.
Seafood Inspection
Senator Bumpers. You also have jurisdiction over fish
inspection, do you not?
Dr. Woteki. No.
Senator Bumpers. Who does?
Dr. Woteki. The Food and Drug Administration and the
Commerce Department.
Senator Bumpers. Well, I am not going to burden you with
the question I was going to ask, but do you know what
percentage of the domestic fish is inspected? Does anybody on
this panel have any idea?
Dr. Woteki. Mr. Billy previously worked on this issue.
Senator Bumpers. Mr. Billy.
Mr. Billy. I formerly was the Director of the Office of
Seafood for the Food and Drug Administration. I may be a little
out of date in terms of my statistics.
The basic regulation of seafood safety falls to the Food
and Drug Administration, and they operate an inspection system
that is of a surveillance type. So, they spot check plants and
products at a frequency appropriate to the hazards that are
associated with the various types of seafood products.
In addition to the mandatory system that they have, the
Commerce Department operates a voluntary program similar to the
programs operated by the Agricultural Marketing Service for
other commodities. As I recall, about 20 percent of the seafood
produced in the United States is under that voluntary program.
Under that system, there are inspectors present daily and it
operates more closely aligned to the way you would think meat
and poultry inspection is done, although tailored to seafood.
Fruit and Vegetable Inspection
Senator Bumpers. The President is now proposing to inspect
all fruits and vegetables coming into the country from abroad.
Is that correct?
Mr. Billy. As I understand it, under the food safety
initiative, the proposal is to strengthen the inspection
activity of both domestic and imported fresh fruits and
vegetables.
Senator Bumpers. Is that also Commerce's responsibility?
Mr. Billy. It is primarily a Food and Drug Administration
responsibility, but Assistant Secretary Dunn may want to
comment in terms of the role that the Agricultural Marketing
Service will play.
Senator Bumpers. I would be glad to hear it, Secretary
Dunn.
Mr. Dunn. Mr. Chairman, what we have requested in our
budget is $6.3 million to begin microbiological testing for
fruits and vegetables as part of the President's food safety
initiative. We are going to be able to minimize that cost by
putting it in with our pesticide data program that we currently
have where we work through 10 different States to do testing
for pesticide data residue. That will allow us to begin to have
some inkling of how much microbiological problems there are in
fruits and vegetables that come in, and we will have that
information that we will turn over then to the Food and Drug
Administration for action.
Senator Bumpers. I want you to know I am hot for that
program, and I was amazed, when the President offered that,
that that was not already in effect. Most of the people in the
country, when they buy--and in the winter months, you know that
virtually everything you are eating is imported, and I think
most people assume that it has been inspected and that there
are no pesticide or herbicide residues on any of fruits and
vegetables that have been imported. I would like to see that go
forward, of course, and implemented at the earliest possible
time.
Ms. Woteki, how many poultry and meat plants were closed
down totally in 1997 under the HACCP Program? Do you know the
answer to that?
Plant Closures Under HACCP
Dr. Woteki. The numbers that I have with me are for 1997
and year to date so far in 1998. It includes January, February,
and March of this year.
Senator Bumpers. Say that again. I am sorry.
Dr. Woteki. The numbers that I have with me that I can
report to you today include calendar year 1997 as well as 3
months of calendar year 1998.
Senator Bumpers. Fine.
Dr. Woteki. We have withheld inspection in 28 plants for
failure to implement their sanitation standard operating
procedures.
Senator Bumpers. Let me interrupt you for just a moment.
How many plants are we talking about total? How many do you
inspect, meat and poultry?
Dr. Woteki. Over 6,000.
Senator Bumpers. How many of those are poultry?
Dr. Woteki. FSIS inspects 428 plants that produce only
poultry products, and 3,464 plants that produce both meat and
poultry products.
Senator Bumpers. Go ahead.
Dr. Woteki. There have been 50 actions to withhold
inspection which include 28 plants from whom we have withheld
inspection because of repetitive SSOP deficiencies, in 11
plants because of basic E. coli failures, in 10 plants because
of HACCP system failures--and in this case, there are about 300
plants since January of this year that have come under HACCP-
based inspection. Inspection has been withheld in one non-HACCP
plant for zero tolerance failures.
Import Inspection
Senator Bumpers. You also inspect imported meat and
poultry, do you not?
Dr. Woteki. Correct.
Senator Bumpers. Do we import any poultry into this
country?
Dr. Woteki. A small amount.
Senator Bumpers. Pardon?
Dr. Woteki. A small amount.
Senator Bumpers. What kind of inspection do you perform on
imported poultry and meats? Mostly in meat I assume. A lot of
it comes from South America, does it not? Argentina?
Dr. Woteki. Yes; we do a twofold inspection. One is that we
evaluate countries that are exporting to us to determine
whether they have a system that is equivalent to our own
inspection system, and then as product enters the country, we
do a random inspection of all of that product that comes in.
Senator Bumpers. Are you telling me that we would not let a
carcass of beef into this country that came from Argentina that
was not subjected to as rigid an inspection in Argentina as it
would be as if it were produced here?
Dr. Woteki. That is correct, sir.
Senator Bumpers. Do you have any way of verifying that,
validating that?
Dr. Woteki. Yes; we do.
Senator Bumpers. How do you do it?
Dr. Woteki. Well, I would like Mr. Billy to give you the
details on how we go about doing that.
Mr. Billy. Only 37 countries are authorized to export to us
out of all the countries that presumably could.
As Dr. Woteki described, we do a thorough evaluation of a
country's inspection system to ensure that it is equivalent to
ours before we will even approve them to export. That includes
not only reviewing all their laws and regulations, but going on
site and making sure that what they have on paper actually is
being done in the plants and that their pesticide monitoring
program, et cetera are being followed.
Then once we allow shipping to start, as Dr. Woteki
described, we randomly pick shipments and inspect them based on
past performance and the risks associated with the product in
question. This is done by our inspectors at what are called
inspection houses, and we keep records of the performance of
plants and countries.
Then also as an additional step, we send auditors over to
these countries. Our policy is to do that once a year. We
review their program and we audit some percentage of the plants
to make sure that they are continuing to follow the same
procedures that we had reviewed previously. If they do not, we
will delist the plants, have the country delist plants, or we
will delist the country. We have done that on many occasions.
It is a very strict system.
Senator Bumpers. Mr. Billy, how about canned meats?
Mr. Billy. Same thing, same procedure.
Senator Bumpers. You inspect the plants where the meat is
canned?
Mr. Billy. Yes, sir. Yes; we do.
Senator Bumpers. Do you have authority on that or is that
an FDA----
Mr. Billy. No; we have specific authority in the Meat Act
and the Poultry Products Act.
Hudson Foods Recall
Senator Bumpers. Dr. Woteki, let me ask you this. Hudson
Foods bought beef from 15 different beef plants where the
cattle were processed and the beef cut and maybe even ground. I
am not sure. I think it was ground in the Hudson plant. But,
for example, they took the carcass, cut all the meat off of it,
transported it, 15 different packing plants, every one of them
USDA inspected, FSIS inspected.
Now, when the so-called outbreak in the Hudson plant in
Iowa occurred--or in Nebraska, rather. Was it Nebraska? It was,
was it not?
Dr. Woteki. The plant was located in Nebraska. The outbreak
was in Colorado.
Senator Bumpers. Yes.
But in any event, the last I heard FSIS had reduced the
possibilities of where that beef came from. It did not
originate in the Hudson plant. It originated in another plant
that was FSIS inspected and transported there.
Now, Hudson bore the brunt of the entire thing, and he was
innocent as a newly ordained nun.
So, my question to you is, have you ever identified which
of the two plants that it had been narrowed to shipped the beef
to the Hudson plant?
And if I have misstated any thing of fact, do not hesitate
to question it.
Dr. Woteki. No, sir; we have not identified the source of
the original contamination.
Reworked Product
There is one clarification, though, that I think is
worthwhile bringing about. I think Hudson did have a
responsibility for maintaining practices that would prevent the
further contamination of product they were processing within
their plant, and they did have a practice they called return or
rework where product--broken patties or other product--was put
into the cooler overnight and brought back the next day and put
into production. So, they had the possibility for
recontaminating product every day they were producing.
Senator Bumpers. Were you able to determine that that
practice in that Hudson plant caused this outbreak?
Dr. Woteki. We were not able to determine that that was the
cause, but it does bring up the possibility of recontamination
from----
Senator Bumpers. I understand the practice might not be the
ultimate practice even though this was a brand new facility,
state-of-the-art, and I assume that FDA had known for a long
time--the FSIS had known for a long time that this was a
practice in that plant.
Dr. Woteki. I know that this type of practice is common
within the meat industry. I believe that based on the Hudson
experience, many companies have reconsidered the use of this
practice and discontinued it.
Senator Bumpers. Have you issued an order to require no
plant to use this practice?
Dr. Woteki. No; we have not done that.
Senator Bumpers. Why have you not?
Dr. Woteki. We have held a public meeting on this issue and
we are in the process of developing some guidance on this
issue.
Senator Bumpers. If this was a practice that you think
could possibly have been a contributor to this problem, why
have you not made every processing plant discontinue the
practice?
Dr. Woteki. I would like Mr. Billy to comment on the
actions that we have undertaken to address this practice.
Guidelines Versus Command and Control
Mr. Billy. We have held two meetings with the industry, all
of the industry that has concerns about this particular area,
the problem being the contamination of hamburger material with
E. coli O15:H7. We have made it clear that these types of
practices affect the risk of the organism, if it is, in fact,
present in the raw material or if it somehow is introduced into
the plant. This can contaminate more than the day's production.
We have encouraged changes in the procedures that plants
follow. We have drafted and will be sharing an announcement,
just about to go out, guidelines that explain in very
straightforward language how these different types of practices
affect the exposure of the plants in terms of this organism
being present in their product.
Mr. Chairman, we are trying to move away from the
traditional command and control approach. HACCP is about seeing
plants take responsibility for how they produce their product,
to use procedures that minimize the risk to the consumer. That
is why we are working on guidelines. That is why we have had
meetings, but we want the plants to take responsibility and
have appropriate control measures in their HACCP programs. Many
plants have already done so and we are going to encourage all
plants that produce this type of product to do that.
I am very concerned about falling back into the traditional
approach of telling plants specifically you can do this, you
cannot do that, at 11 o'clock you must make this step; the
practices of the past.
I believe the industry is committed. I believe they want to
produce safe products. They have certainly shown to us with
their HACCP programs that we have seen so far that they are
taking good, positive steps to do that, and we are going to
encourage more. I think that is the prudent strategy.
We have included the public in this process. They are aware
of what we are doing and how we are approaching it. I think
there is a reasonable degree of comfort that this is a sound
approach that will net us a safer product for the future.
Impact of Recall
Senator Bumpers. I raise this issue because I am familiar
with all of these people in my State. I watched Hudson Foods
from the time I was elected Governor, maybe doing a few million
dollars a year, go to $1.7 billion. I have always thought that
the people who have the greatest incentive to put out a pure
product are the companies themselves.
In this particular case, I did not know quite what to think
when this thing first burst on the scene, but as time went by
and I found out that that contamination almost certainly
originated in another USDA-inspected plant, not in a Hudson
plant, and yet every press conference by the Department, every
utterance by the Department placed the entire burden on Hudson
Foods and made it so they had no choice but to either fold or
to sell. And they sold for hundreds of millions of dollars less
than that plant would have brought 1 day before this happened.
Until this very day, until this moment, you cannot--I am
not being all that critical about the process. I am concerned
about the public relations that occurred during that period of
time. You cannot tell me with any degree of certainty that they
were culpable in any way. You are telling me that the procedure
they used was one that was used in virtually all these plants,
and that while it might have lent itself to the possibility of
Salmonella or E. coli breaking out, you cannot state at all
that that is what caused this problem.
Yet, here is a family who worked themselves to death over
the past 25 years to build that business and all of a sudden,
they are out of business at a cost of several hundred million
dollars to them.
Reworked Product
Mr. Billy. Mr. Chairman, we do have information that
indicates product that was produced in late April or early May
and associated with some of the illnesses in Colorado was
subsequently put into use roughly 4 weeks later, and we can
provide the specific information for the record. That
introduction of the return material into that later production,
in fact, may well have introduced the organism into that later
day's production and caused the bulk of the outbreaks of
illness in Colorado. So, to the extent we were able to glean
information from the company records, we do have information to
indicate that the plant took part in practices that appeared to
have caused the organism to be spread from one day's production
to another.
I would be happy to provide you with that information for
the record.
Senator Bumpers. Well, the information now is of not much
benefit. I mean, the damage has already been done.
I have chastised myself in a way because I did not speak up
in the beginning, but the reason I did not speak up is because
I did not know. I thought maybe the contamination was going to
be widespread. I thought that maybe Hudson was culpable in the
whole thing. I had no way of knowing, and I was listening to
these press conferences constantly about going from a few
pounds of beef until we wound up with 25 million pounds and
then the plant then shut down. It is a powerful thing.
I consider Secretary Glickman one of the best friends I
have ever had. I have known him for years, long before he was
Secretary, and I think he is a man of immense integrity,
immense talent, and I think he does, by and large, an excellent
job in the Department of Agriculture. So, I am reluctant to--I
am not chastising him because none of us really knew in the
beginning, but I am just saying the end result was catastrophic
so far as I am concerned for innocent people.
This morning on the way to work--my chief of staff who
lives in the neighborhood and I drive to work together. I was
talking about a large gathering last night that I had spoken
to, and I told her, I said, you know, when I started talking
about how lucky we are to live in a nation where, when you eat
food, you know it is pure, when you drink water, you know it is
pure, and when you take a dose of medicine, you know it has
been tested and tested and tested, when you are in an airplane,
you feel relatively safe because you know you are on a radar
that is handing you off from one to the next one, and on and on
and on it goes.
But I saw two or three people in the audience. I could tell
they did not like to hear that, and we were talking about that.
I have been in this business a long time. I can watch an
audience and I can tell who appreciates what I am saying and
who does not. I could tell there was some anti-Government
sentiment in that audience.
Sometimes anti-Government sentiment is irresponsible,
reckless, and irrational, but I told her this morning, I said,
but you have ever been on the receiving end of an autocratic
bureaucrat enforcing a regulation that you are quite sure he is
misinterpreting or using to abuse you, you do not ever get over
that.
And that is the reason for the antipathy toward the
Internal Revenue Service. They brought most of this on
themselves. Now, I am not for abolishing the Internal Revenue
Code or the Internal Revenue Service. All I am saying is I
understand the hostility people feel about it, and I certainly
understand the Hudson family's attitude about the Federal
Government, and I might say it is toward OSHA as much as it is
FSIS.
But our job here is to try to make Government responsive,
try to make it function. You will not ever make people like
Government. You are not ever going to have a wholesale respect
for Government. All I am saying is our job is to constantly day
by day do the best we can and improve it as much as we possibly
can.
Well, that is enough of that lecture.
I have just one other question, maybe a couple.
Boll Weevil
Mr. Medley, I wanted to ask you about the boll weevil
program because my State is going to get left on the starting
blocks. We are just getting started on it and now you are
cutting the budget by $12 million. Does that bring the boll
weevil eradication program to a halt?
Mr. Medley. Senator, the cut of $12 million in the boll
weevil program budget request is the Department proposing to
move out of those areas where we have been successful in
eradication and also provide a way by which the producers can
get the startup costs, which sometimes can be very high,
through an FSA loan program.
It is an attempt to refocus our resources. Because of the
success of the program and because of the high return for
producers that have invested in the eradication program, we can
move from providing direct support to providing technical
assistance.
Senator Bumpers. Mr. Medley, let me interrupt you just a
moment. You are phasing out the grant program in favor of a
loan program. Is that correct?
Mr. Medley. Well, the appropriated funds in favor of a loan
program; yes, sir.
Senator Bumpers. Well, so my question is this. How about
States like mine for example? This program has been going now,
what, 5 or 6 years, a little longer?
Mr. Medley. Yes; a very successful eradication program.
Senator Bumpers. But everybody else had enjoyed the fruits
of the grant program and now that you get down to Arkansas, you
are converting it to a loan program, if I understand it. And I
do not consider that fair for my cotton farmers.
Mr. Medley. Senator, in the beginning, the eradication
program was funded through a 70-30 cost share with 30 percent
of the funding coming from the Government through
appropriations. Over the last several years, there are more new
eradication programs starting with growers paying more of the
eradication costs because of the economic benefits. For
instance, producers contribute over 85 percent for new
eradication programs in Texas. As we demonstrate that the
program can be successful, we have requested reduced
appropriations for the eradication program. It is different
from when the program first started.
Senator Bumpers. I am enjoying this so much but we have got
a vote on here. So, I will submit a few questions.
Jim, I am sorry I did not have anything for you this
morning. [Laughter.]
Mr. Baker. It does not bother me a bit, sir. [Laughter.]
Senator Bumpers. I thought you were rather enjoying it.
Mr. Baker. I was.
Submitted Questions
Senator Bumpers. We have a vote on, and so I am going to
have to do that. I will submit a few questions in writing and
ask that you at your earliest convenience answer those
questions.
[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
Question. The President's fiscal year 1999 budget proposes new
language under the Food Safety Inspection Service's Salaries and
Expenses account which would waive the requirement that ``Federal funds
for any year shall not exceed 50 per centum of the estimated total cost
of the cooperative program'', as required by the Federal Meat
Inspection Act. What is the rationale for increasing federal support to
the States for this program, especially when the Administration is
requesting private funds to pay all costs for inspection of the private
companies?
Answer. This waiver is needed to assist the States and ensure
timely implementation of all HACCP requirements in the State inspection
programs. The States will need assistance in developing infrastructure
support for HACCP-based inspection in the areas of automation,
laboratory pathogen testing, and inspection workforce training. This
assistance will provide State programs with the same capability as FSIS
in these critical areas so that State requirements will be ``equal to''
those at the Federal level, as required by the statutes.
The budget request will extend the current FAIM project initiative
to the States, which would eliminate the need for each State to design,
develop and implement automated systems that will support communication
with FSIS automated systems. FSIS has already tested and proven the
value of this infrastructure and the cost to FSIS would be less than
paying 50 percent of the full cost for twenty-five individual State
automation programs. This proposal will assist in moving toward a
seamless food safety program through support of a uniform nationwide
inspection system.
Question. How does the Administration propose to pay for this
increase?
Answer. The Administration proposes a net appropriation of nearly
$150 million that includes $7.8 million for this initiative.
Question. The President's budget proposes legislation to require
user fees to recover the full costs of meat, poultry, and egg products
inspection. How many inspectors are supported by the fiscal year 1998
budget?
Answer. The fiscal year 1998 budget supports a total of 7,628
permanent full-time inspectors and the full-time equivalent of 570
other than permanent full-time inspectors.
Question. Does the fiscal year 1999 budget propose an increase or
decrease in the amount of funding for inspectors?
Answer. The fiscal year 1999 budget proposes increases totaling
$19.8 million for mandatory pay, retirement, and non-salary costs, as
well as assumption of the Florida State inspection program to support a
constant level of inspection staffing. FSIS will continue the process
of transforming the inspection process within the same overall staffing
levels in 1999 that we have in 1998.
Question. Would all inspectors be supported by the user fee
collections proposed?
Answer. Yes, the proposal would cover the full cost of inspection,
including the salaries and benefits of all inspection personnel.
Question. How much will the consumer have to pay under the
Administration user fee proposal?
Answer. We estimate the overall impact on costs as a result of
these fees will be less than one cent per pound of meat, poultry, and
egg products production.
Question. Why is a $100 million appropriation required to implement
the user fees?
Answer. Under our user fee proposal, establishments will be billed
on a monthly basis, with fees due by the end of the month following the
billing period. Because no fees will be received in the first month of
the fiscal year, start-up funding is requested to cover FSIS budget
obligations that must be paid in the first month. In addition, a
reserve is needed to maintain a stable Federal inspection program as
the flow of user fee revenue may not match estimated costs. Of the
total $100 million request, estimated costs include $48 million for
fiscal year start-up, and $52 million for program reserves.
Question. What start-up costs would this amount support? Please be
specific.
Answer. The obligations that must be paid before the receipt of
user fees are primarily for the salaries and benefits of the FSIS
workforce, which is estimated at 85 percent of the total cost of the
Federal inspection program.
Question. When does the Administration plan to send to the Congress
the legislation authorizing user fees?
Answer. The proposed user fee legislation is presently in clearance
at the Office of Management and Budget (OMB) and will be submitted to
Congress very soon.
Question. Did the Administration submit its user fee proposal to
the Congress last year?
Answer. Yes, on June 26, 1997, Secretary Glickman transmitted to
the President of the Senate, Albert Gore, and the Speaker of the House,
Newt Gingrich, a draft bill, ``To authorize the Secretary of
Agriculture to impose user fees for the inspection of livestock, meat,
poultry, and products thereof, and egg products.''
Question. Dr. Woteki, you mention in your statement that you have
been tapped as the coordinator of the President's Food Safety
Initiative. Among other duties, one directive is to develop and carry
out a plan to ensure the safety of domestic and imported fruits and
vegetables. How does the agency's fiscal year 1999 budget address the
President's initiative to enhance the safety of imported and domestic
fruits and vegetables?
Answer. While FSIS does not inspect fruits and vegetables, $13
million of the $46 million included in the USDA fiscal year 1999 budget
for the President's Interagency Food Safety Initiative has been
specifically targeted for the President's Directive on the safety of
domestic and imported fruits and vegetables: $4.0 million for the
Cooperative State Research, Education, and Extension Service (CSREES)
for research and producer education; $2.7 million for the Agricultural
Research Service (ARS) for research on the development of new food
safety technologies aimed at reducing and controlling pathogens on
fruits and vegetables; and $6.3 million for the Agricultural Marketing
Service (AMS) to establish a microbiological data program on fresh
fruits and vegetables.
florida inspection program
Question. Florida terminated its funding for the Cooperative State
Inspection Program on December 1, 1997. Why did the State of Florida
terminate its funding for this program?
Answer. Governor Lawton Chiles informed Secretary Glickman, in his
letter of July 23, 1997, that the State budget adopted by the Florida
legislature for the fiscal year 1997-98 reduced funding for the State
meat and poultry inspection program sufficiently to necessitate
termination of the State program in December 1997 when funds would be
depleted. Details were not provided for the rationale used by the
legislature to prioritize funds.
Question. Does the law direct FSIS to fund these activities should
a state choose not to participate in this program?
Answer. FSIS is mandated by law to assume responsibility,
previously held by a State, for administering meat and poultry
inspection programs with respect to operation and transactions within a
State. In accordance with section 301(c)(3) of the Federal Meat
Inspection Act and section 5(c)(3) of the Poultry Products Inspection
Act, States that have terminated their inspection programs are
designated to receive Federal inspection with respect to operations and
transactions within the State.
Question. Does the FSIS anticipate any other of the participating
25 states terminating its participation in this program? If so, which
ones?
Answer. FSIS has not received any notification that a State is
planning to terminate its program.
Question. Should the Committee propose to not provide this needed
increase, what are the consequences?
Answer. The requested increase in funding is needed to ensure full
coverage of inspection assignments for which FSIS assumed
responsibility when Florida terminated its program. Without this
increase, FSIS will absorb the additional workload, making adjustments
as needed in resource allocations based on inspection priorities.
president's food safety initiative
Question. How much money in fiscal year 1998 did FSIS contribute to
the ``Fight BAC!'' educational campaign?
Answer. FSIS is contributing $75,000 in fiscal year 1998 towards
the ``Fight BAC!'' campaign. This includes $30,000 for printing ``Fight
BAC!'' brochures and $45,000 for distribution of the brochures through
the Consumer Information Center in Pueblo, Colorado. Additionally, FSIS
is planning a multi-year education initiative that is part of the
President's Food Safety Initiative. The Agency proposes an increase of
$500,000 in the fiscal year 1999 budget request to develop new
educational products and support distribution of existing products.
Question. What was FSIS' role in this campaign?
Answer. FSIS played a leading role in creating the Partnership for
Food Safety Education, which brings together representatives from
industry, government, public health, and consumer organizations. The
Partnership developed the ``Fight BAC!'' campaign. FSIS is completely
involved in all aspects of the Partnership, including selection of the
public relations firm that created the ``Fight BAC!'' campaign, and
review of all educational materials, the public service announcement,
and Web site design and content. FSIS also played a major role in
coordinating the ``Fight BAC!'' press conference held at USDA. FSIS
continues to play an important role in recommending new promotional
opportunities for the ``Fight BAC!'' campaign and planning the next
phase of the campaign, which is to develop materials for the classroom.
Question. FSIS is planning a multi-year education initiative which
is a part of the President's Food Safety Initiative. The agency
proposes in the fiscal year 1999 budget request an increase of $500,000
to develop new educational products and support distribution of
existing products. Are these additional funds to continue the ``Fight
BAC!'' educational food safety campaign?
Answer. The four key safe food handling messages contained in the
``Fight BAC!'' campaign will continue to be the cornerstone of new
materials developed by FSIS. The Agency proposes in the fiscal year
1999 budget request an increase of $500,000 to develop new educational
products and support distribution of existing products in order to help
food handlers change unsafe behaviors.
Within the President's Food Safety Initiative, there are many
consumer education projects identified that require government funding.
For example, FSIS is proposing to produce a safe food handling video
for senior citizens at risk for developing foodborne illness. Reaching
at risk audiences is one of the goals of the President's Initiative.
FSIS is currently investigating how best to integrate food safety
education into the school environment. Once that analysis is completed,
plans will be developed and funded by the request.
Question. Do other USDA agencies develop and distribute
informational products regarding food safety? If yes, which ones and
how does this educational material differ from FSIS'?
Answer. There is no other agency within USDA that develops and
distributes national food safety information materials to consumers.
However, FSIS has worked very closely with the Cooperative State
Research, Education, and Extension Service (CSREES) at the State level.
FSIS believes that the programs complement each other. Most of the
CSREES resource allocation is provided through grant funding to local
extension offices in individual States or localities. Projects are
developed on a smaller scale. FSIS conducts educational programs on a
national level and provides local extension specialists with tools to
expand the impact of the national programs at the grass-roots level.
For example, FSIS, as a partner in the ``Fight BAC!'' campaign,
contributed to the production of brochures, camera-ready art and action
kits, which are supplied to extension specialists. FSIS is funding the
brochure's distribution through the Consumer Information Center (CIC).
Extension specialists can direct their constituents to that resource.
Question. The President's fiscal year 1999 budget request proposes
an increase of $3 million for risk assessment and producer education.
Of this increase, $1 million will be used to collaborate with animal
production experts in identifying cost effective pathogen reduction
strategies to reduce foodborne illness. The other $2 million will be
used to educate producers, marketers, and transporters of meat and
poultry products and to fund up to 25 State agriculture initiatives.
Would you please elaborate on how these risk assessment and educational
initiatives will be used by producers to reduce pathogen contamination.
Answer. Currently, there does not exist the scientific
understanding of practical ways to reliably reduce the level of
pathogens in animals prior to slaughter that would result in lower
contamination levels on the carcasses. The $1 million will continue the
focus of the fiscal year 1997 initiatives in risk factor analysis at
the food animal production stages for lamb, beef, poultry, and pork.
The data collected from the pathogen reduction strategy pilot
demonstration projects will provide information for quantitative and
qualitative evaluation of production practices that producers may opt
to use which have potential to lower the chemical, physical, and
microbiological hazards associated with food animals presented for
slaughter and processing.
The $2 million for educational efforts will foster State level
initiatives among food animal producers, practicing veterinarians,
animal and public health agencies, agricultural research and extension
and other stakeholders to assist producers in developing practical,
cost-effective methods of managing their flocks and herds in ways which
enhance food safety. As HACCP implementation causes the marketplace to
encourage adoption of HACCP-compatible production practices, food
animal producers, including small producers, will be aware of the
changing nature of the marketplace. They will have the ability to
remain viable by using the option of adopting management practices that
both meet the demands of the marketplace and result in production of
animals, which are the basis of safe, high quality food.
Question. Does the agency plan to mandate these practices for
producers in the future?
Answer. The Agency has no plans to seek statutory authority for
animal production. FSIS supports the implementation of voluntary
efforts to reduce chemical, physical and microbial hazards from the
farm, through markets, transportation, feedlots and during pre-
slaughter preparation of food animals. The Agency believes the Pathogen
Reduction/HACCP systems rule will affect food animal suppliers when
they sell to slaughter plants implementing these systems. Plants will
need more information about the potential hazards in/on incoming
animals, including birds, in order to address those hazards
appropriately in their HACCP plan. This will drive market changes that
will promote HACCP-compatible practices at the production level. These
practices may include record keeping, following the FDA compliance
guidelines for appropriate drug use, animal or premise identification,
and other Quality Assurance Program and Good Production Practices
standards.
Question. The fiscal year 1999 budget provides funds to train
federal and state inspectors as the Hazard Analysis and Critical
Control Point (HACCP) system is implemented in all sectors of the food
industry. What areas are being emphasized in these training sessions?
To date and by fiscal year, how many Federal inspectors and how much
funding has been used?
Answer. The 1999 budget requests a $750,000 increase to develop and
deliver HACCP training for State inspection personnel under the
activity Special Assistance for State programs, which is a major part
of the President's Food Safety Initiative. The proposed State training
will be modeled on the Federal HACCP training already underway since
fiscal year 1997. Federal HACCP training includes the following:
1. In fiscal year 1997, the first phase of the implementation of
the pathogen reduction and HACCP rule took place. It dealt with Pre-
HACCP requirements primarily consisting of the sanitation standard
operating procedures (SSOP's), effective in all plants on January 27,
1997. Two separate training programs were delivered at the cost of $3.5
million, as follows:
a. 4,331 employees, including supervisors, completed a three-day
training program that focused on how to (1) perform the inspection
tasks for the regulatory oversight of the pre-HACCP requirements; and
(2) understand and appreciate the changes being brought about by the
new rule.
b. 1,200 supervisors completed a two-day training program to equip
them to lead the changes brought about by the pathogen reduction and
HACCP rule.
2. In fiscal year 1998, the second phase of the implementation of
the pathogen reduction and HACCP rule occurred. It dealt with the
implementation of the HACCP and Salmonella requirements in large
plants, effective January 26, 1998. It cost approximately $2 million
and included a training program for more than 2,000 field inspection
and compliance personnel during a six-week period in December 1997 and
January 1998. Preparatory to the implementation, some 112 facilitators
completed a three-week Facilitator Training Program on the delivery of
the HACCP Technical Training Program.
Included in the HACCP Technical Training Program was a module on
Business Relations that focused on the concepts and practices that
inspection personnel need to know to establish and maintain an
effective business relationship with plant owners, operators and
employees. It is centered on the following five relationship
principles:
1. Maintain open, honest, and straightforward communications.
2. Have mutual respect.
3. Be issues-oriented, do not personalize.
4. Maintain a work environment that is absent of the fear of
retaliation and intimidation.
5. Understand each other's roles and responsibilities.
On January 30, 1998, FSIS announced that Federally inspected meat
and poultry plants may, upon request, implement and receive inspection
under the pathogen reduction and HACCP rule prior to the mandatory
implementation dates. Plants are not permitted to begin operating under
the rule until FSIS has trained the assigned inspector(s). Upon receipt
of a request, the HACCP Training Facilitators will schedule and deliver
the training to the affected inspectors.
Question. When does the agency plan to complete all training for
Federal and State inspectors, by fiscal year?
Answer. The training of Federal inspection personnel assigned to
plants implementing the HACCP and Salmonella requirements will occur in
subsequent fiscal years, as follows:
1. In fiscal year 1999, for employees assigned to small plants that
are required to implement the HACCP rule on January 25, 1999; and
2. In fiscal year 2000, for employees assigned to very small plants
that are required to implement the HACCP rule on January 25, 2000.
Training for State inspection program personnel will be developed
during the first part of fiscal year 1999, with delivery of training to
begin in late fiscal year 1999 and continue into fiscal year 2000 to
complete mandatory HACCP implementation in all very small plants.
Question. Has the agency used any funding in providing joint
training to the industry? If yes, how much?
Answer. No, the Agency has not used any funding to provide joint
training to the industry. FSIS is providing information to the industry
through briefings at many locations nationwide, and technical
assistance for small and very small establishments. FSIS is making
available to small and very small establishments various HACCP
materials that should assist these establishments in conducting their
hazard analyses and developing their HACCP plans. As stated in the
HACCP final rule, each establishment is responsible for training its
employees. FSIS training is limited to FSIS and State employees because
of complex logistical and cost considerations.
Question. Dr. Woteki, you mention in your statement implementing
the farm-to-table food safety strategy. What is the agency's strategy?
Answer. The consumer's risk of foodborne illness from meat or
poultry is a composite of the microbial hazards introduced to the
product throughout the farm to table continuum. The only way to provide
the maximum reduction in risk to consumers, and to allocate the costs
of ameliorating those risks fairly, is to promote, or where appropriate
require, adoption of reasonable interventions at every step where a
hazard is introduced.
While FSIS continues to focus much of its resources on oversight of
slaughter and processing operations, the Agency is addressing other
risk factors that contribute to foodborne illness and make consumers
sick. FSIS officials recognize that the measures contained in the
Pathogen Reduction and HACCP rule 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 emphasis on hazards that arise during production,
transportation, distribution and retail sale.
Animal production food safety.--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 voluntary 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 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.
In the animal production area, the Agency strategy is two-fold.
First, FSIS will continue efforts begun in fiscal year 1997 to identify
and field-test production practices that will result in lower risk
animals being presented for slaughter and processing. These efforts
will be aimed at defining cost-effective, practical management
adjustments that tend to contribute to food safety in all areas of
chemical, physical, and microbial risks. They will address practices in
the production of beef, lamb, poultry and pork, and the process will
involve collaboration with numerous specialists in management, disease
control, data collection, and risk analysis both inside and outside of
USDA.
Second, we will promote and encourage the development at the State
level of partnerships among producers, veterinarians, animal and public
health agencies, marketers, transporters, and education and extension
personnel. These partnerships will function to make producers aware of
the food safety challenges in the production of food animals, and
define locally feasible methods of addressing these challenges. Every
effort will be made to encourage the blending of needed food safety
practices into existing and developing industry quality assurance and
total quality management programs. The food safety HACCP-compatible
production practices will then be available to producers in form and
language familiar to them, and as part of projects already supported by
industry leaders.
Transportation, storage and distribution.--Other important links in
the food safety chain are transportation, storage and distribution. In
these areas, FSIS, FDA, and State and local governments share authority
for oversight of food products. FSIS and FDA are working together 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. When raw
product leaves the inspected facility, unsanitary conveyances can
contaminate product and inadequate temperature controls during
transportation to market can promote rapid and progressive growth of
any bacteria present. For this reason, we are working with FDA and the
food industry to develop procedures and practices that will ensure only
clean and sanitary vehicles are used and appropriate temperature
controls are maintained throughout transportation and distribution to
retail.
Retail and food service.--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 the 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.
CDC outbreak data indicate that where a food source has been
identified, mishandling of food at retail or in a food service
establishment is, more often than not, cited as a contributing factor.
Usually, one of the following factors is cited: (1) improper holding
temperatures, (2) inadequate cooking temperatures, (3) contaminated
equipment, (4) unsafe food sources, or (5) poor health or hygiene of
personnel. There are about one million such establishments, employing
about 12 million people. Close to half the consumer food dollar is
spent on food prepared by others outside the home. These people
represent not only a potential source of additional microbiological
contamination, but also the last point at which interventions--such as
cooking--can reduce or eliminate microbial risks. Improvements in food
handling at retail promise to achieve the greatest reductions in the
prevalence of foodborne illnesses.
FSIS intends to be aggressive in promoting higher food safety
standards and more uniformity among State and local jurisdictions that
have primary jurisdiction over these establishments and food at retail.
We are joining with FDA on a number of projects to support State and
local food regulatory officials. Most notably, the Food Code provides
the best advice of the Federal agencies on State laws and procedures
for oversight of the retail food industry. The Food Code is
continuously updated in collaboration with State and local regulatory
officials, industry representatives, academic experts, and consumers
participating in the biannual Conference for Food Protection.
In addition, FSIS is providing training for State and local
officials on meat and poultry processing, increasingly important as
more and more retail establishments are processing products that, if
they were produced in inspected establishments, would be subject to
mandatory HACCP.
The Agency is also collaborating with FDA on other training
initiatives that will promote more uniform and effective oversight by
State and local food regulators. One initiative is train the trainer
courses, together with training materials and ongoing support, to
increase the ability of the States to reach those in subordinate
jurisdictions that most need training. Another initiative involves
adapting HACCP principles to the many various conditions confronted by
establishments handling and preparing foods at retail.
Consumer education.--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, poultry, and egg 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. FSIS is a key participant in the
Public/Private Partnership consisting of industry, government and
consumer groups that have developed a public education campaign,
``Fight BAC!'', which is focused on food handling and is a key part of
our efforts to educate consumers. The campaign includes public service
announcements, and highlights the need for increased safety in food
preparation practices. The ``Fight BAC!'' campaign highlights four
basic sanitation and food-handling strategies consumers should use in
their homes through use of a graphic featuring these four steps to food
safety. The steps are: (1) Clean: Wash hands and surfaces often, (2)
Separate: Don't cross-contaminate, (3) Cook: Cook to proper
temperatures, and (4) Chill: Refrigerate promptly. The graphic is
designed for use in a variety of materials, including posters and
refrigerator magnets. This campaign is the foundation for the multi-
year food safety education initiative.
field automation and information management[
Question. The fiscal year 1999 President's budget proposes an
increase of $5.8 million for automation assistance to extend the Field
Automation and Information Management (FAIM) project to the State
inspection programs. How many States would be served by this proposed
funding, and would the FAIM program be fully implemented in fiscal year
1999?
Answer. In January 1998, the National Association of State Meat and
Food Inspection Directors polled each of the 25 States that maintain
their own inspection programs. All twenty-five expressed their desire
to participate in FAIM. Twelve of the States want FAIM to be
implemented in fiscal year 1999; the remaining thirteen States have
asked for fiscal year 2000 as an implementation date. The funding
requested for fiscal year 1999 will be sufficient to implement FAIM in
the twelve States requesting implementation in fiscal year 1999.
Implementing FAIM in the States will eliminate the need for each
State to design, develop and implement automated systems that will
support communication with FSIS automated systems. FSIS has already
tested and proven the value of this infrastructure and the cost to FSIS
would be less than paying 50 percent of the full cost for twenty-five
individual State automation programs. This proposal will assist in
moving toward a seamless food safety program through support of a
uniform nationwide inspection system.
Question. Does the fiscal year 1999 budget request contain any
funds earmarked for the FAIM program on the Federal level?
Answer. FAIM--for FSIS inspectors--is predicated on a phased five-
year implementation. The Agency budget request includes $8.525 million
in fiscal year 1999 for the fourth year of nationwide implementation.
Implementation is on schedule and will be completed in fiscal year
2000.
Question. Please provide funds made available for FAIM in each
fiscal year since the program was initiated to fiscal year 1999 and
indicate the amount obligated for the program in each of these years.
Answer.
[The information follows:]
------------------------------------------------------------------------
Fiscal year Funding Obligated
------------------------------------------------------------------------
1996.................................... $8,425,000 $7,230,000
1997.................................... 8,525,000 9,485,000
1998.................................... 8,525,000 8,760,000
1999.................................... 8,525,000 8,525,000
------------------------------------------------------------------------
Notes:
1. Nearly $1.2 million was carried over as no-year funding from fiscal
year 1996 to fiscal year 1997.
2. In fiscal year 1997, $1.0 of the $1.2 million carryover funds was
expended.
3. Projected fiscal year 1998 obligations include the remaining $0.2
million carryover funds.
4. Fiscal year 1999 funding and obligated data reflect the current
budget proposal.
salaries and expenses
Question. In fiscal year 1999 the budget proposal assumes a
decrease in staff years for non-inplant personnel realizing a savings
in salary and operating costs. What factors influence this reduction in
staff years?
Answer. The 1999 budget proposes reductions of $1.75 million and 25
staff years in salary and benefits and operating costs. This includes
$1.0 million and 10 staff years for field office streamlining as a
result of continued implementation of the FAIM project. An additional
savings of $750,000 for salaries and benefits associated with 15 staff
years is projected to result from the elimination of the prior approval
programs.
Question. How long does the agency expect these factors to affect
staff reductions?
Answer. Implementation of the FAIM project is scheduled for
completion by the end of fiscal year 2000 and the resulting field
streamlining will also be completed in fiscal year 2000. Elimination of
the prior approval programs will be completed by the beginning of
fiscal year 2000.
hazard analysis and critical control points
Question. On January 26, 1998, the Hazard Analysis and Critical
Control Point system (HACCP) was implemented in 312 of the largest meat
and poultry plants in the nation. Some leading scientists involved in
developing the model HACCP program have charged that FSIS is ignoring
scientific data and forcing plants to incorporate the old organoleptic
processing methods into HACCP plans. The Committee had serious concerns
at the time the HACCP rule was being written about layering the new
system on top of the old.
I am aware that complaints have been made that FSIS is in fact
forcing plants to write regulations from the old system--such as time
and temperature cooling requirements--into their HACCP plans. Mr.
Billy, if this is true, how does this fulfill the commitment the
department made to Congress to eliminate layering?
Answer. FSIS does have regulatory requirements that need to be
updated and the Agency has acknowledged that it needs to remove its
command and control requirements and replace them with performance
standards, which provide the regulated industry with more flexibility.
The Agency is developing a consolidated set of regulations that bring
meat and poultry requirements together in a single place. We are
committed to writing our regulations in plain and simple language so
that they can be understood by not only the regulated industry, but
also by the public, which expects that the government will hold
industry accountable for meeting regulatory requirements.
However, we acknowledge it is taking us longer to meet our goals
than originally intended. Until performance standards are implemented,
there are a number of regulations containing command and control
requirements that will continue to be enforced. One such regulation is
the requirement that poultry be chilled to a specific temperature
within a certain time frame, depending on the weight of the bird: 40
degrees within eight hours for turkey (9 C.F.R. 381.91). This
requirement was based on the best available scientific knowledge about
the lag phase for bacterial growth. FSIS would be negligent in its food
safety mission if it dropped this requirement before implementing a
performance standard.
Question. How does this enhance food safety?
Answer. To protect the public health, FSIS is enforcing current
regulatory requirements that are based on the best science available at
the time the requirements were developed. Chilling reduces the growth
of bacteria.
Question. FSIS has eliminated pre-approval for equipment and
blueprints. Does FSIS intend to remove any other outdated requirements
that you could share with us today?
Answer. FSIS made a commitment to change its command and control
regulations into performance standards as rapidly as it could, given
current requirements for regulatory change.
We are providing the FSIS portion of USDA's Unified Agenda that
will be published in the Federal Register in April 1998. The Agenda
outlines the Agency's regulatory reform efforts, including Sanitation
Requirements for Official Meat and Poultry Establishments, Rules of
Practice, Performance Standards for Perishable, Ready-to-eat Products,
and Elimination of Requirements for Partial Quality Control Programs.
[Clerk's note.--The information referred to does not appear in the
hearing record, but can be reviewed in the April 1998 Federal
Register.]
Question. Mr. Billy, in your statement you mention the proposed
increase of $2.3 million for upgraded HACCP inspection technology for
the implementation of HACCP in the Egg Products Inspection program, and
equipment and increased travel for distribution compliance activities.
Why hasn't the agency promulgated the final rule requiring a 45
degrees Fahrenheit ambient air temperature for the transportation and
storage of eggs as the Committee required in the fiscal year 1998
Appropriations Act?
Answer. We are moving as rapidly as possible to publish the
regulation mandating a 45 degree ambient air temperature requirement
and will comply with the 1998 Appropriations Act.
Question. Please elaborate on the need for this proposed increase
of $2.3 million.
Answer. Under HACCP-based inspection, FSIS will redeploy inspection
personnel within the plant and in distribution to implement the farm-
to-table food safety strategy. While redeployment enables us to operate
within existing staffing levels, increased operating support is needed
to perform the new inspection tasks required to ensure the safety of
meat, poultry, and egg products.
An enhanced compliance presence is needed to conduct increased
inspection activity in distribution channels beyond the in-plant
setting in order to ensure food safety from the farm to the table. An
increase of $0.5 million is needed to provide travel, equipment, and
supplies associated with these activities. The farm-to-table strategy
for inspection will entail a great deal of out-of-plant activity
requiring travel to multiple destinations. Specialized equipment, such
as cameras and portable telephones, and supplies for taking samples are
required to support these efforts.
Additionally, FSIS expects to complete amendments to the HACCP rule
that will cover Egg Products Inspection in fiscal year 1999.
Implementation of HACCP provisions will require training for all
inspectors, relief personnel, and supervisory staff involved with Egg
Products Inspection; and sampling of egg products from the plant
environment for various microorganisms to establish baseline data. FSIS
is requesting an additional $0.4 million to provide training for more
than 120 inspection personnel and enable the agency to perform required
baseline sampling. Prior year funding for HACCP training will not be
available for this purpose as it is committed to meat and poultry
inspection and will be needed for training in new slaughter inspection
procedures.
Upgraded inspection technology is needed to assist inspection
personnel in the fully implemented HACCP-based inspection program. The
requested increase of $1.4 million will pay for technology not
currently available to inspectors as well as improvements in current
technology. Some examples include stethoscopes for veterinary medical
officers to make a more thorough and complete determination of the
health status of incoming animals for slaughter. In addition, improved
thermometers are needed to perform verification tasks required by
HACCP. Neither stethoscopes nor thermometers are currently available to
FSIS inspectors. These instruments will be used in the HACCP inspection
models project this year and will be needed by the full inspection
workforce in fiscal year 1999. They are also necessary in order for
inspection results to be fully accepted as accurate. Additionally,
software packages are being developed, which inspection personnel will
use in determining the adequacy of critical limits and other technical
information related to HACCP.
Question. What do you think about organizing an independent,
scientific organization to come in and see if HACCP implementation has
strayed from science-based HACCP?
Answer. FSIS appreciates the importance of an independent,
scientific evaluation of HACCP implementation. The Agency's evaluation
strategy for HACCP is two-fold: conduct formative evaluations to gain
information at each phase to facilitate the overall implementation of
HACCP; and obtain scientific evaluation expertise from beyond the
Agency to conduct a summative evaluation that will assess the impact of
the final rule on inspection, industry, consumers, and foodborne
illness.
The first formative evaluation effort, Results of the SSOP
Implementation Follow-Up Study, has been completed. Six months after
the initial implementation date of sanitation standard operating
procedures (SSOP's), this study was conducted to determine the extent
to which the new system was implemented and where additional effort was
needed to assure that the new system would continue to work as
intended.
The second formative evaluation, Evaluation of Inspection
Activities During Phase One of HACCP Implementation is just starting.
This in-house evaluation of FSIS inspection activities during HACCP
implementation in large plants is designed to identify areas that might
need modification before small plants begin implementation in January
1999. The plan is to design the study, collect the data, analyze it and
write the final report by July 1998. This tight timeline will enable
FSIS Field Operations to review the findings and as necessary modify
aspects of its delivery of inspection in time for small plant
implementation in January 1999. Evaluation efforts of this type are
planned at each phase of HACCP implementation.
Concurrent with these evaluation efforts, the Agency is already
planning an evaluation of the HACCP final rule. This evaluation will
require expertise from beyond the Agency. The study is expected to
address whether or not HACCP process control systems: (1) control
production safety hazards, (2) reduce foodborne illness, (3) make
inspection more effective, (4) increase consumer confidence, and (5)
provide an opportunity for increased productivity.
Question. When do you suggest this should be carried out?
Answer. Based on the tentative timeline, the evaluation reports
will be due in fiscal year 2000, fiscal year 2001 and fiscal year 2002.
This would allow adequate time to fully assess the implementation of
HACCP in all meat and poultry plants.
Question. Please provide the Committee with the multi-year HAACP
plan for staffing levels in the plant (in-plant inspections and
others).
Answer. Under HACCP implementation, FSIS is currently designing
pilot projects to determine the best ways of conducting inspection of
establishments and areas of in-distribution. FSIS has the opportunity
to focus its inspection staffing resources on food safety both in
plants and in distribution to achieve its Strategic Goal of enhanced
public health. These projects will help the Agency determine what are
optimum staffing levels and configurations to ensure the safety of
meat, poultry, and egg products along the food safety continuum.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. The mission of FSIS is to ensure that meat, poultry, and
egg products moving in interstate commerce or exported to other
countries are safe, wholesome, and accurately labeled. In 1996, FSIS
issued the HACCP final rule, which serves as a blueprint for changes in
meat, poultry, and egg products' inspection for the future.
The FSIS Strategic Plan goes beyond HACCP to develop the Agency's
strategy for achieving enhanced public health. The Plan contains one
goal: to enhance the public health by minimizing foodborne illness from
meat, poultry, and egg products, which is supported by six
corresponding strategic objectives that are necessary to accomplish the
goal.
The Strategic Plan and the Annual Performance Plan are closely
linked in that the annual performance goals are based on the strategic
objectives. All of the program activities in the 1999 budget request
support the Agency's strategic goal. The ``Means and Strategies''
section under each performance goal identifies specific budget
initiatives that will enable FSIS to achieve its annual performance
goals.
Question. Could you describe the process used to link your
performance goals to your budget activities?
Answer. The Agency recognized the importance early on of linking
the performance goals and the budget activities through the Agency
mission. The goals represent our mission objectives, while the budget
activities represent our mission activities. On a preliminary basis,
the Agency evaluated the relationship between the budget activities and
the performance goals to determine whether or not changes were needed
in budget activities, and found that the complementary linkage of
performance goals and budget activities to the Agency mission indicated
no immediate need for change.
Question. What difficulties, if any, did you encounter, and what
lessons did you learn?
Answer. FSIS is undergoing a transformation in its inspection
program from traditional organoleptic inspection to HACCP-based
inspection. The performance goals are specific to achieving a reduction
in foodborne illness through HACCP and other inspection changes, and
primarily focus on new and anticipated food safety developments. The
budget activities capture all costs for both the traditional inspection
program and the new HACCP-based inspection system now being
implemented. We learned that the linkage of performance goals and
budget activities will evolve through many stages as transformation of
the inspection program takes place, and we should not make further
changes in our budget activities at this time.
Question. Does the agency's Performance Plan link performance
measures to its budget?
Answer. FSIS used both its Strategic Plan and preliminary 1999
budget information to design the Annual Performance Plan. The
performance goals are specific to achieving a reduction in foodborne
illness, and the measures in the Plan indicate progress in achieving
these goals. The performance measures are linked to the budget
activities that compose the budget as indicated by the description of
the measure. For example, the first goal--to reduce pathogens on raw
products by continuing implementation of the Pathogen Reduction/HACCP
rule--includes as one performance measure, the percentage of large and
medium meat and poultry slaughter and processing facilities in
compliance with the HACCP rule. This measure is linked to Federal food
inspection, the budget activity through which FSIS will obtain the data
to measure the industry's compliance with the HACCP rule.
Question. Does each account have performance measures?
Answer. FSIS has one major appropriated salaries and expenses
account, and the Agency designed performance measures for that account.
Many of the performance measures do not apply to the Agency's Trust
Fund account because voluntary inspection is not included under the
HACCP final rule. FSIS has not designed separate performance measures
for the Trust Fund account.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The FSIS performance planning structure is built around
specific steps that must be carried out to achieve the strategic goal
of minimizing foodborne illness in meat, poultry, and egg products. The
account and activity structure presented in the budget justification is
organized along program activity lines that capture the range of
infrastructure and support activities necessary to carry out a total
inspection program.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. At this point in time, it is too early to discuss with any
certainty the likelihood of changes to the account structure. In the
1998 budget, FSIS proposed a new, streamlined program activity
structure that would reduce the number of activities from eight to
five. The new structure of Federal Food Inspection, Import/Export
Inspection, Laboratory Services, FAIM, and Grants to States replaced
the old structure of Slaughter Inspection, Processing Inspection, Egg
Products Inspection, Import/Export Inspection, Pathogen Reduction
Program, FAIM, and Grants to States. FAIM and Grants to States were
preserved because of unique funding arrangements: no year funding for
FAIM and earmarked funding for States. In the 1999 budget, FSIS
included an additional activity, Special Assistance for State Programs,
to reflect proposed enhanced Federal funding of 75 percent, rather than
the authorized 50 percent matching funds. The proposed program activity
structure is broad and flexible enough to permit linkage with strategic
and annual performance goals, especially as these are fine-tuned or
change over time.
Question. How were performance measures chosen?
Answer. As part of the performance goals, the performance measures
were chosen as indicators of progress toward achieving goals. The
annual performance goals are written in measurable, performance-
oriented terms so that annual program evaluations can more easily gauge
progress for each performance goal. Maintaining a common set of
objectives and performance goals provides a strong linkage between the
long-range strategic plan objectives and the more output-oriented
performance goals in the Annual Performance Plan.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. When designing its performance indicators, FSIS tried to
rely on information that was readily available within the Agency.
Therefore, the data collected for activities contained in the Strategic
Plan will be consistent and comparable with other activity data
collected over time, ensuring a stream of reliable and valid
performance data for the Plan's goals and objectives. Data quality
should continue to be high since the Agency will rely on the same data
sources (inplant records, for example) from which it has published data
in the past.
With some exceptions, there should be little increased cost due to
the collection of data to meet the GPRA requirements. What will be
needed is a review of the methodology the Agency uses to collect and
verify the data and a strengthening of record keeping technology. FSIS
has also established a performance measure to track the number of
automation processes improved to determine how well information
technology is supporting strategic and program goals. Management is
committed to institutionalizing an integrated IRM system throughout
FSIS and this commitment to better data collection and evaluation will
permit more accurate data available for performance measurement of
activities detailed in the FSIS Strategic Plan and Annual Performance
Plan.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. During the performance measure design process, FSIS created
measures that would utilize information that is both available and
reliable. The Agency does not anticipate performance-reporting
difficulties in preparing the March 2000 report.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. FSIS recommends that the subcommittee use performance goals
one, two, three, and four to track FSIS program results. They are as
follows:
--Reduce pathogens on raw products by continuing the implementation
of the Pathogen Reduction/HACCP rule.
--Collaborate with other public health agencies and stakeholders to
implement the near term program objectives contained in the
President's National Food Safety Initiative.
--Develop a comprehensive strategy for promoting food safety from
farm-to-table.
--Continue the necessary cultural change to support HACCP and related
food safety initiatives by training the workforce to carry out
the re-defined regulatory tasks and procedures and by ensuring
industry and State programs understand their new roles and
responsibilities.
The Agency believes that HACCP, along with microbiological testing,
will improve food safety and reduce foodborne illness. Agency
management also believes that applying HACCP or HACCP-compatible
procedures in both the Federal and State programs throughout the farm-
to-table food safety continuum will reduce foodborne illness. The
Agency's performance measures for fiscal year 1999 were specifically
selected to track progress in achieving this goal.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. The FSIS strategic goal is to enhance the public health by
minimizing foodborne illness from meat, poultry, and egg products. The
Annual Performance Plan establishes performance goals and measures to
achieve the strategic goal. The long-term outcome for both the
Strategic Plan and the Annual Performance Plan that FSIS is working
toward is a 25 percent reduction in foodborne illnesses associated with
meat, poultry, and egg products, which will be a major benefit for the
consumer. Reducing pathogen contamination of these products is the
major focus of FSIS initiatives.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. The Agency has conducted training for its managers over the
last three years in preparation for meeting the requirements of GPRA.
Substantial progress has been made. However, continued training is
needed as GPRA concepts and requirements are integrated into ongoing
program operations.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. Customer satisfaction measures will be based, in part, on
feedback from stakeholders, including our own employee groups,
representatives from the regulated industry, consumer groups, academia,
State and local governments, and foreign governments. Stakeholders have
participated in the development of the HACCP regulation for achieving
greater food safety through numerous meetings that FSIS has conducted
over the past several years. In addition, we expect to solicit feedback
from the general public through a planned food safety consumer survey
in cooperation with the Department of Health and Human Services as
partners in the President's Food Safety Initiative.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The measurable goals of the fiscal year 1999 Annual
Performance Plan enabled the Agency to evaluate and prioritize program
needs in determining where budget initiatives were needed to help
achieve performance goals.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. FSIS would be able to indicate the likely impact on program
performance goals if budget numbers are changed up or down by the
committee. What would be more difficult is measuring the precise impact
on the FSIS strategic goal of enhancing the public health by minimizing
foodborne illness from meat, poultry, and egg products, and the
corresponding outcome of this goal. The Agency will be able to indicate
the impact in a more definitive way after implementing the annual
reporting requirement and completing a full GPRA cycle.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. FSIS is currently able to measure and report performance on
a regular basis for its performance goals. However, in preparing for
the future the Agency contracted with a consulting firm to help
managers internally evaluate data collection and measurement. The
Administrator has created the FSIS Process and Data Analysis Project in
conjunction with the Leads Corporation to develop systematic evaluation
of Agency data systems as an ongoing process. In fact, FSIS has
identified evaluation as one of its six core business processes. Data
evaluation will be systematized using the Integrated Computer Aided
Manufacturing (ICAM) methodology and the ICAM definitional language
modeling technique (IDEF). The Agency is committed to
institutionalizing an integrated information resources management (IRM)
system throughout FSIS and this commitment to better data collection
and evaluation will produce more accurate data for performance
measurement of activities in the FSIS Strategic Plan and Annual
Performance Plan.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Answer. Many of the FSIS results are based on outcomes related to
HACCP implementation, which will be completed in fiscal year 2000,
while the budget account structure covers both traditional and HACCP
inspection activity. Therefore, the linkage between performance results
and budget activities is not complete.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. The activities included in the budget account structure are
sufficiently broad to cover the use of all budgetary resources and are
also specific enough to account for the Agency's use of particular
resources, such as Grants-to-States and FAIM. At this time, FSIS does
not think it is necessary to modify the budget account structure.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. While FSIS does not think modification is necessary at this
time, the feedback received as we continue to transform the inspection
program and complete the entire GPRA cycle will be evaluated to revisit
this question.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. No modification is proposed at this time.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. The achievement of Agency goals is largely dependent on the
success of multiple partnerships FSIS has with both internal and
external stakeholders. The 1999 Annual Performance Plan identifies a
number of external factors that influence goal achievement, including
but not limited to cooperation of other Federal agencies and State and
local governments, industry compliance with regulatory requirements,
and the food handling behavior of consumers.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. Recognizing the importance of partnerships, FSIS continues
working proactively with our partners to identify needs, meet
education/information and infrastructure needs, and invest budgetary
resources to ensure we are moving toward goal achievement. In
developing the HACCP regulation FSIS conducted extensive meetings with
the industry to address their needs, and as a result, is providing
technical assistance, especially to small businesses to assure
successful implementation of regulatory requirements. The 1999 budget
proposes an increase for food safety education for consumers, building
on the Public/Private Partnership's ``Fight BAC!'' campaign to promote
safer food handling by consumers. In addition, the 1999 proposed
special assistance for State programs reflects the Agency's effort to
ensure successful State implementation of HACCP requirements based on
infrastructure needs identified in the State inspection programs.
Question. What impact might external factors have on your resource
estimates?
Answer. External factors influence the allocation of existing
resources and generate new resource requirements. In the 1998 budget,
FSIS requested and Congress approved funding for two activities that
were part of the President's Food Safety Initiative, and both
activities are associated with external factors. FSIS learned from CDC
that Campylobacter is the most common foodborne pathogen, so the Agency
requested an increase of $0.5 million for CDC to provide baseline data
on the incidence of foodborne illness resulting from this pathogen. In
addition, FSIS requested $0.6 million to provide HACCP training to
State and local food regulatory officers who have jurisdiction over the
packaging and processing of food in restaurants and retail
establishments.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. The Agency did not identify any function or program overlap
or duplication internally or with other USDA agencies while developing
its performance plan. The recently implemented FSIS reorganization is
based on a thorough evaluation of functions and programs that resulted
in streamlining to eliminate overlap and duplication. The FSIS public
health mission is broad in scope, however, and the Agency has
participated with other agencies on food safety issues, such as HHS and
EPA with the President's National Food Safety Initiative. Although such
interagency activities are limited, FSIS considers them beneficial
because they provide different Federal agencies with similar food
safety interests an opportunity to share information and experiences in
food safety protection.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that: To what extent are your performance measures sufficiently mature
to allow for these kinds of uses?
Answer. The Agency's performance measures are designed to measure
performance in areas where performance has never been measured before.
This is clearly a learning period for the Agency and adjustments will
be made as lessons are learned.
FSIS has established performance measures that it believes relate
to each performance goal in question. That is, the measures used
correlate directly to the targeted performance. However, the Agency
believes that it needs more experience before it is able to confidently
predict future budget requirements based on projected performance.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. The performance goals are specific to achieving a reduction
in foodborne illness and do not capture full inspection program costs
at this time. The resource estimates are accurate, based on what
actually took place in the prior year, and current and budget year
projections. Estimates reflect employment trends and projections, as
well as the estimated cost of specific budget initiatives for which
funding has been requested.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No, the Agency does not foresee any need to make
substantive revisions in its strategic plan submitted on September 30,
1997.
______
Questions Submitted by Senator Bumpers
user fees
Question. You state that protection of public health is your
mandate. What other federal program charged with protecting public
health seeks to impose user fees in order to pay for its entire
inspection costs?
Answer. There is no other Federal program that imposes or seeks to
impose user fees for its entire inspection costs; however, other
countries that have meat inspection programs completely financed by
user fees include Argentina, Australia, Canada, Denmark, Germany, Great
Britain and New Zealand. All of these countries have inspection
programs that FSIS has determined are equivalent to ours and all of
these countries are exporting product to the U.S.
Question. Other than to achieve savings, is there any public health
and safety policy reason to impose user fees?
Answer. Yes, user fees will provide the required funds to maintain
a strong public health protection for meat, poultry, and egg products.
Question. If you state that your mandate is to protect public
health, then why do you further state that ``cost burdens must be
shifted from taxpayers to those who benefit directly from the provided
services?''
Answer. Both the public and industry benefit from our inspection
services. However, industry is the direct beneficiary of Federal
inspection, which enables businesses to engage in commerce and earn
profits. Industry also directly benefits from the consumer confidence
in inspected meat, poultry, and egg products.
Question. Are not the direct beneficiaries of your mission the
consuming public?
Answer. Industry receives the direct benefit of Federal inspection,
which is permission to operate businesses and earn profits. The
consuming public also benefits by receiving strong public health
protection from Federal inspection.
Question. Are not the taxpayers directly benefited from the
protections you provide? If not, why mandate an inspection program at
all?
Answer. Taxpayers who purchase meat, poultry, and egg products
benefit from the public health protections that Federal inspection
provides.
Question. Is it the Department's view that the FSIS inspection
service benefits the industry more than the consumer?
Answer. Both industry and the consumer benefit from Federal
inspection, but they do so in different ways. The consumer benefits by
eating meat, poultry, and egg products that are safe, wholesome, and
accurately labeled. Industry benefits from Federal inspection
financially because inspection enables establishments to operate and
helps to assure the public confidence in the safety and wholesomeness
of their products. Federal inspection also benefits industry by
providing the level of inspection commensurate with production so as
not to limit production.
Question. If enacted, the user fee proposal would result in FSIS
inspectors remaining under the direction of the agency, but their
livelihood tied to the financial health of the companies. Since there
would be no appropriated funds for the salaries of FSIS inspectors, the
inspectors would have a direct interest in the well-being of the
companies. How does USDA plan to counter the questions in consumer
confidence that will result from this plan?
Answer. FSIS has and will continue to work at all levels of the
Agency and with employee groups to ensure that an inspector's
livelihood remains tied to his or her competence in performing
regulatory inspection duties rather than the financial health of an
individual company. FSIS is recommending that user fees be based on
volume of production rather than an hourly inspection rate to avoid
providing an opportunity for any external pressure to modify the
application of inspection standards or inspection intensity. While the
total number of inspection personnel is related to the overall size and
growth of the industry, FSIS will perform inspection, including HACCP
verification tasks, in a manner that will assure consumers and industry
that the inspection program operates in accordance with regulatory
requirements. Consumer confidence will grow, maintaining strong markets
for industry as establishments produce product under HACCP programs
that are fully compliant with regulatory requirements. Further, by
basing user fees on objective, verifiable data, the Agency will be able
to assure an equitable distribution of inspection costs.
To maintain consumer confidence in the inspection program, FSIS
will provide public information about the impact of user fee
legislation. A key element in the public information effort would be
public meetings with key Department and Agency officials, similar to
those conducted for the HACCP regulation, to solicit input on issues
concerning the implementation of user fees.
Question. What are the views of most consumer organizations to this
proposal?
Answer. We are aware that many groups--consumer and industry--have
expressed concern about user fees. Rather than attempting to speak for
them, you may wish to contact them directly to ensure their full views
are adequately conveyed. However, as I stated earlier, we will continue
to work with all of our stakeholders on this very important issue. I
believe that all of these groups want inspection personnel to maintain
high inspection and enforcement standards and requirements in order to
maintain consumer confidence and provide strong markets for meat,
poultry, and egg products.
hazard analysis and critical control points
Question. One of the early concerns about moving to HACCP was that
the old organoleptic system would be left in place creating a
``layered'' system containing features of both. We had been assured
that as the new HACCP program became established, the old ``command and
control'' methods would be removed. Now that HACCP is in place in the
large plants, what parts of the old system have been eliminated?
Answer. We are providing the Inspection System Guide contained in
FSIS Directive 5400.1, which contains a number of tasks that inspection
program personnel are no longer required to perform in establishments
that are subject to the HACCP system regulations. In addition, we are
providing Inspection System Procedures contained in FSIS Directive
5400.5 that replace the Inspection System Guide.
Question. What is the timetable for eliminating the remaining
elements of the old system?
Answer. FSIS made a commitment to change its command and control
regulations into performance standards as rapidly as it could, given
current requirements for regulatory change. We believe we have made
significant progress to fulfill our commitment as evidenced by the FSIS
portion of USDA's Unified Agenda that will be published in the Federal
Register in April 1998. The Agenda provides a timetable for the
Agency's regulatory reform efforts, including Sanitation Requirements
for Official Meat and Poultry Establishments, Rules of Practice,
Performance Standards for Perishable, Ready-to-eat Products, and
Elimination of Requirements for Partial Quality Control Programs.
[Clerk's note.--The information referred to does not appear in the
hearing record, but can be reviewed in the April 1998 Federal
Register.]
Question. There have been complaints that confusion on the
implementation of HACCP in certain plants could have been avoided if
inspectors and other personnel had received HACCP training earlier. In
fact, some FSIS inspector training was conducted just prior to the
implementation date in January of this year. What were the reasons for
the delay in HACCP training?
Answer. You can be assured that the Agency is concerned about the
way inspection personnel carry out their regulatory responsibilities.
The HACCP Technical Training Program provides inspection personnel with
the (1) required information and background on HACCP and its principles
and (2) knowledge, understanding, and techniques to apply the
inspection procedures established to determine a plant's compliance/
noncompliance with Pathogen Reduction and HACCP requirements. The
``just-in-time'' approach allows the agency to:
1. Link the training to the four-phase implementation schedule
contained in the Pathogen Reduction and HACCP rule spanning a period of
6 to 42 months;
2. Make the best use of scarce human resources;
3. Minimize the disruption of program services; and
4. Have employees immediately apply their newfound knowledge and
skills thus eliminating the need to establish and maintain costly re-
training or refresher programs.
Further, we have established multiple means for employees to become
more familiar and comfortable with the new Pathogen Reduction and HACCP
inspection procedures as follows:
1. Computer Based Training programs;
2. Issuance of a Reference Guide on the HACCP-based inspection;
3. Around the clock availability of technical assistance from the
Technical Service Center through the use of e-mail and a 800 number;
and
4. Day-to-day guidance, support and coaching by supervisors.
Question. It is my understanding that some meat and poultry plants
have been shutdown due to HACCP violations already. How many plants
have been shutdown since the implementation of HACCP?
Answer. We inspect over 6,000 plants and from the pre-HACCP
implementation in January 1997 through mid-March of this year, there
have been 50 actions to withhold inspection.
Question. What were the causes for the shutdowns?
Answer. Of those 50 actions, 28 plants had Federal inspection
withheld because of repetitive SSOP deficiencies, 11 plants because of
basic E. coli failures, 10 plants because of HACCP system failures, and
one non-HACCP plant for zero tolerance failures.
Question. Is there a formal administrative appeal process a company
may use to avoid a shutdown or other adverse agency action regarding a
HACCP violation? If not, why?
Answer. If the Inspector-in-Charge (IIC) determines that there may
be a HACCP system inadequacy because an establishment has multiple,
recurring noncompliances, as specified in 9 CFR 417.6, and has failed
to adequately implement immediate and further planned actions as
documented on the Noncompliance Record (NR) (FSIS Form 5400-4), the IIC
should discuss this developing trend at the weekly meetings held with
establishment management. If the IIC subsequently determines that the
trend of multiple, recurring noncompliances without successful
interventions has led to a HACCP system inadequacy and that the marks
of inspection should be withheld, he or she shall contact the District
Office (DO) and provide all the relevant information for the DO to
prepare a Notice of Intent to Suspend Inspection. The Notice shall:
1. Inform the establishment that the nature and scope of the
noncompliances indicate that the HACCP system is inadequate as
specified in 417.6 of the regulations;
2. State that, because of the trend, FSIS intends to withhold the
marks of inspection and suspend inspection;
3. Explain the reason for the determination;
4. Reference each pertinent NR by number;
5. Inform the establishment that it is being afforded the
opportunity to demonstrate why a HACCP system inadequacy determination
should not be made or that it has achieved regulatory compliance; and
6. Provide the establishment three business days from the date of
the letter to provide its response to the DO.
Based on the establishment's response, FSIS will determine further
actions.
If at any time inspection personnel determine that adulterated
product was shipped, FSIS will immediately enact enforcement actions.
Prior to appealing, the establishment may request that the program
employee or IIC reconsider his or her finding or decision. The program
employee or IIC who made the finding or decision should evaluate and
consider any factual information the establishment provides. Program
employees should encourage establishment management officials who
indicate that they may appeal a decision or finding to do so as soon as
possible. Timely appeals will help ensure that the relevant information
is provided to subsequent decision makers promptly and that facts and
observations can be verified. Timely appeals also avoid the implication
that the establishment does not contest the inspection finding or
decision.
FSIS regulations provide establishments with the opportunity to
appeal, orally or in writing, an inspection finding or decision made by
any program employee. Such appeals should be directed to the employee's
immediate supervisor. The following outlines the chain-of-command for
inspection decisions:
1. Program employee, including the Inspector-in-Charge (IIC), who
made the determination;
2. Circuit Supervisor;
3. District Manager;
4. Assistant Deputy Administrator for District Inspection
Operations; and
5. Deputy Administrator for Office of Field Operations.
[The information (9 C.F.R. 417.6) follows:]
Sec. 417.6 Inadequate HACCP Systems
A HACCP system may be found to be inadequate if:
(a) The HACCP plan in operation does not meet the requirements set
forth in this part;
(b) Establishment personnel are not performing tasks specified in
the HACCP plan;
(c) The establishment fails to take corrective actions, as required
by Sec. 417.3 of this part;
(d) HACCP records are not being maintained as required in
Sec. 417.5 of this part; or
(e) Adulterated product is produced or shipped.
fsis and trade
Question. The U.S. poultry industry has been fighting a ruling by
the European Union that product sprayed with chlorine as an anti-
microbial will not be allowed in any EU country. Is the use of chlorine
as an anti-microbial not an FSIS approved method to assure product
safety?
Answer. Chlorine is permitted as an antimicrobial treatment in the
U.S.
Question. Is there any evidence that any EU nation is using
chlorine or is importing product from countries other than the U.S.
that use chlorine as an anti-microbial?
Answer. It was reported that the United Kingdom was using chlorine
as an antimicrobial in their poultry plants. The EU Commission
indicated that they would take legal action to assure that the United
Kingdom was in compliance with EU requirements.
Question. Has FSIS been involved in discussions with the EU on this
subject and if so, what have they accomplished?
Answer. The use of chlorine was the most contentious issue
concerning poultry during the negotiation of the U.S.-EU veterinary
equivalency agreement. The end result of the talks was that the
agreement calls for the EU to conduct a scientific review of the use of
antimicrobial techniques regarding poultry meat.
Question. FSIS conducts inspections of meat and poultry imported
into this country at 124 locations. Are there other locations that
imports may cross in which there are no inspectors?
Answer. Imported product can enter the United States at other
locations, but must move under Customs bond to one of the FSIS
inspection locations for import inspection.
Question. How can you be certain that product is not coming into
the country at undetected locations?
Answer. U.S. Customs controls all products that enter the United
States. Customs refers the importer to the appropriate government
agency responsible for the specific imported product. In addition, FSIS
Field Operations personnel would detect uninspected meat or poultry
products during their routine inspections both in Federal plants and in
commerce.
Question. What safeguards can be put in place?
Answer. U.S. Customs control at the Nation's borders and the
continued vigilance of FSIS inspection personnel provide the safeguards
necessary to ensure that foreign product is not entering U.S.
commercial distribution channels illegally.
______
Questions Submitted by Senator Kohl
Question. Some leading scientists involved in developing the model
HACCP program have charged that FSIS is ignoring scientific data and
forcing plants to incorporate old organoleptic processing methods into
HACCP plans. If this charge is true, this is very serious. If this is
happening, then how is food safety being enhanced?
Answer. To protect public health, FSIS is enforcing current
regulatory requirements that are based on the best science available at
the time the requirements were developed. The process of replacing
command and control regulatory requirements with performance standards
is not one that can be accomplished quickly; therefore, it has taken
the Agency longer to meet its goals than it had originally intended.
Until performance standards are implemented, there are a number of
command and control requirements that will continue to be enforced in
order to protect public health.
Question. When do you think would be a good time to have an
independent, scientific organization to come in and see if HACCP
implementation has strayed from science-based HACCP?
Answer. FSIS appreciates the importance of an independent,
scientific evaluation of HACCP implementation. The Agency's evaluation
strategy for HACCP is two-fold: conduct formative evaluations to gain
information at each phase to facilitate the overall implementation of
HACCP; and obtain scientific evaluation expertise from beyond the
Agency to conduct a summative evaluation that will assess the impact of
the final rule on inspection, industry, consumers, and foodborne
illness.
The first formative evaluation effort, Results of the SSOP
Implementation Follow-Up Study, has been completed. Six months after
the initial implementation date of sanitation standard operating
procedures (SSOP's), this study was conducted to determine the extent
to which the new system was implemented and where additional effort was
needed to assure that the new system would continue to work as
intended.
The second formative evaluation, Evaluation of Inspection
Activities During Phase One of HACCP Implementation is just starting.
This in-house evaluation of FSIS inspection activities during HACCP
implementation in large plants is designed to identify areas that might
need modification before small plants begin implementation in January
1999. The plan is to design the study, collect the data, analyze it and
write the final report by July 1998. This tight timeline will enable
FSIS Field Operations to review the findings and as necessary modify
aspects of its delivery of inspection in time for small plant
implementation in January 1999. Evaluation efforts of this type are
planned at each phase of HACCP implementation.
Concurrent with these evaluation efforts, the Agency is already
planning an evaluation of the HACCP final rule. This evaluation will
require expertise from beyond the Agency. The study is expected to
address whether or not HACCP process control systems: (1) control
production safety hazards, (2) reduce foodborne illness, (3) make
inspection more effective, (4) increase consumer confidence, and (5)
provide an opportunity for increased productivity.
Based on the tentative timeline, the evaluation reports will be due
in fiscal year 2000, fiscal year 2001, and fiscal year 2002. This would
allow adequate time to fully assess the implementation of HACCP in all
meat and poultry plants.
Question. There have been complaints that inspectors in the field
have had varying interpretations of what a HACCP plan should contain
and how a HACCP plant should operate. Some feel this situation has
bordered on disastrous and that it was caused by a lack of inspector
training, yet we understand FSIS still believes ``Just-in-Time''
training is the best approach to preparing inspectors for HACCP. How
can you explain your rational?
Answer. You can be assured that the Agency is concerned about the
way inspection personnel carry out their regulatory responsibilities.
The HACCP Technical Training Program provides inspection personnel with
the (1) required information and background on HACCP and its principles
and (2) knowledge, understanding, and techniques to apply the
inspection procedures established to determine a plant's compliance/
noncompliance with Pathogen Reduction and HACCP requirements. The
``just-in-time'' approach allows the agency to:
1. Link the training to the four-phase implementation schedule
contained in the Pathogen Reduction and HACCP rule spanning a period of
6 to 42 months;
2. Make the best use of scarce human resources;
3. Minimize the disruption of program services; and
4. Have employees immediately apply their newfound knowledge and
skills thus eliminating the need to establish and maintain costly re-
training or refresher programs.
Further, we have established multiple means for employees to become
more familiar and comfortable with the new Pathogen Reduction and HACCP
inspection procedures as follows:
1. Computer Based Training programs;
2. Issuance of a Reference Guide on the HACCP-based inspection;
3. Around the clock availability of technical assistance from the
Technical Service Center through the use of e-mail and a 800 number;
and
4. Day-to-day guidance, support and coaching by supervisors.
Question. This subcommittee had serious concerns at the time the
HACCP rule was being written about layering the new system on top of
the old. To this point, FSIS has eliminated preapproval for equipment
and blue prints. Is this all FSIS intends to do toward removing
outdated requirements, or do you have more activities planned?
Answer. FSIS made a commitment to change its command and control
regulations into performance standards as rapidly as it could, given
current requirements for regulatory change.
We are providing the FSIS portion of USDA's Unified Agenda that
will be published in the Federal Register in April 1998. The Agenda
outlines the Agency's regulatory reform efforts, including Sanitation
Requirements for Official Meat and Poultry Establishments, Rules of
Practice, Performance Standards for Perishable, ready-to-eat Products,
and Elimination of Requirements for Partial Quality Control Programs.
[Clerk's note.--The information referred to does not appear in the
hearing record but can be reviewed in the April 1998 Federal Register]
Question. There have been complaints that FSIS is in fact forcing
plants to write regulations from the old system--such as time and
temperature cooling requirements--into their HACCP plans. How does this
fulfill the commitment the Department made to Congress to eliminate
layering?
Answer. FSIS does have regulatory requirements that need to be
updated and the Agency has acknowledged that it needs to remove its
command and control requirements and replace them with performance
standards, which provide the regulated industry with more flexibility.
The Agency is developing a consolidated set of regulations that bring
meat and poultry requirements together in a single place. We are
committed to writing our regulations in plain and simple language so
that they can be understood by not only the regulated industry, but
also by the public, which expects that the government will hold
industry accountable for meeting regulatory requirements.
However, we acknowledge it is taking us longer to meet our goals
than originally intended. Until performance standards are implemented,
there are a number of regulations containing command and control
requirements that will continue to be enforced. One such regulation is
the requirement that poultry be chilled to a specific temperature
within a certain time frame, depending on the weight of the bird: 40
degrees within eight hours for turkey (9 C.F.R. 381.91). This
requirement was based on the best available scientific knowledge about
the lag phase for bacterial growth. FSIS would be negligent in its food
safety mission if it dropped this requirement before implementing a
performance standard.
Question. The subcommittee understands there have been a few plant
shutdowns so far. When FSIS makes a serious finding against a plant,
what opportunity does the plant have to demonstrate compliance or
dispute the findings before the plant is shut down? Is there a formal
dispute resolution process in place? If not, why not?
Answer. If the Inspector-in-Charge (IIC) determines that there may
be a HACCP system inadequacy because an establishment has multiple,
recurring noncompliances, as specified in 9 C.F.R. 417.6, and has
failed to adequately implement immediate and further planned actions as
documented on the Noncompliance Record (NR) (FSIS Form 5400-4), the IIC
should discuss this developing trend at the weekly meetings held with
establishment management. If the IIC subsequently determines that the
trend of multiple, recurring noncompliances without successful
interventions has led to a HACCP system inadequacy and that the marks
of inspection should be withheld, he or she shall contact the District
Office (DO) and provide all the relevant information for the DO to
prepare a Notice of Intent to Suspend Inspection. The Notice shall:
1. Inform the establishment that the nature and scope of the
noncompliances indicate that the HACCP system is inadequate as
specified in 417.6 of the regulations;
2. State that, because of the trend, FSIS intends to withhold the
marks of inspection and suspend inspection;
3. Explain the reason for the determination;
4. Reference each pertinent NR by number;
5. Inform the establishment that it is being afforded the
opportunity to demonstrate why a HACCP system inadequacy determination
should not be made or that it has achieved regulatory compliance; and
6. Provide the establishment three business days from the date of
the letter to provide its response to the DO.
Based on the establishment's response, FSIS will determine further
actions.
If at any time inspection personnel determine that adulterated
product was shipped, FSIS will immediately enact enforcement actions.
Prior to appealing, the establishment may request that the program
employee or IIC reconsider his or her finding or decision. The program
employee or IIC who made the finding or decision should evaluate and
consider any factual information the establishment provides. Program
employees should encourage establishment management officials who
indicate that they may appeal a decision or finding to do so as soon as
possible. Timely appeals will help ensure that the relevant information
is provided to subsequent decision makers promptly and that facts and
observations can be verified. Timely appeals also avoid the implication
that the establishment does not contest the inspection finding or
decision.
FSIS regulations provide establishments with the opportunity to
appeal, orally or in writing, an inspection finding or decision made by
any program employee. Such appeals should be directed to the employee's
immediate supervisor. The following outlines the chain-of-command for
inspection decisions:
1. Program employee, including the Inspector-in-Charge (IIC), who
made the determination;
2. Circuit Supervisor;
3. District Manager;
4. Assistant Deputy Administrator for District Inspection
Operations; and
5. Deputy Administrator for Office of Field Operations.
[The information (9 C.F.R. 417.6) follows:]
Sec. 417.6 Inadequate HACCP Systems
A HACCP system may be found to be inadequate if:
(a) The HACCP plan in operation does not meet the requirements set
forth in this part;
(b) Establishment personnel are not performing tasks specified in
the HACCP plan;
(c) The establishment fails to take corrective actions, as required
by Sec. 417.3 of this part;
(d) HACCP records are not being maintained as required in
Sec. 417.5 of this part; or
(e) Adulterated product is produced or shipped.
______
Agricultural Marketing Service
Questions Submitted by Senator Cochran
market news reporting
Question. A $320,000 increase is requested for fiscal year 1999 to
expand reporting in foreign markets to include South and Central
America and the Pacific Rim countries. What international markets does
AMS report on currently? How do you decide which markets to cover
within available resources?
Answer. AMS currently reports selected markets in Canada, Mexico,
England, France, Japan, Germany, New Zealand, the Netherlands,
Colombia, and Bulgaria. The markets covered are chosen on the basis of
their significance or importance to United States interests either as
suppliers, competitors, or markets of opportunity. Our reports only
include limited data on the important markets in those countries. Our
requested increase would allow us to expand coverage in these and other
markets in response to U.S. requests for information.
pesticide data program
Question. The fiscal year 1999 budget proposes to increase funding
for the Pesticide Data Program from $13,616,000 to $23,730,000, an
increase of $10,114,000. Of the increase requested, $2,480,000 is for
continuation of the current Pesticide Data Program; $1,716,000 is to
create a rapid response capability to support increased EPA demands for
pesticide residue data to conduct dietary risk assessments; and
$6,257,000 is to initiate a microbiological surveillance program on
domestic and imported fruits and vegetables. Why is an 18.2 percent
funding increase needed to maintain current Pesticide Data Program
activities?
Answer. The increase of $10,114,000 mentioned in your question is
the increase request for the entire Market Protection and Promotion
activity. The combined budget net increase for the Pesticide Data
Program, or PDP, is $10.453 million. The increase of $2.48 million for
current Pesticide Data Program activities is needed to maintain
statistically reliable data for use by EPA and other government and
private entities in their decision-making. If the requested funding is
not provided, we would have to reduce sampling levels and eliminate
certain types of testing.
We would also be unable to update our technical capabilities. Since
1991, a new generation of instrumentation has become available,
especially in chromatography and mass spectrometry. Furthermore, the
computer systems for the laboratory instrumentation purchased in the
early 1990's are not year 2000 compliant. The program needs to invest
in replacement instruments or upgrade present instrumentation to make
them compatible with present advancements in technology and year 2000
compliant.
Question. The budget indicates that if the requested increase of
$2.48 million is not provided for current Pesticide Data Program
sampling and testing, sampling in Colorado, Maryland, and Wisconsin
would be eliminated, and either one other major state would be dropped
or funding to the remaining participating states would be reduced by 13
percent. Why have you determined that Colorado, Maryland and Wisconsin
would be dropped from the program instead of reducing funding across-
the-board if the requested funding increase is not provided?
Answer. Reducing funding to the states across the board is not an
option since the sampling in Colorado, Maryland and Wisconsin is at a
minimum level now and those states cannot maintain viable programs if
reduced further. Even with the three states leaving the program, the
remaining states will still have to absorb a 13 percent decrease in
funding which will mean reduced staffing and withdrawal of services in
those states. Alternatively, having one of the seven remaining states
leave the program would have the least impact on program effectiveness
while still retaining regional balance. Ohio or Michigan would be one
of the likely candidates.
Question. Which states are currently participating in the Pesticide
Data Program? How many State employees in each of these states are
currently being supported with federal funds through this program?
Answer. The 10 States in the 1998 Program and number of employees
expressed as staff years are: California--23, Colorado--2.5, Florida--
12, Maryland--3, Michigan--12, New York--17, Ohio--7.5, Texas--15,
Washington--12.5, and Wisconsin--1.5. The total number of State staff
years is 106.
Question. Which fruits and vegetables are currently being tested
and sampled through the Pesticide Data Program in each of the
participating states?
Answer.
[The information follows:]
PDP COMMODITY SAMPLING AND TESTING LOCATIONS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fresh Sweet Canned Fresh
State collecting samples (No. for F&V) (No. Apple juice Green beans Whole milk Orange strawberries potatoes Fresh pears spinach tomatoes Winter Grape juice
milk) (AJ) (GB) (MK) juice (OJ) (ST) (SW) (PE) (SP) (TO) squash (WS) (GJ)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
California (14) (milk, 14)...................... CA1 CA1 US1 CA1 CA1 CA1 US1 CA1 CA1 US2 WA1 CA1 CA1 CA1 CA1
Colorado (2) (milk, 2).......................... MI1 MI1 US1 CA1 WA1 WA1 US1 MI1 US1 WA1 US2 WA1 MI1 MI1 MI1
Florida (7) (milk, 5)........................... TX1 TX1 US1 FL2-WH FL1 FL2 US1 TX1 TX1 US1 WA1 FL1 FL1 TX1 TX1
US2
Maryland (4) (milk, 5).......................... CA1 CA1 US1 CA1 CA1 CA1 US1 CA1 CA1 WA1 US2 CA1 CA1 CA1 CA1
Michigan (6) (milk, 6).......................... MI1 MI1 FL2- WA1 WA1 MI1 US1 WA1 US2 WA1 MI1 MI1 MI1
New York (9) (milk, 10)......................... NY1 NY1 US1 NY1 NY1 NY1 US1 NY1 NY1 US1 WA1 NY1 NY1 NY1 NY1
US2
Ohio (6) (milk, 5).............................. OH1 OH1 US1 NY1 OH1 NY1 US1 OH1 OH1 US1 WA1 OH1 OH1 OH1 OH1
US2
Texas (8) (milk, 6)............................. TX1 TX1 US1 FL2-WH FL1 FL2 US1 TX1 TX1 US1 WA1 FL1 FL1 TX1 TX1
US2
Washington (4) (milk, 4)........................ MI1 MI1 US1 FL2-WH WA1 WA1 US1 MI1 US1 WA1 US2 WA1 MI1 MI1 MI1
Wisconsin (2) (milk, 8)......................... OH1 OH1 US1 NY1 OH1 NY1 US1 OH1 OH1 US1 WA1 OH1 OH1 OH1 OH1
US2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
LAB CODES: Gulfport (NMRAL)--US1; California, Sacramento--CA1; Colorado (Sampling Only); Florida, Tallahassee--FL1; Florida, Winter Haven--FL2; Maryland (Sampling Only); Michigan, East
Lansing--MI1; Gastonia, NC--US2; New York, Albany--NY1; Ohio, Reynoldsburg--OH1; Texas, Brenham--TX1; Washington, Yakima--WA1; and Wisconsin (Sampling Only)
Question. How much of the current Pesticide Data program currently
supports equipment costs? Of the $2.48 million increase requested, how
much is for equipment?
Answer. The present PDP equipment budget is essentially zero. If
states can realize savings through reduced indirect costs or economies
in staffing, they can apply the funds toward equipment purchases. Such
savings would be insufficient to maintain or implement new and more
efficient technologies. Since PDP's inception in 1991 an entire new
generation of instrumentation has become available, especially in the
area of chromatography and mass spectrometry. Most computer systems for
laboratory instrumentation are not Year 2000 compliant. However
upgrades for certain instrumentation software are available to correct
this situation. Of the $2.48 million requested, a minimum of $600,000
is needed to invest in replacement instruments or upgrades for year
2000 compliance.
Question. Please describe the $1.7 million rapid response
capability which you say you need to support increased EPA demands for
pesticide residue data. What additional data does the EPA need and
specifically what will this data be used for?
Answer. The EPA is required to review over 9,000 tolerances over
the next ten years to meet the requirements of the Food Quality
Protection Act, or FQPA. EPA's initial plan is to reevaluate tolerances
for pesticides with a common mechanism of action such as
organophosphates and N-methylcarbamates. Also, when factoring in EPA's
Dietary Risk Assessment System criteria, more pesticides will fall
under the acute rather than chronic classification. The acute
pesticides will require single serving size studies in order to meet
the criteria of ``no health concern'' for infants and children.
EPA needs data for most commodities for which a pesticide is
registered in order to conduct effective dietary risk assessments under
FQPA guidelines and assure compliance with the new stringent standards.
The first part of PDP rapid response would conduct modified residue
studies for these commodities, for example, 100 to 300 data points over
a one to two year period rather than 600 samples or more over two or
more years. These rapid response situations will require minimal method
development investment and can be done with minimal method validation
with no need to assess laboratory capability to test new pesticides.
Some commodities which may be considered under this arrangement are
lemons, selected berries, nectarines and so forth.
The second part of this response is single serving size studies for
specific acute exceeder pesticides or group of pesticides, based on a
composite sample analysis exceeding predetermined target level. Crops
considered for these studies would already have been studied previously
in the testing program. PDP already has experience in designing these
studies. One such study was for aldicarb/potatoes in 1997, using a
multi-residue method, therefore, the data were also applied to
carbofuran at a later date.
Question. You are requesting a $6.2 million increase for the
Pesticide Data Program to initiate a microbiological testing program.
Please tell us why this new program is needed, whether any testing of
this type is done currently and who is doing it, and how this program
will work.
Answer. Although the U.S. domestic food supply is unmatched in both
quantity and quality, sporadic cases of microbiological and viral
contamination and parasitic infestation accounted for 90 percent of the
confirmed food borne disease outbreaks nationwide. Apparently,
microorganisms once thought under control are adapting to their
environments, developing resistance to conventional food processing
operations, and are re-emerging with increased pathogenicity. The risk
of contracting food borne illness may increase with questionable
practices in food production, the mass preparation of meals, the trend
to consume a greater proportion of meals away from home, the emphasis
to increase fresh fruits and vegetables in the diet and product
distribution logistics. This could be especially true where produce is
imported from sources which may have less rigorous sanitation
standards.
The President mandated a Food Safety Initiative and a Produce and
Imported Foods Safety Initiative. Under these initiatives, FDA and USDA
share the responsibility for developing a research program aimed at
reducing disease caused by food borne microbes and their natural
products. The President also directed FDA and USDA to issue guidance on
good agricultural practices and good manufacturing practices for fruits
and vegetables. It is generally agreed that there are a number of
missing pieces of information in the scientific basis for reducing or
eliminating pathogens in the agricultural setting. One of those missing
pieces is valid statistical information on the present day level of
fecal contamination and pathogenic contamination of the nation's fresh
fruit and vegetable supply. Without this information, it is very
difficult to determine if recommended changes in the production and
handling of these commodities are effective. This program is designed
to provide this piece of the missing information. It is also hoped that
once this statistical data is available to both government and the
public, innovative minds in other disciplines will make use of it in
research areas that have not yet been considered.
Statistically valid testing of pathogenic and fecal contamination
in produce available in this country is not being performed. The
current work being done by the Centers for Disease Control and
Prevention, or CDC, FDA, and the States supports regulatory mandates
and outbreak episodes. CDC has the primary responsibility for
surveillance and tracking of both communicable and food borne illness.
FDA provides support to this effort by funding surveys and notifying
CDC of findings related to regulatory and laboratory investigations.
CDC also relies on reports from State and local health departments to
estimate the number of food borne illness cases occurring across the
country. These reports are based on outbreak information from one or
more individuals experiencing a similar illness, depending on the
source. Local and State health departments conduct an investigation to
identify the source of contamination and the specific food, if
possible, before notifying CDC. Reports are limited by the ability of
State and local authorities to follow up leads and report
investigations to CDC. For example, outbreaks involving restaurants or
institutions are more likely to be recognized than those involving
foods prepared in the home or processed foods. In addition, the
information reported can also differ widely by State, with some States
having no surveillance staff specifically assigned to monitor for the
presence of key pathogens and spoilage organisms in food and water.
The Microbiology Data Program, or MDP, would use the infrastructure
of PDP. All the elements that make PDP scientifically-sound will be
incorporated into MDP. The same States performing work for PDP will
perform work for MDP. The same samplers that obtain samples for PDP
will be trained to gather the samples for MDP. A rigorous laboratory
quality control program will be initiated to ensure that the results
from various laboratories are comparable. The number of samples taken
at each site will be statistically determined by NASS and the
electronic transfer of data from the laboratories to AMS will mirror
the data transfer for PDP. The data will be analyzed for accuracy and
published in an annual summary. Commodities will be chosen based on per
capita consumption and seasonality, and the organisms for testing will
be chosen by USDA officials with recommendations from the scientific
community.
It is expected that seven staff years will be required for this
program. It is anticipated that the ARS, FDA, and CDC will provide
expert scientific advice and will make use of the resulting data, but
will not receive any funds from the program. Some funding for
statistical work will go to NASS, but at least 75 percent of the funds
will go to the States performing the sampling and analysis.
Question. How will AMS work with the Agricultural Research Service,
the Centers for Disease Control, the Food and Drug Administration, and
participating States on the requested microbiological testing program
initiative?
Answer. AMS scientists will confer with scientists in the ARS, CDC,
FDA, and academia to obtain the best scientific advice on technical
aspects of the program through surveys and informal consultations with
experts. The ARS, CDC, and FDA would also have access to any pathogenic
organisms isolated in the Microbiological Data Program, or MDP, for use
in ongoing research projects. ARS is interested in examining any
isolates obtained to expand their collection of organisms and to be
able to correlate antibiotic resistance to areas of the country and
perhaps production practices. The FDA is interested in determining the
genetic relationships of pathogens isolated from various commodities
from various parts of the country. This information might reveal the
pathways of dissemination of pathogens. In addition, FDA would be able
to use the data generated to determine whether recommended production
modifications are having a positive effect on the microbial level of
fresh fruits and vegetables and to determine the risk to the food
supply relative to the microbial load. Using genetic fingerprinting,
the CDC hopes to use the information generated in the MDP to help trace
the source of food infection outbreaks. The Economic Research Service
of USDA is very interested in obtaining statistically valid information
for use in its projections regarding the economic impact of food borne
outbreaks. Any additional data developed by these agencies that is not
confidential, would be transmitted back to the MDP program for
inclusion in the published data.
To implement MDP, AMS will initiate agreements with the States
currently participating in PDP--California, Colorado, Florida,
Maryland, Michigan, New York, Ohio, Texas, Washington, and Wisconsin.
States will collect samples at terminal markets and distribution
centers. Those States without adequate microbiology laboratory
capability will serve as collection centers with the analyses performed
in other state laboratories or in an AMS laboratory. Those States with
appropriate laboratory capabilities will perform the required analyses
and electronically transfer the resulting data to AMS. We estimate that
the States will receive at least 75 percent of the available funds. All
participating State and AMS laboratories will participate in a
stringent quality assurance program which will include analysis of
check samples and on-site laboratory reviews. Those States currently in
PDP have informally expressed interest in participating in MDP.
Question. Please prioritize the increases requested for the
Pesticide Data Program.
Answer. The priority is as follows: First, $2,480,000 for
continuation of the current Pesticide Data Program. Second, $6,257,000
to establish the Microbiology Data Program. Third, $1,716,000 to create
a rapid response capability to support increased EPA demands for
pesticide residue data to conduct dietary risk assessments.
section 32 commodity purchases
Question. Please list the commodity purchases made under the
emergency surplus removal program in each of fiscal years 1996 and 1997
and in fiscal year 1998 to date, and the reason for each removal action
[The information follows:]
The emergency surplus removal program is a mechanism used to
stabilize market conditions. Commodities that are determined to be in
overabundant supply are acquired to accomplish the purpose of clause
(2) of Section 32. The goal also is to encourage the domestic
consumption of commodities by diverting them from normal channels of
trade and commerce and donating them to schools, institutions, and
other domestic feeding programs.
Emergency surplus removal
Fiscal year 1996
Dollars
Item (millions)
Beef roast........................................................ $6.4
Blueberries, frozen............................................... 10.1
Date pieces....................................................... 1.9
Dried figs........................................................ 2.4
Fig nuggets....................................................... 0.4
Orange juice, canned.............................................. 13.3
Potatoes, fresh................................................... 1.5
Prunes, dried..................................................... 6.4
Prunes, puree..................................................... 1.6
Salmon, canned.................................................... 10.0
Salmon nuggets.................................................... 2.2
-----------------------------------------------------------------
________________________________________________
Total....................................................... 56.2
Fiscal year 1997
Apricots, canned.................................................. $2.1
Apricots, frozen.................................................. 1.5
Beef, boneless.................................................... 6.4
Beef roast........................................................ 2.1
Beef, ground...................................................... 19.1
Cheese............................................................ 5.0
Cherries, canned.................................................. 3.0
Cherries, frozen.................................................. 2.8
Date pieces....................................................... 1.6
Fig nuggets....................................................... 1.3
Figs, dried....................................................... 2.6
Grapefruit Juice.................................................. 2.3
Orange juice...................................................... 5.5
Peaches, canned................................................... 2.9
Peaches, frozen................................................... 0.7
Pork rib patty.................................................... 8.8
Potato flakes..................................................... 1.5
Potato granules................................................... 4.1
Potato oven fries................................................. 1.1
Potato rounds, frozen............................................. 3.3
Potato slices, dehydrated......................................... 6.3
Potato wedges, frozen............................................. 3.1
Potato slices, canned............................................. 4.0
Salmon, pouched................................................... 1.3
Turkey............................................................ 8.5
-----------------------------------------------------------------
________________________________________________
Total....................................................... 100.9
Fiscal year 1998 through 3/20/98
Salmon............................................................ $7.1
Turkey............................................................ 26.4
Navy beans........................................................ 1.6
Prunes, dried..................................................... 5.8
Peaches, frozen................................................... 4.5
Prune puree....................................................... 0.6
Unused authorization.............................................. 62.0
-----------------------------------------------------------------
________________________________________________
Total....................................................... 108.0
market development and assistance
Question. Funding of $1 million was provided in fiscal year 1998
for AMS to assist Alaska in marketing salmon. The fiscal year 1999
budget indicates this assistance is complete. Please describe the
marketing efforts supported with this funding.
Answer. Of the $1 million provided for marketing assistance to
Alaska, $50,000 was designated for the promotion of agricultural
commodities by the Alaska Division of Markets, or ADM. The Alaska
Fisheries Development Foundation, Inc., or AFDF, will receive $880,000
for marketing Arctic-Yakor-Kuskokwin salmon. Based on a review of ADM's
and AFDF's marketing plans, AMS has submitted grant agreements to both
groups. Funds will be distributed as soon as AMS receives the signed
agreements from ADM and AFDF.
Question. What agricultural marketing problems and opportunities
have been addressed through projects funded through the Federal-State
Marketing Improvement Program?
Answer. Federal-State Marketing Improvement Program, or FSMIP,
funds are allocated competitively among State departments of
agriculture or other appropriate State agencies, for a wide range of
research and service projects aimed at improving the marketing,
distribution, and utilization of agricultural products. Federal grants,
which must be matched by non-federal funds or in-kind resources, have
averaged about $50,000 each in recent years, resulting in approximately
25 proposals funded per year. I will provide some examples of the
marketing problems and opportunities addressed for the record.
[The information follows:]
The Global Marketing Support Service at the University of Arkansas
is providing information and other assistance to small- or mid-sized
producers of specialty food and wood products to further their efforts
to enter and compete effectively in targeted international markets.
FSMIP provided assistance to the Missouri Department of Agriculture
in developing a prototype market reporting system which more accurately
reflects prices paid by packers and processors for slaughter hogs by
accounting for premiums and discounts associated with carcass leanness.
After operating on a pilot basis in Missouri during the past year, this
system now is being extended to other areas under the Federal-State
Market News Service.
Funds provided to the Illinois Department of Agriculture, in
cooperation with the University of Illinois, have been used to identify
market opportunities for specific varieties and grades of soybeans used
in food products in South Korea and other Asian markets. A second
project, with the same cooperators, is aimed at improving farmers' and
country elevator managers' access to information about the value of
soybeans based on differences in oil and protein content as measured by
Near Infra-Red technology.
Kansas University, in cooperation with the agricultural marketing
division of the State Department of Commerce, is identifying consumer
demand and transaction costs for locally-grown produce through
alternative market channels or marketing organizations, including
producer cooperatives.
organic certification program
Question. An increase of $505,000 is requested for fiscal year 1999
to continue implementation of the Organic Certification Program. What
is the fiscal year 1998 level of funding for this program?
Answer. A total of $490,000 was made available in the 1998
appropriation for the Organic Certification Program. AMS estimates that
an additional $362,000, for a total of $852,000 from its Marketing
Services account, will be needed in fiscal year 1998. A reprogramming
proposal is under review within the Department.
Question. What is the current staffing (FTE) level for the Organic
Certification Program? What staffing (FTE) level is proposed for the
program for fiscal year 1999?
Answer. The current staffing level for the National Organic Program
is 10 staff years. AMS proposes 12 staff years for fiscal year 1999.
Question. Once the Organic Certification Program is fully
established, growers and handlers and certifying agents are to be
assessed fees to recover program costs. The user fees collected will be
deposited in the Treasury under current law. Please provide the
statutory language that would need to be included in the appropriations
Act to allow these fees to be credited to the Appropriations account to
cover program costs.
Answer. A technical amendment to the Organic Foods Production Act
of 1990, or 7 U.S.C. 6506, was adopted by conferees as section 601 of
the Agricultural Research, Extension, and Education Reform Act of 1997,
S. 1150. S. 1150 is pending final action by the Congress. The language,
which authorizes the retention and use of the fees, is added at the end
of section 2107 of the Organic Foods Production Act of 1990.
[The language follows:]
``(d) Availability of Fees.--
``(1) Account.--Fees collected under subsection (a) (10) (including
late payment penalties and interest earned from investment of the fees)
shall be credited to the account that incurs the cost of the services
provided under this title.
``(2) Use.--The collected fees shall be available to the Secretary,
without further appropriation or fiscal year limitation, to pay the
expenses of the Secretary incurred in providing accreditation services
under this title.''
Question. When do you expect a final rule to be published?
Answer. The current plan is to publish a final rule by the end of
calendar year 1998.
Question. When do you expect the program to be fully established
and user fees to be charged?
Answer. The proposed rule lays out an 18-month implementation
schedule following publication of the final rule. During the first 6
months, applicants seeking accreditation for certification status will
pay an application fee and an administrative fee. Operations wishing to
be certified organic will then have 12 months to be certified, and will
pay fees into the program. Site visits to the certifying agents will
take place during this 18-month period and will generate fees. After
the 18-month period, AMS anticipates the program will be self-
supporting.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. AMS' annual performance goals are directly linked to its
mission and strategic goals. The agency's program activities are
grouped according to the agency's two strategic goals; the performance
goals are listed by program activity. I will provide a table that shows
the linkage between each activity and goal.
[The information follows:]
SUMMARY OF AMS PERFORMANCE GOAL LINKAGES, FISCAL YEAR 1999
------------------------------------------------------------------------
Fund Goal 1 Goal 2
------------------------------------------------------------------------
Marketing services:
Market news, appropriation.................... X .........
Standardization, appropriation................ X .........
Shell egg surveillance, appropriation......... ......... X
Federal Seed Act Program, appropriation....... ......... X
Organic Certification Program, appropriation.. X .........
Pesticide Recordkeeping Program, appropriation ......... X
Pesticide Data Program, appropriation......... X .........
Market development and assistance, X .........
appropriation................................
Wholesale market development, appropriation... X .........
Transportation services, appropriation........ X .........
Payments to States and possessions: Federal-State X .........
Marketing Improvement Program, appropriation.....
Section 32:
Commodity purchase services, appropriation.... X .........
Marketing agreements and orders, appropriation ......... X
User funded:
Grading and certification, user funded........ X .........
Plant Variety Protection Act Program, user ......... X
funded.......................................
Commodity research and promotion acts, user X .........
funded.......................................
Perishable Agricultural Commodities Act ......... X
Program, user funded.........................
------------------------------------------------------------------------
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. AMS developed a performance goal for each budget activity.
Since we used the budget activities as the framework, we did not
encounter any difficulties.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. Yes, the agency's performance plan links performance
measures to budget activities. AMS budget accounts include multiple
activities; each AMS activity has a performance measure.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. AMS' performance planning structure does not differ from
the budget structure. The activities in the annual performance plan are
the same as the activities in the budget justification. The budget
justification lists AMS activities by account, whereas the performance
planning structure lists the activities by goal.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. No, AMS does not plan to propose any changes in its account
structure.
Question. How were performance measures chosen?
Answer. Performance measures were developed through a consensus of
program personnel and agency managers. As part of its strategic plan
development, AMS established committees of agency program personnel for
each activity. These committees were responsible for developing
performance measures for their activities based on the strategic plan.
AMS also formed a Strategic Planning Action Team at the Associate
Deputy Administrator level. This team monitors the performance goals in
the annual plan, gathers actual performance data semiannually, and
prepares a report to the Administrator.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. Since we were already collecting data on a budget activity
basis, there was no significant increase in costs.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. At this point, we do not believe there will be a problem,
but since the performance goals are new, we cannot be sure.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results.
Answer. Since the AMS performance goals track the budget
activities, we believe that the Subcommittee would be interested in all
of them.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. We attempted, where possible, to provide outcome measures
for each program area.
Question. Do you believe your program managers understand the
differences between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Yes, we believe AMS program managers understand the
differences. The problem, in some instances, was that measuring outcome
was not possible and we had to use surrogate measures instead.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. Some examples of customer satisfaction measures for
external customers include the performance goal for market news
services that is based on timeliness and the measures for wholesale
market development and transportation services that are based on
customer satisfaction survey results. None of our measures are
specifically oriented toward internal customers.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. We developed the budget based on the agency's mission and
strategic plan, then adjusted the performance goals as needed.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals.
Answer. Yes, we change the goal estimates based on the budget
proposals. If the proposed budget number is changed, AMS program
personnel can estimate the likely impact of the change on program
performance. The performance goals and indicators reflect the requested
budget levels.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. AMS has systems in place to measure and report program
performance on a semiannual basis for management use.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget.
Many agencies have indicated that their present budget account
structure makes it difficult to link dollars to results in a clear and
meaningful way.
--Have you faced such difficulty?
--Would the linkages be clearer if your budget account structure were
modified?
--If so, how would you propose to modify it and why do you believe
such modification would be more useful both to your agency and
to this committee than the present structure?
--How would such modification strengthen accountability for program
performance in the use of budgeted dollars?
Answer. We have not faced any difficulty in linking dollars and
results since we are using an activity basis under both the annual
performance plan and the budget structure. Therefore, there is no need
to change the budget account structure for AMS to improve the linkages.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
--If so, what steps have you identified to prepare, anticipate and
plan for such influences?
--What impact might external factors have on your resource estimates?
Answer. We included a discussion of external factors in the
strategic plan. The discussion of performance goals in the performance
plan briefly mentions external factors that could influence goal
achievement for some of the agency's activities. AMS programs try to
anticipate and prepare for uncontrollable external factors such as
weather, economics, production levels, and consumer preference by
closely monitoring the agricultural industry and its environment.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. No, rather the plan process has helped us to understand the
complementary nature of our activities with others within and outside
the Department.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that:
--To what extent are your performance measures sufficiently mature to
allow for these kinds of uses?
--Are there any factors, such as inexperience in making estimates for
certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. We believe our performance measures are the best that are
currently available to reflect the accomplishment of our mission. We
have not experienced any difficulty, but we plan to periodically
reassess our performance measures to assure that they effectively
measure AMS performance.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No, we do not see the need for any substantive revisions.
______
Questions Submitted by Senator Bumpers
organic standards
Question. The Department finally published proposed rules to
establish national organic standards after many years of requests by
the organic farming community. However, the proposed rule appears to
have raised concerns by many about various practices that may be
included in the standards. You suggest the final rule may be published
by early in fiscal year 1999. Given all the past problems in publishing
a proposed rule and the problems that have surfaced since, do you think
early fiscal year 1999 is a realistic target?
Answer. Secretary Glickman has stated that the final rule will be
in place by the end of the year. We are committed to meeting that
deadline. We are proposing to reprogram $362,000 for Organic
Certification in fiscal year 1998.\1\ With those additional funds and
the funding increase requested for fiscal year 1999, we should have the
resources and personnel we need to meet our goal.
---------------------------------------------------------------------------
\1\ A reprogramming request is under review within the Department.
---------------------------------------------------------------------------
Question. When the organic movement began, many thought of it as a
passing fad. What do you see as the long-term outlook for this method
of production and marketing?
Answer. The size of the organic industry has risen dramatically in
recent years. In 1996, total domestic retail sales of organically-grown
food products reached $3.5 billion, up from $78 million in 1980. Sales
of organically-grown food have grown at approximately 20 per cent per
year since 1990. From 1992 to 1994, certified organic cropland
production in the U.S. expanded from 473,000 acres to 667,000 acres,
and is expected to reach 2 million acres by the year 2000.
U.S. exports of organically-grown products totaled $203 million in
1994, or about nine percent of the organic output. Export markets may
become more substantial and offer price premiums for organic products,
with increased world-wide consumption of organically produced food. The
organic market share in the European Union, or EU, has been projected
to reach 2.5 percent of total food consumption expenditures in 1998.
Austria expects its organic market share to equal one third of all food
sales by the year 2000. In 1994, France and Germany combined had total
retail sales of organic foods equal to that of the United States in the
same year, approximately $2 billion. Japan's retail sales for that year
were estimated to be $688 million. Other EU countries report growth
rates equal to or greater than the current growth rate in the United
States, which is about 20 percent per year.
Question. AMS recently completed a study on the Little Rock River
Market. Can you provide an overview of the finding and recommendations
of that study?
Answer. In September 1996, AMS initiated a cooperative agreement
with the city of Little Rock to conduct an operational management
analysis of the River Market, a public market that had recently opened
in downtown Little Rock. A goal of the study was to develop a strategy
for River Market to position itself as a preferred fresh food shopping
destination, providing quality products built on farmer and grocery
trade. A preliminary report was presented to market management and the
City outlining a series of recommendations for improving operating
procedures and management practices at the market.
Included among the recommendations were:
--Institute a monthly advertising fee to conduct ongoing and long-
term promotional and marketing campaigns.
--Hire a committed, strong, focused, visionary manager and give that
person the authority to make decisions and orchestrate the
market's success.
--Reduce the number of days the market is operating to coincide with
consumer shopping preferences.
--Enhance security, particularly at night, to ensure a safe
environment for the market.
--Enforce terms of lease agreements, particularly as they relate to
Use Clause, Stall Design, and Rental Rates. Excesses and abuses
should be curtailed.
--Consider implementing a validation system that would provide free
parking for shoppers.
Question. When will the study be available?
Answer. A final draft is currently being prepared which further
describes market data, demographics, and structural features of the
market. This draft is scheduled for completion by May, 1998.
______
Animal and Plant Health Inspection Service
Questions Submitted by Senator Cochran
agricultural quarantine inspection
Question. The fiscal year 1999 President's budget request proposes
an increase of $12,000,000 for the agricultural quarantine inspection
(AQI) user fee program. Does APHIS expect to use any of its operating
reserves in fiscal year 1998? If yes, how much and for what purposes?
Answer. Yes, in fiscal year 1998 APHIS will need to access $12
million from the AQI Reserve Account to fund the operating shortfall
that exists between the $100 million Federal Agriculture Improvement
and Reform (FAIR) Act of 1996 threshold and the $88 million in
appropriated funds. The FAIR Act changed the way funding is made
available for most AQI activities and provided a mechanism to meet
increased demands for AQI services. The FAIR act was designed to
transition the AQI User Fee program into a true demand-driven user fee
program in fiscal year (FY) 2003 based on the assumption that the
program would receive $100 million in annual appropriated funds through
fiscal year 2002 and finance additional costs with user fee collections
that exceed $100 million. However, if less than $100 million is
appropriated, the shortfall must be funded from the AQI Reserve
Account. In both fiscal year 1997 and 1998 the AQI User Fee program was
appropriated less than $100 million, $98 million and $88 million,
respectively. We began fiscal year 1998 with a reserve account balance
of $17.8 million on a cash accounting basis. However, after using the
reserve account to finance the fiscal year 1998 appropriations
shortfall, only $5.8 million is projected to remain available in the
AQI Reserve Account for fiscal year 1999. This is a critically low
reserve balance for a large-scale program such as AQI. Continued annual
appropriations of less than $100 million will gravely threaten the
program's ability to perform its mission. The proposed fiscal year 1999
$12 million program increase will help APHIS avoid further depleting
the AQI Reserve Account to finance user fee inspection services.
pest and disease exclusion activities
Question. A recent General Accounting Office (GAO) report advised
APHIS to improve its point-of-entry inspection program. What actions
are being taken by APHIS to address this report? How much money has
been earmarked in the proposed fiscal year 1999 budget request to
address these concerns?
Answer. APHIS proposes to address these concerns by providing
additional inspectors at new ports of entry; expanding facilities at
the Mexican and Canadian borders, and Hawaii; and further expanding the
detector dog program along the Mexican border. An increase of $2.6
million is included in the fiscal year 1999 budget to fund these
improvements.
Question. To address the GAO report, APHIS has stated that it will
hire additional staff for inspections in Hawaii, Canada, and Mexico.
How many additional staff will be devoted to conduct predeparture
inspections in Hawaii, and preclearance inspections in Canada and
Mexico? How many staff does Hawaii need to be considered fully staffed
for all AQI programs?
Answer. The fiscal year 1999 increase of $2.6 million for AQI
appropriated activities supports nineteen additional staff years for
predeparture inspections in Hawaii; 3 additional staff years for
preclearance inspections in Canada; and 18 additional staff years for
preclearance inspections along the U.S./Mexican border. Two additional
inspectors above the increase level would provide optimal AQI staffing
in Hawaii.
Question. With the increase in world trade and global
competitiveness, many responsibilities have been created to comply with
the new World Trade Organization (WTO) obligations. Which
responsibilities fall under the responsibility of APHIS?
Answer. APHIS personnel have made and continue to make major
contributions in resolving issues related to the World Trade
Organization (WTO) Agreement on the Application of Sanitary and
Phytosanitary (SPS) Measures. Several USDA agencies, including FAS,
ARS, FSIS and all three Marketing and Regulatory Programs mission area
agencies (AMS, APHIS, and GIPSA), spend considerable time and resources
in resolving the many animal and plant health issues that arise due to
increasing world trade and global competitiveness. In fiscal year 1996,
APHIS and USDA SPS accomplishments included the resolution of 38 trade
barrier issues worth nearly $7 billion in exports of U.S. agricultural
commodities, representing about 12 percent of the $60 billion in U.S.
agricultural exports that year. In 1997, SPS accomplishments included
the resolution of over 70 issues worth over $1 billion.
APHIS provides critical technical input for protecting American
agriculture while facilitating trade. APHIS must maintain monitoring
and surveillance activities in countries that have a trade relationship
with the United States while, at the same time, ensuring that domestic
agricultural products have access to emerging markets.
Question. How does the proposed fiscal year 1999 budget request
address the financial obligations placed on the agency?
Answer. The demands facing APHIS have shifted substantially as a
result of agricultural trade liberalization achieved during the GATT
Uruguay round. The workload associated with regulating imports and
certifying exports is increasing. As traditional barriers such as
tariffs and quotas are eliminated under the WTO and other trade
agreements, the temptation has increased for countries to adopt health-
related requirements as disguised trade barriers.
This reality increases the need for APHIS to assertively execute
its role as a leader in the SPS area. First, APHIS conducts risk
analyses to monitor epidemiological pest and disease trends and conduct
or participate in risk analysis for specific plant and animal
commodities and pathways of introduction. Second, APHIS is continuing
to assess and make regulatory decisions on an increasing number of
import requests. These regulatory decisions must be in accordance with
WTO rules which require greater documentation, scientific analysis, and
transparency than in the past. Third, an increasing portion of our
resources is being used to support U.S. agricultural exporters who
encounter foreign technical trade barriers. Our scientific staffs play
a critical role in the negotiation and resolution of these SPS issues.
Fourth, APHIS spends an increasing amount of time and resources working
with its foreign regulatory counterparts to develop international
standards and address a variety of pest and disease issues which affect
trade. Increasingly, APHIS must also gather technical information in
foreign countries on surveillance and monitoring procedures and certify
these systems. These international activities and relationships are
becoming increasingly vital for promoting harmonized regulatory
approaches which allow U.S. products to compete on a level playing
field.
This expanding function presents certain challenges for APHIS as it
seeks to reassess priorities and existing processes for managing
sanitary and phytosanitary issues. APHIS is realigning its work
processes to fit these changing needs, but increasing demands place a
strain on current resources and the ability to update the skills of the
workforce. Accordingly, we have requested increases in several line
items to help us address sanitary and phytosanitary issues.
Specifically, we request increases of $4.6 million for our animal
health monitoring and surveillance program and $374,000 for our pest
detection program. These program increases would enhance our domestic
infrastructure and surveillance systems to certify the health status of
American agricultural products. To specifically address SPS issues, we
request an additional $694,000 for international programs, $173,000 for
import/export inspection, and $2.6 million for our agricultural
quarantine inspection appropriated program.
Question. Under the import/export program, does APHIS' workload
address the President's Food Safety Initiative? If yes, where and how
much does the fiscal year 1999 proposed budget request contain?
Answer. Because APHIS is not directly involved in the President's
Food Safety Initiative, the fiscal year 1999 workload projections for
the import/export program do not address the initiative. However, APHIS
has technical expertise in the area related to animal and plant health
and is well-suited to advise the Food and Drug Administration and other
participating agencies within the USDA as they address the Food Safety
Initiative.
karnal bunt
Question. How much does the agency plan to spend on Karnal Bunt in
fiscal years 1998 and 1999?
Answer. In fiscal year 1998, we plan to spend approximately $4.3
million on operating costs, which will fund surveys, testing,
regulatory, and laboratory work. We expect the funding need for these
activities to decrease by fiscal year 1999. However, we will not have
an accurate cost estimate for fiscal year 1999 until at least July 1,
1998. At that point, enough fields will have been harvested to give us
some indication of the level of activities needed for fiscal year 1999.
So far through our Karnal Bunt (KB) Emergency Program, we have been
able to prevent the presence of KB in the United States from crippling
the $5.9 billion wheat export market. Preserving this market is highly
dependent on our successful continuation of the regulatory program and
ongoing national survey to document that major wheat-producing areas of
the U.S. are free of KB.
Question. Has the private sector agreed to finance this program?
Answer. There is no consensus among the private sector about
financing this program. Although industry groups within the major
wheat-producing areas of the country are generally supportive of the KB
National Survey, grain handlers in some regions are resistant. By
fiscal year 1999, there will be a decreasing need for extensive survey.
This is because our intensive National Survey of 1996-97 has provided
ample evidence that KB is not present at detectable levels in
unregulated U.S. wheat production regions and is not a production or
quality problem in our system.
Currently, we know that at least some of the sample collection
element could be transferred if industry is willing to accept such a
transfer. We believe we could also effectively transfer parts of the
sample analysis element to private laboratories under accreditation
processes. Also, we are working with the private sector to determine
how parts of the data analysis and data management elements of the
National Survey could be transferred. As long as our trade partners
regard KB as a phytosanitary issue, the private grain sector should be
willing to accept such a transfer and should want to take whatever
measures may be necessary to assure trade partners that U.S. wheat
meets import requirements. However, private sector acceptance of this
transfer will depend on our ability to ensure that the private sector
system would yield an official sample to meet WT Organization
requirements.
silverleaf whitefly program
Question. In the fiscal year 1999 President's budget, APHIS
proposes to incorporate all components of the silverleaf whitefly
program into the Biocontrol line item at the fiscal year 1998 funding
level. Why is the agency proposing this?
Answer. Although we are proposing to incorporate the silverleaf
whitefly (SLW) program into the Biocontrol line item, we plan to
continue SLW activities in fiscal year 1999 at approximately the same
level as in fiscal year 1997 and 1998. However, this transfer could
provide greater flexibility in future years in allocating resources
related to biological control methods for the SLW.
Question. Does the agency know if the industry agrees with this
transfer?
Answer. The industry is concerned about this transfer. They believe
that it may signal decreased funding for SLW activities in fiscal year
1999, but this is not the case. We plan to spend the same amount for
SLW activities from the biocontrol line item in fiscal year 1999 as in
fiscal years 1997 and 1998.
boll weevil eradication program and loan
Question. In your statement, Mr. Secretary, you indicated that a
redirection of $12 million from the Animal and Plant Health Inspection
Service (APHIS) appropriations to the boll weevil loan program has been
proposed. However, the budget shows the loan program level would
decline from $40 million in fiscal year 1997 to $30 million in fiscal
year 1999. Why is this?
Answer. The boll weevil program, stays in the same areas for a few
years, then rapidly expands into new zones. We understand that program
leaders in Texas are considering a loan request of as much as $78
million. We also have indications of requests that will be made from
other States. At the time the budget was developed, our assessment of
the need for loans was $30 million. We have not had an opportunity to
review the current thinking behind the requests and cannot determine at
this time, whether there will be a need for funding of the magnitude
indicated.
Question. APHIS plans to discontinue all cost-sharing program
activities where the boll weevil no longer exists in the fiscal year
1999 budget. In which areas does the boll weevil no longer exist?
Answer. The boll weevil no longer exists in Virginia, North
Carolina, South Carolina, Georgia, Florida, California, Arizona, most
of Alabama, middle Tennessee, and northwestern Mexico.
Question. The boll weevil loan program was created to enhance the
appropriated funds for the boll weevil eradication program. The fiscal
year 1999 President's budget proposes to decrease the eradication
program by $12.2 million. Last fiscal year, the President's budget
proposed to decrease the program by $9.8 million.
Why does the agency continue to propose reductions in this program
even though it knows the loan program is not capable of covering the
costs of the program? Please explain how USDA proposes to utilize the
$4 million proposed for the Boll Weevil Program in fiscal year 1999?
How much of the APHIS funds go directly to the field and how much are
attributed to administrative overhead? Since the program is continuing
to expand, please provide the Committee with an analysis of whether the
program can succeed without significant funding for federal cost
sharing and for the FSA loan program--particularly while cotton prices
are low and acreage is in decline.
Answer. Since boll weevil eradication has proven to be successful
and profitable for cotton growers, program beneficiaries will assume a
greater financial responsibility for program costs. Additionally,
growers had expressed a desire to have primary control over the daily
operations of their program.
In an effort to mitigate the impact of reduced Federal grants to
the boll weevil eradication foundations, the USDA provided a loan
program with very favorable terms which supplements funds raised
through grower assessments and eases cashflow problems. In fact, the
FSA loan program makes more total funds available for boll weevil
program expansion than have been available under the traditional
appropriations and grants approach. Because of the tremendous benefits
cotton growers can gain from boll weevil eradication, we believe that
they will choose to take advantage of the loan program. It provides a
reasonable alternative that is cost beneficial.
The Agency proposes to use approximately $2 million to fund direct
and indirect costs for the ten technical coordinators APHIS has placed
throughout the active eradication area. The remaining $2 million would
be allocated as cost-sharing funds among the active program areas.
Approximately 86.1 percent of APHIS' funding is allocated to the
field for program delivery costs while 13.9 percent is allocated for
agency and program-level support costs.
We believe the boll weevil eradication program can succeed with
fewer federal cost-share funds and a flexible loan program. Cotton
acreage has fluctuated significantly over the last two years, largely
due to recent changes in farm legislation. These swings in acreage make
it more difficult to provide the cash flow for the eradication program
in each new area. High acreage during the expensive few years of
eradication will result in high overall program costs. If acreage then
declines in the post-eradication phase as loans are being repaid,
grower assessments may not be sufficient to retire existing debt on
schedule. Loans, therefore, must be flexible and the acreage accurately
reported each year through FSA.
Question. What is the status of the memorandum of understanding
(MOU) between APHIS and FSA which would provide for collection and
sharing of crop acreage data in Boll Weevil Eradication zones which
would facilitate administration of the program and collection of
producer assessments? Is this consistent with report language which
accompanied the fiscal year 1997 appropriations bill?
Answer. Both agencies agree that an MOU is not needed. Coordination
of data is proceeding adequately to facilitate administration of the
program and collection of producer assessments.
Yes, I believe that the Department is administering the program
consistent with the Committee recommendations contained in Senate
Report on the 1997 Act. In particular, we have developed working
relationships with the foundations that actually carry out the boll
weevil eradication program. Efforts by both FSA staff responsible for
the loan program and APHIS staff responsible for the USDA's eradication
program are closely coordinated, and we are making every effort
possible to ensure that loan terms and conditions meet the needs of
borrowers.
Question. Please provide the Committee with an explanation of how
the Department is currently collecting crop acreage data. Is there
concern about gaps and inaccuracies in crop acreage data figures under
the Department's new collection procedures?
Answer. In most areas involved in eradication, FSA offices are
involved, to varying degree, in collecting acreage information from
producers. This information is provided by growers in accordance with
State boll weevil eradication laws. It is critical that grower
Foundations involved in the eradication program receive accurate and
timely acreage reports from FSA. This information is used to bill
growers for the assessments they voted to pay when they joined the
program. Some States are very aggressive in enforcing their laws, while
others are not.
Question. Does USDA have authority to allow producers to report
their planted acreage? Does USDA have authority to share planted
acreage data with private organizations who need such data?
Answer. Yes, the statutory authority to collect information such as
reports on planted acreage is contained in Section 374 of the
Agricultural Adjustment Act of 1938. No, the Department does not have
authority to share the data with private organizations. Planted acreage
reports are subject to a Privacy Act system of records and are exempt
from Freedom of Information Act requests for sharing with private
organizations.
yellowstone bison
In fiscal year 1998, the Committee appropriated $1 million to plan,
design, and construct a quarantine facility in Montana to hold and test
bison leaving the confines of the Yellowstone National Park.
Question. What is the status of this project?
Answer. Discussions with the State of Montana are currently taking
place to determine the best location for this facility and the roles
and responsibilities of both APHIS and the State. Although a location
has not been determined, APHIS has consulted with an engineering firm
to put together a preliminary generic plan for construction. Upon
selection of a site, a specific design plan for the facility will be
developed. Once the design phase is complete, construction will begin.
Due to the mild winter thus far in Montana, the need for such a
facility has not been critical. APHIS expects that the facility will be
operational by the winter of 1999/2000.
Question. How has the project contributed to the agency's strides
in reaching a long-term solution?
Answer. The facility, when completed, will be consistent with the
long-term solution to manage brucellosis in the Yellowstone bison
population announced in June 1997 by State and Federal officials. The
long-term solution includes capturing animals and sending them to
quarantine facilities; providing the disease free animals to Native
American Indian tribes; hunting bison in certain situations; and
vaccinating the bison when a vaccine is approved.
Question. Has the agency spent any of the fiscal year 1998
appropriation of $1 million?
Answer. To date, APHIS has not spent any of the $1 million
appropriated in fiscal year 1998 for this project.
Question. What is the next phase of this project and how much money
will be needed in fiscal year 1999? Is this amount included in your
fiscal year 1999 request? If not, why?
Answer. Upon completion of the construction phase, the operational
phase of the facility will begin. Presently, discussions are taking
place to identify the roles and responsibilities of APHIS and the State
of Montana. Funds were not included in the fiscal year 1999 budget for
this activity because at the time the budget was developed, funds had
not yet been included in the fiscal year 1998 Appropriations Act to
construct the facility. For this reason, APHIS did not anticipate a
need for operating and maintenance funds in fiscal year 1999.
golden nematode
Question. In 1997, APHIS, the National Plant Board, the potato
growers' industry, and the Agricultural Research Service conducted an
extensive review of the golden nematode program. Why has the plan not
been implemented?
Answer. After a panel representing these groups conducted the
review, they made several recommendations concerning the golden
nematode program. In fiscal year 1997, we established an implementation
team to review this panel's report, to determine which of the
recommendations could be implemented, to establish a timetable for
implementation, and to address the operational details associated with
implementation. This implementation team consists of representatives
from APHIS, ARS, New York State, Cornell University, New York State
potato grower groups, the National Potato Council, and the American
Association of Nurserymen. The recommendations and the actions we have
taken on each follow:
(1) that the feasibility of eradication be tested in accordance
with the parameters presented by the Panel, and that the USDA, the New
York State Department of Agriculture (NYSDA), and Cornell University
continue to conduct a joint golden nematode (GN) management program.
Since total eradication is not possible, the team advocated that
some type of GN program must continue to prevent the pest from becoming
more widely distributed.
(2) that the program should explore the possibility of developing
other effective control methodologies.
We developed a steam heat treatment for farm equipment that we hope
can replace methyl bromide by 2000. Also, we developed the ``hatching
factor,'' which uses a chemical that would cause GN to hatch
prematurely. In addition, the team supported the idea that
biotechnology may have some application in the long term to accelerate
the development of new GN-resistant potato varieties.
(3) that the USDA or the New York State Department of Agriculture
(NYSDA) work with potato growers to obtain a special local needs or
general registration for Basamid.
The team advocated the registration of Basamid, although it would
probably require a third-party registrant. The availability of Basamid
would not significantly affect program operations.
(4) that the national GN detection surveys now in progress be
completed.
The team favored the continuation of the golden nematode program
and Federal quarantine. Also, it advocated the need for additional
national surveys that would enable the program to identify and regulate
infested properties in time to prevent further spread.
(5) that the program continue to intensely manage the GN in New
York State.
The team will be appointing a subcommittee to determine to what
extent Long Island should be regulated. Currently, only individual
properties are regulated on Long Island. Also in New York State, we
initiated and implemented GN-resistant potato variety crop rotation on
exposed lands (those that are at risk of becoming infested) which will
control GN populations and prevent further spread. This would reduce
workload because we would not need to survey the lands that are in
rotation as often or as intensely as other lands.
(6) that the GN management program be restructured to reduce
workload.
The program could be restructured and workload reduced if New York
State would be willing take a greater role in activities concerning the
intrastate movement of farm equipment.
(7) that the federal-domestic quarantine be revised and the NYSDA
evaluate the New York State parallel quarantine.
The team supported the idea that the Federal quarantine not be
revised until it is determined what type of program funding would
allow. Also, the team believes that the current quarantine is an
effective mechanism for preventing GN spread.
(8) that ARS and Cornell University continue research and
development efforts, that funds now provided to these efforts from
APHIS and NYSDA be redirected to the regulatory and management program,
and that federal funding for regulatory and management activities
continue.
ARS and Cornell University will continue research and development
efforts to develop GN-resistant potato varieties and a heat treatment
technique for farm equipment since the availability of new resistant
varieties is essential to the program's success. But most of the team
favored ARS and/or Cornell University funding this work. In fiscal year
1997, APHIS funded these activities at $50,000.
Also, the team endorsed the idea that APHIS conduct a cost-benefit
analysis of the GN program in an attempt to justify requests for
additional funding.
(9) that potato commissions be consulted in developing research to
identify other detection and control methods.
The National Potato Council and the American Association of
Nurserymen were represented at the most recent implementation team
meeting in February.
Question. Have other areas of the country become infested by the
golden nematode?
Answer. No, there are no areas outside of New York State that are
infested with GN.
Question. Under the circumstances, why is the fiscal year 1999
President's budget request proposing a decrease of $36,000?
Answer. We can achieve savings through the closing of our golden
nematode facility in West Hampton Beach, Long Island, without impacting
program operations. The employee now working in that office would be
re-located to another office, but would still conduct most of the
activities she is currently conducting. These activities include
maintaining compliance agreements with growers and treating used farm
equipment. The savings would be realized primarily through utility and
maintenance costs.
wildlife service operations
Question. The agency has proposed changes to the Wildlife Services
Operations program to reduce the disparities between the States
cooperators who are receiving assistance from the Federal Government.
Please provide the Committee with a list of all States participating in
the program currently, the amounts the States contribute currently, and
those States identified which would be affected by these proposed
changes.
Answer. The following table contains the amount of net Federal
appropriated funds and cooperator contributed funds by State for fiscal
year 1997. Federal funds used for Congressional Directives, human
health and safety work, protection of endangered species, migratory
bird work, and basic program infrastructure costs are excluded from the
Federal amounts listed. The balance reflects the Federal amounts which
are directly contributed toward cooperative agreement activities.
[The information follows:]
------------------------------------------------------------------------
Fiscal year 1997--
State -------------------------------
Appropriated Cooperative
------------------------------------------------------------------------
Alabama................................. .............. $142,116
Alaska.................................. .............. 347,407
Arizona................................. $306,793 323,608
Arkansas................................ 18,890 ..............
California.............................. 338,453 2,513,179
Colorado................................ 534,997 236,519
Connecticut............................. .............. 1,392
Delaware................................ .............. ..............
District of Columbia.................... .............. ..............
Florida................................. .............. 88,710
Georgia................................. .............. 118,343
Hawaii.................................. .............. 640,938
Idaho................................... 672,186 488,089
Illinois................................ .............. 280,275
Indiana................................. .............. 20,703
Iowa.................................... 16,325 15,475
Kansas.................................. 25,500 65,267
Kentucky................................ .............. 227,000
Louisiana............................... 61,725 288,119
Maine................................... .............. 135,157
Maryland................................ .............. 50,340
Massachusetts........................... .............. 53,490
Michigan................................ .............. 31,915
Minnesota............................... .............. 631
Mississippi............................. 319,072 821,463
Missouri................................ .............. 104,998
Montana................................. 562,055 816,258
Nebraska................................ 223,001 285,754
Nevada.................................. 593,659 637,232
New Hampshire........................... 11,969 162,818
New Jersey.............................. 29,630 318,240
New Mexico.............................. 839,896 1,001,291
New York................................ .............. 48,494
North Carolina.......................... 61,623 691,320
North Dakota............................ 143,625 436,229
Ohio.................................... .............. 88,736
Oklahoma................................ 551,429 1,099,536
Oregon.................................. 735,311 897,095
Pennsylvania............................ .............. 13,993
Rhode Island............................ .............. 2,075
South Carolina.......................... 28,312 311,024
South Dakota............................ 231,458 1,032,867
Tennessee............................... 19,952 404,848
Texas................................... 1,574,520 5,383,783
Utah.................................... 853,825 1,035,008
Vermont................................. 9,594 36,105
Virginia................................ 30,700 258,917
Washington/Guam......................... 95,031 2,929,073
West Virginia........................... .............. 209,938
Wisconsin............................... 357,540 1,036,177
Wyoming................................. 701,924 571,845
-------------------------------
Total............................. 9,948,995 26,703,790
------------------------------------------------------------------------
The following chart shows disparity amounts by state, based on the
same formula used in developing the fiscal year 1999 budget proposal,
but is based on fiscal year 1997 rather than fiscal year 1996 data. The
formula used for determining disparity amounts involves totaling both
Federal and cooperative funding, and then determining the amount below
50 percent of the total, which is then the disparity amount.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1997--
State -------------------------------- Total program Disparity
Appropriation Cooperator
----------------------------------------------------------------------------------------------------------------
Arkansas........................................ $18,890 .............. $18,890 $9,445
Colorado........................................ 534,997 $236,519 771,516 149,239
Idaho........................................... 672,186 488,089 1,160,275 92,048
Iowa............................................ 16,325 15,475 31,800 425
Wyoming......................................... 701,924 571,845 1,273,769 65,039
---------------------------------------------------------------
Total..................................... 1,944,322 1,311,928 3,256,250 316,196
----------------------------------------------------------------------------------------------------------------
Mr. Medley, you mention in your testimony that a survey was done of
catfish farmers and that ``68 percent of the respondents indicated they
had spent some effort to avoid wildlife caused losses to their catfish
crops.''
Question. What does ``spent some effort'' mean?
Answer. In January 1997, the National Agricultural Statistics
Service conducted a survey of catfish farmers regarding wildlife-caused
losses in 1996. The results of the survey indicated that 69 percent of
aquacultural producers suffered some type of damage from wildlife.
Wildlife cost catfish producers about $17 million in 1996. Preventative
measures most frequently cited by producers included shooting, vehicle
patrol, scare tactics, and roost dispersal.
Question. What is the agency doing to avoid these losses?
Answer. Assistance is provided nationwide, with intense efforts
concentrated in Alabama, Florida, and Mississippi, where three wildlife
biologists are stationed. Wildlife biologists conduct onsite
evaluations to assess damage and identify the species of bird or mammal
causing the damage, and make control equipment available to producers.
If exclusionary and scaring techniques fail to reduce losses, producers
may now take a limited number of birds by lethal means, as a result of
a cormorant depredation order recently issued by the U.S. Fish and
Wildlife Services (FWS). In addition, APHIS' field research station in
Starkville, Mississippi, conducts research and field studies to improve
current control methods, and to develop new ones.
In addition, APHIS cooperates with the FWS in the development and
implementation of a management plan to control damage caused by fish-
eating birds to aquaculture resources in the mid-south. APHIS is also
continuing to work with FWS to study the ecology, behavior, food
habits, and migratory patterns of various fish-eating birds.
Question. How does the fiscal year 1999 budget request address the
agency's preventive actions?
Answer. Funding to continue all current aquacultural assistance and
research activities would continue at the current level, if cooperators
increased contribution levels as proposed in the fiscal year 1999
request.
Question. Through the agency's actions in fiscal year 1997 and
1998, oral vaccines for the canine strain of rabies have been
successful in stopping the spread of disease in Texas. Does the fiscal
year 1999 budget request propose any spending for continued actions in
Texas? If yes, how much?
Answer. The fiscal year 1999 request does not propose any funding
for support of the Oral Rabies Vaccination Project in Texas. However,
APHIS will support the Texas program with in-kind services totaling
about $25,000.
Question. Oral rabies vaccine bait distributions, monitoring and
surveillance activities in Vermont, Ohio and New York have helped to
stop the spread of the Mid-Atlantic strain of rabies in the raccoon
population in those States. How much money is requested for the
continuation of these activities in the fiscal year 1999 budget
request?
Answer. The fiscal year 1999 request includes approximately $30,000
to provide continued support of a Rabies Hotline which is maintained in
the APHIS Wildlife Services Vermont office. No funds are included for
oral rabies vaccination program activities in New York, Ohio, or
Vermont.
Question. During 1997 APHIS was able to reduce a backlog of Animal
Welfare Act cases to about 25 percent. What is the current estimate of
the reduction of backlog in the fiscal year 1999 budget request, and
how much money is proposed to be used for these activities?
Answer. We believe this problem is close to being resolved. Where
in the past there were several hundred cases open awaiting formal
administrative prosecution, the number has now been reduced to fewer
than 100, most of which are recent. The main factor in our success has
been an emphasis on settling cases at the agency level through
stipulations, where the party agrees to improve their operation and
pays in most cases a nominal fine, rather than issuing a formal
complaint which may necessitate a lengthy hearing and appeals process.
In addition there has been an intensive effort by APHIS and the Office
of the General Counsel to eliminate the backlog of cases and reduce the
time it takes to formally adjudicate an Animal Welfare case.
We did not include a request for additional funds in the fiscal
year 1999 budget to reduce the current backlog of cases.
Question. In the fiscal year 1998 Appropriations Act, the Committee
provided funding to enforce the Commercial Transportation Equine for
Slaughter Act. What actions has the agency taken to date, and has the
entire amount provided in fiscal year 1998 been used for enforcement
activities? How much does the fiscal year 1999 budget request contain
for the continuation of these activities?
Answer. APHIS is in the process of implementing a program which
focuses on regulating and educating the trucking and slaughter
industries and conducting research on issues related to the humane
treatment of horses from shipment to slaughter. Presently, APHIS is
gathering information to draft regulations to enforce the Act.
Information is being gathered from the horse industry including the
American Horse Protection Association, the Humane Society of the United
States, and the American Horse Council (AHC). APHIS expects to begin
developing the regulations in the third quarter of fiscal year 1998.
For fiscal year 1998, APHIS is funding two research studies which focus
on the stress and well-being of slaughter horses during transport and
examine health problems such as dehydration. The budget request
includes approximately $400,000 to continue these activities in fiscal
year 1999.
panama facility
Question. The fiscal year 1999 budget request proposes $1.4 million
reduction for the screwworm program. Planning for the new Panama
facility is to begin in fiscal year 1999 with an architectural and
engineering study. How much money is ear marked in the proposed fiscal
year 1999 budget for the planning of this facility?
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 1998,
APHIS had $5.4 million available from prior years in the screwworm
program to plan and conduct an architectural and engineering study and
another $.5 million available in Buildings and Facilities to update the
master plan for the facility. These funds were accumulated gradually
from program savings over the past 4 years. No money in the proposed
fiscal year 1999 budget is ear marked for planning the Panama facility.
Question. What is the projected total cost of this building, and
when does the agency plan to finish it?
Answer. We expect to begin operations at the new facility by 2002.
Current projections estimate costs for the construction of the sterile
screwworm facility to be up to $80 million for three modules plus
another $8 million for an architectural and engineering study and
environmental studies. APHIS has the authority to make a grant to the
Commission which could then construct, lease, or make loan payments for
the facility.
animal welfare act
The Animal Welfare Act is administered by APHIS and regulates
groups under the Act which include ``dealers'' in dogs and cats. The
Animal Welfare Act specifically excludes ``retail pet stores'' from the
definition of ``dealers'' and regulations have excluded persons from
the definition of ``dealer'' who sells dogs and cats at retail. I
understand that APHIS is now considering to expand the definition of
``dealer'' to include some persons who sell dogs and cats at retail,
specifically persons who sell dogs and cats at retail in their own
residence.
Question. Is APHIS considering such a proposal, and if so, do you
have any idea how many additional entities would be defined as
``dealers'' and subjected to regulation under the Animal Welfare Act as
a result of this regulatory expansion?
Answer. APHIS is considering a proposed rulemaking that would
require licensing and inspecting of both wholesale and retail outlets
of dogs--including dogs intended for hunting, security, and breeding
purpose--while still excluding true retail pet stores. The licensing
determination would be based on the number of adult breeding females on
the premises. Currently premises with less than four are not required
to be licensed. We will propose to modify the threshold of breeding
females based on recommendations received during a comment period after
publication in the Federal Register. By soliciting this input from
interested parties such as animal protectionist organizations as well
as current and potential licensees, we can better determine the
appropriate number and expect better compliance with any new
regulation.
According to my information, the number of residential breeders who
sell dogs and cats at retail could number as many as 300,000 to
500,000. I have no idea how many additional persons may sell dogs and
cats for breeding, hunting, or security purposes. I understand from
APHIS' recent Animal Welfare Enforcement reports that the Animal Care
unit currently has fewer than 8,000 licensees and registrants, and only
inspects about 10,000 sites annually. That is an inspection rate of
about 1.4 inspections per year. The proposal to expand regulations to
retail sellers, if it is carried out, seems like it would greatly
expand the number of entities regulated by APHIS' animal care unit.
Question. Will the Animal Care unit require additional funds to
carry out this expansion?
Answer. The number of additional facilities to be regulated has not
been determined. An Animal Care survey showed that possibly another
10,000 facilities might need to be regulated whereas, other estimates
from industry has been as high as 270,000. It is estimated that to
inspect an additional 10,000 facilities, 58 more inspectors and an
additional $4.8 to $5 million would allow APHIS to service these
facilities as in the past. APHIS is considering raising the current
threshold of breeding females to a level where the additional
facilities picked up would be offset by not inspecting those facilities
below the threshold. Until the final rule is published, we will not
know the full impact of this proposed regulation. Also, using a newly
developed Risk-based Inspection System, APHIS will reallocate resources
to those facilities most needing inspection services. Those facilities
having a good history of Animal Welfare Act compliance may only be
inspected once every 3 years; those facilities with a history of
noncompliance may be inspected 2 to 4 times per year. However, using
risk-based inspection will free up an estimated 3 to 10 percent of
Animal Care resources that can be used to cover these additional
facilities.
Question. Is APHIS considering a request for an increase in its
appropriation to regulate residential breeders or persons who sell
hunting, breeding or security dogs at retail?
Answer. In fiscal year 1999, APHIS did not request funding to carry
out these activities. The Agency will consider requesting additional
funds for these activities at a later time.
Question. Has APHIS made any estimates of the additional funds that
would be required to carry out this expansion?
Answer. It is estimated that it will cost approximately $4.8 to $5
million to cover the expenses associated with inspecting an additional
10,000 facilities.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. They are directly linked. The five general goals of the
APHIS strategic plan correspond to the five functional components of
the agency's budget structure (Pest and Disease Exclusion, Plant and
Animal Health Monitoring, Pest and Disease Management, Animal Care, and
Scientific and Technical Services). Similarly, the objectives listed
under each goal correspond directly to funded line programs under each
functional component. In the annual performance plan, APHIS has
developed a set of annual performance targets for each goal of its
strategic plan.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. Development of performance goals and supporting budgets in
APHIS occurs through a formal process we call the Multiyear Program
Planning and Budgeting process. Personnel involved in budget
development receive formats requesting that they develop budgets and
measures for performance goals. Each program has its own set of
ongoing, or formative, evaluation activities in place to identify
strengths and weaknesses, and these evaluations are used by the program
managers to develop new performance goals and strategies that are tied
to funding levels.
For many of our pest and disease eradication goals and objectives,
the annual performance targets describe a progression leading to the
long-term eradication objectives of the strategic plan. For other, more
difficult-to-measure goals, further efforts are underway to quantify
performance baselines. Once the performance baselines have been
established, it will be possible for us to set targets for the goals of
the strategic plan and then link them more fully to the performance
plans.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. The annual performance plan identifies selected program
performance measures to reflect progress toward achieving the general
goal. Each general goal has selected annual performance measures, but
not every objective in the general goal is represented in the
performance plan.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The annual performance plan identifies progress toward
general goals. However, it does not contain specific measures for each
objective under the general goals.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. At present, there has been no decision to change our
account structure for fiscal year 2000, although final agency decisions
on the fiscal year 2000 proposal will not be completed until June of
this year when budgets are due to the Department.
Question. How were performance measures chosen?
Answer. Performance measures were chosen as part of the Agency's
cycle of long-and short-range planning, budgeting, and program
evaluation. Each program has its own set of ongoing, or formative,
evaluation activities in place to identify strengths and weaknesses,
and these evaluations are used by the program managers to develop new
performance goals and strategies. These evaluations include station
reviews, port reviews, program reviews, customer and stakeholder needs
assessments, and the results of public hearings, meetings, and symposia
on current scientific issues. In addition, as part of its annual
performance planning cycle, APHIS is developing performance monitoring
systems which will be refined over the next several years, so that
program managers can routinely evaluate program effectiveness.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. The need for reliable and valid performance data is
considered a high priority within the agency's information technology
needs. Cost may affect how quickly we can reach our goal of having
reliable and valid performance data for all our programs, especially
given the resources devoted to the Year 2000 problem, but we are
committed to eventually reaching the goal.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. There will likely be some performance measures for which
reliable data will not be available in time for our first performance
report in March 2000.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. We believe that none of the performance goals should be
overlooked in tracking program results.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. Ever since the passage of the Government Performance and
Results Act, APHIS planning, budget, and program staffs have been
engaged in efforts to change the mind set within the agency toward
outcomes versus outputs. Initially, this work was done in small groups
focusing on selected pilot line items, then broadened to encompass all
of the agency's funded activities.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. We believe that most of our program managers do recognize
the distinction, although there may still be a few who don't. We are
making every effort to promote awareness, through a number of avenues
including training sessions, redesigned data collection formats, and
interaction between program, policy, and budget staffs.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. In our Wildlife Services program, we will measure
``customer satisfaction with Wildlife Services livestock protection.''
For Horse Protection, the following measure has been developed: ``level
of customer satisfaction with the Horse Protection program expressed by
a random sample of customers in a mail survey.'' For Veterinary
Biologics, we will measure ``public confidence in the safety and
efficacy of biological products.'' These are but a few of many customer
satisfaction measures that have been developed.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The fiscal year 1999 budget was developed last Spring,
before the fiscal year 1999 Annual Performance Plan was completed.
However, each program in APHIS has its own set of ongoing, or
formative, evaluation activities in place to identify strengths and
weaknesses, and these evaluations are used by the program managers to
develop new performance goals and strategies and prioritize activities
in their budgets. In addition, as part of its annual performance
planning cycle, APHIS is developing performance monitoring systems
which will be refined over the next several years, so that program
managers can routinely evaluate program effectiveness. We will continue
to work in the coming years toward integrating these processes so that
program goals can translate into resource needs.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Yes, we would be able to estimate the likely impact.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. We have made some progress in this area, but the work is
not finished. Our field and headquarters personnel are working together
to develop the necessary technological capabilities to meet reporting
requirements.
The Government Performance and Results Act requires that your
agency's Annual Performance Plan establish performance goals to define
the level of performance to be achieved by each program activity set
forth in your budget. Many agencies have indicated that their present
budget account structure makes it difficult to link dollars to results
in a clear and meaningful way.
Question. Have you faced such difficulty?
Answer. We have not experienced any difficulty from the standpoint
of having a compatible budget structure. The five general goals of the
APHIS strategic plan correspond to the five functional components of
our budget (Pest and Disease Exclusion, Plant and Animal Health
Monitoring, Pest and Disease Management, Animal Care, and Scientific
and Technical Services). Similarly, the objectives listed under each
goal correspond directly to funded line programs under each functional
component. In our annual performance plan, we developed a set of annual
performance targets for each goal of the strategic plan. For many of
our pest and disease eradication goals and objectives, the annual
performance targets describe a progression leading to the long-term
eradication objectives of the strategic plan. For other, more
difficult-to-measure goals, further efforts are underway to quantify
performance baselines. Once the performance baselines have been
established, it will be possible for APHIS to set targets for the goals
of the strategic plan and then link them more fully to the performance
plans.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. We do not believe modifying the budget account structure
would significantly improve our ability to measure program performance.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure? How would such
modification strengthen accountability for program performance in the
use of budgeted dollars?
Answer. We do not see a need to modify the budget structure at this
time.
Question. Does your fiscal year 1999 performance plan-briefly or by
reference to your strategic plan-identify any external factors that
could influence goal achievement?
Answer. The performance plan does not specifically mention or
identify external factors that could influence goal achievement. Those
factors are enumerated and discussed in the Agency's strategic plan.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. APHIS takes into account a wide range of external factors
in developing its overall strategy for accomplishing its mission. As
the risk of pest and disease entry increases due to emerging animal and
plant health issues, increases in global trade and passenger movement,
and improved transportation technologies, APHIS is increasingly
challenged to update prevention strategies, monitoring systems, and
response actions that ensure effective management of those risks and
preserve our markets. We must also continue to update strategies and
methods to ensure that solutions are practical and environmentally
sound.
Question. What impact might external factors have on your resource
estimates?
Answer. External factors may have a significant impact on our
resource estimates, as emergency outbreaks of fruit flies, citrus
canker, and Karnal bunt have shown in recent years. Our aim, however,
is to find solutions and adjust priorities so that we can accomplish
our mission within resource estimates.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication?
Answer. No, we have not.
Question. If so, does the Performance Plan identify the overlap or
duplication?
Answer. We have not identified overlapping functions or program
duplication.
Future funding decisions will take into consideration actual
performance compared to expected or target performance. Given that:
Question. To what extent are your performance measures sufficiently
mature to allow for these kinds of uses?
Answer. For many of our programs we are still in the process of
establishing baselines and shifting measures from outputs to outcomes.
We are also working to identify those external factors which could
impact on our ability to achieve our targets. However, in certain
eradication programs such as brucellosis and screwworm, the performance
measures are as mature as possible and may be suitable for such uses.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Both factors exist to some degree and would affect the
accuracy of resource estimates. Another factor which interferes with
accurate resource estimates is the occurrence of unexpected outbreaks
of emerging pests and diseases.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No. We see the need for some small adjustments, but none
that we would consider substantive.
boll weevil
Question. Is it accurate that USDA and Land-Grant University
analyses have concluded that the boll weevil program has generated
significant economic and environmental benefits in the Southeastern
states?
Answer. A report written by USDA and University of Georgia
researchers entitled--Cotton Production and the Boll Weevil in Georgia:
History, Cost of Control, and Benefits of Eradication--summarizes the
tremendous economic and environmental benefits of boll weevil
eradication in Georgia. According to the study, cotton production has
increased dramatically each year since the program was completed in
1990. Average yield has increased from 482 pounds per acre in the pre-
eradication period (1971 to 1986) to 733 pounds per acre in the post
eradication period (1991 to 1995). Acreage has increased from an
average of 288,000 to 770,000, and average gross crop revenues have
increased from $70 million to $400 million per year. In addition, net
crop revenues (gross revenues less insect pest management costs and
amount of damage) have increased from $187 to $451 per acre.
The report also identifies environmental advantages to growers and
residents of the State due to a significant decrease in insecticide use
in Georgia cotton. The average number of insecticide treatments have
decreased from 14.4 per acre in the pre-eradication period to 5.4 per
acre in the post-eradication period. In most cases, the materials used
are more specific, and the amount of active ingredient applied during
each treatment has been reduced from pounds per acre to a few ounces
per acre.
______
Questions Submitted by Senator Burns
bison quarantine facility
Question. Mr. Secretary, last year this committee provided the
Animal Plant Health Inspection Service (APHIS) with $1 million to
construct a bison quarantine facility in the state of Montana outside
the boundaries of Yellowstone National Park. Could you provide the
Committee with an update on the current status of those funds?
Answer. APHIS has not yet obligated the $1 million for the bison
quarantine facility. Presently, APHIS is in discussion with the State
of Montana to determine a location for the facility and to identify
roles and responsibilities for both APHIS and the State. Although a
location has not been determined, APHIS has consulted with an
engineering firm in Utah to put together a preliminary generic plan for
construction. Upon selection of a site, a specific design plan for the
facility will be developed. Once the design phase is complete,
construction will begin. Due to the mild winter thus far in Montana,
the need for such a facility has not been critical. APHIS expects that
the facility will be operational by the winter of 1999/2000.
Question. Would you also provide the Committee a breakdown of the
negotiations that have occurred between APHIS and the State of Montana
on this particular facility?
Answer. Negotiations with the State of Montana are underway. Since
January 1998, contacts have been made with the newly hired State
Veterinarian in Montana to meet and discuss the facility. Items for
discussion include operations management, authority issues, and a site
location.
Question. Could you also provide us with a status report on the
agency's involvement in the Environmental Impact Statement being
designed to address the bison/brucellosis problems in Yellowstone
National Park?
Answer. The National Park Service (NPS) is the lead Agency for the
Environmental Impact Statement (EIS). APHIS is a cooperator. In our
role as cooperator, APHIS has participated in the preparation, review,
and evaluation of the alternatives of the EIS. APHIS has also provided
assistance with assessing the economic impacts of actions on ranchers
in the area. As a cooperator, APHIS is committed to providing input
concerning brucellosis pathogenesis, epidemiology, and disease
management methods.
brucellosis
Question. What is the current count of herds in the United States
currently infected with brucellosis?
Answer. As of February 28, 1998, there were 12 cattle herds under
quarantine in the United States for brucellosis. These 12 herds were
located in Texas. In addition, one privately owned bison herd in South
Dakota was under quarantine.
Question. What is APHIS' assessment of the science and research
currently available with respect to brucellosis in livestock, captive
wildlife and free ranging wildlife?
Answer. Several research projects are ongoing and others have been
conducted that provide or will provide critical information towards
resolving the brucellosis problem in the Greater Yellowstone Area.
These projects address disease transmission, pathogenesis,
epidemiology, and vaccine safety and efficacy. However, additional
information is needed including vaccine delivery systems, the effect of
the vaccine on non-target animals, and management methods. Many of
these studies require a statistically significant number of animals to
validate study results and facilities which can handle large numbers of
animals.
Question. What are the principal centers and facilities for
research on disease transmission between captive and free ranging bison
and wildlife?
Answer. The principal centers known to APHIS for research on
transmission between captive and free ranging bison and wildlife are
(1) Yellowstone National Park, (2) the Agricultural Research Service's
facility in Ames, Iowa, (3) Texas A&M University, and (4) the Idaho
Wildlife Laboratory/Caine Veterinary Teaching Center, Caldwell Idaho.
Other facilities work on various aspects of brucella research but they
do not have facilities to house bison for transmission studies.
Question. What does APHIS see as the principal scientific, health,
and research issues involving captive and free ranging bison and
wildlife?
Answer. APHIS feels that current brucellosis control and
eradication methods are adequate to eradicate the disease from the
Greater Yellowstone Area (GYA). However, implementing these standard
procedures could potentially have a significant negative impact on the
number of bison in the Yellowstone National Park (YNP) herd. Therefore,
additional information is needed to address management procedures that
could be used in YNP to eliminate infection and limit the impact on the
herd populations. Issues that APHIS considers principal to implementing
a brucellosis control plan in the GYA include evaluating vaccine safety
and efficacy in a significant number of bison and elk; developing a
variety of vaccine delivery systems that can be used in a variety of
situations in YNP and surrounding elk feedgrounds; and evaluating newer
vaccines with more potential for efficacy. Additional information that
would be very useful includes improving elk habitats to prevent
commingling on elk feedgrounds; additional studies in transmission,
epidemiology, and pathogenesis in bison and elk (especially in males);
and latency in bison and elk calves.
Question. The Northwest Pilot Project is not working. The Canadians
set protocols so unfriendly toward feedlots in the country that at this
point in time only three have signed onto the program. The United
States/Montana protocols are not applicable because USDA-APHIS approved
the Regionalization Docket. I have several questions here so, first
what can APHIS do to get Ag Canada to address the issues of rewriting
the Northwest Protocol, and to expedite the development of a Canadian
Regionalization document?
Answer. The Canadian Cattlemen's Association (CCA) has already
approached the Canadian Food Inspection Agency (CFIA) about adjusting
the protocol. Their concerns reflect the issues that Montana producers
have raised. CFIA is willing to address these issues on a scientific
basis and continues to work with CCA to do so. Therefore, at this time,
the process has been started. We have urged the industries on both
sides of the border to cooperate with this process.
Question. The producers in Montana are not very happy about the
current situation. Canada got all it was asking for and the United
States, particularly those states in the northwest got almost nothing.
Could you explain to me what happened here?
Answer. This project was developed over several years at the urging
of both the National Cattlemen's Beef Association (NCBA) and the
Canadian Cattlemen's Association (CCA). Both groups were involved with
drafting the specifics of the project. Canada, which has a notice and
comment regulatory procedure similar to the U.S. Federal Register
process, published the proposed changes, including the requirements
that feedlots must meet, for public comment. Neither the NCBA nor the
CCA submitted any negative comments on this proposal. The regulatory
changes were finalized and published. These changes allowed Canada to
accept untested feeder cattle from any state that met the provisions.
The U.S. commitment to this project addressed brucellosis and
tuberculosis testing requirements for cattle from Canada. APHIS has the
authority to waive federal requirements when it is determined that a
risk is not present to the domestic livestock population. Using this
authority, we evaluated Canada's animal health status for these
diseases and decided to waive the testing requirements. At the same
time, we were in the rule-making process with our regionalization
document, which proposed many changes to the United States' animal
health import requirements. The agreement to waive the Canadian
requirements was made with the understanding that any final changes as
decided in the rulemaking process would supersede any waivers. Final
changes from the regionalization regulations were made in fall 1997 and
took effect in November 1997.
Question. Why didn't we ask for some sort of reciprocal
regionalization document?
Answer. This pilot was an industry driven project. The industry
wanted to ship untested feeder cattle into Canada. The Agency pursued
this request with Canada. Canada is primarily concerned with bluetongue
and anaplasmosis. Currently, there is not enough available data on the
status of these diseases in Montana to support any type of a
regionalization request. We are working with Montana to obtain this
data.
wildlife services
Question. Mr. Dunn, the Wildlife Services program is obviously
important to a broad range of the American public. It is involved with
livestock protection, reintroduction of the wolf, public health and
keeping wildlife away from airports. In four of the past five years the
Department's budget has proposed large decreases in the operational
budget. Can you explain to the Committee why this is happening with a
program that is so important to the public safety and to wildlife
conservation?
Answer. Recently proposed decreases, including the fiscal year 1999
request, have been based upon a cost sharing proposal which constitutes
an effort to reduce Federal Costs by encouraging increased cooperative
contributions to the program. This approach maintains total cooperative
funding and cooperative program efforts at the current level, provided
cooperators meet 50 percent of total program costs. If, however,
affected cooperators did not increase their contributions, the Federal
amount would be reduced and program activity would be reduced
accordingly.
Question. Is this a decision by the Office of Management and Budget
(OMB)?
Answer. WS has maintained a policy for several years in which
cooperators must provide a minimum of 50 percent of total funding in
all new agreements. In addition, WS has made and continues to make
every effort to increase cooperative funding in all agreements, old and
new. This is evidenced by the dramatic increase in total cooperative
contributions, increasing from $13,957,909 in fiscal year 1990, to
$26,703,790 in fiscal year 1997.
Question. If so, has the Secretary done anything to point out to
OMB the importance of this program?
Answer. We met with representatives of OMB to discuss the cost
sharing proposal. We believe that OMB understands the importance of the
program.
This Committee, in response to the public need, has restored funds
in each of the years when decreases have been proposed.
Question. Can we expect that the Department's budget will continue
to propose such cuts in the coming years that the Committee will have
to restore?
Answer. Constantly changing program demands and budgetary
circumstances may dictate a future need to propose a reduction for the
program, but APHIS currently has no specific plan to request further
reductions for Wildlife Services.
Question. On the east coast we hear a lot about the methods used to
control wildlife and predators that are causing damage. With this type
of criticism, why is the Department proposing to cut the budget for
research on new methods of animal control?
Answer. In fiscal year 1996, the National Wildlife Research Center
(NWRC) conducted a survey of wildlife damage management experts to
determine highest priority advanced research needs. The survey resulted
in the identification of priority needs for which additional emphasis
is required. The new NWRC was established to meet such advanced needs
and had anticipated taking advantage of new facilities to implement
these expanded/enhanced priority areas in fiscal year 1999. However,
the animal research building support wing and the outdoor animal
holding and testing pens must be constructed before identified priority
research can be fully supported. This will impact APHIS' ability to
develop, improve, and maintain Environmental Protection Agency and
Federal Drug Administration approved chemicals, vaccines, and drugs
used for wildlife damage management.
national wildlife research center
Question. Mr. Dunn please describe for the Committee what your
plans are for completing the new research facility in Fort Collins,
Colorado.
Answer. On August 4, 1997, the Denver Wildlife Research Center in
Lakewood, Colorado, was officially closed, and the National Wildlife
Research Center (NWRC) in Fort Collins, Colorado, was opened. As of
that date, all NWRC headquarters personnel began working from the NWRC
Animal Research Building and GSA leased facilities in Fort Collins.
Construction of the 82,000 sq ft office/laboratory/headquarters
building began in late 1997, and is expected to be ready for occupancy
in late 1998. At that time all NWRC headquarters personnel again will
be located at one site.
The remaining unfunded components of the 43 acre Master Plan as
approved in 1989, include the outdoor animal pens and several
associated support buildings, including a warehouse, bulk chemical
storage facility, and a garage/maintenance/shop building, collectively
known as the Outdoor Pen Project. Another essential component in NWRC
construction, and one which is crucial for research scientists in the
development of alternative control methods is the Animal Research
Building (ARB) support wing. In addition, the completion of the full
complement of animal holding and testing rooms in the ARB, and
associated design and bid documents for this and for a pump house,
irrigation piping, landscaping/visual barriers, fencing, etc., remain
to be constructed.
Additionally, a one-time investment is required for equipment and
technology for the NWRC to fully utilize the new research facilities.
This will allow the Center to maintain its research capabilities in
terms of modern technologies, such as analytical instrumentation,
computing infrastructure, information transfer capability, etc.
Question. When do you propose to have it completed?
Answer. Until funding sources are identified and secured for the
remaining $22.75 million in unfunded components of the NWRC Master
Plan, a completion date for the Center cannot be projected.
Question. Why have you not requested funds to complete the
facility?
Answer. Although APHIS understands the importance in completing the
NWRC, because of budgetary constraints, funding for NWRC construction
could not be included in the fiscal year 1999 request.
50/50 cost sharing
Question. Mr. Dunn, I have noticed that you have once again
proposed a 50/50 cost share arrangement for Wildlife Services, the same
proposal rejected by Congress last year. Do you have more recent
Federal/cooperative data available, and if so what is the disparity
amount by State based on this data?
Answer. The following chart shows disparity amounts by state, based
on the same formula used in developing the fiscal year 1999 budget
proposal, but is based on fiscal year 1997 rather than fiscal year 1996
data. The formula used for determining disparity amounts involves
totaling both Federal and cooperative funding, and then determining the
amount below 50 percent of the total, which is then the disparity
amount.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1997--
State -------------------------------- Total program Disparity
Appropriation Cooperator
----------------------------------------------------------------------------------------------------------------
Arkansas........................................ $18,890 .............. $18,890 $9,445
Colorado........................................ 534,997 $236,519 771,516 149,239
Idaho........................................... 672,186 488,089 1,160,275 92,048
Iowa............................................ 16,325 15,475 31,800 425
Wyoming......................................... 701,924 571,845 1,273,769 65,039
---------------------------------------------------------------
Total..................................... 1,944,322 1,311,928 3,256,250 316,196
----------------------------------------------------------------------------------------------------------------
Question. Was this something that the Department came up with or
did this possibly come from OMB?
Answer. WS has maintained a policy for several years in which
cooperators must provide a minimum of 50 percent of total funding in
all new agreements. In addition, WS has and continues, to make every
effort to increase cooperative funding in all agreements, old and new.
This is evidenced by the dramatic increase in total cooperative
contributions, increasing from $13,957,909 in fiscal year 1990, to
$26,703,790 in fiscal year 1997.
Question. Wildlife Services' operational program is funded from a
single line item, and I understand that overall, the program has more
cooperative than Federal funding (probably more than any other Federal
agency). Why does the Administration insist on micro-managing Wildlife
Services down to the state level when cooperative funding objectives
are being met nationally?
Answer. A state by State analysis and subsequent cost sharing
proposal was initiated not only because of States in which cooperator
contributions are minimal or nonexistent, but also because of the
States in which cooperative contributions far exceed Federal funding.
The cost sharing proposal is made in an effort to encourage cooperators
to contribute a fair share of funding toward cooperative program
activity in each State. This approach greatly enhances the value of
Federal funds invested. By encouraging a minimum 50 percent cooperator
contribution level, the Agency can accomplish a more equitable
distribution of Federal funds, can accomplish the same level of program
activity with less Federal funding, and can consider future needs and
new cooperative agreement proposals on a more programmatic and equal
basis.
Question. You are seeking to eliminate cost sharing disparity in
each state, and you are requesting a reduction in funding because of
this, yet at the same time, I understand you are projecting funding
shortfalls for activities such as wolf control. Efforts to increase
cooperative funding and to reduce Federal costs are commendable, but
shouldn't program shortfalls be addressed before requesting reduced
funding?
Answer. The purpose in the fiscal year 1999 proposal was to
facilitate a more equitable distribution of Federal WS funds among
States, and to encourage cooperators to increase contributions for
activities such as wolf control.
It is true that there is a projected shortfall of approximately
$70,000 in fiscal year 1998 for wolf management efforts in Montana,
Idaho, and Wyoming, and a projected shortfall of about $235,000 in
fiscal year 1999. In Minnesota, wolf control work is currently
conducted solely with APHIS funding of about $250,000 per year with a
projected shortage in fiscal year 1998 of about $30,000, and a
projected shortfall in fiscal year 1999, of $100,000. These figures
exclude inevitable wolf damage control costs relating to reintroduction
of the Mexican wolf in Arizona, which will result in an additional need
of about $100,000 in fiscal year 1999. Although the Agency must seek
alternative means for funding these shortages in the short term, APHIS
hopes that current efforts to reduce Federal program costs where
possible, may permit shifting some funds to wolf damage control
efforts.
Question. Mr. Dunn, the livestock industry in Montana and other
western states objected to the reintroduction of wolves. With this 50/
50 cost share proposal are you proposing that they now have to share in
the cost of controlling the wolves which they did not agree with in the
first place?
Answer. The cost sharing proposal would only affect those States
which do not currently contribute a minimum of 50 percent of total
funding toward cooperative program activities. As Montana is one of
those States in which cooperative contributions totaling $816,258, far
exceed Federal contributions of $562,055, the State would not be
affected by this proposal.
Question. Are there any exceptions to the cost share arrangement as
it is now proposed?
Answer. The cost sharing proposal would be applied to all States
equally, without exception. To do otherwise, would defeat one of the
proposal's goals of eliminating inequities in the State by State
distribution of Federal funds as much as possible.
wolf control
Question. I understand that Wildlife Services is responding to an
increasing number of requests for wolf control assistance in the Rocky
Mountains and in Minnesota. How much of this increase is due to Fish
and Wildlife Service wolf reintroduction efforts?
Answer. APHIS responded to 76 requests for assistance due to
suspected wolf predation in Idaho, Montana, and Wyoming, in fiscal year
1997. Approximately two thirds of these were due to reintroduced
wolves. Minnesota has no wolf reintroduction, but is experiencing a
great increase in the natural wolf population.
Gray wolves began naturally moving back into northwestern Montana
from Canada in the mid-1980s. 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 with the assistance of WS personnel. These animals were
released into Yellowstone National Park and central Idaho and are
increasing in number. Naturally occurring populations from Canada and
the reintroduced animals in Idaho and Yellowstone National Park now
total estimated 235 adult wolves with an additional 134 pups produced
this year.
In August 1974, the eastern gray wolf was classified as an
endangered species. At the time, the Minnesota wolf population was
estimated at 500 to 1,000 animals and occupied a range of approximately
19,000 square miles. The Minnesota wolf population is increasing at an
annual rate of 3 to 5 percent and expanding its range considerably. By
1996, the population had reached an estimated 2,200 to 2,300 wolves
which had expanded their range to more than 39,000 square miles. APHIS
verified 195 incidents of wolf predation on domestic animals in
Minnesota in fiscal year 1997 and captured 226 wolves.
After the wolf was classified as endangered, livestock producers
became dependent on the Federal Government for protection from wolf
depredations on their livestock in Minnesota. In Idaho, Montana, and
Wyoming, wolf recovery and reintroduction have caused restrictions on
the use of traditional methods of control where wolves may exist. The
endangered status in Minnesota and the restriction on control methods
due to reintroduction in Idaho, Montana and Wyoming, in addition to
increasing populations of natural and reintroduced animals, have all
contributed to great increases in the number of requests for
assistance.
Question. How much funding is Fish and Wildlife Services currently
providing to APHIS for this work?
Answer. In fiscal year 1997, the FWS and APHIS each agreed to
contribute $100,000 to provide assistance at current wolf population
levels, in dealing with wolf predation on livestock in Idaho and
Montana. In Minnesota, wolf control work is accomplished solely with
APHIS funding.
Question. What are these efforts costing APHIS in fiscal year 98
and projected to cost in fiscal year 99, and can you provide the same
level of response with an increasing volume of work?
Answer. In addition to the total of $200,000 provided under
cooperative agreement equally from APHIS and FWS, there is a projected
shortfall of approximately $70,000 in fiscal year 1998 for wolf
management efforts in Montana, Idaho, and Wyoming. APHIS is projecting
costs in these States to total $435,000 in fiscal year 1999, creating a
shortfall of about $235,000. Also, reintroduction of the Mexican wolf
in Arizona, initiated in January of this year, will result in an
additional need of about $100,000 in both fiscal year 1998 and fiscal
year 1999. FWS has agreed to provide $100,000 to deal with initial wolf
predation problems in Arizona in fiscal year 1998. In Minnesota, where
wolf control work is conducted solely with APHIS funding of about
$250,000 per year, a $30,000 shortage is expected in fiscal year 1998,
and total costs in this State are expected to be $380,000 in fiscal
year 1999. In addition, wolf expansion into Wisconsin is projected to
cost approximately $10,000 in fiscal year 1999. APHIS will have to
adjust response levels to match available funding.
introduction of exotic plant and animal disease
Question. A national news broadcast last week portrayed the risk of
deadly disease originating in livestock all around the world, sometimes
in a matter of days or hours. In some cases, such as the Hong Kong
Chicken Flu, these diseases can be transmitted to humans.
What steps has the agency taken to provide a proper defense against
unintentional or intentional introduction of exotic plant and animal
diseases into this country?
Answer. APHIS delivers a number of programs that protect the health
of U.S. plant and animal resources, such as preclearance inspection,
permit regulations, port of entry inspection, quarantine treatment,
detection survey, and pest and disease eradication. However, dramatic
increases in international travel and trade, and containerization of
cargo make total reliance on traditional inspection techniques and
procedures impractical. Therefore, APHIS is developing a comprehensive
safeguarding system to augment these activities and improve our pest
and disease exclusion efforts.
The cornerstone of the safeguarding model is traditional point-of-
entry inspection, but the model expands the use of foreign source
intervention, increased point-of-entry inspection, smuggling
intervention, exotic plant pest detection, and management of exotic
pest incursions. A strong scientific base is fundamental to all parts
of the system. The safeguarding model is still under development.
boll weevil/brucellosis eradication
Question. The boll weevil eradication program has been successfully
completed in some states and producers there are enjoying lower
production costs, higher land values, and other benefits. Other states,
such as Arkansas, are just now beginning the eradication process
(pursuant to a timetable earlier agreed upon by the cotton industry)
but are being told the budget is being reduced by $12 million.
Does the Agency feel it would not harm the entire program to stop
the eradication effort before it is complete?
While the FSA boll weevil loan program allows the program to
accelerate, is the intention of the agency to now phase out the grant
program in lieu of the loan program? If so, does that not give an
unfair advantage to those regions of the country where eradication was
complete before this shift in policy?
Would it not be better for all producers, the environment, and your
agency mission to proceed with the eradication program as quickly as
scientifically appropriate?
Answer. We believe that areas where the boll weevil no longer
exists--Virginia, North Carolina, South Carolina, Georgia, Florida,
California, Arizona, most of Alabama, middle Tennessee, and
northwestern Mexico--as well as current active zones would suffer if
the eradication program were to stop expanding and moving toward
completion.
Since boll weevil eradication has proven to be successful and
profitable for cotton growers, program beneficiaries will assume a
greater financial responsibility for program costs. Additionally,
growers had expressed a desire to have primary control over the daily
operations of their program.
Earlier program areas assumed a greater degree of risk in joining
the eradication effort since the efficacy of the technology was still
unproven. Now that the boll weevil has been effectively eradicated from
over 4 million acres, the technology is generally accepted and the
risks to growers has been dramatically reduced. It is reasonable that
the early ``pioneers'' of eradication received more significant
assistance. In an effort to mitigate the impact of reduced Federal
grants to the boll weevil eradication foundations, the USDA provides a
loan program with very favorable terms to supplement funds raised
through grower assessments and eases cash flow problems. In fact, the
FSA loan program makes more total funds available for boll weevil
program expansion than have been available under the traditional
appropriations and grants approach. Because of the tremendous benefits
cotton growers can gain from boll weevil eradication, we believe that
they will choose to take advantage of the loan program. It provides a
reasonable alternative that is cost beneficial.
It would be very beneficial for the entire cotton industry and the
environment if the eradication program moved quickly to completion
since unnecessary delays usually result in higher program costs and
additional program constraints.
imported fire ant
Question. The imported fire ant continues to be a growing problem
all across the South affecting property, health, and safety. The budget
proposal again zeros out the appropriation for the fire ant stating, in
part, that since there is no real control, there is little you can do.
However, you also state that the fire ant program at the University of
Arkansas at Monticello along with the University of Florida has been
working on the introduction of a natural enemy of the fire ant that
might be a successful control tool. Would you provide an update on the
University of Arkansas at Monticello program?
Answer. APHIS has a cooperative agreement with the University of
Arkansas at Monticello to conduct research on imported fire ants. The
three areas funded by this agreement are a self-supporting community
abatement program, an economic impact assessment, and an Agricultural
Research Service (ARS) biological control project.
The abatement program uses several public information tools to help
area residents better manage fire ants using existing control methods.
The economic assessment has concluded that pesticides alone will not
provide a long-term solution to the problem and that the focus for IFA
control should turn to non-pesticide strategies, such as biological
controls. In the biological control project, ARS has identified three
organisms for potential impact on the imported fire ant (IFA). These
organisms include a microsporidium disease (Thelohania), a species
complex of phorid flies (Phoridae), and a social parasitic ant
(Solenopsis dagarri). Currently, ARS scientists are studying several
colonies of these agents at their quarantine facility in Gainesville,
Florida. These studies, which will likely continue until 2001, are
aimed at introducing these organisms into the U.S. from South America.
Once they are introduced, APHIS would mass produce and distribute the
biological control agents. We began field release of one Phoridae in
fiscal year 1997 and will begin field release of the parasitic ant by
the Fall of 1999. None of the identified organisms by themselves would
be enough to eradicate IFA from the United States because the pest is
so widespread. We hope, however, that some combination of these methods
will eventually enable native ants to compete effectively with the IFA
to reduce economic losses and public health risks associated with IFA.
Question. What efforts are you making to ensure that the ant does
not further spread by interstate movement of nursery plants or other
hosts of the ant?
Answer. We are working to prevent further spread of the imported
fire ant (IFA) by enforcing the Federal quarantine and cooperating with
infested States to regulate articles like nursery stock and soil moving
equipment. Also, we will continue evaluating the efficacy of regulatory
treatments for preventing further spread of the IFA and revise our
regulations and procedures as necessary. Even if the IFA line item were
eliminated, the States could maintain a strong regulatory program with
the Federal quarantine guidelines and industry cooperation. In
addition, States have, in many cases, proven themselves able to
eradicate small isolated infestations outside the regulated area.
el nino and other weather phenomena
Question. The El Nino and similar events are credited with erratic
weather patterns this year. Notably, the Mid-Atlantic region has had a
very mild winter that suggests there may have been little winter-kill
of insect pests. The storms in the Dakotas last year were predicted to
cause an increase in grasshopper problems. It appears shifting weather
patterns all across the nation are likely to have some affect on insect
and other life.
Has APHIS made or is APHIS aware of any forecasts of unusual insect
or pest problems this year resulting from erratic weather or other
conditions?
Answer. We expect higher than normal boll weevil numbers in all
weevil-infested areas this spring due to the unusually mild winter
experienced across much of the Cotton Belt. In addition, we expect to
lose some ground in the leafy spurge program since the mild winter
eliminated the insulating effect of snow causing an increase in the
mortality of flea beetles. The Agency anticipates high grasshopper
populations this summer if, as in the past, a drought follows the end
of the El Nino weather pattern.
wildlife services and fish eating birds
Question. For years, the growing aquaculture industry in the Mid
South has been plagued by fish-eating birds, most notably, the Double
Crested Cormorant. I understand agreements have recently been reached
with the U.S. Fish and Wildlife Service which has issued a depredation
order to reduce the economic losses to this industry?
Answer. A double-crested cormorant depredation order was published
in the Federal Register on March 4, 1998. This allows aquaculture
producers to take action against cormorants without applying for
individual permits from the U.S. Fish and Wildlife Service (FWS).
Question. What effect will this order have on your program?
Answer. With the publication of this order, APHIS has begun
assisting producers in implementing the certification and reporting
criteria required by the FWS in the depredation order. The depredation
order requires APHIS to ``certify'' that an aquaculture facility has a
cormorant depredation problem and has implemented nonlethal actions to
reduce cormorant impacts before the producer can take depredating
cormorants by lethal means. The order also requires producers to keep a
record of numbers taken so that the FWS can asses the impact of these
``takes'' and evaluate the success of the depredation order. APHIS is
currently developing policies to assist producers in implementing
consistent certification and reporting procedures. With the elimination
of the Federal permit requirement, the number of producers requesting
technical assistance from APHIS for the control of cormorants is
expected to increase.
Question. Please provide an update on your activities to control
fish-eating birds.
Answer. Assistance is provided nationwide, with intense efforts
concentrated in Alabama, Florida, and Mississippi, where three wildlife
biologists are stationed. Wildlife biologists conduct onsite
evaluations to assess damage and identify the species of bird or mammal
causing the damage, and make control equipment available to producers.
If exclusionary and scaring techniques fail to reduce losses, producers
may now take a limited number of birds by lethal means, as a result of
a cormorant depredation order recently issued by the U.S. Fish and
Wildlife Services (FWS). In addition, APHIS' field research station in
Starkville, Mississippi conducts research and field studies to improve
current control methods, and to develop new ones.
______
Grain Inspection, Packers and Stockyards Administration
Questions Submitted by Senator Cochran
packers and stockyards office restructuring
Question. The fiscal year 1999 budget requests a one-time increase
of $3 million to enable the Packers and Stockyards to reorganize its
National and regional offices in response to an Office of Inspector
General report recommending an office restructuring to improve the
Agency's ability to monitor and investigate anticompetitive practices.
Can this office restructuring be completed in fiscal year 1999?
When do you plan to begin the consolidations of offices if the
requested funding is provided?
Answer. If funding is provided, GIPSA plans to complete its
restructuring during fiscal year 1999. The Agency is currently moving
forward with restructuring its headquarters operations by consolidating
two operating divisions and six branches into one division and three
branches. The requested funding will be used to consolidate Packers and
Stockyards' 11 field offices into 3 regional offices located in Denver,
Colorado; Des Moines, Iowa; and Atlanta, Georgia, to provide
significantly larger staffs located in regions with concentrations of
beef, pork, and poultry. In order to assure that basic services are
maintained across the Nation, the reorganization plan also includes
resident agents who will work out of their homes or one of three
suboffices located in Sacramento, California; Fort Worth, Texas; and
Lancaster, Pennsylvania. This restructuring is vital to meeting the
Department's responsibility, and industry's concerns, relating to
competitive behavior in the livestock, meat and poultry industries.
Question. What savings will be realized as a result of this plan to
consolidate and maintain fewer office?
Answer. The purpose of the restructuring plan is to strengthen
Packers and Stockyards' ability to investigate anticompetitive
practices while providing greater flexibility and efficiency in the
Agency's operations by creating larger staffs with a broader mix of
investigative skills. Except for the one time cost, consolidating the
offices is not expected to result in either an increase or decrease in
cost. However, the budget request does include additional resources to
address concerns about competition in livestock procurement and poultry
contract growing arrangements.
Question. Will this reorganization result in a staffing reduction
as well?
Answer. The reorganization will not result in a staff reduction,
however, it will substantially increase GIPSA's capacity to assemble
investigative teams possessing the appropriate mix of economic, legal,
and industry expertise required to conduct complex investigations in a
timely manner.
proposed new user fees
Question. The fiscal year 1999 appropriations request assumes a net
reduction of $17.3 million resulting from proposed new user fees:
$2.819 million from new methods development fees, $3.598 million in new
fees for standardization activities; and a net reduction of $10.859
million in Packers and Stockyards license fees and a dealer trust.
Please describe the proposed new user fees assumed in the President's
fiscal year 1999 budget.
Answer. The proposed new user fees are consistent with the overall
effort to balance the budget and with the Administration's efforts to
shift funding for programs which benefit identifiable groups.
GIPSA develops, reviews, and maintains official U.S. grain
standards that describe the grain characteristics in terms of physical,
sanitary, and intrinsic value at the time of inspection. GIPSA also
conducts applied research or tests that produce new or improved
techniques for measuring grain quality. Because these standards and
methods directly benefit and are used almost solely by the grain
trading industry, and because they facilitate the orderly marketing of
grain products, we believe that it is industry, rather than the general
public, that should bear the costs.
As for the Packers and Stockyards license fees, this proposal would
impose a license fee on an estimated 23,000 subject firms to fund the
cost of administering the Packers and Stockyards Act (Act). The
principal purpose of the Act is to assure the integrity of the
livestock, meat, and poultry markets for the benefit of producers. This
includes fostering fair and open competition, guarding against
deceptive and fraudulent practices and providing financial protection
for livestock and live poultry sellers and contract poultry growers.
The dealer trust proposal would amend the Act to create a dealer
trust and 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. Dealer failures represent a
significant amount of unrecovered losses in the livestock marketing
chain. A dealer trust would minimize the losses suffered by producers
because of dealers failing to pay.
Question. Is new legislative authority required for all new user
fees proposed assumed in the budget? Has the Administration submitted
its legislative proposals for these fees to the Congress for
consideration?
Answer. Yes, new legislative authority is required for all of these
proposed user fees. The GIPSA legislative proposals will be sent to
Congress as part of a total USDA legislative proposal package in the
near future.
Question. Most of these user fee proposals have been proposed by
the President in previous-year budgets but have not been acted upon by
the Congress. Is there any indication that these fee proposals will
have greater success in gaining the approval of the Congress and being
enacted into law this year?
Answer. No. We have had no prior indications of Congress' intent
regarding the user fee proposals.
Question. What impact will approval of the President's
appropriations request for the agency have if the proposed user fees
are not adopted?
Answer. Approval of the President's appropriations request will
significantly impact the Agency's standardization and methods
development activities, as well as its Packers and Stockyards program.
agricultural concentration
Question. The President's fiscal year 1999 budget requested
increased resources to continue to implement the recommendations of the
Secretary's Advisory Committee on Agricultural Concentration. The
fiscal year 1999 budget requests an additional $505,000 for the
Agricultural Marketing Service (AMS) to expand reporting of livestock
and poultry markets. For the Grain Inspection, Packers and Stockyards
Administration, an additional $795,000 and 15 staff years is requested
for packer competition and industry structure investigations and
analyses, and an additional $750,000 and 10 staff years is requested
for poultry compliance investigations.
Please address the need for the additional resources requested for
fiscal year 1999 to address livestock and poultry competition and
industry structure.
Answer. The additional funds and personnel are needed for GIPSA to
more aggressively pursue anticompetitive practices related to industry
concentration. We have increased the breadth and depth of
anticompetitive practice investigations during the past 3 years. Due to
our limited staff resources, however, the added focus on
anticompetitive practice investigations 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 five
additional economists, three lawyers, and two computer programmers into
investigative units that will conduct investigations involving
anticompetitive practices. Such expertise will allow for more effective
monitoring and enforcement of potential anticompetitive practices in
the increasingly concentrated meat packing industry while also ensuring
that fair and competitive practices continue to grow and develop as the
industry progresses. The funds will be used in fiscal year 1999 to
continue conducting major investigations of potential anticompetitive
practices and detailed analyses in the slaughter steer and heifer,
slaughter hog, slaughter cow, and slaughter lamb industries. Detailed
evidence will be developed if, and where incidences of anticompetitive
practices are disclosed. Additional personnel with economic,
statistical, and legal expertise will be critical to completing the
necessary analyses that are essential for a full and complete
investigation.
The additional $750,000 requested for poultry compliance is
necessary for GIPSA to perform the in-depth compliance investigations
necessary to ascertain if the firms are engaging in activities that may
be unfair or unjustly discriminatory to the growers. These additional
funds would permit GIPSA to be proactive in initiating and expanding
the scope of our compliance investigations, and at the same time
continue to timely investigate the large number of complaints being
received from poultry growers. The funds will be used to place
additional investigators in the field to conduct industry-wide
investigations and address specific grower complaints on a more timely
and thorough basis. This will enable us to examine the effect of
practices that impact grower performance and pay on a broader scale.
Question. What progress has been made to date in implementing the
recommendations of the Secretary's Advisory Committee on Agricultural
Concentration with the increased resources that have been provided for
this purpose?
Answer. USDA has taken several steps to implement the
recommendations of the Secretary's Advisory Committee on Agricultural
Concentration. USDA reviewed surveillance, investigation, and
enforcement practices under the Packers and Stockyards Act and
developed a restructuring plan to increase flexibility and efficiency
in enforcing the trade practice and payment protection provisions of
the Packers and Stockyards Act, and strengthened enforcement against
anticompetitive practices.
GIPSA is currently recruiting and integrating economists into
investigative units that will conduct investigations involving
anticompetitive practices. Major investigations of fed steer and heifer
procurement in the Texas Panhandle, slaughter hog procurement in the
central United States, and slaughter lamb procurement in the western
United States are currently under way. The investigations will examine
statistical relationships between livestock prices and various formula
and other contract purchase arrangements.
USDA has taken several actions to improve the market and price
discovery information available to the livestock industry.
--Producer pork reporting--USDA is expanding the Missouri pork
producer price reporting pilot project. Officials from USDA
have met with the National Pork Producers Council to explore
expanding Missouri hog price reporting to three additional
States--Illinois, Iowa and Wisconsin.
--Expanded boxed beef reporting--Beginning September 1996, USDA
extended its coverage of boxed beef sale commitments to cover
the upcoming 15 business days, rather than the previous 10
business days. Approximately 45 percent of volume traded is now
reported, compared with 30-40 percent previously reported.
--Value-based reporting--In October 1996, USDA initiated a weekly
report of premiums and discounts being offered for cattle in
the upcoming week by meat packers. All major packers are
participating and feedlots can verify information through the
report.
--Livestock produced or traded under contract--Beginning with the
December 1996, Hogs and Pigs Report. USDA is reporting the
number of hogs produced under contract by large hog producing
operations. Starting in October 1996, USDA also began issuing a
weekly report indicating the number of cattle being produced
under contract for delivery in future months. For those
contracts calling for settlement relative to a futures market
price, the basis difference from a futures market contract is
also reported.
--Regional beef quality and yield report--In February 1997, USDA
initiated a report of beef grading results on a regional basis,
for four regions of the country, that will provide better
geographic detail than contained in the current national
report.
USDA will examine the relationship between prices reported to AMS
and prices that GIPSA obtains during its investigations of competitive
issues to evaluate whether USDA's publicly reported Market News prices
accurately reflect packer procurement transactions.
government performance and results act
Question. How are the agency's performance goals linked to the
agency's mission, strategic goals, and program activities in its budget
request?
Answer. There is a direct correlation between the agency's mission,
strategic goals, performance goals, and budget activities. Each of the
agency's budget activities--the Packers and Stockyards program and the
Grain Inspection program--is directly linked to a strategic goal and
supporting performance measures. The Packers and Stockyards program is
represented in Goal 1 of the Agency's strategic plan, and the Grain
Inspection program is represented in Goal 2. Both goals support the
Agency's mission and have supporting performance measures.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. We developed our strategic plan around our core business
practices which parallel our existing budget activities. The end result
is that there is a one-to-one correlation between budget activities and
strategic goals and supporting performance goals.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. Yes, each budget account is aligned with a strategic goal
and supporting performance measures. Several performance measures are
still under development as we strive to efficiently and effectively
measure outcomes.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. There are no differences.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. The Agency is evaluating the benefits of consolidating two
budget activities, Standardization and Methods Development.
Question. How were performance measures chosen?
Answer. The Agency focused on measurements requested by our
customers--cost efficiency, timeliness of service, and accuracy of
results. To date, the Agency has developed measures of timeliness
(e.g., percentage of violations corrected within one year of
investigation's starting date) and cost efficiency (e.g., cost of the
official grain inspection and weighing service per metric ton using
constant 1992 dollars indexed on the Gross Domestic Product). The
Agency will develop measurements of accuracy to coincide with the
beginning of the fiscal year 2000 budgeting cycle.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. For some of the Agency's performance measures, such as cost
per metric ton, the data was already available and resulted in no extra
cost to the Agency. In other instances, the agency is still struggling
with developing meaningful outcome measures and identifying the
necessary data sources.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. No, at this time, the Agency does not anticipate having
performance measures for which reliable data are not available in time
for the first performance report.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. Each of the Agency's five performance goals align with the
Agency's five budget line items and, as a result, it would be difficult
to assign greater importance to any one goal. As given in the fiscal
year 1999 Annual Performance Plan, the Agency's five performance goals
and affiliated budget line items are: (1) Monitor, investigate, and
analyze the livestock, meat and poultry industries; identify and
correct unfair, deceptive, or discriminatory trade practices; and
provide financial protections to livestock and poultry producers, all
with the intent of ensuring a fair, open, and competitive marketing
environment for livestock, meat, and poultry (Packers and Stockyards);
(2) Increase the efficiency of U.S. grain marketing by harnessing
technology to streamline grain inspection and weighing processes and
providing objective measures of grain quality, quantity, and end-use
value (Methods Development); (3) Enhance the uniformity of grain
quantity and quality measurements to promote a more standardized
framework for trade in the U.S. grain marketing system
(Standardization); (4) Provide all segments of American agriculture
with cost-effective and responsive official inspection and weighing
services (Inspection and Weighing); and (5) Protect the integrity of
U.S. grain marketing by regulating grain weighing and handling
practices, and regulating the providers of official grain inspection
and weighing services (Compliance).
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. The Agency worked with its customers and employees to
determine program expectations and then developed measurements to best
determine whether those expectations are met. GIPSA anticipates
refining some of its current performance goals and measures prior to
the fiscal year 2000 budgeting cycle.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Although managers understand the difference, the Agency, at
large, is still having difficulty in identifying meaningful outcome
measures. For example, standardization of grain quality and quantity
measurement improves market efficiency. Likewise, the use of grades and
standards improves market efficiency if the grades and standards
communicate the quality characteristics relevant to the market. GIPSA
directly controls the standardization of the official inspection system
and influences the standardization of the commercial market. Measuring
the use of grades and standards by the commercial market is
impractical, since nearly all those buying or selling grain use the
grades and standards to one degree or another. As a result, GIPSA is
attempting to develop surrogate measures that track the efficiency of
the official inspection system and the adequacy of grades and
standards.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers?
Answer. In late 1996, GIPSA conducted a mail-out survey of external
customers of the official inspection and weighing system. Results from
the survey have allowed the official system to quantitatively assess
customer satisfaction in terms of the factors that have been identified
by customers as being critical to the official system's success:
timeliness, accuracy and consistency, cost-effectiveness,
responsiveness, and professionalism. Results from the survey will also
serve as benchmarks against which further progress will be measured.
The Agency plans to conduct another customer survey in fiscal year
1999.
In 1994 and 1997, GIPSA also conducted surveys of employees of the
grain program. The Agency's managers and employees have used, and will
continue to use, the survey results to identify the Agency's strengths
and weaknesses and to take actions to improve both.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. We aligned the Agency's strategic goals and supporting
performance goals and measures with the Agency's two budget accounts,
the Packers and Stockyards program and the Grain Inspection program.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. While not directly apparent, it is possible that a shift in
funding sources for the Grain Inspection program would affect the cost
of the official grain inspection and weighing service per metric ton.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. Yes. With the exception of one measure, GIPSA will rely on
internal agency procedures to track performance. More specifically, the
Agency will rely upon existing systems, such as the agency's quality
assurance/quality control and information management collection
systems, to measure and report on program performance. By the start of
the fiscal year 2000 budgeting cycle, GIPSA will have the capability of
regularly assessing program progress.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget.
Many agencies have indicated that their present budget account
structure makes it difficult to link dollars to results in a clear and
meaningful way.
--Have you faced such difficulty?
Answer. Since GIPSA's program activities set forth in the budget
and the Agency's strategic and performance goals are aligned, the
Agency has not encountered such difficulty.
--Would the linkages be clearer if your budget account structure were
modified?
Answer. No, the linkages are currently clear.
--If so, how would you propose to modify it and why do you believe
such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. The Agency does not consider modification to be necessary
at this time.
--How would such modification strengthen accountability for program
performance in the use of budgeted dollars?
Answer. The Agency does not consider modification to be necessary
at this time.
Question. Does your fiscal year 1999 Performance Plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. The Agency's strategic plan, rather than its performance
plan, identifies key external factors that could influence goal
achievement.
--If so, what steps have you identified to prepare, anticipate and
plan for such influences?
Answer. GIPSA must effectively respond to the fluid and dynamic
business environments in which the grain and livestock industries
operate. Like many segments of American agriculture, these industries
are experiencing rapid changes such as mergers, acquisitions, vertical
integration, and increasingly automated operations. The changes are
shaping how GIPSA operates. For example, GIPSA has developed a field
office consolidation plan which will allow more resources to be located
in regions where beef, pork, and poultry production and processing are
concentrated. Furthermore, the field offices will be strengthened with
additional expertise in economic, statistical, and legal issues to more
effectively conduct investigations of alleged anticompetitive practices
and financial and trade practice violations.
--What impact might external factors have on your resource estimates?
Answer. Changing external factors may require the Agency's Packers
and Stockyards program to shift from one area of focus to another. In
the grain arena, increases or decreases in U.S. grain exports may
affect the cost per metric ton of the grain inspection and weighing
service.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. GIPSA has not identified any overlapping functions or
program duplication. GIPSA does, however, coordinate its program
activities with a number of government entities. Within USDA, GIPSA
works with the Animal and Plant Health Inspection Service and the
Agricultural Marketing Service on marketing issues; the Foreign
Agricultural Service on international trade issues and programs; the
Agricultural Research Service and the Economic Research Service for
research support; and the Office of the Inspector General on
investigative matters. Further, GIPSA cooperates with various non-USDA
entities, including the Food and Drug Administration on food safety
issues; the Environmental Protection Agency on pesticide residue
programs; and the Department of Justice and the Commodity Futures
Trading Commission on investigative matters. GIPSA's strategic plan,
rather than its performance plan, addresses the coordination of
efforts.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that:
--To what extent are your performance measures sufficiently mature to
allow for these kinds of uses?
Answer. Given that the Agency's current performance goals and
measures are relatively immature, the Agency is in the process of
reviewing and refining its current goals and measures and developing
some new measures in time for the beginning of the fiscal year 2000
budgeting cycle.
--Are there any factors, such as inexperience in making estimates for
certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. The Agency has not encountered any such factors at this
time.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issues on September 30, 1997?
Answer. GIPSA does not foresee any need for substantive revisions
in the Agency's strategic plan at this time.
______
Questions Submitted by Senator Burns
price reporting
Question. What does the Department plan in terms of price reporting
action?
Answer. The Department plans to implement or enhance the following:
(a) Increased reporting on the terms of contract sales, or captive
supply transactions. While AMS has been able to report captive supply
volumes, reporting of contract terms and transactions has been more
difficult. This information will assist the industry as they move
toward a value based marketing system.
(b) Expanded reporting that includes value-based pricing
indicators. A matrix report for value based marketing has been
requested by the cattle industry. The report will provide the economic
indicators to help guide producers in supplying products to meet
consumer demands.
(c) Reporting share of slaughter by grade and yield. This report
will provide industry with the consist and distribution of cattle that
provides a barometer of available supplies that meet certain criteria
for the trade.
(d) Reporting daily live cattle and hog crossings from Canada and
Mexico. These reports provide the industry with information on volume
and prices of animals being exported and imported at U.S. borders.
Knowledge of movements and price levels provide industry a more level
trading platform to assess their marketing plans.
(e) Increasing the reported volumes of forward sales of boxed beef.
Increased volumes and broader coverage of prices provide market
information that is important to the industry in negotiating forward
sales of products and enhances competition.
(f) reporting packer premiums and discounts for beef carcass value
differences. Information on packer premiums and discounts will assist
industry in improving their products to meet stated premiums and
therefore move more efficiently to meet consumer demands.
(g) Expanding producer reported hog marketing information. This
will 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.
(h) Reporting regional and national marketing of the direct feeder
pig trade. There currently is no market report in place to assist
producers in determining the fair market value of segregated early
weaned and other weaned pigs. These reports will assist in this area.
Question. What options does the Department have to implement some
sort of mandatory price reporting system for fat cattle?
Answer. Options include:
Continue with voluntary reporting of market information.
Pros:
(1) Most economical for the government and industry.
(2) Analysis and reporting volumes are sufficient to adequately
establish trading levels and assist in the price discovery process.
(3) Information collected and reported does not divulge proprietary
information.
(4) Places a minimum amount of burden on the industry.
(5) Contacts who currently provide information play large or
significant roles in the market. Collection from a large number of
small participants may have little or no effect on the price discovery
process.
Cons:
(1) As the industry becomes more concentrated it is more difficult
to obtain voluntary information.
(2) Some commodity products have very limited open market sales and
if these sales are not obtained, the price discovery process hindered.
(3) There is the appearance of hidden sales.
Mandatory reporting of transactions only when asked by a reporter.
Pros:
(1) Would provide industry with a large amount of sales transaction
marketing data.
(2) Remove the appearance of hidden sales information.
(3) Would limit the financial and personnel requirements that would
be required under 100 percent reporting.
Cons:
(1) Promote the absence of available industry contacts to avoid
reporting.
(2) Place a large financial burden on the government.
(3) Monitoring and enforcing mandatory reporting would require
additional government financial and personnel resources.
(4) Industry members may be unwilling to cooperate with private and
industry information systems if reporting to the government is
mandated.
(5) Divulging information that could be used by a domestic or
international competitor could be detrimental to the industry.
Question. Is the voluntary price reporting system working?
Answer. Yes, the system is working, however due diligence must be
practiced. Market reporters develop reliable contacts to discuss market
conditions and obtain information about sales or purchases. Voluntary
participants are more likely to provide information of a confidential
nature that affect market conditions to aid reporters in their market
analysis. Voluntary collection of information is the most economical
for the government and places a minimum amount of burden on the
industry.
Question. What is USDA doing to insure that there is a competitive
environment in the live cattle market?
Answer. GIPSA will restructure its Packers and Stockyards Programs
(P&S) to strengthen enforcement against alleged anticompetitive
practices and provide greater flexibility and efficiency in enforcing
the trade practice and payment protection provisions of the P&S Act.
GIPSA will restructure the headquarters offices of P&S, consolidate
field offices, and add staff with economic, statistical and legal
expertise to work on investigations of anticompetitive practices. P&S'
Denver, Colorado, regional field office will handle all major
competition and industry issues in the United States relating to cattle
and sheep, as well as all trade practice and financial protection
issues in its region. The Denver office will continue to conduct
investigations of anticompetitive behavior in the cattle industry
following reorganization.
GIPSA is conducting a broad investigation of fed steer and heifer
procurement in the Texas Panhandle. Preliminary descriptive and
graphical analysis have been completed and portions reported to the
industry. Purchase and slaughter patterns have been examined to
identify potential occurrences of aberrant or unusual procurement
practices. Assessment has begun of whether the Department's publicly
reported Market News prices accurately reflect packer procurement
transactions. Econometric and statistical analysis of the data is
underway to identify relationships between spot market prices and
nonspot purchases, and to reveal relationships that may not be
otherwise apparent. Portions of the econometric analysis will be
conducted under cooperative agreement with researchers at Iowa State
University and the University of Nebraska. The completion date depends
on the results of the econometric and statistical analysis.
Subcommittee Recess
Senator Bumpers. We will stand in recess subject to the
call of the chair. Thank you very much.
[Whereupon, at 12:18 p.m., Tuesday, March 17, the
subcommittee was recessed, to reconvene at 10:06 a.m., Tuesday,
March 24.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, MARCH 24, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:06 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Burns, Bumpers, Kohl, and Leahy.
DEPARTMENT OF AGRICULTURE
STATEMENT OF AUGUST SCHUMACHER, JR., UNDER SECRETARY,
FARM AND FOREIGN AGRICULTURAL SERVICES
ACCOMPANIED BY DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND
PROGRAM ANALYSIS
Farm Service Agency
STATEMENT OF KEITH KELLY, ADMINISTRATOR
General Sales Manager
STATEMENT OF CHRISTOPHER E. GOLDTHWAIT, GENERAL SALES
MANAGER
Foreign Agricultural Service
STATEMENT OF LON HATAMIYA, ADMINISTRATOR
Risk Management Agency
STATEMENT OF KENNETH D. ACKERMAN, ADMINISTRATOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
Today our subcommittee continues its hearings reviewing the
President's budget request for the next fiscal year for the
Department of Agriculture and related agencies. This morning we
are specifically considering the budget request for programs
and activities of the Department's Farm and Foreign
Agricultural Services agencies. Our witnesses this morning
include a panel led by the Under Secretary for Farm and Foreign
Agricultural Services, Mr. August Schumacher, Jr.
Mr. Secretary, we appreciate your attendance and that of
the others who are with you this morning. We invite you to
introduce them and proceed with your statement and any other
statements by the panel that you think would be helpful to the
subcommittee. We have copies of the prepared testimony, which
we will print in the record in full. We are interested in
hearing what your proposal is for appropriations for these
activities, and thank you for being here today.
I am going to yield now for any comments or opening
statements from other members of the subcommittee. Senator
Bumpers.
STATEMENT OF SENATOR BUMPERS
Senator Bumpers. Mr. Chairman, today's panel is going to be
the last panel we will hear from regarding the President's
budget. I would just like to make a few comments, and I will
insert my formal opening statement for the record.
During my tenure in the Senate, I have seen many changes in
farm programs and the relationship of the Department to the
farming community. I have seen agricultural production go from
huge surpluses to shrinking supplies. I have seen farm prices
soar and I have seen them collapse. I have seen crops prosper
and I have seen untold natural disasters that have destroyed
countless acres of farmland and farmers' livelihoods along with
them.
Two years ago, Congress enacted, without my support,
legislation that dramatically changed the relationship of
farmers and the Federal Government. Prices were good then,
better than they are now. The phaseout of farm programs seemed
a distant problem, especially when sweetened with additional
cash from Uncle Sam.
We are already beginning to hear the faint cries of hard
times ahead. Legislation is being discussed to extend crop loan
periods and other farm safety net mechanisms seen only as an
amendment away. I do not hold out false promises. We fought the
hard fight and my side lost.
Still, in all my years of public service, one thing always
rings true: The Government, Congress especially, will never
forget its farmers. Not only has the Department changed its
relationship with farmers, it has changed its relationship with
itself. The USDA of 5 years ago is not the USDA of today. Names
have changed, but changes have gone beyond the purely cosmetic.
The Farm Service Agency now exists where two agencies were
before, ASCS and the Farmers Home Administration. To further
complicate matters, the new agency houses more than two former
agency missions. It houses two separate classes of USDA
employees. The old Farmers Home Administration offices were
staffed with regular Federal Civil Service employees, while
ASCS offices were staffed with employees hired under a
different authority, tied to the county committee system, and
were considered non-Federal employees. Still, they were and are
USDA employees, all with the same commitment to farmers and the
delivery of Federal farm programs.
I make this distinction because the two classes of
employees are not treated alike. Earlier this year, the Farm
Service Agency conducted a RIF of 152 employees. Because of
their status as non-Federal employees, the USDA employees from
the old ASCS offices were the only ones to lose their jobs,
regardless of years of service, experience, or other relevant
factors. With all the attention to civil rights problems at the
Department, this inherently unfair situation is one that should
not be overlooked.
Prepared Statement
Mr. Chairman, I will forgo the rest of my statement and ask
a couple of questions on the point I just made later. I ask
unanimous consent that my full statement be inserted in the
record.
Senator Cochran. Without objection, it is so ordered. Thank
you, Senator.
[The statement follows:]
Prepared Statement of Senator Bumpers
Mr. Chairman: It is a pleasure to welcome Secretary
Schumacher and the other USDA officials to this morning's
hearing. Today's panel will be the last from USDA we will hear
regarding the President's budget request for fiscal year 1999.
It is somehow appropriate that this final USDA hearing will
focus on those agencies which are most closely associated with
farmers, in the traditional context, and with expanding export
markets, which many believe will be the focus of U.S.
agriculture's future.
During my tenure in the United States Senate, I have seen
many changes in farm programs and the relationship of USDA to
the farming community. I have seen agricultural production go
from huge surpluses to shrinking supplies. I have seen farm
prices soar and collapse. I have seen crops prosper and I have
seen untold natural disasters that have destroyed countless
acres of farmland and farmers' livelihoods along with them.
Two years ago, Congress enacted, without my support,
legislation that dramatically changed the relationship of
farmers and the Federal Government. Prices then were good,
better than they are now, and the phaseout of farm programs
seemed a distant problem, especially when sweetened with
additional cash from Uncle Sam. We are already beginning to
hear the faint cries of hard times ahead. Legislation is being
discussed to extend crop loan periods, and other ``farm safety
net'' mechanisms seem only an amendment away. I don't hold out
false promise. We fought the hard fight and we lost. Still, in
all my years of public service one thing I have learned: the
Government, Congress especially, will never forget its farmers.
Not only has USDA changed its relationship with farmers, it
has changed its relationship with itself. The USDA of five
years ago is not the USDA of today. Names have changed, but
changes have gone beyond the purely cosmetic. The Farm Service
Agency now exists where two agencies were before, the
Agricultural Stabilization and Conservation Service (ASCS) and
the Farmers Home Administration (FmHA). To further complicate
matters, this new agency houses more than two former agency
missions, it houses two separate classes of USDA employees. The
old FmHA offices were staffed with regular federal civil
service employees while ASCS offices were staffed with
employees hired under a different authority tied to the county
committee system and were considered non-federal employees.
Still, they were, and are, USDA employees all with the same
commitment to farmers and the delivery of federal farm
programs.
I highlight this distinction because the two classes of
employees are not treated alike. Earlier this year, the Farm
Service Agency conducted a RIF of 152 employees. Because of
their status as ``non-federal'' employees the USDA employees
from the old ASCS offices were the only ones to lose their
jobs, regardless of years of service, experience, or other
relevant factors. With all the attention to civil rights
problems at the Department, this inherently unfair situation is
one that should not be overlooked.
Another major change at USDA has been the manner in which
federal assistance is administered to help farmers recover from
natural disasters. In place of the ad hoc programs of the past
is a series of risk management programs designed to cover a
wide variety of disaster scenarios. Some of these programs even
cover losses in market price. Still, there is much to do to
make these programs truly fair. The natural disasters that now
have the attention of Congress speak to this point. Some
producers, dairy for example, are not covered at all for losses
in production. Maple producers are covered for production
losses but in a way that doesn't precisely fit the facts of the
recent ice storms in the Northeast. Clearly, it is hard to
prepare for every contingency, but it should be our goal to
treat producers as fairly and consistently as possible.
Otherwise, we will be urged to head back down the path of ad
hoc programs that can only escalate to a multitude of changing
and contrary programs that we could not easily justify on
either policy or budgetary grounds.
Finally, let me mention the role of the American farmer in
world markets. When Thomas Jefferson spoke of America as a
nation of yeoman farmers, his vision of agricultural markets
did not see beyond the demands of a growing and expanding
domestic population. In the course of two hundred years,
Jefferson's view has been dramatically altered.
Today, financial crisis in Asia will affect thousands of
metric tons of U.S. farm production that may find no way to
market. Phytosanitary requirements in Europe may close down
U.S. poultry plants and cost American jobs. Famine in Africa
may compel the U.S. to ship food stores through the Public Law
480 programs, thereby boosting grain prices to farmers in mid-
America. More and more, the nations and regions of the world
are tied together in ways not imagined even a few short years
ago.
I have spoken many times before about my concern for world
food security and our ability to keep pace with an ever growing
population. American farmers remain the best in the world and
our natural resource base can keep them there if we manage it
properly. We must keep our access to the markets and the people
of the world wide open. Our farmers can produce, but they're
never quite sure which markets will be open.
This is the last year I will review the policies and
priorities of USDA in an official capacity as a member of the
subcommittee. I want to stress in this, my last hearing with
USDA agencies, the importance of supporting the American
farmer. He is more than the simple romantic notion contained in
political speeches. The American farmer is an integral and very
important part of our economy. He contributes to our balance of
trade. He protects our natural resources which, unlike most of
us who see them as recreation, are the basis of his livelihood.
There is also something to that old romantic notion that is
more than mere fiction. From the early days of America,
philosophies tied to work ethic became the very fabric of this
nation and that work ethic was largely based on that of the
farmer. The America of today was not built from the foundation
of a shopping mall or office complex. Neither the empires of
finance nor the network of telecommunications serve as the
model for who we are as Americans. If there is any single part
of the American family that can remind us all of who we once
were, it is the American farmer. The New York bond dealer, the
Dallas oilman, and the California computer tycoon may never
admit it publicly, but all our roots are on the farm.
STATEMENT OF SENATOR BURNS
Senator Cochran. Senator Burns.
Senator Burns. Thank you very much, Mr. Chairman.
For the first time, I want to welcome Keith Kelly to the
table this morning. Keith was raised up in the Red Lodge, MT,
country and his father was an outstanding sheepman and they
lost him a year ago. They are just fine people. I want to
welcome Keith here. We have had a great working relationship
for a long time.
I want to sort of associate myself with the words of
Senator Bumpers. I think we have changed the direction of the
USDA. It seems like we are getting away from the support. Of
course, Mr. Kaplan has heard this speech so many times that he
is getting sick of it and wants to go out and throw up. But we
are changing our emphasis from the grassroots producer.
The more I explore this and we take a look--and we have a
crisis on the farm. I do not care how you turn it. We have a
crisis and it is an income crisis. A guy says there is nothing
wrong on the farm except in the price, what we get at the gate.
The more I am kicking this around, the more I think it is
in the area of the transparency in the market. We just do not
get reports from our processors and our purveyors as it
compares to the prices we receive at the gate, and I think
there has to be some way that we get some transparency in the
market. And it is just not in our grains. It boils down to the
problem with all of the commodities.
Now we have packers that do not want to report what they
gave for fat cattle going into their plants, and I think that
is wrong because the free market--I will say right now that the
auction markets right now are the only ones that are really
engaged in price discovery. And I think we have to look at
price discovery in order to gain transparency. That is our
problem with the Canadian grain situation is transparency in
the market. And I go back to the old Wheaties thing again, and
I hate to keep beating on that, but if there is transparency in
the market, then it seems as though good things happen and
money does get filtered back down to the farm.
But we do not know what a crisis is until this next year as
far as on the farm because we have got farmers that will not--
we cannot produce our commodities for the same price,
especially in the grains, as we produced in 1948, 50 years ago,
and now that same combine is costing $180,000, that same
tractor is costing over $100,000. And we are still paying
taxes, and we pay the highest taxes. The Government does not
choose to pay taxes on their land that they own in our counties
to the rate of the private taxpayer.
So, we are in a bind, folks, and I am very much concerned.
But I think it boils down to transparency in the market.
Prepared Statement
I will put the rest of my statement in the record. I got
another commitment, Mr. Chairman, and I must leave, but that
still concerns me.
Thank you very much.
Senator Cochran. Thank you, Senator. Your statement will be
printed in the record.
[The statement follows:]
Prepared Statement of Senator Burns
Thank you, Mr. Chairman.
I appreciate you calling this hearing this morning. As we
look at the budget for the Department of Agriculture I see this
as one of the more important hearings on the calendar. I
believe that both of these agencies have a great impact on the
farmer on the ground in Montana as well as the rest of the
nation.
I would like to welcome Mr. Keith Kelly to this hearing.
Mr. Kelly and I go back a ways in Montana agriculture. While I
was broadcasting agriculture radio shows, Keith was the
Director of Agriculture for the state of Montana. Keith is a
good Montana native and we are pleased to see him in his
position today.
As with most of the agencies which we have seen come before
this committee, I am again concerned with the way that these
agencies are budgeting for the coming fiscal year. I have to
admit that I am again concerned with the lack of work that I
feel is being done for the producer on the ground. This group
has as much to do with lack of concern as any we have had
testify before us.
As I look upon this budget for this year, I am concerned
with the way the funds have once more been directed by the
Department of Agriculture. I see funding cuts in areas where we
have restored funds in past years. I also see programs
continually proposed which this committee and Congress have
told the Department that they are not inclined to agree with
the Administration.
I will continue to stress the need I see for a sound and
committed agriculture trade policy which will assist our
producers in the world market. About a month ago I attended a
farm forum in Cut Bank, Montana, where I was able to spend time
with the people on the ground who are trying to make a living
today, but who face terrible odds in doing so. Partially
because of what they, and I, see as a faulty trade policy. When
my farmers in Montana cannot sell their bushels of wheat for
the equivalent price of a one pound box of Wheaties. Yet they
continue to see hundreds of thousands of bushels of wheat
crossing the border from Canada. Well, Mr. Chairman, it does
not take a genius to understand how and why these men and women
feel the way they do.
The man and woman in the field are very concerned about
what they see happening on the world market. The rest of the
world seems to be trading with each other and we sit by and
watch them move their grain, while our Department of
Agriculture does nothing. My producers are asking that this
Department do something, other than sitting on their hands.
My producers in Montana, and those I have talked with
across the country are very puzzled by what they are seeing in
Washington today. They see reactive and not proactive trade
arrangements being made. They feel as though, like I do, that
this Administration and this Department do not care about them.
Instead of actively moving in the market we hear that the
Secretary is waiting until the rest of the world depletes their
supplies of grain. Well I wonder how many farmers out there
will still be there when something finally occurs.
Last week before the House, Secretary Glickman told the
Agriculture Committee that he felt that using the Export
Enhancement Program (EEP) would drive wheat prices lower. The
countries we compete with would in turn lower their prices. He
followed up by stating that sooner or later our competitors
will run out of grain anyway and we will have the market to
ourselves. Well I have some very serious concerns about those
statements, and I will have questions to follow up with those
remarks.
The one thing I have to say here is that the Secretary
finally gave us some sense of a reason for not using the EEP
funding. The real problem here lies in the way that all the
funds for export marketing in the Department of Agriculture are
being used. This is the basic root of why the producer in the
field is losing sleep over and confidence in this Department.
We see other programs like the Foreign Market Development
funds not being totally expended, resulting in carryover which
the Department claims is a success. Instead where we have a
program that they are using, they are not using it to its
fullest degree. Programs where the dollars are cost shared by
the producer are being carried over for use in the coming
years.
Now I understand that the Department and the Foreign Ag
Service is not excited about the fact that I got an amendment
in the last farm program bill to create a line item for this
account. And it has been stated that this line item ties their
hands, but I like the people in the field, have little
confidence in what would have been done if there was not a line
item for this account. I believe I have heard it stated that
they would have put more money in there, well I find that
difficult to believe considering the amounts that they have
placed in the budget in the past couple of years.
I could go on and on about the lack of confidence that the
general agriculture producer has in this Administration when it
comes to trade policy, but well unfortunately I don't see where
it will do a lot of good. This Administration and Department
have their minds set on not doing enough to assist the
producers in the field. I will have some follow up questions to
bring before the Committee to see if I can get some answers on
later.
Last year we had some problems with the way that the
signups for lands to be placed into the Conservation Reserve
Program were being completed. The people on the land were left
in a state of confusion and unfortunately now, in a state of
distrust in the Department of Agriculture. The confusion in the
way the program was being administered has hurt both the
program and the producer.
The results of this confusion led to some of the best
producing land in the state of Montana being placed in CRP.
Excluding those marginal lands which the program was originally
designed to protect. It was my understanding that the
Conservation Reserve Program was a plan developed to take
marginal, environmentally sensitive lands out of production and
allow them to be reseeded in grasses. This then would serve to
protect those lands, the environment and enhance wildlife
opportunities in areas of a sensitive nature.
Instead in Montana what has occurred, by the development of
the indexes used to judge the fields, was the exact opposite of
what the program was intended to do. We have large sections of
good solid producing land coming out of production, and those
areas with highly sensitive land will continue to see the
plowshare breaking the soil. This just does not make sense to
me or to the people trying to protect the lands on which they
plant.
Furthermore, during the signup periods, people were
provided with certain sets of rules and standards by which
their land was judged for suitability for inclusion in the
program. Only to find out afterwards, that during the process
the rules and standards had changed. So ultimately they found
that the standards for which they were planning were no longer
the same standards by which they could plant their cover seed
for this land.
In a large operation it might be possible to overcome this
type of realignment of seed purchase for cover forage, but on
many of the smaller operations who count on this land for
stable income, well it completely wipes out their cash reserve
for the coming planting season. Making nearly impossible to
either continue their enrollment in the program or plan for
planting costs for the upcoming year.
These people are having a difficult enough time this year,
with grain prices at horribly low levels. Brought on, in part
at least, by the unwillingness of this Administration and the
Secretary to use all the marketing tools at their disposal to
make gains on the world market stage. American agriculture is
always one of the first issues taken off the table at trade
negotiations, in favor of the hi tech industry for which the
United States is famous. Forsaking our ability to continue to
produce our own supply of safe, reliable and cost effective
food and fiber.
Mr. Chairman, I am concerned about the future of
Agriculture in these United States. It seems we are headed down
the wrong path. Life in Washington, DC, is so easy compared to
the nightmares that the producer faces daily in the fields of
our states. I pledge my time and energy to working with you to
find ways we can assist the producer. I know you and the
ranking member have a great deal of work before you, but I will
be there to help in anyway I can to make sure that the producer
on the ground in either Montana, Mississippi or Arkansas has a
chance to make something of their futures, despite all the
efforts of the Department of Agriculture.
STATEMENT OF SENATOR LEAHY
Senator Cochran. Senator Leahy.
Senator Leahy. Mr. Chairman, I will put mine also in the
record.
I am glad to see, of course, Gus Schumacher here. I have
worked with him for so long. And Ken Ackerman who was a valued
member of the Senate Agricultural Committee staff. He not only
advised me on that, but perhaps as importantly has given me
great advice on scuba diving. [Laughter.]
He is one of the best there is in that area.
I just want to thank you, Mr. Chairman, and Senator Bumpers
for your help in approving the amendment for the emergency
supplemental for maple farmers. I understand from Mr.
Schumacher, he is looking carefully how to help there, and I
will have questions that I will submit for the record on that
area.
Prepared Statement
Senator Cochran. Thank you very much, Senator. We will
insert your prepared statement in the hearing record.
[The statement follows:]
Prepared Statement of Senator Leahy
Good morning Under Secretary Schumacher. I would like to
take a moment to mention a problem that I raised once before
with Secretary Glickman, but which I think is important to
discuss again today. Earlier this year a devastating ice storm
paralyzed communities from Northern New York to the tip of
Maine.
Just a few days after the storm, I visited the hardest hit
areas of Vermont. The storm's damage was the worst I have ever
seen. The damage to Vermont's maple groves was especially
severe. The cost of downed taps and tubing in Vermont alone
totaled over $4 million. In some cases, sugarmakers will have
to wait for several years to allow regrowth before tapping can
resume. And yet none of those costs were covered through the
disaster assistance programs.
Last week the Appropriations Committee corrected that
problem by including $4.48 million in the emergency
supplemental to assist farmers to replace taps and tubing in
maple groves throughout the Northeast which were affected by
the storm. I appreciate the help Senator Cochran and Senator
Bumpers gave in approving that amendment. However, getting this
money out to those farmers will require an emergency
designation by the President. I hope you will support that
request and that the Farm Service Agency will help farmers in
Vermont and throughout the Northeast make use of this funding
to bring their maple groves back into production.
One other area also needs to be mentioned. I was hopeful
that you, Mr. Under Secretary, could work out some new
arrangements with Canada that would permit us to export milk to
Canada. This is potentially a huge dairy market for Vermont--
yet tariffs can be as high as 300 percent. I would like to see
something done about this problem as soon as possible.
On a similar front, I am very concerned about other
countries using sanitary standards as an excuse to keep out
American products. And third, I am very concerned about the
quality and safety of our imports.
Statement of August Schumacher, Jr.
Senator Cochran. Mr. Secretary, please proceed.
Mr. Schumacher. Thank you, Mr. Chairman, and thank you, Mr.
Burns, Mr. Bumpers, and Mr. Leahy.
I have a very fine panel this morning. Ken Ackerman is with
us. Keith Kelly not only worked in Montana, but he and I worked
together as commissioners, and we enjoyed each other working
different ends of the country. Lon Hatamiya is our new FAS
Administrator, but not new to USDA. He has done a fine job at
AMS, and is doing a great job right off the get-go on Asia in
FAS. Chris Goldthwait and Dennis Kaplan are here as well. Chris
is working closely on Asia with Lon. Dennis has been here
almost every meeting.
I would like to submit my formal statement for the record,
Mr. Chairman, and then have a very brief opening comment, if
that would be permissible.
Senator Cochran. That certainly will be. Your statement
will be printed in the record.
Mr. Schumacher. Mr. Chairman, our mission--and I always
consider this the most important area of USDA--is to secure
long-term vitality, global competitiveness, and profitability
for the American family farmer and rancher. As American
agriculture continues to adjust to the new Federal policies
that the committee has outlined, these expose producers more
directly to risks and market fluctuations, as has been noted.
The goal of the President and the Secretary remains to improve
farm income and to provide an adequate safety net for American
family farmers and ranchers. The President's budget we feel
will permit us to accomplish this goal.
Today I am going to talk a fair bit about this in my
opening statement and then, of course, take questions on the
crucial safety net for our farmers and ranchers.
This safety net has several critical elements, including
assistance in managing risks inherent in agricultural
production, assistance in obtaining credit necessary for
agricultural production, assistance to producers and ranchers
in times of crisis, emergency, and some of the new weather
patterns we are seeing, and assistance in marketing our
agricultural products in the strong global marketplace. We feel
this budget supports and strengthens this safety net.
Today's hearing is very timely, Mr. Chairman, because it is
being held while Congress is considering support for critical
elements of the safety net in the context of the President's
supplemental appropriations request for fiscal year 1998, and
the research bill, as well as the present budget debate that is
currently ongoing.
We certainly appreciate the support the Senate has shown in
supporting additional funding to provide emergency assistance
to farmers and ranchers who recently sustained losses due to
natural disasters, which is well documented, and to finance
farm ownership and operating loans targeted to small,
beginning, and socially disadvantaged farmers through
supplemental appropriations.
Absent enactment of the supplemental budget, funds
available for direct loan programs during 1998 will be used up
by this spring. They will end, and farm ownership guaranteed
loans will be exhausted by the end of June.
We also appreciate the healthy debate that is taking place
in the context of the research bill and other bills regarding
permanent funding for the vitally important crop insurance
program.
We appreciate the opportunity to work with you and your
committee to provide permanent funding for these critically
important programs without jeopardizing funding for other
priorities outlined in the President's budget.
Mr. Chairman, Secretary Glickman is concerned the safety
net does need to be strengthened in three respects: credit,
insurance, and the international side. I will be brief on all
three.
Mr. Chairman, the Secretary believes that several aspects
of our credit programs need to be strengthened. In order to be
successful and profitable in farming, America's farmers and
ranchers need access to adequate, affordable credit. For that
reason, the budget provides almost $3 billion in funding for
farm loan and loan guarantee programs for farm families who
would be unable to obtain credit otherwise, and is consistent
with recommendations of the Department's Civil Rights Action
Team and the National Commission on Small Farms.
Carolyn Cooksie, who is here today, oversees lending for
110,000 farmers on direct loans and an additional 50,000, I
believe, on guaranteed. So, roughly 160,000 farmers are working
with Carolyn on credit, a very important issue.
We have submitted legislation that would amend the ``one
strike and you are out'' clause that prohibits family farmers
and ranchers, 73,000 since 1989, who have ever had a wipe-down,
for whatever reason, from ever coming to USDA for another loan.
We believe this is too harsh, too restrictive, and we hope
Congress will support this legislation.
Further, the Secretary has placed high priority on
providing credit to small, socially disadvantaged, and
beginning farmers and ranchers. The budget proposal we have
submitted reflects this commitment.
We also believe more funds are needed for the direct loan
programs. We have 7,400 direct operating loan applications on
hand. Nearly 4,000 of these will go unfunded unless we provide
some additional funds. This is similar to what happened last
year. Loans are made on a first-come-first-served basis, and
when funds are gone, they are gone.
As I said earlier, we appreciate your support in the
Senate--strong support--for these programs through the
supplemental appropriations bill that is underway, and we look
forward to working with you and your colleagues in the House to
put this funding in place.
We are reviewing several other aspects of our credit
programs. We will be proposing regulatory streamlining changes
to make these programs more user friendly, both for the
borrowers and also for the banks that provide the important
guarantee. We are moving very hard on low documentation and we
will continue to brief you and your committee on those
improvements.
Let me just touch briefly on crop insurance, and then I
will end with the international side.
This is under great discussion as we speak, in fact,
yesterday, today, and tomorrow. I was with Mr. Stenholm in
Texas yesterday, and he has been in close touch with the
Congress on these very important issues.
We believe that America's family farmers and ranchers
deserve to know that crop insurance, the backbone of the farm
safety net, is on a sound financial footing. Crop insurance
provided $24 billion in protection to more than 600,000
producers last year.
Ken Ackerman's group expects that next year 63 percent--63
percent--of our total insurable acres will be covered by our
crop insurance risk management program. Twenty-two percent of
this acreage is expected to be covered at the CAT level, which
is 50 percent of the approved yield covered at 55 percent of
the expected market price, with the Federal Government paying
100 percent of that premium. Forty-one percent of the insurable
acres is expected to be covered at higher levels, the buy-up,
up to 75 percent of the approved yield level, covered at 100
percent of the expected market price, and for this buy-up, of
course, producers pay a premium.
Since passage of crop insurance reform in 1994, total
expenditures have averaged about $1.2 billion. In 1999, these
expenditures are expected to rise, depending on the
appropriation, to $1.8 billion. The budget proposal provides
for full funding of this amount, and proposes to shift all
delivery expenses from discretionary to mandatory. This shift
would consolidate all spending for the program other than
salary related and operating costs into a single account, a
mandatory account, and eliminate the possibility of the program
being restricted by a limited appropriation of discretionary
funds.
We look forward to working with your committee, Mr.
Chairman, to provide offsets without diminishing funding for
the program to the extent that it would be put at risk or for
other priorities in the President's budget.
Our crop insurance program has changed dramatically over
these past 5 years and is, we feel, much improved.
Participation is more than double the levels of the early
1990's. Farmers have more choices of insurance, and our
delivery system has been solid. At the same time, we also
recognize that expectations for crop insurance and the
complementary risk management tools, as we are looking at a
number of issues like dairy options and others, will have grown
dramatically as well. And it is very important that in addition
we move beyond crop insurance and look at related risk
management tools that Ken Ackerman and his team are ably
developing, in accordance with the farm bill.
As other programs have receded under the farm bill, farmers
more and more depend on crop insurance and related risk
management tools as the principal safety net, along with Lon
Hatamiya's group on the international side.
As a result, while maintaining the program's basic
financial soundness, we must continue to expand Federal crop
insurance to cover as many producers as practical, correct
program flaws when we find them, and respond to customer needs
with a growing menu of services and tools. It is a great
challenge, Mr. Chairman. We will need to work closely with you
as we work to make the necessary improvements.
Let me then conclude on the international side. I have been
before you in the past as Lon's predecessor. I continue to
spend a fair bit of my time on the international side because
export markets are so critical--so critical--to America's
family farmers.
The budget provides a number of tools which we believe are
needed to help expand U.S. agricultural exports. The key is to
ensure that markets are open and ranchers and farmers have the
opportunity to compete and ensure that we remain a reliable
supplier of safe, affordable, high-quality food and farm
products to our customers.
Again, our budget will allow us to continue our market
reporting. Senator Burns has mentioned the very important need
for transparency in market reporting and intelligence gathering
activities overseas. Our budget will also continue our trade
policy negotiating work going into the next round. We have been
very active, Mr. Chairman, in trying to make sure that as we
get information internationally, we get it out promptly to all
segments of American agriculture, particularly using the radio,
so that farmers have equal access to this information that
comes in from overseas so they can make prompt decisions on
their crop sales and planning ideas.
Access to this information is one of the keys to success in
this marketplace. The budget provides full funding for the MAP
program, the Market Access Program, the Dairy Export Incentive
Program, and the GSM Export Credit Guarantee Programs, as well
as some innovative multiyear funding for the Export Enhancement
Program.
It also includes $3 million for the very successful Cochran
Fellowship Program, unchanged from 1998 levels.
We believe we need to use all these tools to respond to
changes in market condition. We have been very aggressive this
year, Mr. Chairman, in using the GSM program in Asia. Chris and
Lon have been to Asia twice and they can respond to any
questions. We feel, because of liquidity problems there, this
is the right tool for the right job. We have been criticized
for this by certain countries.
There continues to be a need, however, for liquidity in
Asia as they continue to work through a very difficult
situation. There is a tremendous demand for our products--
meats, cotton, soybean meal, hides and skins, and corn and
soybeans.
But the Asian currency situation and the banking crisis
have made it difficult, particularly in December, January, and
February, to finance transactions through Lon's and Chris'
program, the GSM, which provides commercial guarantees on
letters of credit at commercial rates to allow this trade to
take place and to help resolve some of the ongoing liquidity
problems in certain key countries. GSM is the right tool for
managing this crisis.
The facts speak for themselves. Since Secretary Glickman
announced the program in Korea, we have registered nearly $700
million in sales under the program. This includes $87 million
in beef, $13 million in pork, $125 million in cotton, and $100
million in hides and skins. And certainly it is having an
impact on the bottom line.
One of the mistakes made when Chris, Lon, and I were
negotiating this is that we did not include hides and skins in
the original negotiation with Korea. Once we realized the
importance of hides and skins, the Secretary, Lon, and I worked
to get the Korean Government another $100 million, to bump it
up to $1.1 billion.
This had an immediate effect. The price of hides a
hundredweight fell in January to $57 because Korea takes
something like 35 percent of all the hides produced in the
United States, and as soon as that was announced, the price
went up $10 to $67, and that put between $5 and $10 back into
the hands of America's 900,000 producers of cows and calves.
Again, a very useful tool and we were able to operate it very
quickly.
Certainly also with cotton, the GSM has had an important
role to play throughout Asia as it has been used to stabilize
contracts and keep those markets open for American cotton
exporters.
Mr. Chairman, in closing, we are using all of these tools
that Congress has made available--credit, crop insurance,
emergency assistance, and export expansion measures--as
strategically targeted as possible, to accomplish our mission
to keep family farming and ranching profitable in this country.
We do not have all the tools we would like to have, and we
have put forward a series of proposals within the framework of
a balanced budget to strengthen the farm safety net.
I look forward to working with you and other members of the
committee as Congress considers our proposals for the upcoming
year.
That concludes my remarks, Mr. Chairman. I would be very
pleased to take your questions.
Prepared Statements
Senator Cochran. Thank you very much, Mr. Secretary. We
will insert your prepared statement in the hearing record along
with the statements of Mr. Kelly, Mr. Hatamiya, and Mr.
Ackerman.
[The statements follow:]
Prepared Statement of August Schumacher, Jr.
Mr. Chairman and Members of the Committee, I am pleased to appear
before you this morning to discuss the fiscal year 1999 budget and
program proposals for the Farm and Foreign Agricultural Services (FFAS)
mission area of the Department of Agriculture (USDA). With me today are
the Administrators of the three agencies within our mission area:
Kenneth D. Ackerman, Administrator of the Risk Management Agency; Keith
Kelly, Administrator of the Farm Service Agency; and Lon S. Hatamiya,
Administrator of the Foreign Agricultural Service. I am also pleased to
be accompanied by Christopher Goldthwait, the Department's General
Sales Manager, and Dennis Kaplan from the Department's Office of Budget
and Program Analysis.
Statements by the Administrators, providing details on their
agencies' budget and program proposals for 1999, have been submitted to
the Committee. My statement will summarize the proposals, after which
we will be pleased to respond to your questions.
Mr. Chairman, the mission of FFAS is to secure the long-term
vitality and global competitiveness of American agriculture. As
American agriculture continues to adjust to new Federal policies that
expose producers more directly to risks and market fluctuations, the
goal of President Clinton and Secretary Glickman remains to improve
farm income and provide an adequate safety net for American family
farmers and ranchers. The President's budget proposals allow us to
accomplish this goal.
While we have moved away from the traditional supply management and
price support farm programs, USDA still provides a crucial safety net
for American producers. This safety net has several critical elements,
including assistance in managing risks inherent in agricultural
production, assistance in obtaining credit necessary for agricultural
production, assistance for producers in times of emergency, and
assistance in marketing American agricultural products in the global
marketplace. The budget supports and strengthens this safety net.
Further, Secretary Glickman has placed a very high priority on
providing credit to small, socially disadvantaged, and beginning
farmers and ranchers. The President's budget proposals reflect that
commitment.
farm service agency
The Farm Service Agency (FSA) is the agency that family farmers and
ranchers interact with most frequently. Producers come to FSA to
participate in farm programs, for farm ownership, operational, and
commodity loans, for disaster assistance, and to participate in the
Conservation Reserve Program. The FSA network is a tremendous resource.
We can all be proud of the dedicated FSA staff who serve America's
family farmers and ranchers.
The consolidation of staffs and county offices, establishment of a
common computing environment, and the convergence of administrative
services at all levels of the county-based agencies continue to be the
focus of USDA streamlining efforts. As part of the Department's
continuing reorganization, we are implementing a field office
streamlining plan which co-locates the county-based agencies in one-
stop USDA Service Centers. At this point, the county offices have been
consolidated into about 2,700 Service Centers. An additional
streamlining initiative will consolidate administrative support
functions for the county-based agencies.
We are also developing a common computing environment for these
agencies to optimize the use of data and equipment and improve the flow
of information across the agencies. Also, the Department has entered
into a contract with an independent consultant who is examining what
further steps, if any, can be taken to improve the efficiency of our
farm and rural program delivery system. That study is scheduled to be
completed by the end of this fiscal year. Collectively, these efforts
represent a substantial retooling of our service delivery system and a
vital investment in rural America that is important to family farmers
and ranchers.
Our budget proposals provide $976 million for salaries and expenses
for FSA in 1999 for the administration of its programs. This is
comprised of appropriated funding of $953 million, a proposal for the
collection of user fees for the sale of information to the public of
$10 million, and estimated carryover funds of $13 million. The total
includes $21 million for increased pay costs and $30 million in
increased funding for the common computing environment. The 1999
request represents a $13 million increase over our current estimate for
1998; however, the funding requested will support about 1,100 fewer
staff years than in 1998.
Commodity Credit Corporation
Before I turn to the programs administered by FSA, I would like to
address the budget request for the Commodity Credit Corporation (CCC),
a government entity for which FSA provides operating personnel.
Domestic farm commodity price and income support programs are
administered by FSA and financed through CCC. CCC is also the source of
funding for a number of the conservation programs administered by USDA,
and it funds a portion of the export programs administered by the
Foreign Agricultural Service. Funds are borrowed by the Corporation
from the Treasury to finance CCC programs. Changes over the last decade
in commodity, disaster, and conservation programs have substantially
modified the level, mix, and variability of CCC outlays. Since the mid-
1980s, commodity program spending has declined dramatically, spending
for ad hoc crop disaster programs has been virtually eliminated, and
spending for conservation programs has increased and become a major
portion of CCC's outlays. A great deal of volatility associated with
CCC outlays has been removed due to provisions of the 1996 Farm Bill.
The 1999 budget reflects a need for $8.4 billion to reimburse CCC
for its actual fiscal year 1997 realized losses, an increase of $7.7
billion from the 1998 reimbursement of $784 million. In prior years,
the request for appropriations to reimburse 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 the 1998 budget, the
request for appropriations to reimburse CCC for net realized losses
covered the actual amount of the unreimbursed losses incurred 2 years
earlier. The appropriation request for 1999 would fully reimburse CCC
for the balance of actual 1997 net realized losses of $8.4 billion.
Appropriations to reimburse CCC for actual net realized losses to be
incurred in 1998, currently estimated to total $8.5 billion, will be
requested in the President's budget for fiscal year 2000.
Commodity Price and Income Support Programs
Commodity price and income support program outlays account for
about two-thirds of total CCC outlays in 1999. The President's budget
includes $5.94 billion in funding for commodity price and income
support programs in 1999, down from the current estimate of $6.25
billion in 1998.
The commodity price and income support programs administered by FSA
were changed dramatically by provisions of the 1996 Farm Bill. The 1996
Farm Bill replaced deficiency payments with fixed production
flexibility contract payments that are no longer tied to market price.
Nonrecourse loan programs for contract commodities and oilseeds have
been retained. These programs continue to provide producers with some
protection against sharp declines in market prices, but the changes in
the support programs have diminished the traditional role of the farm
programs as a buffer against fluctuations in production and commodity
prices.
The 1996 Farm Bill also modified price support provisions for
dairy, sugar, and peanuts. Dairy price supports are being phased out,
and Secretary Glickman recently announced major reforms of milk
marketing orders. The peanut program was made a no-net-cost program,
the minimum national peanut poundage quota was eliminated, and the
quota rate level was reduced. With respect to sugar, sugar loan rates
were effectively reduced with the imposition of loan forfeiture fees,
marketing assessments were increased, and marketing allotments were
suspended.
The Administration continues to place a high priority on helping
farmers to manage risk. These changes underscore the importance of crop
insurance programs that help farmers manage production risk. For the
crop insurance program administered by the Risk Management Agency,
legislation will be proposed with the 1999 budget to provide mandatory
funding for administrative expense reimbursements to reinsured
companies previously funded through the discretionary account. Offsets
required for the proposal are included in the budget. For producers of
crops for which crop insurance is unavailable, the Noninsured Crop
Disaster Assistance Program, administered by FSA and funded through
CCC, provides coverage against catastrophic losses where area-wide crop
losses exceed 35 percent of normal yields.
Conservation
Conservation program outlays account for almost one-fourth of the
CCC expenditures in 1999. The 1996 Act authorized CCC funding for the
Conservation Reserve Program (CRP) administered by FSA and several new
conservation programs administered by the Natural Resources
Conservation Service (NRCS). In 1998, outlays for CRP will total an
estimated $1.9 billion, including $63 million in NRCS and Forest
Service technical assistance costs paid for with appropriated funds and
$1.8 billion from CCC for rental costs and for sharing the cost of
establishing permanent cover on replacement acres. For 1999, outlays
for CRP will total approximately $1.72 billion, including $24 million
in appropriated funds for technical assistance and $1.7 billion from
CCC.
CRP provides landowners annual payments and half the cost of
establishing a conserving cover in exchange for retiring
environmentally sensitive land from production for 10 to 15 years. The
1996 Act authorized the program through 2002 and set maximum enrollment
in the program at 36.4 million acres. Current enrollment totaled about
28 million acres at the end of calendar year 1997. After a successful
16th CRP regular signup, the budget assumes acreage enrollments under
the CRP of about 32 million acres in 1998, 34 million acres in 1999,
with an eventual enrollment of 36.4 million acres by 2001.
A number of other conservation programs administered by USDA, such
as the Wetlands Reserve Program, the Environmental Quality Incentives
Program (EQIP), the Conservation Farm Option Pilot Program, and the
Wildlife Habitat Incentive Program are also funded by CCC. These
programs are administered primarily by NRCS, and funding for these
programs will be discussed in detail when NRCS appears before the
Committee.
Farm Loans
In order to be successful in farming, America's family farmers and
ranchers need access to adequate credit. For that reason, the budget
provides almost $3 billion in funding for farm loan and loan guarantee
programs for farm families who would be unable to obtain credit
otherwise and is consistent with recommendations of the Department's
Civil Rights Action Team and the National Commission on Small Farms. It
includes $85 million for direct farm ownership loans and $425 million
for guarantees for farm ownership loans, compared to 1998 levels of $46
million and $400 million, respectively. The funding requested would
allow USDA to help 3,458 beginning and small farmers to either acquire
their own farm or to save an existing one, with about 1,000 of those
served receiving direct loans.
The budget also includes $2.4 billion in direct and guaranteed farm
operating loans, nearly the same funding level as 1998. This funding
level will allow FSA to serve an estimated 28,000 beginning and small
farmers, about 12,000 of whom will receive direct loans. The budget
also provides $25 million in emergency loans for qualifying losses
which occur in areas covered by a Presidential or Secretarial disaster
declaration. In addition, the budget provides $1 million for Indian
tribe land acquisition loans, $25 million for credit sales of property
acquired by FSA, and $30 million for the boll weevil eradication
program.
Credit is one element of the farm safety net which needs
strengthening. For this reason, the Administration has proposed
emergency legislation to modify the 1996 Act prohibition on loans to
borrowers who received debt forgiveness. The ``one strike and you're
out'' provision in current law is more restrictive than U.S. bankruptcy
laws which allow individuals to reestablish credit. Our proposal would
correct this inequity by providing borrowers a second chance.
Other FSA Programs
The budget proposes to double funding for State mediation grants
from $2 million in 1998 to $4 million in 1999. Mediation gives family
farmers, including many low income and socially disadvantaged farmers,
the opportunity to remain on the farm by resolving credit and other
issues through alternative dispute resolution. The increased funding
will support mediation programs in the 21 States currently certified in
1998, as well as any additional States that become certified by 1999,
and will allow States to expand programs to include mediation of other
agricultural issues in addition to credit disputes.
FSA also administers the Emergency Conservation Program (ECP).
Under this program, USDA shares the cost of rehabilitating farmland
damaged by natural disasters. Supplemental appropriations provided a
total of $95 million for the ECP in 1997. As of March 12, 1998,
approximately $9.7 million of that total remains unallocated. No funds
have been appropriated to date for the program in 1998, although a
request for supplemental funding is now pending before Congress. The
budget proposes no funding for the program in 1999.
Requested 1998 Supplemental Funding
The President recently submitted several supplemental funding
requests to Congress to provide emergency assistance to farmers and
ranchers who recently sustained losses caused by natural disasters, and
to finance farm ownership and operating loans targeted to beginning and
socially disadvantaged family farmers.
For those whose lands were damaged by ice storms in the
Northeastern United States, rains and mudslides in California,
tornadoes in Florida, and other recent natural disasters, we are
requesting a contingency of $20 million for the Emergency Conservation
Program. The Administration is also asking for $4 million for losses
sustained by dairy and livestock producers. Emergency funding is also
requested to provide $25 million in additional emergency loans ($6
million in budget authority) and a contingency of $62 million in
emergency loans ($15 million in budget authority).
In addition, we are requesting approval to redirect $6.7 million in
budget authority from guaranteed farm operating loans to finance $39
million in direct farm ownership loans, $25 million in farm ownership
guaranteed loans, and $10 million in farm operating direct loans.
Absent enactment of the supplemental, funds available for direct loan
programs during 1998 will be used up by this Spring, and farm ownership
guaranteed loans will be exhausted by the end of June. These programs
are targeted to beginning and socially disadvantaged family farmers and
were recommended for increased funding in the Civil Rights Action Team
Report to the Secretary.
risk management agency
The virtual elimination of ad hoc crop disaster aid and subsequent
passage of the 1996 Farm Bill expanded the role of the Risk Management
Agency (RMA), giving it primary responsibility for providing an
agricultural safety net. It is doing so in several ways. RMA
administers the Federal crop insurance program on behalf of the Federal
Crop Insurance Corporation (FCIC), offering farmers protection against
income losses due to production failures and in some cases, market
price declines. It is aggressively providing risk management education
to make farmers aware of risk management strategies and actions to
cover those risks. And, it is pursuing innovative tools, such as the
Dairy Options Pilot Program, to give farmers more risk management
alternatives.
From 1987 to 1994, disaster assistance payments averaged roughly
$1.2 billion a year, while annual crop insurance outlays averaged
roughly $800 million over the same period. Combined, the total Federal
expenditure was roughly $2 billion annually. Since the Federal Crop
Insurance Reform Act of 1994 (1994 Act), total expenditures for the
crop insurance program have averaged $1.2 billion annually. For 1999,
expenditures will total about $1.8 billion; the budget provides for
full funding of this amount.
In 1997, crop insurance provided $24.3 billion in protection to
more than 600,000 producers, holding slightly more than 1.3 million
policies on 181.4 million acres. For 1998 and 1999, we expect to
maintain approximately the same level of participation and that
producers will select higher levels of coverage. Further, Crop Revenue
Coverage (CRC) is now available on almost 90 percent of the corn,
wheat, cotton, soybean, and grain sorghum acres in the United States.
CRC helps protect producers from losses in yield, price, or
combinations of both factors.
By 1999, RMA expects that roughly 63 percent of the country's
insurable acres will be covered by the crop insurance program. Twenty-
two percent of insurable acreage is expected to be covered at the
catastrophic coverage level (50 percent of the approved yield covered
at 55 percent of the expected market price) with the Federal government
subsidizing 100 percent of the premium, and 41 percent of the insurable
acreage is expected to be covered at higher levels of coverage (up to
75 percent of the approved yield covered at 100 percent of the expected
market price) for which producers pay a premium, a portion of which is
also subsidized by the Federal government.
With our private sector partners, including farmer organizations,
crop insurance agents, trade associations, and educational
institutions, we are continuing to work with agricultural leaders
nationwide to increase producers' awareness of risk management
strategies and impress upon them the importance of taking active steps
to protect their investments from fluctuating prices and weather-
related disasters. Our budget proposals include $5 million to carry out
these educational initiatives.
We are also exploring new programs that will allow us to offer
coverages that better meet the needs of family-sized farm operations.
We intend to launch a Dairy Options Pilot Program this year, and our
budget proposal includes $10 million for this program in both 1998 and
1999.
The budget includes a proposal to shift all reimbursements for
delivery expenses incurred by reinsured companies from discretionary to
mandatory spending. This shift would consolidate all spending for the
program other than salary-related and operating costs into a single
account and eliminate the possibility of the program being restricted
by a limited appropriation of discretionary funds.
The proposal results in an increase of $185 million in outlays from
the mandatory account in 1999, associated with $205 million in budget
authority for reimbursement of delivery expenses. This will require
corresponding mandatory offsets. Of the $1.1 billion in offsets needed
through 2002, USDA will propose that about half come from the crop
insurance program, with producers and insurance providers sharing the
reductions. Beginning in 2000, savings within the crop insurance
program are achieved by: limiting payment eligibility under the
catastrophic risk protection (CAT) insurance program to $100,000 per
person; reducing administrative subsidies for insurance providers from
27 percent to 25 percent of premiums for buy-up coverage; reducing
premium subsidies for higher levels of coverage; and reducing the
statutory loss ratio target from 1.075 to 1.060 beginning in 2000.
For 1999, necessary offsets have been identified, including savings
from the Cotton Step 2 Payments and from the Export Enhancement
Program.
foreign agricultural service
One of USDA's primary goals is to expand economic and trade
opportunities for agricultural producers and other rural residents. The
opening and expansion of foreign agricultural markets has never been
more important. Recent changes in Federal farm policy, including those
adopted in the 1996 Farm Bill, have made it clear that new and growing
markets are critical to future income growth for our farmers and
ranchers.
We have made some notable progress in achieving our export
expansion goal in recent years. U.S. agricultural exports reached $57.3
billion in fiscal year 1997, the second highest level on record. Last
year also marked the third consecutive year that exports topped $54
billion. The agricultural trade surplus ended the year at $21.5
billion. Four of 1997's top 10 markets for U.S. agricultural exports
rose to new highs. Records were set to both U.S. neighbors, Canada and
Mexico. Together, our NAFTA partners accounted for $11.7 billion in
U.S. exports this past year, 20 percent of our total agricultural
exports worldwide and greater than our sales to Japan. Records were
also set to Hong Kong and Russia. However, we also experienced declines
in other top markets with value declines to three key Asian markets--
Japan, Taiwan, South Korea--ranging from 10 to 12 percent.
The Foreign Agricultural Service (FAS) plays a critical role in our
efforts to achieve the Department's goal of expanding overseas markets.
Working with the Office of the United States Trade Representative, FAS
is involved in agricultural trade policy, monitoring and enforcing
trade agreements, and working to reduce trade barriers and increase
market access for U.S. agricultural products. Through its network of 81
Counselor/Attache offices and Agricultural Trade Offices, FAS provides
market intelligence information to U.S. producers and exporters,
enabling them to compete for market opportunities abroad. FAS
administers a variety of foreign food assistance, market development
and export promotion programs which are designed to bolster U.S.
competitiveness in international markets and build long-term trading
relationships with other countries. FAS also carries out exporter
outreach and assistance programs which are designed to increase
domestic awareness of export opportunities, help companies become
export ready, and link export-ready and new-to-export companies to
foreign buyers overseas. And, FAS coordinates international activities
throughout USDA, bringing to bear all of the resources of the
Department to address issues as they arise.
The budget provides a total program level of $190 million for FAS
for 1999. This includes $146 million of appropriated funding, an
increase of $6 million over the 1998 enacted level.
The budget proposal includes $4 million for overseas administrative
services provided by the Department of State in support of the
International Cooperative Administrative Support Services (ICASS)
program, and includes $2 million to establish a buying power
maintenance fund to assist FAS in managing unanticipated changes in the
costs of its overseas operations which can result from exchange rate
losses or gains. This proposal responds to a request of the Conference
Committee on the 1998 Agriculture Appropriations Bill.
The budget also includes an increase of $500,000 for FAS to re-
engineer its program performance measurement and evaluation tools,
which are a critical element in meeting requirements of the Government
Performance and Results Act.
The budget proposes to shift funding for FAS information technology
infrastructure and related expenses to the FAS appropriated account. At
present, these costs are funded through a reimbursable agreement with
CCC. FAS will meet these costs, which are estimated to be $12 million
in 1999, through staff-year and associated cost reductions and through
increased cost-share contributions to the Foreign Market Development
Program.
Export Credit Guarantee Programs
Under the export credit guarantee programs, CCC provides payment
guarantees for the commercial financing of U.S. agricultural exports.
These programs facilitate exports to buyers in countries where credit
is necessary to maintain or increase U.S. sales, but where financing
may not be available without CCC guarantees.
The budget proposes a new approach to presenting the estimates for
export credit guarantee programs. Program levels, budget authority and
outlays will reflect the level of sales expected to be registered
rather than the authorized level. This provides more realistic
estimates of the costs of the guarantee programs and improves the
accuracy of CCC budget estimates. This change will not restrict program
use; the authorized levels remain available for use as determined by
program demand and changing market conditions.
Following this new approach, the budget projects an aggregate
program level of $5.0 billion for export credit guarantees in 1998 and
$4.6 billion in 1999. These program levels are significantly higher
than in recent years, reflecting large increases in programming in
Southeast Asia and South Korea this year that are expected to continue
into 1999. The 1999 program level includes $4.3 billion for GSM-102
short-term export guarantees and $100 million for GSM-103 intermediate-
term guarantees. Additionally, the budget includes $150 million for
supplier credit guarantees and $50 million for facilities financing
guarantees.
Export Subsidies
The budget proposes a flexible, multi-year program level
authorization for the Export Enhancement Program (EEP), which is one of
two export subsidy programs administered by FAS. The proposal provides
total funding level of just under $1.2 billion for EEP during the 1999
to 2003 period and provides administrative discretion to the Department
to determine the level of funding for individual years. The proposal
will generate approximately $1.4 billion in savings during this period,
which will help offset increased funding included in the budget for
crop insurance and other mandatory spending proposals. There has been
limited activity under EEP during the past two years due to world
supply and demand conditions. However, the program remains in place and
USDA is prepared to resume awarding EEP bonuses should market
conditions warrant. Annual program levels will continue to be subject
to the export subsidy reduction commitments established in conjunction
with the Uruguay Round Agreement on Agriculture.
FAS also administers the Dairy Export Incentive Program (DEIP),
which helps exporters of U.S. dairy products become price competitive
and thereby make sales in targeted overseas markets where competitor
countries are making subsidized sales. For DEIP, the budget assumes a
somewhat lower level of program activity in 1999 due primarily to a
projected tighter domestic market situation. However, the actual level
of DEIP programming will be determined by market conditions in 1999,
subject only to the Uruguay Round Agreement subsidy reduction
commitments. Thus, the actual level of DEIP programming could exceed
what is assumed in the budget should supply and demand conditions not
be as tight as currently projected.
Public Law 480
Public Law 480 programs are the primary means by which the United
States provides foreign food assistance. FAS administers Title I of
Public Law 480, which provides for sales of U.S. agricultural
commodities to developing countries and private entities through
concessional financing. Titles II and III of Public Law 480 are
administered by the Agency for International Development. Under Title
II, the United States provides humanitarian food assistance to needy
people in foreign countries in response to malnutrition, famine, and
other extraordinary relief requirements. Title III provides food
assistance on a grant basis to least developed countries to support
programs of economic development.
The budget provides a total program level for Public Law 480 food
assistance of $979 million. This is expected to provide approximately
2.8 million metric tons of commodity assistance, approximately 700,000
metric tons less than the current estimate for 1998. The budget reduces
funding for Title I from $245 million in 1998 to $112 million in 1999.
Funding for Titles II and III remains the same for 1998 and 1999 at
$837 million and $30 million, respectively.
In addition, the budget assumes that approximately $109 million of
CCC funds will be used to support the Food for Progress program. Under
Food for Progress, U.S. agricultural commodities are provided to
developing countries and emerging democracies which have made
commitments to introduce and expand free enterprise in their
agricultural economies. Commodities are provided on either long-term
credit or grant terms to foreign governments, private voluntary
agencies, nonprofit agricultural organizations, cooperatives, or
intergovernmental organizations.
Market Access Program
The President's budget fully funds the Market Access Program (MAP)
at $90 million. FAS administers MAP to support the development,
maintenance, and expansion of commercial export markets for U.S.
agricultural commodities and products. Under the program, CCC funds are
used to provide cost-share assistance to participating organizations
including nonprofit agricultural trade organizations, State regional
trade groups, and private companies, for carrying out foreign market
development activities in designated countries. Only small businesses
are permitted to receive direct assistance under MAP.
year 2000 compliance
Finally, I would like to provide an update on Year 2000 compliance
efforts. FAS, FSA, and RMA are on target for meeting required
conversions and retrofitting computer hardware, software, and other
systems to ensure Year 2000 compliance.
FSA is the lead agency providing information technology support for
the agencies within our mission area. In August 1996, FSA established a
target of September 30, 1998, for completion of conversion, well ahead
of OMB's recently announced target of March 1999. FSA has reported and
tracked the status of all Year 2000 efforts since October 1996. All FSA
systems that have not been canceled or replaced are regarded as mission
critical systems. As of January 28, 1998, FSA has completed 42 percent
of its Information Technology (software application) systems. For all
Year 2000 projects, both application and non-application projects, FSA
has completed over 27 percent. Within the next 3 to 6 months, the
percentage of completion will increase significantly as ongoing field
office projects are completed.
FAS has also established September 30, 1998, as the target date for
completion of all conversion projects. From the beginning, FAS took the
approach that Year 2000 compliance would be incorporated into the
overall re-engineering efforts for the FAS applications systems. The
process to re-engineer all of FAS's mission critical applications into
a client/server environment began in 1994. FAS identified 14
applications as being mission-critical. Eight of those 14 applications
are Year 2000 compliant; the remaining 6 systems will be compliant by
September of this year.
RMA is also making steady progress to meet Year 2000 compliance.
The Agency has identified 48 mission-critical application systems which
must be Year 2000 compliant. Of these, 19 are compliant, 10 will be
replaced, one is being repaired, and 18 will be retired. All of RMA's
transaction data is compliant now. Historical data is still being
migrated into Year 2000 compliant systems. Most of the work will be
done by September 1998, and RMA is on track to have all systems Year
2000 compliant by the March 1999 deadline.
The planned early completion date for FSA and FAS will allow those
agencies to use the remaining time for actual production processing
with the systems to ensure compliance and will provide time to
eliminate any errors.
In closing, I would like to add that I believe the Department of
Agriculture has an important role to play in helping American farmers
and ranchers succeed. The FFAS mission area plays a crucial role in the
Department's efforts to improve farm income and provide an adequate
safety net for America's family farmers and ranchers. Our programs
don't operate in a vacuum, but in partnership with State and local
governments, commodity organizations, private insurance companies,
colleges and universities, and most importantly, with individual
producers. These are our customers, and these are the people we are all
here to serve. Although many challenges are ahead of us, FSA, FAS, and
RMA are committed to the prospect of using all the tools available to
us to serve our customers in a farmer-friendly way. With the continued
support of this Committee, we will continue to do so.
This concludes my statement, Mr. Chairman. We will be pleased to
answer any questions you and other Members of the Committee may have.
______
Prepared Statement of Keith Kelly
Mr. Chairman and Members of the Subcommittee, this is my first
opportunity to offer a statement to this Subcommittee, and I am pleased
to present the fiscal year 1999 budget for the Farm Service Agency
(FSA). While our budget estimates conform with Government Performance
and Results Act (GPRA) requirements regarding strategic and annual
performance plans, I will discuss in a traditional format the budget
estimates for the programs that serve as our tools for meeting GPRA
goals--price and income support and related programs of the Commodity
Credit Corporation, conservation programs funded by the Commodity
Credit Corporation, the farm loan programs of the Agricultural Credit
Insurance Fund, and a number of others. To conclude my statement, I
will summarize our request for administrative support.
Before presenting our budget requests, however, I would like to
emphasize the importance of strategic planning. The formal plans that
we have submitted so far are a first step in a comprehensive process of
examining the role of this agency and its appropriate level of
resources now and years into the future. Accordingly, I have
established a Strategic Planning, Policy, and Operations Staff within
FSA to spearhead the necessary analysis.
I would also like to take a moment, before I discuss 1999, to
mention some proposed changes to 1998 funding. The President has
transmitted to Congress a number of supplemental requests as well as a
rescission proposal. To respond to natural disaster conditions
afflicting various parts of the nation, we are requesting $20 million
for the Emergency Conservation Program; $4 million to indemnify
producers for milk and livestock lost due to disaster; and $21 million
in appropriated subsidy, of which $15 million would be available on a
contingency basis, to provide up to $87 million in emergency disaster
loans. We are also requesting approval to redirect $6.7 million from
the current appropriation for guaranteed farm operating loans to
provide increases in direct farm ownership and operating loans as well
as guaranteed farm ownership loans, all of which are expected to be
depleted in coming months. This redistribution would help increase
opportunities for beginning and socially disadvantaged farmers.
Finally, the Administration is proposing a rescission of $1.08 million
from the FSA Salaries and Expenses account to help offset a
supplemental funding request for the USDA civil rights initiative.
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 (CCC), 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 the Natural
Resources Conservation Service (NRCS), and it funds a portion of the
export programs administered by the Foreign Agricultural Service (FAS).
Funds are borrowed by the Corporation from the Treasury to finance CCC
programs. Commodity support operations, handled primarily through
loans, 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.
Program Outlays
The current 1999 budget estimates largely reflect estimated supply
and demand conditions for the 1998 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 programs 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 budget includes proposed legislation that would limit cotton
user marketing certificates to no more than $140 million in 1999 for
savings of about $110 million. The proposed spending level of $140
million in 1999 is in line with the history of spending for this
program. Since the marketing certificate program was first implemented
in 1991, we have spent about $750 million on these payments--a little
over $125 million per year, on average. To help meet critical water
quality goals and to address the recommendations of the Civil Rights
Action Team (CRAT), legislation is proposed to increase CCC funding for
the Environmental Quality Incentives Program (EQIP) by $100 million in
1999 and by a total of $350 million for the period 1999 to 2003. The
Department also proposes legislation to provide a flexible, multi-year
program level authorization for the Export Enhancement Program (EEP),
providing total funding of just under $1.2 billion for the 1999 to 2003
period, with a funding limitation of $320 million in 1999. This
proposal provides the Department the discretion to determine the annual
funding levels, where funding not used one year will remain available
for use in subsequent years. This proposal would generate estimated
savings of $230 million in 1999 and a total of $1.4 billion during 1999
to 2003.
Changes over the last decade in commodity, disaster, and
conservation programs have substantially modified the level, mix, and
variability of CCC outlays. Since the mid-1980's, commodity program
spending has declined, and will continue to decline as annual fixed
production flexibility contract payments are reduced. Spending for ad
hoc disaster programs has been virtually eliminated, and CCC spending
for conservation programs has increased from negligible amounts prior
to the 1996 Farm Bill to over $2 billion in 1999, becoming a major
portion of CCC's outlays. Including conservation programs and other
programs for which CCC funding was authorized by the 1996 Farm Bill,
CCC outlays are projected to total $8.6 billion in fiscal year 1998 and
$8.4 billion in fiscal year 1999, and are expected to decline to about
$7.0 billion by fiscal year 2003. This outlay trend is shown on the
graph that follows.
[GRAPHIC] [TIFF OMITTED] T01MA24.006
Total net outlays for fiscal year 1999, including the impact of
proposed legislative savings, are expected to decrease by $200 million
to $8.4 billion.
ADP Expenses and other Section 11 Activities
Section 161 of the 1996 Farm Bill significantly limits the use of
CCC funds for certain operating expenses. 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 $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 1997 was $36.1 million. The 1999 budget assumes
that expenditures for computer and telecommunications equipment subject
to the cap will total $107 million in fiscal year 1998 and $76 million
in fiscal year 1999. Start-up funding for the Common Computing
Environment (CCE) is included in both years, and will supplement other
agencies' funds to begin USDA Service Center CCE implementation
activities.
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 $46.2 million,
obligations in fiscal year 1996 were $51.2 million, and obligations in
fiscal year 1997 were $39.3 million. The budget projects obligations
under the cap for reimbursable agreements will total $44.9 million in
fiscal year 1998 and $46.1 million in fiscal year 1999.
Reimbursement for Realized Losses
Mr. Chairman, the 1999 budget reflects a need for $8.439 billion to
reimburse CCC for its fiscal year 1997 realized losses, an increase of
$7.7 billion from the fiscal year 1998 reimbursement of $784 million.
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. Last
year, in response to OIG recommendations, the request for
appropriations to reimburse CCC for net realized losses covered the
actual amount of the unreimbursed losses incurred 2 years earlier. In
this manner, realized losses are not requested for reimbursement until
actually recorded on the books of CCC. The appropriation request for
fiscal year 1999 would fully reimburse CCC the balance of actual fiscal
year 1997 realized losses of $8.439 billion. Appropriations to
reimburse CCC for actual net realized losses to be incurred in 1998,
currently estimated to total $8.5 billion, will be requested in the
fiscal year 2000 budget.
Appropriation Language Change
One CCC appropriation language change is proposed in the budget.
Language pertaining to a minimum level of export credit guarantees is
proposed for deletion. This language is not required in the
appropriations act because the export credit authorizations are
permanent authority. Moreover, the 1999 budget adopts a new approach
for presenting more realistic annual program levels for the export
credit guarantee programs. The estimates for the annual level of
programming will reflect the actual level of sales expected to be
registered under the export credit guarantee programs, to be determined
by program demand, market conditions, and other relevant factors.
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 has been available for certain high priority
practices involving small acreages, such as filter strips and
shelterbelts. As of December 1997, over 500 thousand acres have been
signed up under this provision. The 16th signup for CRP regular
enrollment began on October 14, 1997, and ended on November 14, 1997,
with 9.5 million acres offered for enrollment at FSA offices. The 1999
budget assumes acreage enrolled under the 15th and 16th signups, in
combination with the continuous signup, will bring CRP enrollment to
about 32 million acres in fiscal year 1998, to 34 million acres in
fiscal year 1999, and to an eventual enrollment of 36.4 million acres
by fiscal year 2001.
In 1998, CCC is making payments of approximately $1.603 billion for
rental costs of acres that were enrolled for fiscal year 1997. About
$195 million is being used for sharing the cost of permanent cover on
acres enrolled during the 15th and 16th signups and under continuous
signup provisions. Fiscal year 1998 CRP technical assistance costs of
$63 million for NRCS and FS are funded by unobligated balances of CRP
funds appropriated prior to enactment of the 1996 Farm Bill. For 1999,
CCC program costs are expected to total approximately $1.694 billion,
consisting of: $1.497 billion for rental payments on acres enrolled for
fiscal year 1998, including those approved during the 15th, 16th, and
continuous signups; and about $197 million for cost-sharing of
permanent cover on enrolled acres. Fiscal year 1999 CRP technical
assistance costs of $24 million for NRCS and FS are also 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 $123.7 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 $300 million for the EQIP in 1999,
including the proposed legislation to increase the program by $100
million in 1999 and by a total of $350 million for 1999 to 2003. 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 1999, $25 million
is included for the CFO in the CCC budget. CCC funding of $20 million
will be transferred to NRCS to be used in 1999 for the Wildlife Habitat
Incentive Program, which shares the cost of developing habitat for
upland wildlife, wetland wildlife, threatened and endangered species,
fish, and other types of wildlife.
farm loan programs
The programs of the Agricultural Credit Insurance Fund (ACIF)
provide a variety of loans and loan guarantees to farm families who
would be unable to obtain credit otherwise. The 1999 budget provides
for a total program level of almost $3.0 billion in ACIF direct loans
and guarantees, up approximately $83 million from the current estimate
for 1998. The largest segment of FSA lending is carried out in
partnership with private lenders through the guarantee programs, which
are most cost-efficient for the taxpayer because of their low subsidy
cost. This budget continues strong support for guaranteed loans, with a
proposed program level of over $2.3 billion. Moreover, in accordance
with the recommendations of the Secretary's Civil Rights Action Team
(CRAT) report of February 1997, we are seeking additional funding for
direct loans, which provide affordable, supervised credit, a portion of
which is targeted to beginning farmers and members of socially
disadvantaged groups.
For direct farm ownership loans we are requesting a loan level of
$85 million, at least 18 percent of which would be targeted to socially
disadvantaged farmers. This program level, an increase of over $39
million from fiscal year 1998, would enable FSA to extend credit to
more than 1,000 small and beginning farmers to purchase or save a
family farm, nearly double the number estimated for the current fiscal
year. For direct farm operating loans we are requesting a modest
increase for a program level of $500 million, up about $10 million from
1998, to provide about 11,580 loans to family farmers. At least 12
percent of this funding would be targeted to socially disadvantaged
farmers. Both of these direct loan requests represent the levels
recommended by the CRAT report.
For guaranteed farm ownership loans in fiscal year 1999, we are
requesting a loan level of $425 million, an increase of $25 million.
For guaranteed farm operating loans we propose to hold the 1999 program
level at the current level of $1.9 billion.
Other Loan Programs.--The Budget requests a loan level of $25
million for credit sales of acquired property, unchanged from 1998.
This program assists qualified applicants to purchase property in FSA
inventory.
The Budget also proposes a program level of $25 million in
emergency disaster loans in fiscal year 1999. In addition, our budget
proposes to offer just over $1 million in Indian tribe land acquisition
loans and $30 million for boll weevil eradication.
We have noted the recommendations of the Secretary's National
Commission on Small Farms and are studying ways to use them. Our farm
loan programs are already essentially directed at small farms since
only family-size farms meet our loan eligibility requirements. Our
average farm operating loan is about $45,000. In response to a
recommendation made by both the Commission and the CRAT, USDA is
proposing legislation to amend the 1996 Farm Bill prohibition on loans
to borrowers who have been granted debt forgiveness. This change is
designed to provide a second chance to borrowers who might be denied
credit as a result of losses that occurred long ago.
other appropriated programs
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 agricultural issues. Operated primarily by State
universities or departments of agriculture, the program provides
neutral mediators to assist producers, primarily small farmers, in
resolving disputes before they culminate in litigation or bankruptcy.
Moreover, this program supports the Vice President's initiative to
achieve savings through alternative means of dispute resolution since
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.
Participating States certify their programs with FSA annually.
Currently, 21 States have programs that qualify for grants. At least
one additional State is expected to be certified for fiscal year 1999,
and additional States are in the process of developing programs. For
fiscal year 1999 the Budget requests $4 million, an increase of $2
million over fiscal year 1998, to meet the rising demand expected as a
result of the program's broadened scope and to accommodate newly
participating States. This level would allow us to provide grants which
cover the full 70 percent of program costs authorized by law,
eliminating the need to prorate available funds among States as we have
done at the current appropriated level.
A proposed rule for this program is in final stages of clearance
within the Department and will soon be published for public comment.
The regulations provide a uniform set of requirements for all States
participating in the program and address the issue of confidentiality
of records in mediation cases.
Emergency Conservation Program
The Emergency Conservation Program assists producers in
rehabilitating farmland damaged by natural disasters 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.
The President's Budget requests no ECP funding for fiscal year
1999. No funding was provided in the fiscal year 1998 Appropriations
Act, but carryover unallocated balances remain available from
supplemental funding of $95 million in fiscal year 1997. As of March
12, approximately $9.7 million is available for allocation. Allocations
of about $14.3 million have been issued so far in fiscal year 1998 for
some of the Northeast States hit by ice storms, several States damaged
by floods, and a number of other States affected by other disasters.
Additional requests are anticipated from the Northeast as well as
flood-damaged regions of California, and others. We anticipate that all
funds remaining from 1997 will be allocated before the end of the
fiscal year. Accordingly, as I mentioned earlier, the Administration
has transmitted a request for $20 million in supplemental funding that
would be contingent upon usage of available funds and subject to a
budget request from the President.
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 1999 appropriation
request of $450 thousand would cover a higher than normal but not
catastrophic level of claims.
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. The Budget proposes to increase direct funding by
$40.7 million, of which $17.8 million is included under the
Agricultural Credit Insurance Fund program account in order to offset
serious staff shortages in administering farm loan programs. These
resources would help achieve reduced direct loan losses by providing
enhanced supervised credit, and would also allow reduced processing
time for direct and guaranteed loan requests. We also plan to lower
delinquency rates by increasing our loan servicing capability. Our
proposal for $952.7 million in direct funding reflects increases for
the Common Computing Environment ($30 million) and pay costs ($20.8
million), partly offset by salary savings from reductions in staffing
financed by direct funds (-$11 million). Considerable county office
staffing reductions occur because of a $37.8 million reduction in
available carryover funds in 1999, and because of continuing workload
impacts of the 1996 Farm Bill.
The increase of $30 million for the Common Computing Environment
(CCE) will be used, along with funding from the Natural Resources
Conservation Service and Rural Development, to implement the CCE for
USDA Service Centers. A CCE will provide a common technical
architecture supporting both the program delivery and administrative
support of participating agencies. Implementation is based on a
thorough analysis and reengineering of business practices and involves
pretesting, procurement, deployment, installation, and training
associated with equipment and software such as standard network
servers, desktop or laptop computers, standardized peripherals, and
commercial off-the-shelf software. Achievement of a CCE will enhance
customer service and optimize the opportunities for sharing of
resources among the USDA Service Center partner agencies.
In the meantime I am happy to report that FSA is making good
progress in conversion and retrofitting of existing computer systems to
ensure Year 2000 compliance. In August of 1996, we established a target
of September 30, 1998, for completion of conversion, well ahead of the
Office of Management and Budget's recently announced target of March
1999. We have reported and tracked the status of all Year 2000 efforts
since October 1996. All FSA systems that have not been cancelled or
replaced are regarded as mission critical. As of January 28, 1998, we
have completed 42 percent of our Information Technology (software
application) systems. For all Year 2000 projects, both application and
non-application projects, we have completed over 27 percent. Within the
next 3 to 6 months, the percentage of completion will increase
significantly as ongoing field office projects are finished. Our
planned early completion target will allow us time for testing and
correction of any problems.
Staffing
From fiscal year 1993 through the current fiscal year 1998, FSA
will have reduced total staffing by 25.8 percent. These reductions
reflect an overall 22.5 percent reduction in Federal staff years and a
27.5 percent reduction in non-Federal county office staff years. The
fiscal year 1999 Budget proposes a further reduction of 1,118 staff
years for fiscal year 1999, of which 263 are Federal staff years and
855 are non-Federal county office staff years.
As you know, Mr. Chairman, we have proceeded with the closure of
FSA county offices according to the 1994 plan. However, the staffing
reductions we are proposing for fiscal year 1999 require a
reexamination of our county office structure. Because there is a point
at which an office can be too small to function effectively, it may
become necessary to consolidate offices where staffing reductions take
place. I will consider any closure decisions in light of cost
effectiveness and quality of service to the producer, and I will keep
the Committee apprised of any prospective closures.
As you also are aware, the Secretary favors converting FSA non-
Federal county committee employees, with their career tenure, to
Federal civil service status. Conversion of these FSA non-Federal
employees to Federal civil service status would eliminate the
challenges FSA currently faces in operating two different personnel
systems for employees in county offices. These challenges include the
fact that non-Federal FSA employees cannot compete for FSA Federal
vacancies on an equal footing with Federal employees, non-Federal
employees who are RIFed are not entitled to assistance and priority
placement under the Career Transition Assistance Program, and FSA is
required by law to establish separate supervisory reporting lines for
non-Federal and Federal employees located in the same county office.
Legislative Proposal
In closing, I would like to point out that the President's Budget
includes a proposal to provide $10 million of FSA's 1999 funding
through charging a fee for information requested by insurance
companies, appraisers, consultants, attorneys, and others. This
proposal is in keeping with the Administration's user fee initiative
intended to shift costs from the general taxpayer to the parties that
benefit directly from the information.
Mr. Chairman, this concludes my statement. I will be happy to
answer your questions and those of the other Subcommittee Members at
any time.
______
Prepared Statement of Lon Hatamiya
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
1999.
Although I have been administrator of FAS for a short time, I am
familiar with the Agency and its accomplishments, both through my work
as administrator of the Agricultural Marketing Service and through work
on my family's farm in California. During my four years as AMS
administrator, FAS and AMS worked together on a regular basis,
particularly in our efforts to implement the North American Free Trade
Agreement (NAFTA). As a farmer from the No. 1 exporting state, I can
fully appreciate the role of FAS in assisting agricultural exporters
and the increasing importance that exports will play in the future for
American farmers.
agricultural exports reach second highest level ever
In fiscal year 1997, U.S. agricultural exports reached $57.3
billion, the second highest level on record. Last year also marked the
third consecutive year that exports topped $50 billion.
Exports of intermediate products (such as soybean meal and planting
seeds) set a record at $12.3 billion. Consumer-oriented products also
reached a record level of $20.8 billion, with poultry and fresh fruit
leading the way. Exports of bulk products were down 16 percent because
reduced wheat, corn, and cotton sales offset record soybean and tobacco
sales.
Four of 1997's top 10 markets for U.S. agricultural exports rose to
new highs. Records were set to both U.S. neighbors, Canada and Mexico.
Together, our NAFTA partners accounted for $11.7 billion in U.S.
exports this past year, 20 percent of our total agricultural exports
worldwide and greater than our sales to Japan. Records were also set to
Hong Kong and Russia. However, we also experienced declines in other
top markets with value declines to three key Asian markets--Japan,
Taiwan, South Korea--ranging from 10 to 12 percent.
The Latin American market continues to grow in importance for U.S.
agriculture. U.S. exports to Latin America reached $10 billion in 1997,
exceeding the total for all of Western Europe.
As usual, agriculture made a healthy contribution to the U.S.
merchandise trade balance in fiscal 1997. The agricultural trade
surplus (exports minus imports) ended the year at $21.5 billion. With
this latest figure, agriculture has now registered trade surpluses in
each of the last 37 years.
More so than agricultural products, U.S. wood and fishery products
faced a mixed trade picture in fiscal 1997. It was good news for wood
product exports, which reached a record $7.5 billion--up 5 percent from
the previous year. Edible fish and seafood products did not fare as
well. Export value slipped 6 percent to $2.7 billion. Weak world salmon
prices, a shortage of U.S. crab and crabmeat, increased competition,
and sluggish demand all contributed to this drop.
Combined U.S. exports of agricultural, wood, and fish products in
1997 were $67.4 billion. This was down 3 percent from 1996's record-
breaking $69.8 billion, but well above earlier levels. In fiscal 1990,
agricultural, wood, and fish exports totaled only $49.4 billion.
For fiscal 1998, our February estimate forecasts U.S. exports at
$56 billion. With imports projected at $38.0 billion, the current
estimates set the agricultural trade surplus at $18 billion this year.
The decline in exports forecast for this year is due largely to the
unsettled financial situation in Asia, strong competition from other
exporting nations, and the strong dollar.
Mr. Chairman, one of USDA's primary goals is to expand economic and
trade opportunities for agricultural producers and other rural
residents. The modest annual growth projected in domestic demand for
U.S. agricultural products makes the export market one of the most
viable sources of increases in U.S. farm income.
fas mission, accomplishments and future challenges
Before I present our budget request, I would like to briefly share
my thoughts on our mission highlighted in our 5-year strategic plan,
and briefly review the strategies we will use to successfully
accomplish our goals. My staff at FAS has created a highly focused
strategic plan to guide us in accomplishing our mission and turning
future challenges into opportunities for U.S. agriculture. As stated in
our strategic plan, FAS' mission is to serve U.S. agriculture's
international interests by expanding export opportunities for U.S.
agricultural, fish, and forest products and promoting world food
security.
FAS identified two goals and a number of strategies in its
strategic and annual performance plans that I believe will help us help
American agriculture tap into export opportunities. The first goal is
to expand export opportunities. We will accomplish this goal by:
--aggressively pursuing reductions in trade barriers and trade-
distorting practices of key trading partners;
--identifying constraints to U.S. exports and implementing strategies
for overcoming them;
--defending U.S. agricultural interests by promoting U.S. policy
views before the international community;
--strengthening the export knowledge and skills of producers,
exporters, and new-to-export small agribusiness firms so they
can compete more effectively in the international marketplace;
--educating foreign buyers on the merits of U.S. products;
--targeting market development and promotion activities to leverage
the entrepreneurial spirit of America's small business owners
in expanding agricultural exports;
--assuring accurate and timely dissemination of market intelligence
that serves a broad domestic customer base through the
effective application of technologies such as the Internet;
--effectively applying our GSM export credit guarantee programs in
developing country markets where liquidity is a limiting factor
to U.S. exports; and
--using the Dairy Export Incentive Program (DEIP) up to GATT-
allowable limits. Our second goal is to promote world food
security, which we will accomplish by:
--ensuring the U.S. research community has accurate and up-to-date
information about areas of emerging trends in scientific
research and technical activities that will benefit U.S.
farmers through improving farming technologies;
--supporting economic development efforts, especially in emerging
markets and developing countries;
--continuing to use the Public Law 480, Title I program, increasing
its focus on the private sector; and
--continuing the successful work under the Food for Progress
program with private voluntary organizations.
Through these aggressive strategies, we are helping our farmers and
ranchers meet the competitive challenges both now and in the future.
FAS conducts a wide range of programs and activities to successfully
implement these strategies, as we work to achieve our mission and
goals. Some accomplishments in 1997 include:
Trade policy accomplishments.--In 1997, the United States won a
major victory in the first case brought to the World Trade Organization
(WTO) under the new Sanitary and Phytosanitary (SPS) Agreement. In
August, the WTO upheld the claims of the United States and Canada that
the European Union's (EU) import ban on meat from hormone-treated
animals was inconsistent with the EU's commitments under the WTO SPS
Agreement. The decision was affirmed just last month by the WTO's
Appellate Body. This ban, initiated in 1989, stopped over $100 million
in U.S. beef exports annually. We are ready to work with EU officials
toward resuming normal trade as soon as possible.
Other accomplishments included the first commercial shipment of
U.S. tomatoes to Japan, the lifting of Egypt's ban on imported poultry,
gaining market access for sweet cherries in Mexico, preserving the
market for U.S. petfood exports to Switzerland, implementing a project
to expedite shipments of live cattle from Montana and Washington to
Canada, and working with Chile to re-open its market to U.S. wheat.
Enforcing Trade Agreements.--FAS aggressively monitored foreign
countries' compliance with Uruguay Round Agreement commitments during
1997, the second year of the agreement's implementation. FAS efforts
helped safeguard negotiated trade benefits, including working with
Costa Rica to open its poultry tariff rate quotas, which had been
delayed by domestic legal challenges. That action set a precedent for
other countries to implement their agreement commitments. FAS efforts
also resulted in the Philippines taking major steps to fully open its
market for U.S. pork and poultry exports. FAS work contributed to the
opening of formal dispute settlement proceedings by the U.S. government
that will challenge the EU's cheese export subsidies and Canada's milk
price pooling scheme--practices that may constrain U.S. dairy exports.
We have used the NAFTA committee process to gain new access for sweet
cherries and address restrictions that would have impeded exports for
grain, livestock, fruit and milk to Mexico.
Expanding and Improving Export Assistance Programs.--Export
programs and services were refined and expanded to meet changing
demands of the international marketplace and keep pace with the
competition. In 1997, funding offered under the Foreign Market
Development Program (FMD) for the first time was provided to export
organizations through a competitive process. Under the 1997 Market
Access Program (MAP), 84 percent of the brand promotion funds assisted
small-sized companies and cooperatives. Funding has been cut
significantly for large companies and will be eliminated entirely in
the 1998 allocation process.
In 1997, U.S. exporters reported the first sales under the Supplier
Credit Guarantee Program. In addition, a new Facilities Credit
Guarantee Program was launched. The program provides payment guarantees
to help finance exports of U.S. goods and services for agricultural
facilities in emerging markets.
Through a variety of training experiences throughout the United
States, the Cochran Fellowship Program provided 707 participants from
45 countries exposure to U.S. economic policies, business practices and
products. New programs were initiated in Kenya, Namibia and Brazil. In
Ukraine, USDA, through the Commercial Agriculture Development Project,
provided technical assistance and training to develop a system of
grades and standards to facilitate domestic and international commerce.
Reaching Out to New Exporters.--FAS continued its outreach efforts
to educate American farmers and exporters about foreign sales
opportunities. In 1997, efforts continued to target cooperatives and
small, disadvantaged, and minority firms. New partnerships were formed
with vocational agriculture teachers, 4-H and FFA representatives to
inform more of the public, particularly young farmers, of the dynamics
of agricultural exports and the need to get more producers and
companies exporting. In addition, FAS has worked with the FFA and
United Negro College Fund to organize an international intern program
providing interested students an opportunity to gain international
experience by working in select FAS overseas offices.
Providing Scientific and Policy Leadership on Biotechnology.--In
1997, FAS and other USDA agencies took a leadership role to ensure that
farmers and consumers around the world have access to approved products
resulting from biotechnology. FAS worked tirelessly in EU countries to
convince policy makers of the need for food safety decisions to be
based on sound science. Two biotech products were cleared for
importation by most European countries. FAS worked with Egyptian
officials to continue to keep the Egyptian market open to approved
agricultural biotechnology products. USDA worked to assure Brazilian
officials of the safety of approved biotechnology products, and
Brazilian officials approved the importation of 1.5 million metric tons
of soybeans, including those derived from biotechnology. The
establishment of the U.S.-Indonesia Food and Agricultural Forum insured
continued dialog among senior public and private sector officials of
both countries on issues related to food safety, genetically engineered
products and trade. This is envisioned as a model to engage the
leadership of other countries in a continuing discussion of these
important issues. The United States also is a key proponent of a
biotech initiative under the Asian Pacific Economic Cooperation (APEC)
forum. We are sponsoring educational workshops aimed at harmonizing
regulatory approaches to biotech products among APEC members.
Working to Ensure Food Security Around the World.--In 1997, USDA
worked vigorously to continue the momentum created by the 1996 World
Food Summit. At the Summit, 186 countries adopted a Plan of Action that
endorses trade liberalization, free markets, private sector initiative,
sustainable development, and self-reliance rather than self-
sufficiency. USDA is coordinating U.S. follow-up by the government,
which emphasizes strengthening the U.S. contribution to alleviating
hunger and malnutrition at home and abroad. Central to that effort is
the development of a U.S. Action Plan on Food Security to serve as a
blueprint for future U.S. policies and programs. The plan is being
developed in full collaboration with non-government organizations, the
private sector and academia. Intended to be not just a government plan,
but one for the country as a whole, its completion will hopefully also
be an incentive for other countries to meet their commitments made at
the Summit.
Promoting Scientific Cooperation.--USDA scientific cooperation with
foreign countries continues to pay off in practical ways for U.S.
agriculture. USDA uses science to help solve critical problems such as
trade barriers and phytosanitary issues, food safety, and exotic
diseases and pests. Postharvest technology scientists have worked with
Malaysian counterparts to develop quarantine treatments to hasten the
elimination of trade barriers to commodities susceptible to fruit fly.
A Chinese team visited the United States to exchange information on
viral diseases of animals, laying the groundwork for the exportation of
U.S. Shorthorn cattle and diagnostic equipment to China.
Scientists are also promoting new industrial uses for U.S.
agricultural products overseas. Initiatives include collaboration with
Hungary on biodegradable plastics from corn starch, Argentina on
hypoallergenic latex from guayule, and Mexico on pulp and paper
products from crop wastes. Such projects help open new markets for U.S.
products and diversify the U.S. export portfolio.
An important component of global food security is food safety. USDA
has ongoing efforts to transfer existing technologies and develop new
technologies in food safety. An example of successful technology
transfer is a project that allowed USDA to provide relevant information
to the Bulgarian government concerning health risks of rice grown in a
region contaminated with arsenic. Subsequent efforts have focused on
developing new phytoremediation techniques using plants to detoxify
contaminated soils.
Challenges for 1998
Mr. Chairman, we just need to look at the front page of nearly any
newspaper in America to see the issues confronting American farmers and
producers. From Asian currency problems to biotechnology to food safety
concerns, American farmers face challenges that were unthinkable just a
few years ago. Today's global trading environment means that the
actions taken by governments and businesses far from U.S. shores can
and do have an impact on U.S. farmers. The enactment of the landmark
1996 farm bill makes the role of exports and, in turn, the role of FAS
even more prominent in increasing the economic opportunities for
America's farmers and ranchers. I would like to take a few moments to
outline some of the issues we will be focusing on in the coming year.
Impact of Asian Financial Problems.--USDA's latest export forecast
shows plainly the impact the events in Asia are having on our exports
to those markets. I just recently returned from Japan and Korea to
learn first hand the problems and the issues that continue to face
those countries and U.S. exporters. Earlier this year, I also visited
several Asian nations and the information I gathered on my most recent
trip will help us determine whether our initial efforts are meeting
with success.
We intend to use all the programs at our disposal to diminish the
impact on U.S. agricultural exports. We have announced the availability
of $1.1 billion in export credit guarantees to South Korea, and have
increased the availability of export credit guarantees to the
Philippines, Indonesia, Malaysia, Thailand, and Singapore to more than
$1 billion. We have sent a technical team to the region and a follow-up
team will visit this spring to ensure the smooth operation of these
programs. We also will continue to constantly review the situations in
these markets to ensure that U.S. exporters have all the necessary
tools available to them.
Competitive Pressures.--The outlook for U.S. agricultural exports
is heavily influenced by competitive pressures that differ by commodity
and can affect price and/or quantity of sales. One of the primary
sources of this pressure is the rising value of the U.S. dollar,
especially against the currencies of our major competitors. This has
the effect of making U.S. exports more expensive to our customers,
relative to those of our competitors. Unfortunately, the dollar has
been rising against the currencies of all our competitors. Given the
strength of the American economy, this situation is likely to continue
for the foreseeable future, putting downward pressure on the U.S. share
of world trade.
There are commodity-specific competitive pressures that pose
challenges to U.S. exports as well. Record production of soybeans in
South America will continue to pressure prices in 1998 and these
pressures will continue in future years. We expect South American
production of grains and oilseeds to expand significantly in the years
ahead, offering increased competition to U.S. suppliers in third
country markets, and pressuring prices in the process. Likewise,
Chinese corn and East European corn and feed wheat available for export
have been putting downward pressure on U.S. corn prices so far this
year. While the threat from Chinese corn appears to have abated as
supplies have diminished, East European products will continue to
pressure U.S. corn prices.
In addition, we will continue to face stiff competition in markets
around the globe. Our annual review of the export promotion activities
of the 22 countries that account for our major competition found that
just like the United States, many of our competitors have ambitious
export goals. The EU and other countries assist their producers and
small business to develop foreign markets through activities similar to
our Market Access Program and Foreign Market Development Program.
Market promotion by EU countries is estimated at $400 million in 1995/
96, with about one-half of that amount provided by EU-member
governments. The rest of the funds comes from producer-funded
organizations 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 $7.2 billion budgeted by the EU in
1997 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.
Fast-track Authority.--We were obviously disappointed that the
President's traditional trade negotiating authority was not renewed in
1997. Like his predecessors since Gerald Ford, the President and his
negotiators need this authority to gain further market access overseas,
extract significant concessions from our trading partners, and play a
leadership role in shaping new trade agreements. But it isn't over. The
Administration is conferring with key members of Congress to secure
this authority. Our preference would be for broad fast track authority,
incorporating the specific goals for agriculture that were spelled out
in the President's last bill.
Next Round of Multilateral Trade Negotiations.--As important as the
Uruguay Round was for initiating the process of liberalizing world
trade in agricultural products, a lot of work remains to be done. WTO
members agreed to begin negotiations on the next phase of agricultural
trade liberalization at the end of 1999. These negotiations are the
best chance U.S. agriculture has for further reducing tariffs, opening
new markets, and addressing unfair trade practices on a global scale.
Fast track authority was critical in concluding the Uruguay Round, and
renewed authority is viewed as essential for U.S. negotiating
credibility and success in future WTO negotiations. Several key issues
stand out:
--Substantial further reductions in tariffs are needed.
--Tariff-rate quotas (TRQ's) should be substantially increased or
effectively eliminated by cutting the out-of-quota duty.
--Export subsidies should be further cut or eliminated.
--Rigorous disciplines should be imposed on the activities of state
trading enterprises.
--Tighter disciplines are needed to prevent countries from
circumventing their trade commitments through disguised
subsidies and nontariff measures.
--Rules on sanitary and phytosanitary measures should be tightened so
countries cannot disguise protectionist intentions or pander to
irrational concerns regarding public health.
Refining Our Export Assistance Efforts.--Today's competitive
environment for exporters coupled with budget realities means that the
Federal government must continue its efforts to do more with less. At
FAS we are using the Government Performance and Results Act (GPRA)
strategic planning framework to rethink our export assistance efforts
from top to bottom. We continue to emphasize customer service and
search for ways we can improve program delivery. This year, we will
begin moving toward a one-stop application process for both our MAP and
FMD programs to better coordinate our export efforts across programs,
as well as simplify and reduce the paperwork burden on potential
program participants. This is one example of our efforts to implement
GPRA principles to guide us in allocating our export promotion
resources.
In our credit guarantee programs, we will continue to expand our
outreach activities to educate both potential exporters and importers
about how the programs can benefit them. We will also continue to work
to increase the number of U.S. firms participating in the export market
through our efforts with state departments of agriculture and state
legislators as well as groups such as FFA.
World Food Security.--Improving world food security continues to be
a top priority. This year, we will continue to work with the public and
private sectors to develop a U.S. Action Plan on Food Security that
will serve as a blueprint for future U.S. policies and programs. Our
food aid programs are also under review as we evaluate the changes that
were made as a result of the 1996 farm bill.
Another area of emphasis is our effort to ensure that farmers and
consumers around the world have access to approved products resulting
from biotechnology. Properly used and regulated, biotechnology offers
one of the most promising tools for meeting future demand for an
abundant, affordable, nutritious, and safe global food supply. It holds
the potential for reducing the use of crop chemicals and fossil fuels,
adapting plant varieties that can be grown in harsh conditions,
reducing losses to plant pests and diseases, increasing the shelf life
and the nutritional content of foods.
Equal Employment Opportunity.--I am firmly committed to ensuring
that FAS supports the civil rights of all our employees. As you can
see, the challenges facing us are many, and we can only begin to
accomplish these goals by effectively working together. Under the
direction of Secretary Glickman, we are committed to ensuring equal
opportunity; respecting the civil rights of all employees, clients, and
customers; and creating a work environment that is free of
discrimination and harassment, while accommodating the needs of persons
with disabilities. As an Asian American, I have experienced prejudice
and stereotypical assumptions solely based on my heritage. As FAS
administrator, I will carefully monitor the implementation of our
agency's EEO commitment and will hold each employee at every level
personally accountable for his or her conduct and performance, as a
public servant, in equal opportunity and civil rights.
fas budget request
Mr. Chairman, 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.
The fiscal 1999 FAS budget proposes a funding level of $145.6
million and 819 staff-years. This represents an increase of $5.6
million above fiscal 1998 funding levels but a reduction of 62 staff-
years from 1998 levels. The budget proposes several initiatives that I
would like to briefly review with you.
The 1999 budget proposes that the costs of operating the CCC
Computer Facility, and other related FAS Information Resources
Management (IRM) costs shall be funded through the FAS appropriation.
The Facility serves as the Department's collection point for
international production intelligence and crop estimates. Currently,
these activities are funded through a reimbursable agreement with CCC.
This change will shift funding for these activities from mandatory to
the more appropriate category of discretionary spending. Additionally,
with this shift, 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 funding support for the CCC Computer Facility and other IRM
costs is estimated at $12.0 million in fiscal 1999. The budget proposes
to finance this activity primarily by reducing employment, associated
administrative cost reductions, and a reduction in the FAS contribution
to the Foreign Market Development (FMD) Cooperator Program from $27.5
million to $22.0 million. It is anticipated that increased cost-share
contributions by participants in the FMD Program will offset reduced
FAS contribution levels.
Year 2000 Efforts.--I am pleased to report that all computer
hardware and application software systems will be Year 2000 compliant
by the end of calendar 1998. Of the 14 FAS mission-critical systems,
eight are already compliant, and the remaining systems will be re-
engineered or modified during calendar 1998. Independent Verification
and Validation (IV&V) of FAS systems will be performed during the
latter part of calendar 1998.
The budget proposes $2.0 million to establish an overseas buying
power maintenance account to assist FAS in managing unanticipated
changes in the costs of overseas operations associated with exchange
rate losses. This proposal responds to fiscal year 1998 conference
report language that directs the Department to develop a plan for
establishing an account to manage overseas currency fluctuations. Under
this proposal, funds appropriated for this purpose in 1999 will be
transferred to a revolving fund where they will remain until expended.
Funds could be withdrawn from the account after exchange rate losses
are verified. Exchange rate gains that may accrue will be deposited
into the account.
The budget provides an increase of $2.0 million for pay costs and
higher agency contribution levels for employees under the Civil Service
Retirement System and includes $4 million for overseas administrative
services provided by the Department of State in support of the
International Cooperative Administrative Support Services (ICASS)
program. In 1998, $4.4 million has been transferred from the Department
of State for this purpose.
The budget includes an increase of $500,000 to develop a more
effective FAS Government Performance and Results Act (GPRA) performance
measurement and evaluation system and to re-engineer market
intelligence gathering processes. FAS will enlist the help of private
sector experts to develop a cross-agency performance tracking and
evaluation system to determine success rates in attaining goals and
objectives outlined in the FAS Strategic Plan. FAS also will evaluate
and re-engineer its crop and market intelligence gathering activities,
interagency partnering, and evaluation and dissemination processes to
make them more efficient in terms of resource utilization and more
responsive to internal and external customer needs.
For fiscal 1999, the budget includes $3.0 million for the Cochran
Fellowship Program, unchanged from 1998 levels.
Export Programs
Mr. Chairman, the export promotion, food assistance and foreign
market development programs administered by FAS are key to expanding
global market opportunities for U.S. agricultural producers. Our
program proposals provide the tools to meet these new sales
opportunities, tempered by the need to reduce Federal spending.
Export Credit Guarantee Programs.--The budget proposes a new
approach to presenting the estimates for the CCC export credit
guarantee programs. Program levels, budget authority and outlays will
reflect the level of sales expected to be registered rather than the
authorized levels. This provides more realistic estimates of the costs
of the guarantee programs and improves the accuracy of CCC budget
estimates. This change will not restrict program use; the authorized
levels remain available for use as determined by program demand and
changing market conditions.
Following this new approach, the budget projects an aggregate
program level of $5.0 billion for export credit guarantees in fiscal
1998 and $4.6 billion for 1999. These program levels are significantly
higher than in recent years, reflecting large increases in programming
in Southeast Asia and South Korea during 1998 that are expected to
continue into 1999.
The 1999 program level includes $4.3 billion for the GSM-102
program and $100 million for the GSM-103 program. Additionally, the
budget includes $150 million for supplier credit guarantees and $50
million for facilities financing guarantees.
Public Law 480.--The 1999 budget provides a total program level of
$979 million for Public Law 480 foreign food assistance, a reduction of
$133 million from 1998 levels. At this program level, 2.8 million
metric tons of commodity assistance will be provided, 700,000 metric
tons below the current estimate for 1998. The reduction in Public Law
480 funding proposed for 1999 will occur in the Title I program;
funding for Titles II and III will remain unchanged from 1998 enacted
levels. This will ensure the availability of adequate resources to meet
the most serious food assistance needs.
Market Access Program.--For the Market Access Program, the 1999
budget proposes to continue the program level at $90.0 million, the
maximum annual program level authorized in the 1996 Farm Bill.
Export Enhancement Program.--For the Export Enhancement Program
(EEP), the budget proposes a program level of up to $320 million for
fiscal 1999. While world market conditions have limited the use of EEP
over the past two years, we believe it is extremely important that we
maintain a strong position in order to protect U.S. agricultural trade
interests. Additionally, the budget proposed a flexible multi-year
program level for EEP of $1.2 billion for the fiscal years 1999 through
2003. This proposal will provide the Department with the administrative
discretion to determine the annual funding level for EEP, subject to
the $320 million limitation in 1999. Amounts not used in one year will
remain available for use in subsequent years, subject to the export
subsidy reduction commitments made in conjunction with the Uruguay
Round Agreement on Agriculture. It is anticipated that this proposal
will generate some $1.4 billion in savings over the five-year period
that will be used to finance crop insurance sales commissions,
increased EQIP funds, and other increases requested for mandatory
programs in the budget.
Dairy Export Incentive Program.--For the Dairy Export Incentive
Program (DEIP), the budget includes a program level of $82.3 million,
somewhat below the current level due to projected tighter domestic
market situation. As is the case with EEP, actual 1999 program levels
for DEIP will be determined by market conditions subject to the export
subsidy reduction commitments made in the Uruguay Round Agreement on
Agriculture.
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 1999 budget for the Risk Management Agency
(RMA). It is my privilege to appear before you as Administrator of RMA,
and I would like to express my personal gratitude to the members of
this Subcommittee who have shown a continuing interest and commitment
to RMA programs.
The virtual elimination of ad hoc disaster aid and subsequent
passage of the 1996 Farm Bill positioned the RMA to be the primary
provider of the agricultural safety net. In order to assure that
American agriculture remains solid, solvent, and globally competitive
into the 21st century, RMA has committed itself to transforming the
crop insurance program into a broad-based safety net for producers.
That is our vision. We have worked to assure a broad-based safety net
consisting of many public and private alternatives, all of which are
intended to improve the economic stability of agriculture. Today, I
want to discuss with you an important budget issue which must be
addressed in order to continue our work establishing, maintaining, and
delivering this safety net for producers. However, before I do that, I
would like to emphasize our mandate which has taken RMA into many new
areas beyond traditional crop insurance, including the development of
innovative products based on proposals from the private sector spanning
the breadth of the farm risk management community. I would also like to
highlight some of RMA's key accomplishments for 1997.
program participation
Participation in the crop insurance program remains at a
significantly high level despite elimination of the requirement that
producers obtain crop insurance to participate in other major
Department of Agriculture (USDA) programs. In 1997, crop insurance
provided $24.3 billion in protection to more than 600,000 policyholders
holding slightly more than 1.3 million policies on 181.4 million acres.
We expect to have about the same level of participation in 1998 and
1999. In 1997, RMA expanded coverage on 29 insured crops to 343
additional counties in 26 States. In 1998, coverage will be expanded on
25 crops to 144 additional counties in 16 States. Further, Crop Revenue
Coverage (CRC) is now available on almost 90 percent of the corn,
wheat, cotton, soybean, and grain sorghum acres in the U.S. CRC helps
protect producers from losses in yield, price, or combinations of both
factors.
preparing for the future
We are continuing to work with agricultural leaders nationwide to
increase producers' awareness of risk management strategies and impress
upon them the importance of taking active steps to protect their
investments from fluctuating prices and weather disasters. Private
sector participation is key to the success of this initiative. Without
the active efforts of our private sector partners, our ability to help
growers manage risk would be lessened. Our Risk Management Education
effort is backed by a $5 million apportionment of the Federal Crop
Insurance Corporation Fund, on which we will draw in the coming months
to carry out educational initiatives and competitively award education
proposals submitted by our private sector partners, including farmer
organizations, trade associations, and educational institutions. In its
role as facilitator of the education effort, RMA will work to ensure
that all producers are fully aware of not only the production risks but
also the economic risks facing them in today's environment and of what
tools are available to them to manage these risks. This initiative
directly supports our strategic goal to strengthen the safety net for
agricultural producers through sound risk management programs and
education, as well as our objective to increase the agricultural
community's awareness and effective utilization of risk management
alternatives.
As part of our continuing efforts to develop programs for a range
of agricultural commodities, we announced a new program for dairy
farmers on January 6, 1998. The Dairy Options Pilot Program will
provide minimum pricing guarantees for dairy farmers through a cost-
sharing agreement with USDA. This program offers eligible producers a
financial safety net by allowing them to purchase options on the price
of their milk. Under this program, when milk prices fall, producers
will be able to offset losses based on projected future earnings, in
effect insuring the price of their milk. The pilot program, scheduled
to begin this spring, is limited to six counties in six States that RMA
will select on the basis of concentration of production and other
factors. Funding for this program will be provided by the Commodity
Credit Corporation.
In addition, we, along with our private sector partners, are
exploring other opportunities to develop additional risk management
tools, including insurance for many new crops and some exciting new
products.
RMA recognizes changes and new challenges in its mandate and
organizational environment and is currently underway with a Business
Process Reengineering project which began in November, 1997. The
project will produce a blueprint for reengineering the risk management
tools and compliance investigations lifecycles. Throughout this
process, RMA will be responding to such factors as tightening budget
and staff resources, as well as growing program demands from Congress,
the Department, and key customers and partners. This process will help
us achieve the goal and objectives I mentioned earlier, as well as our
objective to improve program integrity and protect taxpayers funds.
strengthening the partnership
After spirited negotiations, RMA and the insurance companies agreed
on terms for a new Standard Reinsurance Agreement for the 1998 crop
year. The new agreement reduced annual administrative costs by $30
million and average annual underwriting profits by an estimated 20
percent. Timely completion of this agreement ensured that producers
will continue to receive the high level of service they have come to
expect, and that taxpayers will receive good value for their investment
in American agriculture.
preserving the safety net
From 1987 to 1994, disaster assistance payments averaged roughly
$1.2 billion a year, while annual crop insurance outlays averaged
roughly $800 million over the same period. Combined, the total Federal
expenditure was roughly $2 billion annually. Since the Federal Crop
Insurance Reform Act of 1994 (1994 Act), total expenditures for the
crop insurance program have averaged $1.2 billion annually. Compared to
historical expenditures, the reform has saved between $700 and $800
million annually, net of Noninsured Assistance Program (NAP) payments,
while providing most farmers affordable risk protection. While much of
these savings are due to favorable weather, crop insurance reform has
produced budgetary savings that have greatly exceeded expectations. For
1999, the crop insurance program is expected to cost $1.785 billion,
which is still below the historic cost of disaster assistance payments.
To follow-up on my earlier remarks, I would now like to address the
budget issue facing RMA for fiscal year 1999. The 1994 reform
legislation did not fully fund the enhanced crop insurance program.
Rather, about half of the amount needed to fund the administrative and
operating (A&O) subsidy to participating private insurance providers--
about $188 million in fiscal year 1998--became subject to an annual
appropriation of discretionary spending beginning in 1998.
We are prepared to resolve this dilemma and place the crop
insurance program on a firm financial foundation. USDA has drafted
legislation to shift the payment for A&O subsidy from discretionary to
mandatory spending, a process that requires corresponding mandatory
offsets. In fiscal year 1999, USDA will provide the offsets for this
funding shift from sources outside the crop insurance program. Of the
$1.1 billion in offsets needed through fiscal year 2003, USDA will
propose that about half come from the crop insurance program, with
producers and insurance providers sharing the reductions. The balance
will come from other USDA sources.
USDA is prepared to spend the time and energy necessary to craft a
solution which is fair and flexible for those with an interest in the
crop insurance program. By solving this funding dilemma, we will
benefit producers by assuring year-in, year-out stability to the crop
insurance delivery system and predictability for the program.
Accordingly, we have proposed the following strategy in developing a
package to accomplish the needed offsets beginning in fiscal year 2000:
--Limit payment eligibility under the catastrophic risk protection
(CAT) insurance program to $100,000 per person.--The savings
attributed to this action will be $50 million in crop year
2000, increasing to $56 million in 2003 under the baseline
projections. In crop year 1997, about 9,500 producers had
insurance coverage under CAT that exceeded $100,000 for all
insured crops. While maintaining the essential ``safety net''
for producers, the proposed limitation responds to criticisms
of a ``free'' CAT program providing potentially millions of
dollars of coverage to certain large operators.
--Reduce administrative subsidies for insurance providers from 27
percent to 25 percent of premiums for the standard plans of
insurance.--This action, combined with the reduced premium due
to the limitation on CAT coverage, reduces costs by an
estimated $35-40 million per year.
--Reduce premium subsidies for higher levels of coverage.--The
smallest program cuts were made in this area in order to
continue protecting farmers and encourage producers to take
advantage of higher crop insurance coverage levels. Currently,
the premium risk subsidy for each producer is calculated as if
the per-person premium had been purchased at a 50 percent
coverage of yield and 75 percent of the price election (50/75).
A reduction to 50/72.5 will cause only a slight increase in
producers' out-of-pocket costs to pay premiums, approximately
10 cents per acre.
--Reduce the statutory loss ratio target from 1.075 to 1.060
beginning in fiscal year 2000.--The savings attributed to this
action are about $30 million total during fiscal year 2000-
2003. To achieve this savings, premium rates would be
increased, thus increasing out-of-pocket costs for producers.
The proposed changes will have the following effect on
participants. In annual dollar terms, large CAT-insured producers take
the largest share of the reductions ($58 million or a reduction of 15.7
percent from $370 million), followed by providers ($37 million or 6
percent from $612 million), and then by producers who elect additional
coverage ($33 million or 4.3 percent from $772 million).
The time is right for moving forward with this legislative
proposal. If we fail to act, there will be a $205 million shortfall in
company payments as no discretionary funds have been requested to pay
for these expenses. This would result in severe disruption to the
Federal crop insurance delivery system and an unacceptable erosion of
program effectiveness.
In proposing this legislation, our goal is to ensure that cuts are
fair and that they are achieved with minimal disruption for both
program participants and insurance providers. We look forward to
working with you and your colleagues in the coming months on this
proposal, which will protect the interests of agricultural producers
and ensure the stability of the crop insurance program.
year 2000
RMA is making steady progress to prepare for the technological
challenges associated with the Year 2000. We have identified 48 mission
critical software application systems for Year 2000 compliance. Of
these, 19 are compliant, 10 will be replaced, one is being repaired,
and 18 will be retired. We are projecting that the total cost of
bringing RMA into compliance will be $1.69 million.
administrative and operating expenses
Discretionary account expenses are estimated to increase by $2.0
million from the fiscal year (FY) 1998 level of $64 million. This
increase includes: $1,064,000 for pay costs, of which $266,000 is for
annualization of the fiscal year 1998 pay raise and $798,000 for the
anticipated fiscal year 1999 pay raise; $277,000 to fund increased CSRS
contributions; and $659,000 for costs associated with the completion of
Year 2000 conversion requirements in order to comply with Departmental
mandates, Civil Rights activities, and administrative costs in support
of the Risk Management Education initiative. These costs all directly
support the goal and objectives of the Agency.
Mr. Chairman, this concludes my testimony. I appreciate the
opportunity to address this Subcommittee on behalf of the Risk
Management Agency, and I will be glad to answer any questions that you
or other members of the Subcommittee may have.
______
Biographical Sketches
august schumacher, jr.
August Schumacher is the Under Secretary for Farm and Foreign
Agricultural Services in the Office of the Secretary of Agriculture. He
provides leadership in the area of Farm and Foreign Agricultural
programs and more specifically exercises general direction of programs
administered by the Farm Service Agency (Commodity Credit Corporation),
the Risk Management Agency (Federal Crop Insurance Corporation), and
the Foreign Agricultural service.
Prior to his appointment to this position, Mr. Schumacher was
Administrator of the U.S. Department of Agriculture's (USDA) Foreign
Agricultural Service. As Administrator, Schumacher was a strong
advocate for the interests of America's farmers both at home and
abroad. He oversaw the administration of programs to foster exports of
American agricultural, fish and forest products. FAS reports on
international agricultural production and trade, handles USDA's
responsibilities in international trade agreements and negotiations,
administers the Export Enhancement, Foreign Market Development and
Market Promotion Programs, coordinates USDA's role in international
food aid programs and provides linkages to worldwide resources and
technologies that can benefit U.S. agriculture.
Before coming to USDA, Schumacher worked for the World Bank's
agricultural lending group on a series of projects on agriculture
sector policy adjustment, forestry and biodiversity protection in
Central Europe, Belarus and Ukraine. In addition, he has worked in
China, Latin America, the Middle East and Africa.
Schumacher also served as Commissioner of Food and Agriculture for
the Commonwealth of Massachusetts during 1985-90. During his tenure as
Commissioner of Food and Agriculture in Massachusetts, Schumacher was
heavily involved in the joint efforts of USDA and the National
Association of State Departments of Agriculture (NASDA) to promote
agricultural trade. He hosted the 1990 NASDA Food Expo in Boston and
participated in several agri-trade missions to Europe and Japan. As
Commissioner, he also fostered several state market development
initiatives including the Women, Infants, and Children (WIC) farmers'
market coupon program.
Schumacher is from a farm family in Lexington, Mass. He attended
Harvard College and the London School of Economics. He was also a
research associate with the Agribusiness Department of the Harvard
Business School.
______
keith kelly
Keith Kelly, a native of Red Lodge, Montana, is the Administrator
of USDA's Farm Service Agency (FSA). As Administrator, Mr. Kelly
reports to the Under Secretary of Agriculture for Farm and Foreign
Agricultural Services, and is responsible for the administration of
farm commodity programs, agricultural credit programs, and certain
disaster and Federal crop insurance programs.
In 1990, Mr. Kelly served as the first Director of the newly-
created Arizona Department of Agriculture. He was appointed by Governor
Rose Mofford and was reappointed by Governor Fife Symington in 1991.
Under the direction of the Arizona State Legislature, he consolidated
four autonomous state agencies into a unified, cabinet-level department
with 450 employees and an appropriated budget of approximately $13
million. Mr. Kelly was instrumental in the adoption of a bilateral,
livestock health agreement with the state of Sonora, Mexico, and he has
actively promoted the North American Free Trade Agreement as a member
of the Arizona-Mexico Commission. He negotiated the first official
boxed-beef agreement for Arizona processors in the Mexican states of
Sonora and Sinaloa in 1996-97. He was appointed by Secretary Glickman
and U.S. Trade Representative Mickey Kantor to the Agricultural Policy
Advisory Committee in 1995. Following in the foot- steps of his
grandfather (Commissioner of Agriculture, 1939-1941), Mr. Kelly served
as Director of Montana's Department of Agriculture (1983-1988), after
serving two years as deputy director. From 1976 to 1980, he served as
Administrative Assistant for Agriculture and Natural Resources for
Montana's Governor's Office. He is past chairman of the National
Governors Association Staff Advisory Council for Agriculture.
From 1972 to 1974, as a marketing specialist for the Montana Wheat
Commission, he developed the first toll-free Grain Market News Service
in the United States; and from 1974 to 1976, he was assistant director
of Western Wheat Associates, based in Washington, D.C., where he
developed marketing plans for U.S. wheat producers.
Mr. Kelly was raised on his parents' sheep and cattle ranch in Red
Lodge. He attended Montana State University where he received a B.S.
degree in Agricultural Business in 1968 and an M.S. degree in
Economics/Agricultural Economics in 1973. He served in the U.S. Army
Infantry, 101st Airborne Division, in Vietnam and was awarded the
Bronze Star.
Mr. Kelly and his wife, the former Norma Jean Walsh of Butte,
Montana, are the parents of four children.
______
lon s. hatamiya
Lon Hatamiya is the Administrator of the Foreign Agricultural
Service (FAS) of the United States Department of Agriculture (USDA),
where he oversees various programs that foster exports of American
agricultural, fish, and forest products. FAS is responsible for USDA's
obligations in international trade agreements and negotiations along
with coordinating the Department's role in international food aid
programs. This agency also reports on international agricultural
production and trade, administers various export assistance programs,
and provides linkages to worldwide resources and technologies that can
benefit U.S. agriculture.
Prior to his appointment to FAS in October of 1997, Lon was the
Administrator of the Agricultural Marketing Service (AMS) of USDA from
1993 to 1997, where he was responsible for over 50 federal programs.
During his tenure, AMS received two ``Hammer Awards'' from the National
Performance Review in recognition of increased efficiency and cost
savings within a federal government program.
Lon was born and raised in Marysville, California, where his family
has been farming for the past 90 years. He graduated with honors from
Harvard University, with a B.A. in Economics. He received his M.B.A. in
Entrepreneurial Studies and International Business from the Anderson
Graduate School of Management at the University of California, Los
Angeles (UCLA), and his J.D. from the UCLA School of Law. He is
admitted to practice law in California.
Lon has worked in the private sector in various capacities over the
last fifteen years. As a purchasing manager with the Proctor and Gamble
Company in Cincinnati, Ohio, he assisted in the development of material
acquisition and allocation strategies for their production facilities
around the world. Lon has also served as a consultant to the Sony
Corporation in Japan, developing a marketing strategy for broadcast
equipment in Western Europe; and to the Port of Long Beach, developing
a long-term intermodal transportation plan. In addition, Lon was an
attorney with the national firm of Orrick, Herrington & Sutcliffe, in
the practice of public finance, corporate, and political law. In the
vast third Assembly District in Northern California, Lon was the
Democratic nominee and the first Japanese American to run for the
California State Legislature in the last decade.
Lon, before his appointment by President Clinton to USDA in
September 1993, was involved in the general management of his family's
farming business, H.B. Orchards Company, Inc., in Marysville,
California, which grows 1,200 acres of prunes, peaches, walnuts, and
almonds. He was also founder and President of BHP Associates, Inc., an
economic development, education, and agribusiness consulting firm in
Sacramento, California.
In 1991, Lon was selected for the California Agricultural
Leadership Program of the California Agricultural Education Foundation,
comprising top leaders of California agriculture. He was appointed by
the California State Assembly in 1992 to serve on the Rural Economic
Development Infrastructure Panel. He also served on the Boards of
Directors of Planned Parenthood of the Sacramento Valley and the
Marysville Chapter of the Japanese American Citizens League (JACL); as
President of the Sacramento Chapter of the JACL, he was recognized for
his longtime work on obtaining reparations for Japanese Americans
interned during World War II.
Lon currently serves as a member of the National Advisory Council
of Minorities in Agriculture, Natural Resources, and Related Sciences
(MANNRS); as a member of the Board of Governors of the Japanese
American National Museum; and served on the USDA/Hispanic Association
of Colleges and Universities (HACU) Leadership Council.
Lon and his wife Nancy are the parents of two sons, Jon and George.
Dairy Options Pilot Program
Senator Cochran. Before proceeding with my questions, I am
going to yield to the distinguished Senator from Wisconsin,
Senator Kohl, for any comments, statement, or questions that he
might have. Senator.
Senator Kohl. Well, that is very kind of you, Senator
Cochran. I do appreciate it. I have three questions which I
would like to address to the panel with respect to the dairy
issue.
USDA's Risk Management Agency is finalizing the dairy
option pilot project rule, as you know. The Extension Service
in Wisconsin and dairy farmers in Wisconsin are quite anxious
to begin using this new marketing tool. The success of the
program will be determined by how many dairy farmers actually
adopt this new marketing tool after the pilot project expires.
I want to see to it that throughout Wisconsin this pilot
project is maximized in terms of its exposure to Wisconsin
dairy farmers. My concern is that it may be used in as little
as six counties, I understand, and it may be used for as few as
6 months, and then it may move on. You know the dairy industry
in Wisconsin, as well as other places, but in Wisconsin,
because we are so important to the dairy industry in the
country and it is such an important industry in our State, as
you know. And it is in dire straights, as you also know. We
want them very much to use new methods to market their products
like the options program.
I would like to feel that you are going to give Wisconsin
more of an opportunity to participate in it than what I fear
may be the case. Could I get hopefully a favorable response
from you right now?
Mr. Ackerman. Thank you, Senator. I appreciate the support
that you and many others have given to this program. We think
it is a very important one.
At this point, as you note, the comment period on the rule
for the dairy options pilot program is closed. We are reviewing
the comments right now. At an appropriate point, once the
comments are reviewed, we will be making decisions on where the
first set of States and counties will be that will be
initiating the program. We are hoping that will be done in an
expeditious way. We have gotten quite a lot of interest around
the country in the program and we take that as a very healthy
development.
As you note, the dairy options pilot program is designed to
start small. We intend in the first 6 months--in the first
round of it--to start in six States, six counties per State.
The reason for this is that it is a brandnew program. We have
never done this before and are not sure that it works. We want
to make sure that it works, and once we have gained a little
bit of experience, then we will be able to enlarge it. But as
you note, on the first round, we will be limited in size to six
States and six counties per State.
Also, it is designed as a temporary program. Any individual
farmer would be in the program for 6 months, and the reason
again is to teach the farmer how to use exchange traded options
and futures contracts. This is very new to dairy producers.
Dairy futures have only existed for a couple of years. Once
farmers have been through it, we hope that this will enable
them to use the markets on a permanent basis with the education
and experience they have gained.
Senator Kohl. I do appreciate that and I appreciate the
program and its potential value to dairy farmers, and I am
hopeful that I can work with you to see to it that Wisconsin
dairy farmers get the maximum exposure as the program unfolds.
It is intended to be a 3-year program.
Mr. Ackerman. That is correct.
Senator Kohl. With a 6-month kind of a startup phase, and
hopefully then to go on for another 2\1/2\ years. So, my hope
is that we can work to maximize Wisconsin dairy farmers'
exposure, and I am sure that you would be more than happy to do
that.
Mr. Ackerman. That is correct, and we would be happy to do
that with you.
Dairy Export Incentive Program
Senator Kohl. Thank you.
Now, the second question. In the first 2 years, middle of
1995 through the middle of 1997, of the GATT implementation
period, the United States notified WTO that about 141,000
metric tons of nonfat dry milk had been exported through the
dairy export incentive program [DEIP]. It is my understanding
that the U.S. Government approved contracts totaling that
amount, but only some 91,000 metric tons were actually
exported; 141,000 were reported. The difference is
approximately 50,000 metric tons was reported as exported, but
apparently never left the United States.
The question I am asking is when will the Department
reannounce this tonnage so that the product can actually be
exported.
Mr. Schumacher. Senator, this is a very, very important
question, one that we are working on a great deal. That is, the
amount that was registered and then canceled. I am going to ask
Lon or Chris where are we in terms of getting announcements on
those tonnages out.
Mr. Goldthwait. We have met with the representatives of the
dairy industry a number of times on this question. We have told
them that for any tonnages that were canceled within this same
GATT counting period, there is no problem. That tonnage will be
reannounced probably around the beginning of May.
With respect to tonnage from prior years, we have this
issue under study. We are looking very carefully at whether
there is a way to reannounce that tonnage which would not be
inconsistent with our GATT commitments. That review is still
ongoing and we hope to conclude it rather shortly. Obviously we
would like to do something about this quickly.
The other thing we have undertaken to do--in fact, already
done--is to make certain flexibilities available to the
exporters with respect to their sales under the DEIP program so
that fewer contracts will be canceled in the future. Such
flexibilities may involve changing, for example, the buyer in
the purchasing destination if the first buyer is unable to
fulfill those contracts.
So, we have this question very much under study and we
certainly appreciate the importance of the DEIP program, its
benefit to America's dairy farmers.
Senator Kohl. Thank you. I would like to stay in touch with
you as you move ahead with that.
Mr. Schumacher. Absolutely.
Senator Kohl. Hopefully we can maximize the exports.
Mr. Schumacher. We are using the full funding. I think
Chris and Lon's people are working very hard on that issue
under some criticism from a certain number of our competitors,
but I think it is vitally important. I think we are approaching
$1 billion in dairy exports, and that then does help a little
bit on the price.
State Trading Enterprises
Senator Kohl. All right. I thank you so much.
Last question, gentlemen. Users of State trading
enterprises are the most vocal in calling for the total
elimination of, quote, traditional export subsidies. What
measures does USDA suggest to ensure that State trading
enterprises like the New Zealand Dairy Board, that their
anticompetitive advantages, which they have and use, are also
addressed and hopefully eliminated?
Mr. Schumacher. That is a very vital issue--not only the
single desk trading of the New Zealanders but also the
Australia Wheat Board and the Canadian Wheat Board. It is
something that we are working on in terms of the next round. It
is one of our two or three top priorities, Senator.
I am going to ask Lon to address this specific issue. It is
one that our friends in Canada, Australia, and New Zealand--
they are all friends--but they still have these State trading
organizations or single desk trading and it is a very difficult
issue because it does give them a competitive advantage.
Mr. Hatamiya. Mr. Kohl, let me answer that briefly, if I
could.
Under the WTO Agriculture Committee, we continue to bring
up State trading enterprises as a major focus of discussion. It
is a target for us to take a look at. We are looking for
transparency in the marketplace. STE's do not provide that. We
proposed a questionnaire form of approaching STE's. They are
among a number of the highest priorities we are going to be
looking at for our future negotiations in the WTO leading into
the 1999 and 2000 round. So, not only are STE's important, but
tariff reductions, tariff rate quotas, export subsidies, as
well as other issues are major points of contention that we
will continue to address at that appropriate level.
Mr. Schumacher. There is one additional issue, and that is,
as I mentioned in my opening remarks, we have been aggressively
using the liquidity stabilization provided by our GSM. In the
situation of Asia across the board, liquidity is the problem
right now, and State trading has not been as effective in the
sense that they are having some problems on that side.
So, I think the ability to fully use the authorities that
Congress has provided to us in the GSM is certainly helping
American farmers maintain market share, and it is a tool that
we continue to use firmly around the world. Certainly there has
been some strong criticism from some of our good friends for
our timely use of that, and there are certainly interesting
statements from some of their capitals.
Senator Kohl. Well, I thank you and I thank you for your
cooperative attitude and your willingness to work together.
Thanks a lot.
Thank you very much, Mr. Chairman.
Prepared Statement
Senator Cochran. Thank you, Senator. We will insert your
prepared statement in the hearing record.
[The statement follows:]
Prepared Statement of Senator Kohl
Mr. Under Secretary, we appreciate your willingness to
testify before the subcommittee today regarding the Farm and
Foreign Agriculture Service Agency's proposed budget.
My constituents have kept me abreast of the difficulties
the new farm program has caused in your attempts to deliver new
farm and conservation programs and risk management products to
farmers. Your task is further complicated, by the reduction of
USDA's work force by 22,000 employees over the past few years.
I am particularly interested in your plans and goals for
expanding the U.S. market share for dairy products like cheese.
Currently, the world prices for dairy products are 30 to 40
percent under the U.S. price. If the U.S. is going to be a
major exporter then either the U.S. price must drop to the
world market or the world market must go up. I expect probably
a combination of the two will happen. If this is the case, the
dairy industry is in for additional stress over the next five
to ten years. Your leadership and expertise will play a very
important role during this period.
A tremendous number of challenges, such as reining in state
trading enterprises, transfer pricing issues, World Trade
Organization strategy for the next round of discussions, and
expanding exports need to be addressed if the industry is to
become a successful player in the international market. I will
be particularly interested in hearing today how we can make
trade agreements work better for farmers in rural Wisconsin.
Needs for Disaster Assistance
Senator Cochran. Mr. Secretary, let me ask a couple of
general questions about the budget request and then get to some
specifics with the other members of the panel who are here with
you today.
The supplemental request, for example, is under
consideration by the Senate on the floor today, and we hope to
complete action on it by the end of the day. Since the request
was submitted by the administration, there have been some
additional disasters that have occurred in Georgia particularly
and elsewhere in the country.
I hope that you will help us try to assess the needs for
disaster assistance that we should try to fund in this
supplemental. We will still have an opportunity to negotiate in
conference with the House and work out differences between the
two bills that are passed by the two bodies. But I hope that we
can have up-to-date information from the administration to work
with and your assistance in that regard could be very helpful
to us.
Cutback in Foreign Market Development Cooperator Program
In connection with our foreign agriculture activities, I
noticed that in the budget request, there is a cutback in funds
for the Cooperator Program, where the Government makes
available money that is matched with private sector money
through trade associations, like the U.S. Wheat and American
Soybean associations and other groups like that, to try to help
open up new markets and expand our market share around the
world.
With the cutback proposed by the administration in these
funds, what will the impact be insofar as our total commitment
to market development around the world? Is this going to have a
negative consequence at a time when we need to be doing more
maybe rather than less?
Mr. Schumacher. First, Senator, on the first question, on
the Georgia and other disasters, we will get back to you. I
visited Gainesville with Commissioner Ervin a year or so ago.
It is the home of the original poultry industry and I was very
sad to see a number of the poultry houses knocked down. So, we
are going to work carefully and we will get back to you very
quickly on the impact of recent disasters.
On the Cooperator Program, the cooperators and I work very
closely. That program has been going since 1954. They have done
an absolutely outstanding job of increasing our market share--
particularly value-added products--and also maintaining our
market share on bulk commodities. Our exports would be down, I
believe, without the strong support and the cost sharing of the
Cooperator Program. They simply do an outstanding job here and
particularly overseas.
The budget provides $22.0 million for the Cooperator
Program. MAP is fully funded and the Emerging Markets Program
is fully funded. We are putting a complete package together and
making that a bit more efficient so we can look at all the
funds that the cooperators will have access to.
We are hoping to get a bit more cost sharing from the
cooperators. There was report language in last year asking for
that.
So, we would like to work with you very closely. We think
that should be sufficient, but there may be differences of
opinion on that.
Fiscal Year 1998 MAP Allocation
Senator Cochran. For the Market Access Program, $90 million
is requested in the budget, which is the amount mandated by law
to be spent on the program. The program is not a discretionary
program that we fund. We simply go along with the direct
funding that the law makes available for the program.
But my question is, are those funds being used? In this
fiscal year, for example, there has been a holding back on the
allocation of funds and making those funds available for the
purpose for which they are to be spent.
Can you tell us how much of the $90 million in this fiscal
year has been spent and are there any intentional delays in the
process to try to keep from spending that money?
Mr. Schumacher. Well, I know the cooperators very well and
the MAP participants. I think they are pretty aggressive on
using this program. I would like to defer to Lon to discuss the
fiscal year 1998 MAP allocation process.
It is one of the most important programs that we have. We
have fought very hard to maintain the funding at the $90
million level. We have made a lot of changes in the program to
benefit small businesses and cooperatives. There have been
legislative changes made. So, I will defer to Lon.
Mr. Hatamiya. Mr. Chairman, let me agree with Under
Secretary Schumacher. To the contrary, we are being as active
as possible with the use of all tools, as he has mentioned. The
MAP program is now under a new uniform export strategy
application process that may have delayed slightly the
allocation of those funds but for the long term will make more
efficient use of all of the tools provided, not only the
Cooperator Program, but the MAP funds, as well as the Emerging
Markets Program. We are trying to coordinate each one of these,
in addition to the Cochran program, to ensure that all of the
available funds are most efficiently used.
As Mr. Schumacher has said, we are actively pursuing every
avenue of export development. On Friday, I returned from a trip
to Asia, the second in 3 months, to ensure that we are an
active exporter in that very important market. I led a
delegation of agricultural leaders to Japan and Korea to ensure
that our presence was felt. Many of those are participants
within the MAP and Cooperator Program. I think they expressed
their general positive impressions as to the use of these
funds.
Again, we are trying to streamline and make most efficient
this process, and I think that is working quite well.
Reasons for Declines in Asian Exports
Senator Cochran. Thank you. That is very reassuring. We
will continue to follow the use of those funds and hope that
there will not be any delays or backing away from the
commitment to be aggressive in the use of those moneys.
In looking at the statements that were submitted about our
export situation, I noticed that even last year, we saw
declines in our export sales in the Asian marketplace. While we
were increasing our exports in other places in the world, we
were ahead of the downward trend in agriculture exports. It
seemed like nobody else was talking about financial problems in
Asia until just a few months ago, but the agriculture exporters
could already tell that something was wrong.
What were the reasons for the declines that agriculture
exporters had in the Asian markets? Given all the tools that
you have and the growing economies that seemed to be doing well
a year ago, why were they not buying more of the U.S.-produced
commodities?
Mr. Schumacher. I will defer to Lon, but I think we began
to see a strengthened dollar, for example in Japan--the yen I
think has strengthened from 80 to, what, 130, Lon? And that
started about 18 months ago and that has certainly affected our
high value products. The inability to stabilize and grow is
having a softening effect on our high-value product exports,
especially the meats and some of the horticulture.
Mr. Hatamiya. I think in addition to that, the strength of
the dollar in the Asian marketplace, not only in Japan but also
throughout the region. We have seen a nearly 50 to 70 percent
reduction in the currencies of many of the countries in that
region. That led to the decline and softening of agricultural
exports in the United States into that market in the latter
part of last year.
Also, China had a bumper crop in a lot of the grains. They
are also becoming much more competitive in some of the higher
value products as well. With decreased values in the currency,
it makes American products less competitive.
We are trying, as you mentioned, to utilize every tool we
have available. We are trying to minimize the impacts that it
might have in 1998 with use of GSM-102, with the use of other
tools that the Congress has provided us, and so we are hoping
to, again, minimize the decrease in exports into that very
important market region.
Chinese Import Restrictions
Senator Cochran. A couple of months ago, I read in the
paper where China had suspended the importation of some of the
commodities from the United States. I think cotton was one of
them. They just shut down the ports to U.S.-grown cotton.
Has that changed now? Have they changed their mind and let
those goods flow into the country, or are we still under some
kind of embargo there that is commodity-specific from China?
Mr. Schumacher. Lon, do you have any information on that?
Chris?
Mr. Goldthwait. I believe, Senator Cochran, the situation
was as follows. The Chinese woke up one morning and suddenly
decided that they had cotton stocks in the interior regions of
China that they had not counted before. What they actually did
was not place an embargo or stop deliveries that were on the
water, but they simply ceased purchasing. So, we have seen much
less purchasing in the past 2 to 3 months from China.
At the same time, however, we have seen increased sales of
cotton both to Latin American destinations and into some other
markets like Turkey. So, all in all, our cotton exports, if not
exactly where we would like them to be, are doing I think
relatively better than, for example, some of the grains.
Senator Cochran. Thank you very much.
I have some other questions, but at this time I am going to
yield to my good friend from Arkansas for any questions he has.
Reductions in FSA Staff-Years
Senator Bumpers. Mr. Chairman, thank you very much.
I want to take this opportunity to accede to a request by
Senator Byrd because it touches on a question that I had also.
Secretary Schumacher, without going through the details of the
RIF, the proposed fiscal year 1999 budget assumes an additional
reduction of 855 non-Federal county committee employees. That
is almost a 10-percent reduction. It assumes an additional
reduction of 263 Federal employees, about a 4-percent
reduction.
Can you tell me the percentage of reductions nationwide of
the non-Federal county committee employees as compared with the
percentage of Federal staff reductions since the reorganization
took place on October 1, 1995?
Mr. Schumacher. Yes; I will get the exact number from
Keith, but there have been more county employees laid off than
Federal employees, and this is a problem.
What I want to do is--and it is something I am particularly
looking at--to be fair to all of our employees. To minimize
further difficulties and protect farm programs and delivery of
services, we are doing three things, Senator.
First, we are looking at ways we can make cuts in
administrative overhead at the headquarters, regional, and
State levels so that we have less need to reduce county
employees to meet our budget targets. This is very important,
and we are working very hard. This initiative is called
administrative convergence. The Secretary has charged us with
getting on with it and getting it done by October so that we
not cut county people who actually deliver programs.
Second is collocation. We are really trying to work very
hard to collocate all our offices and make further savings and
cut administrative costs so we can minimize further cuts in
county office employment.
Then the third is responding to budget realities that will
require some cuts. What we are trying to do is be fair, to be
equitable, and to look at workload efficiency.
On the exact numbers, Keith, do you have the precise
numbers for the Senator?
Senator Bumpers. Mr. Kelly?
Mr. Kelly. Yes; Senator Bumpers, compared to the 1993
ceiling, prior to reorganization, the cuts will be in the
aggregate about 33 percent for county employees and slightly
under 26 percent for the Federal employees by fiscal year 1999.
Senator Bumpers. What was the latter figure?
Mr. Schumacher. Twenty-six percent.
Senator Bumpers. What was the latter figure?
Mr. Kelly. Thirty-three percent for county employees and 26
percent for Federal employees. The primary reason the cuts fall
heavier on the county employee side is that the 1996 farm bill
brought about significant workload decreases in certain
activities there. The non-Federal county work force was reduced
by 14.9 percent in response to workload changes as compared to
5.8 percent for Federal employees because of the farm bill
impact. The non-Federal county employees had a lesser workload.
That is where the cuts fell the heaviest.
Senator Bumpers. Senator Byrd also asked for those same
statistics in West Virginia, the percentages.
Mr. Kelly. I will get that. I do not have them at hand for
the 5-year period, but I will get them for you.
Senator Bumpers. I will submit this question and other
questions by Senator Byrd, with the chairman's permission, for
the record and you can respond directly to him. OK?
Mr. Kelly. OK.
Senator Bumpers. I had a question along the same line. I am
not sure it is true, but staff indicates to me that despite--
let us see. Your 1999 budget would make 1,100 additional staff-
year reductions, and earlier this year there was a RIF of 152
employees, all of which were non-Federal county employees. In
spite of these RIF's, both at the county and Department level,
apparently FSA is hiring new personnel. Is that true?
Mr. Kelly. That is correct. We have been hiring for
agricultural credit positions.
Senator Bumpers. How do you rationalize that?
Mr. Kelly. Because of changing workload, Senator. Again,
going back to the farm bill, the workload is decreased on some
of the traditional farm programs that we had. However, on the
credit side, we have seen the work increase to cover servicing
of our agricultural credit portfolio to ensure that we reduce
the delinquencies.
So, we added, I believe, 150 Federal county employees or
hires this last year on the agricultural credit side. We
advertised the jobs to all sources, which meant that non-
Federal county employees could apply for them, and our hope and
desire was to hire those county employees that were being
RIF'd, if they were qualified.
Senator Bumpers. Well, needless to say, Senator Byrd and I
are both hearing from our people back home about what they
consider to be the unfairness of these RIF's.
Single FSA Personnel System
Mr. Kelly. Senator, that is why we would be very supportive
of one personnel system, as the Secretary has recommended--a
Federal personnel system--because there are some inequities
between the two personnel systems. Having one system would
certainly solve the problem, because the RIF's and/or the
reallocation of employment would be all within the same pot of
people. Now it is not the case. We have separate ceilings for
non-Federal county staffing and Federal staffing, including
Federal county employees.
Senator Bumpers. Mr. Kelly, it would be helpful to me and I
think to Senator Byrd both if you would address a letter to us
explaining these RIF's and why they were necessary and the
percentages and so on. Obviously we have a parochial interest
in our States, so if you could include the RIF's in our States.
We want to be sure that, even if we agree with the RIF, for
example, Arkansas and West Virginia are not being discriminated
against on the numbers.
Mr. Kelly. Senator, I will be glad to provide that. I want
to reemphasize what the Under Secretary said. We want a fair
and equitable treatment for all employees, and we are working
internally within our administrative capability to try and make
the two different systems look and behave as one within the
limits on what we can do administratively.
[Clerk's note.--See questions Senator Byrd submitted for
the record.]
Flood risk Reduction Program
Senator Bumpers. Secretary Schumacher, what is the status
of the flood risk reduction program?
Mr. Schumacher. Let me just consult here.
Senator Bumpers. Do you have somebody else to defer to on
that?
Mr. Schumacher. Yes; Dennis, are you aware of where we are
on that one?
Mr. Kaplan. No.
Mr. Schumacher. I better come back to you on that one,
Senator, rather than taking time here.
Senator Bumpers. OK.
Mr. Schumacher. Randy mentioned we are still working on
that one, but we will certainly get back to you with a note on
that, Senator.
Market Access Program
Senator Bumpers. The what is now apparently called the
Market Access Program used to be the Market Promotion Program.
Is that correct?
Mr. Schumacher. That is correct.
Senator Bumpers. I would like you, if you would, to provide
me with the number of grants and the amounts of the grants made
under that program in 1997. Can you supply that for me?
Mr. Schumacher. Yes; we will. We have made a lot of changes
in this program. Of course, a lot of guidance has come from you
and members of your committee and the Congress that has
radically changed this program over the last few years and I
think it is working pretty well.
[The information follows:]
Market Access Program Allocations, Fiscal Year 1997
Trade organizations Allocation
Alaska Seafood Marketing Institute...................... $2,965,056
American Brandy Association--Export..................... 36,294
American Forest and 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 U.S.A......................................... 162,938
Blue Diamond Growers.................................... 1,412,689
California Agricultural Export Council.................. 525,178
California Cling Peach Growers Advisory Board........... 727,009
California Kiwi Fruit 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............................................. 103,000
Kentucky Distillers' Association........................ 499,401
Mid-America International Agri-Trade Council............ 190,833
Mohair Council.......................................... 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. (cooperative)..................... 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
Senator Bumpers. I am well aware of that.
I have a figure here that shows that the European countries
spend $400 million on market promotion and about one-half of
that comes from their members. Presumably the other one-half
comes from the exporter or the exporters. Is that correct?
Mr. Schumacher. I think that probably is correct.
Senator Bumpers. In other words, one-half is coming from
the EU members, the other one-half must be coming from the
exporters.
Mr. Goldthwait. That is correct. The same situation
pertains to the Market Access Program where the participants
put up funding of their own to match what we are providing.
Market Promotion Spending by American Producers
Senator Bumpers. Mr. Goldthwait, since you are the guru on
this subject, do you have any way of knowing how much American
agricultural interests spend on market promotion, export market
promotion?
Mr. Goldthwait. Including what is not covered under the
program?
Senator Bumpers. Well, I am trying to figure out for
comparative purposes. Apparently in Europe half of the
expenditures for export promotions is paid for by the companies
who do the exporting or the agricultural interests who do the
exporting. I would like to have a comparative figure of what
American companies pay for that.
For example, in my State we have Riceland Foods who do a
lot of exporting, and there are hundreds of other similar
companies. I would just like to know if you have a figure or if
you can get a figure on how much the private companies in this
country spend to promote agricultural exports. I am sure ADM
spends a lot.
Mr. Goldthwait. We can provide you with an estimate of the
total farm market promotion expenditures of the private sector.
Under the Market Access Program, whereas in fiscal year 1996
our outlays--I am including a little carryover from the
previous year--were $92 million, the private sector
participants contributed roughly $115 million.
Senator Bumpers. $115 million?
Mr. Goldthwait. Yes; so, they more than matched what the
Government provided.
Senator Bumpers. Now, is that the Market Access Program?
Mr. Goldthwait. Yes.
Mr. Schumacher. Yes; one of the concerns we have, Senator,
is export restitutions, for example, on a lot of the high-value
products such as beef, wine, and all the other high-value
products that is creating a lot of problems for us in Europe. I
think as we move into the next round, we have to really work at
eliminating those export subsidies, particularly on high-value
products that are putting our industry at a competitive
disadvantage in addition to market promotion.
EEP Expenditures
Senator Bumpers. How much did we spend last year on the EEP
program?
Mr. Schumacher. On just the EEP itself, we did not spend
any.
Senator Bumpers. I know it is a mandatory program, but you
spent a lot of money on it, did we not?
Mr. Schumacher. We allocated the funds. We did not use the
program last year.
Senator Bumpers. You did not?
Mr. Schumacher. Did not. We did for the Dairy Export
Incentive Program, but we did not use the money for the Export
Enhancement Program last year.
Reduction in Public Law 480
Senator Bumpers. The budget request calls for a reduction
in title I of Public Law 480. What is the purpose of that?
Mr. Schumacher. The administration has proposed a reduction
in the title I program of $133 million from last year's amount.
We have fully funded titles II and III, but because of the need
to balance the budget, the administration felt that this was an
area for which less funds would be proposed.
Senator Bumpers. Mr. Chairman, I have a few other questions
that I will submit for the record and give our panel sufficient
time to answer those questions.
IMF Supplemental
Senator Cochran. Thank you very much, Senator Bumpers.
On the subject of the Asian market again, we are including
in a supplemental bill funds for the IMF at $18 billion at the
request of the administration. Our committee approved that and
we will be taking that up and trying to work with the House to
get some level of funding so that we can continue to
participate in helping to stabilize market conditions and
encourage reforms in some of those areas so that our trade
opportunities will continue to be available.
How strongly do you feel that we need those funds approved
by this Congress? When we go to the floor and try to answer
questions from opponents of the funding, what are some of the
arguments that you think are most effective to persuade the
general public and Senators to vote for that?
Mr. Schumacher. Mr. Chairman, when Lon and Chris and I were
working over the Christmas holidays to make this program
operational, particularly with Korea and then the additional
funds for other countries, we could not make it operational
without an IMF program in place because of the creditworthiness
score. These are funds Congress provides from the taxpayers,
and we simply cannot in good faith, to Congress and
particularly the taxpayers, make the allocations and make it
operational without a sound IMF program in place. So, the IMF
had to come first.
As I said in my opening statement, the improvement we made
in the hides and skins to help cattle or the stability and the
sanctity of the contracts on cotton could not have been done
unless the IMF was there first, a very important issue.
Initially the IMF was very helpful because they looked at
some of the problems in the number of countries that affected
agricultural trade, in Korea on transparency, on port
procedures, and consistency with WTO and phytosanitary issues,
and Indonesia on some of the monopoly practices. They require
the tariffs on food to drop from 20 to 40 down to 5. They noted
yesterday that soybeans now is at zero tariff. That contributed
heavily by the IMF negotiators as they made those funds
available.
So, two points. First we cannot operationalize the GSM
without the IMF standby in place, and second, the IMF has
strategically made a number of requirements which will help
trade in agriculture.
Senator Bumpers. Mr. Chairman, would you yield for just an
observation?
Senator Cochran. Senator Bumpers.
Reasons for Declines in Asian Exports
Senator Bumpers. I was just curious. Are you seeing a
measurable decline in exports to the Asian markets?
Mr. Schumacher. Yes.
Senator Bumpers. At this moment?
Mr. Schumacher. Yes.
Senator Bumpers. How significant is it?
Mr. Schumacher. We are monitoring it pretty carefully.
Certainly in Korea--meat was down substantially. In Indonesia--
last year, Senator Bumpers, we exported $776 million to
Indonesia. Probably that will be cut in half this year,
affecting particularly high-value products. We are working very
hard to maintain our important cotton market in Indonesia, and
I think GSM is operating for cotton in Indonesia as we speak.
It is a major market for cotton. We want to keep that market
open. We will also be providing some Public Law 480 assistance
that is now being negotiated with Indonesia which will
hopefully include rice, wheat, and soybeans.
Senator Bumpers. Thank you, Mr. Chairman.
Goal for Next Round of Trade Negotiations
Senator Cochran. You have mentioned a couple of times the
WTO, the World Trade Organization, and the next round and the
negotiations that you are preparing for leading up to the next
round. What specifically are the administration's goals for the
next round, and do you have the funds included in this budget
request to staff and support the effort that we will need to
make in order to achieve success?
Mr. Schumacher. That is a very, very good question. I am
going to ask Mr. Hatamiya to briefly outline the four or five
key goals and then the issue of the budget on our trade policy
side.
Mr. Hatamiya. Mr. Chairman, I think I previously mentioned
in an answer to Senator Kohl about some of the highest
priorities of what we hope to achieve in the next round of the
WTO negotiations, one being the State trading enterprises,
seeing some reforms there, also looking at tariffs and tariff
reductions, reductions in tariff rate quotas, and also reforms
in that round.
Reforms to export subsidies is another important factor, as
well as bringing some rationality to sanitary/phytosanitary
measures. Many of those are false trade barriers that are
placed in front of us, and we think it is necessary to address
those so that there is a common international standard that is
utilized.
We are using the avenue of the WTO Agricultural Committee
to continue those discussions, but those are the highest
priorities we are looking at the current time. We think it is
necessary to make changes there because it is important. The
United States has the most open and freest market in the world.
We would hope that other trading partners do the same.
Senator Cochran. I had a letter the other day from the
president of the American Farm Bureau Federation suggesting
that I go to Geneva. Is that where the WTO----
Mr. Schumacher. In May there will be a followup to
Singapore in Geneva in preparation for the next round. That is
correct, sir.
Congressional Participation in WTO Negotiations
Senator Cochran. I have not discussed that with anyone, but
I am curious to know whether you think it would be helpful in
the process of preparing for or observing the negotiations in
Geneva, if representatives of this committee or our Agriculture
Committee would go to Geneva and participate in that process?
Mr. Schumacher. We would be honored.
Senator Cochran. How long will it take? [Laughter.]
Mr. Schumacher. I think the meetings are for 4 or 5 days.
In Singapore, when Deputy Secretary Rominger went, there were
47 representative agricultural groups that attended and that
was quite a long distance from the United States. So, there is
tremendous interest in the next round by the agricultural
community. We are working very closely with all the
representatives and a representative of this committee. We
would be very honored to have you attend.
Senator Cochran. What are the dates of the scheduled
negotiations in May?
Mr. Hatamiya. I think it is the 18th through the 20th.
FSA Reorganization
Senator Cochran. Thank you very much.
Senator Bumpers mentioned the layoffs, the RIF's, that were
occurring in the organization of the Farm Service Agency. Mr.
Kelly, you spoke to that some and so did Mr. Schumacher. There
seems to be a good deal of concern out in the States--I hear
this from my own State--about whether or not the reorganization
of the Department's agencies in the States is complete or what
other changes are expected to be made or planned, the absence
of any clear indication from Washington as to what is going on,
or when will the next shoe fall. It has everybody sort of
anxious and concerned, and it has had a negative effect on
morale. That is my assessment of the situation.
What can you tell us about the plans for the continued
reorganization of the States and county offices?
Mr. Schumacher. Well, I will defer to Keith, but I think
there are two themes, Senator, that the Secretary and I and
Keith are operating under. One is administrative convergence,
which will start to take place during this calendar year, and
which has created some uncertainty, particularly among the
administrative staffs at the Washington level, the regional
level, and the State office level. But we feel we can make
savings on the administrative side, so we avoid layoffs at the
county level where programs are actually working directly with
farmers.
The other one is the service centers and the collocation, a
very important issue. We feel that we should be all under the
same roof--Keith's shop, Rural Development, and the NRCS--to
better service farmers and to make continued efficiencies. We
do not need three Xerox machines or two carpools or whatever.
There should be one. Again, those savings could then be used
keeping county-level employees employed to service farmers.
There is some uncertainty and we will try and minimize
that. We welcome any comments from your State and other States
where there are particular questions. We will try and address
them so we can provide good information to those people who
feel unsure as these changes approach.
Keith?
Mr. Kelly. Yes, Senator; those are the two themes, as the
Under Secretary mentioned. On service center collocation, we
are about 60 percent completed. The idea again is to achieve
cost savings by creating service centers for ``one-stop
shopping'' with the objective of customer service for farmers
and ranchers in the communities.
The other one, probably what you had in mind when you
referred to the other shoe falling, is administrative
convergence. The goal there is to streamline administrative
costs, which probably fall heaviest on the headquarters. We
have too many people buying pencils and papers when we can all
do it one and the same way and more efficiently if we combine
administrative staffs of our Natural Resources Conservation
Service, Rural Development, and the FSA.
Policymaking and program operation still stay with the
individual agencies. So, for example, the Farm Service Agency
will continue setting policy and implementing its agricultural
credit and other programs. It is just the administrative
services that are going to be merged. I believe that we are
targeting October 1 for that to take place and be phased in.
Again, Under Secretary Schumacher said it correctly. It
does create uncertainty out there, and it is probably in part
because it is following a significant reorganization over the
last several years. As was mentioned earlier I believe by
Senator Bumpers, the agricultural credit programs of the old
Farmers Home Administration and various programs of the old
ASCS were consolidated. I am not sure we had completely worked
all of the bugs out of that reorganization. Now we are starting
on administrative convergence. But I think what the farmers and
ranchers will get is a much more streamlined, cost effective,
and efficient delivery of services for the programs available
out there.
Senator Cochran. Well, I think that is the emphasis we want
to make, and that is to be sure that we not forget the farmer
in the process and the landowner who has to come to the service
center or the Farm Service Agency office, whatever you want to
call it, and get information and file farm plans and deal with
the requirements of the Federal farm programs. So, I know that
you will try to ensure that that is kept in mind by the
administrators up and down the line.
But the employees are important too, the employees of the
service centers. We hear from them. They are constituents too.
They are people too. I hope that they are all treated fairly
and you will ensure that that is the case.
Mr. Schumacher. Absolutely.
Mr. Kelly. Senator Cochran, it would certainly support
fairness if we were all under the Federal employment system. It
would be much more fair to the employees if they all had equal
chances and options. Right now it is a challenge to manage the
two different systems.
Senator Cochran. I was glad to hear something about your
background. I notice that your grandfather was the commissioner
of agriculture, whatever the name of it is, in Montana. You
have a long heritage of doing this kind of work.
Where is Red Lodge exactly in Montana?
Mr. Kelly. Senator, Red Lodge is 30 miles north, as the
crow flies, from Yellowstone National Park on the northeast
corner.
Senator Cochran. That is pretty country up there.
We share a constituent named Steven Ambrose who spends one-
half of his time in Mississippi and the other one-half in
Montana. He is the fellow who wrote that book about the Lewis
and Clark expedition out there. ``Undaunted Courage'' is the
name of the book. It is quite a masterpiece. You ought to read
it if you have not read it.
Is Red Lodge very far from where the Lewis and Clark
expedition traveled through Montana?
Mr. Kelly. Senator, it is not too far because they did
travel up 15 miles from Red Lodge. There is the Clark Fork
River that drains into the Yellowstone River, and that was
named for George Rogers Clark.
I would hazard a guess that your Mr. Ambrose probably
spends his summer months in Montana and the winter months in
Mississippi. [Laughter.]
Proposed Risk Management Tools
Senator Cochran. You are absolutely right.
One other issue that has been touched on and I wanted to
ask some more about is the crop insurance program. The
statement that you filed with the committee has some
interesting suggestions for reform, additional legislative
provisions. Mr. Ackerman makes some specific recommendations
for changes in the law. These are all very interesting, and I
hope they will be carefully considered by the Congress, the
legislative committee. We cannot make these legislative
changes, though, and we have to kind of deal with the law as it
is.
We notice you talk about other risk management tools
besides crop insurance. Specifically what are these tools that
you are talking about and are there requests for funding that
we need to consider in this next budget cycle?
Mr. Ackerman. Thank you, Mr. Chairman. A very specific
example is the one that Senator Kohl raised earlier in the
hearing, the dairy options pilot program. This is a new tool
for us. It is different from the options pilot program that
existed within FSA a number of years ago. It is a noninsurance
tool. It is a way for dairy farmers to ensure price with a
subsidized tool based on options traded on the organized
futures exchanges. It is a new idea and one that we very much
want to test because we think there is a demand for it.
Other examples of tools that we are looking at are new
types of insurance policies based not on a crop-by-crop premise
but on a whole-farm premise. We have had a number of ideas
suggested to us by the private sector along those lines.
There are a number of others, just to give you a sense of
the range of ideas that are percolating out in the country. We
have one idea that we have been looking at that has been
recommended by a number of the farm groups. It is based on a
Canadian program, the NISA, which is basically a risk
management savings account where farmers would put part of
their income every year into an account that would grow over
time and provide a nest egg, a safety net, for them if they had
a loss. It is a tool that would potentially require legislative
changes to implement in this country, but one that has gained
some popularity in Canada where it has been in effect and which
is gaining a fair amount of recognition here among many of the
farm groups. So, there is a range of ideas like that that we
are considering.
GAO Report on Expense Reimbursement to Private Companies
Senator Cochran. There is a recent GAO report, dated March
20, 1998, on the subject of crop insurance, increases in
insured crop prices and premium rates, and the administrative
expense reimbursement paid to companies. There are some
interesting findings that we have come across here.
Has this been made available to you, or do you have any
information about this GAO report? Of course, that is done at
the request of the Congress. It is not your investigation.
Mr. Ackerman. Senator, I have seen a draft of it, but we
have not yet examined it in detail.
Senator Cochran. I was curious. You have probably been
provided a draft and asked for comments or reactions.
Mr. Ackerman. That is correct.
Senator Cochran. One thing that we noticed here talking
about the expenses, and that is relevant to this appropriations
process that we are going through, it says that higher insured
crop prices and higher premium rates led to a 13-percent
overall increase in premiums. That is a disincentive to buy the
insurance if the farmer gets hit with that kind of an increase.
The report noted, we concluded that FCIC could reduce the
reimbursement rate another 3 percentage points below the 27
percent level we found to be justified in 1994 and 1995 to a
level of 24 percent of premiums and still adequately reimburse
the companies for their administrative expenses.
What is your reaction to that? Is that a fair assessment of
the situation?
Mr. Ackerman. Well, Senator, without getting into the
details of the report because, as I say, we have not analyzed
it in detail yet--we did go through a process with the industry
last year. We renegotiated the standard reinsurance agreement,
and as part of that process, made a significant reduction in
the expense reimbursement to companies. It fell from
approximately 29 percent of net book premium the prior year to
27 percent of net book premium, plus the elimination of what is
called excess loss adjustment. All totaled, that is about $40
million a year and that was coupled with a significant
additional underwriting risk that we put on them last year.
Certainly this is something we are monitoring very closely.
In our legislative proposal, to close the gap on mandatory
spending, we do propose an additional reduction beginning in
the year 2000. We are trying to be cautious in the way that we
do this, however. The delivery system is very important to this
program. We rely on the companies to deal face to face with
farmers, and generally our experience with agents and companies
around the country has been very favorable. They do a good job.
We want to make sure that, while we are tightening our belt and
finding savings, we do it in a way that is moderate and
nondisruptive. That is why, for instance, in our proposal we
did propose going down to a 25-percent reimbursement rate, but
we began it in the year 2000 so that companies can plan for it,
build it into their business plans, and be able to absorb it.
Senator Cochran. As you know, we are in conference right
now in the legislative committee with the House trying to work
out the ratio of mandatory spending to other creative devices
for coming up with the money to support this program. It is
quite a challenge dealing with the constraints the
administration has put on us, with insistence that so much of
the money be allocated to Food Stamp Program activities, and
Budget Committee provisions which restrict us in the leeway
that we have within which to negotiate. But we are working hard
to try to come up with a funding mechanism for the crop
insurance program, and we will continue to work with both the
legislative committee and the Budget Committee and the
administration to try to resolve it so that we save the
program, that we have a risk management program in place that
the farmers can rely upon and not just take a chance on the ad
hoc responses to these disaster situations which we are trying
to deal with right now with the supplemental.
But we appreciate your bringing your best efforts to bear
on the process and we thank you for your cooperation with our
committee.
FSA Data Collection
Let me ask a couple of questions about the acreage
determinations. There is a memorandum of understanding between
APHIS and FSA which would provide collection insuring of crop
acreage data in boll weevil eradication zones for the purpose
of administering that program. We had report language in the
appropriations bill last year and we are curious to get the
response of the administration to what language, if any, we
need to include in this year's appropriations bill to help make
sure that there is an accurate process and a fair process for
collecting crop acreage data information.
The Department has the new collection procedures. We are
curious to know whether they are working. Do we have the funds
in the budget to support the program? I need your reaction to
that.
Mr. Schumacher. Do you have a comment on that?
Mr. Kelly. Senator, I will get back in detail with you.
With regard to the acreage report collection, that is an
agreement that we work out with the APHIS boll weevil
eradication program staff, to collect the acreage report data
that is necessary to ensure that the proper mapping is done out
there in the States.
Right now most acreage reporting is voluntary, and support
for it is included in the user fee proposal in the budget. If
this proposal is adopted through the appropriation process,
then the funding for acreage reporting would depend upon actual
collection of user fees from private individuals and companies.
Boll Weevil Eradication
Senator Cochran. One other concern that I have heard
expressed is the decline in support from the FSA for loans to
help pay the costs of boll weevil eradication expenses. There
is a request in here that is substantially less than last year.
The budget shows the loan program level would decline from $40
million in fiscal year 1997 to $30 million in fiscal year 1999.
We are curious to know what the explanation is, if any, for
$4 million which is for the APHIS Federal cost share of the
boll weevil eradication program, why the program level is
declining like that. We have farm income being pressured with
low prices at market for cotton and people are planting less
cotton now than they did before because of the drop in prices
and the continued increases in costs of production. Now it
looks like the available loan support to help pay the costs of
the boll weevil eradication program is going to drop as well.
Is it realistic to expect farmers are going to continue to
participate in the program if they have a hard time getting
help from the Government?
Mr. Kelly. Senator, I acknowledge that because of the need
to meet budget targets the request is down somewhat from last
year. It is hoped that it would come close to meeting the
demands of the various States to carry out the boll weevil
eradication program. I will acknowledge that it is somewhat
short.
Senator Cochran. Well, we are concerned about that and hope
that you will be responsive to requests to help make sure that
we have a program that works.
I note that APHIS is really the lead agency for this
program, but what is your impression of the status of the
program and the need for funds to achieve complete boll weevil
eradication? Is this something that your agency is actively
involved in trying to support?
Mr. Kelly. Senator, we work closely with APHIS on the boll
weevil eradication program, and we are actively supporting it.
It is the old adage, an ounce of prevention is worth a pound of
cure. Having come from Arizona as a State director of
agriculture, the boll weevil eradication program was very
successful in reducing costs to cotton farmers. Thus the whole
pesticide issue and ground water contamination was
significantly reduced because of a very concentrated
eradication program. So, personally, given where I came from, I
support it.
I stand corrected on my answer to the previous question.
Our loan level is about $21 million in 1998 compared to $40
million in 1997, and our request is going up to $30 million in
1999. So, there is support and a commitment within our agency
for the boll weevil eradication program.
Senator Cochran. We appreciate that and we appreciate your
continuing attention to that problem and support for the goals
of the eradication program.
Resources for the Cochran Fellowship Program
I notice there were a couple of mentions of the Cochran
Fellowship Program and there is a budget request for $3
million. We had in the past some additional funds made
available from the AID Program and from the emerging markets
program. What are the other resources that the Administrator
has to work with in making these program benefits available
throughout the world? What are the prospects next year in this
next budget cycle for additional funds that can be used for the
Cochran Fellowship Program?
Mr. Schumacher. I think you are correct, Mr. Chairman,
funds were allocated from the Emerging Markets Program and I
think some from the USAID. I think, Lon, do you have some of
the details?
Mr. Hatamiya. Yes; I do. Mr. Chairman, for fiscal year
1998, in addition to the $3 million you mentioned in
appropriated funds, we are expecting to receive $1 million from
the Emerging Markets Program and an additional $2.3 million
from USAID, for a total of $6.3 million for this program, which
I believe is the most ever. We are anticipating the number of
participants in the program, an estimated 760, to be well above
where participation has been in the past.
Again, let me repeat, this has been a tremendous program.
We see the benefits worldwide in terms of increased exports
sales. When we bring Cochran fellows into the United States,
they gain an increased knowledge as to markets in the United
States, our export capability, the reliability of U.S.
producers, and that continues to benefit American agriculture
not only currently but hopefully into the future.
Senator Cochran. We appreciate having that information. If
we could have a report for the record showing the countries
that had participants selected and how many there were and
where they went, what they did when they were here, some kind
of capsule report of the program for our hearing record, that
would be helpful.
Mr. Hatamiya. Mr. Chairman, we can do that for you. No
problem.
[The information follows:]
Cochran Fellowship Program
In fiscal year 1997, a total of 707 participants from 45 countries
received training under the Cochran Fellowship Program. The following
provides the fiscal year 1997 participant levels by region and by
country:
--Asia: 154 participants from seven countries: Korea (20
participants), Malaysia (21), China (35), Thailand (17),
Indonesia (18), Philippines (26), and Vietnam (17).
--Eastern Europe: 182 participants from 13 countries: Turkey (19),
Poland (56), Hungary (9), Czech Republic (10), Slovakia (11),
Albania (6), Bulgaria (11), Slovenia (12), Croatia (10), Latvia
(8), Estonia (9), Lithuania (7), and Rumania (14).
--Latin America: 87 participants from seven North, Central, and South
American countries: Mexico (37), Venezuela (13), Trinidad and
Tobago (9), Barbados and Other West Indies (3), Panama (6),
Colombia (14), and Chile (5).
--Africa: 61 participants from African countries: Cote d' Ivoire (9),
Tunisia (10), South Africa (30), Namibia (2), Kenya (5), Uganda
(2), and Senegal (3).
--New Independent States: 223 participants from the New Independent
States of the Former Soviet Union: Russia (53), Ukraine (45),
Kazakstan (23), Kyrgyzstan (8), Uzbekistan (27), Turkmenistan
(8), Tajikistan (5), Armenia (16), Moldova (21), Georgia (10),
and Azerbaijan (7).
In fiscal year 1998, the Cochran Fellowship Program will continue
work in the above mentioned countries. In addition, pilot programs will
be started in Brazil, Bosnia, Costa Rica, Guatemala, and Tanzania, and
the program will be expanded in size (increase in the number of
participants) in Kenya, Uganda, and Senegal.
We expected to provide training to about 760 participants in fiscal
year 1998. Delay in receipt of U.S. AID and EMP until May, 1998,
however, will most likely reduce the number of participants from
countries in the NIS and Eastern Europe during fiscal year 1998.
The benefits of 1997 the Cochran Fellowship Program to U.S.
agriculture can be categorized under the following topics:
I. Sales of U.S. Agricultural Commodities.--An immediate benefit of
the Cochran Program is the sale of U.S. agricultural commodities or
products that come about from information gained and/or direct contacts
provided by participant training. Each year we receive information from
past participants, from U.S. companies and associations, and from
various agricultural offices about sales of products or commodities
that are directly and indirectly related to Cochran Program training
activities. The following provide examples of some of our most recent
sales information:
FAS/Fish and Forestry Products Division reports that a Cochran trip
to U.S. lumber mills for Polish furniture manufacturers was very
effective in promoting U.S. exports of hardwood lumber. The trip: (i)
created personal relationships that resulted in each participant making
orders for U.S. hardwood lumber, (ii) cleared up misunderstandings
about contract specifications, and (iii) may result in future exports
of U.S. hardwood totaling $25 million.
Another report from Poland states that a 1997 participant purchased
over 300 metric tons (about $500,000) of U.S. prunes and several tons
of U.S. almonds and sunflower seeds. Another participant started
imports of U.S. shelled peanuts, his first order in June, 1997,
amounting to $25,000.
A 1995 Polish participant reports that he gained ideas on how to
use U.S. popcorn. Today he imports over 100 containers/year of U.S.
popcorn (30 containers by June 1997) for use in caramel corn and other
popcorn snacks.
The Agricultural Office in Sweden reported that Latvian and
Estonian importers contracted for $300,000 per month of U.S. consumer
and confectionery products after their program at the Food Expo in
Chicago.
A 1996 Slovenian feed mill team returned from their Cochran Program
and ordered 20,000 MT of soybean meal--the first of many purchases.
A 1997 Colombian participant has finalized arrangements to be a
distributor of a line of U.S. consumer ready products and expects to
import 14 containers (@$400,000) by the end of the calendar year.
Almost immediately after a 1997 joint Cochran/CoBank/National
Cattlemen and Beef Association (NCBA) program for Mexican bankers on
the GSM-103 Livestock Program, there were five livestock sales
registered with USDA (about $2.2 million), and two other sales were
reportedly in the works ($3 and $4 million respectively).
The New Jersey Department of Agriculture reports that New Jersey
seafood exports to China have doubled since a Cochran Seafood Buyers
program in September 1995. Exports now exceed $1 million per year.
The Agricultural Office in Malaysia states that ``the Cochran
NASDA/FMI program has proven to be very effective in generating sales
of U.S. high value products as the participants are importers and
supermarket managers. Although specific figures are lacking, the FAS
office has received feedback from FMI exhibitors/suppliers who
indicated that they had received trade leads from the participants and
are very positive in establishing business ties.''
A Vietnamese participant stated recently that his company has been
importing 2-3 containers per month of U.S. pistachios since June, 1997.
Another Vietnamese supermarket owner has imported 3 containers of
consumer ready products to test the market for U.S. products. Sales
thus far are encouraging.
A 1997 Armenian supermarket owner reports that he has widened his
U.S. product lines to include deli meats, fish, baby food and cookies
after participation in his Cochran Consumer Foods Program.
II. Constraints to Imports of U.S. Agricultural Commodities and
Products.--Many constraints to the export of U.S. agricultural products
can be categorized as sanitary and phytosanitary (SPS) restrictions to
trade or market access barriers. Cochran training through agencies such
as the Food Safety Inspection Service (FSIS); Grain Inspection, Packers
& Stockyards Administration (GIPSA); Animal and Plant Health Inspection
Service (APHIS), State Departments of Agriculture, Food and Drug
Administration (FDA) and the Environmental Protection Agency (EPA), and
with private agribusinesses, provide technical information to country
counterpart agencies and help to improve the opportunities to export
U.S. products into countries.
During 1997, 59 Cochran fellows from 18 countries participated in
24 programs directly related to providing information on the safety of
the U.S. food and fiber system as well as providing direct contact with
U.S. counterparts.
The Agricultural Office in Stockholm reports that the meat
inspection program for two Latvian veterinarians has been used to help
establish new sanitary border inspection procedures. He states that
``such education is essential support to the already growing import and
transit markets for a widening array of meat and meat products.''
The Tunisian Agricultural Office reports that the Veterinary Team
``is in the process of developing with APHIS a live cattle and bovine
embryo protocol for U.S. imports in Tunisia, as well as a memorandum of
agreement with Texas A&M University for promoting the exchange of
faculty and qualified students in areas of mutual interest, such as
infections and parasitic diseases of food animals and nutrition.''
The Agricultural Office in Indonesia states that the participant
``has used his food safety training to develop a draft regulation on
Food Security as well as input into drafts of the Indonesian Food Law
Regulations.''
The Agricultural Office in Vienna writes: ``The new Chief
Veterinary Officer in Slovenia is a Cochran alumnus, which bodes well
for relations between his office and FSIS as well as this office as we
work toward agreement on sanitary inspection certificates to allow U.S.
red meat into Slovenia.''
The Agricultural Office in Korea states: ``The Cochran Program
provides the resources to address food safety issues, perhaps the
largest, singularly most restrictive barrier for U.S. products in the
Korean market.''
III. Foster Business to Business Contacts.--One of the major
objectives of Cochran training is to put the international participant
in direct contact with U.S. agribusiness. Even if immediate sales do
not result, follow-up contact with participants in their home country
may lead to future international opportunities for U.S. business.
Cochran fellows make contact with thousands of U.S. agribusinesses
through product or commodity tours, technical discussions, or via
participation at trade shows. Participation in commodity- or topic-
specific trade shows or association meetings allow participants first-
hand contact with a wide-range of U.S. agribusinesses. Several of the
trade shows that were attended in 1997 by Cochran fellows include the
Food Marketing Institute/National Association of State Department of
Agriculture (FMI/NASDA) Food Expo, Produce Marketing Association (PMA)
Show, Institute of Food Technologists, World Dairy Expo, World Beef
Expo, San Francisco Seafood Show, International Poultry Expo,
International Baking Industry Expo, American Seed Trade Conference,
National Building Products Expo, Woodworking and Furniture Supply, High
Point Furniture Show, National Homebuilders Association Expo, Wine
Spectator Showcase, National Restaurant Show, National Barrow Show,
World Pork Expo, American Feed Industry Association Show, All Candy
Exposition, and the Fancy Food Show.
The Agricultural Trade Office (ATO) in Guangzhou writes that the
Chinese Supermarket Program ``. . . is beneficial to American
agricultural products because (the team) were so impressed with the
high quality and diversity of U.S. products that some of them are
considering carrying more products in their stores. As a result, the
largest supermarket chain in China is scheduled to host an American
Food Promotion in December 1997 at 11 major stores.''
The Director of the Appalachian Hardwood Manufacturers writes about
a Polish team: ``We hope that our members were able to make good
contacts with these companies and begin a business relationship. These
were new companies to our exporters who were interested in exporting to
Poland. This service allows American companies to have access to new
business and contacts that would be difficult to establish on their
own.''
``During the last visit of the U.S. Meat Export Federation
representative to Poland, we had a chance to meet with several former
participants. Most, who traveled to the 1995 International Meat
Industry Convention and Expo in Chicago, started to import pork and
offal from U.S. suppliers. ELKOPOL company became a major player on the
Polish market, importing large quantities of U.S. tripe and pork offal.
All claimed that as a result of their Cochran trip, they build their
first contacts with U.S. suppliers of meat and meat products.''
(Agricultural Office, Warsaw)
A Russian textile company employee wrote: ``The Memphis Cotton
School offered excellent coverage of all facets of textile production
contract buying. They also provided us with prospects for increased
cotton purchases from the U.S. in the future.''
IV. FAS Agricultural Affairs Offices.--The primary contact for
Cochran activities in each country is FAS's Agricultural Affairs Office
and Agricultural Trade Offices (ATO). FAS staff describe the benefits
of Cochran training programs to their offices in terms of initiating
and maintaining contacts with public- and private-sector decision
makers, opening lines of communication that are useful for the
resolution of trade issues, building good relations with international
governments, influencing trade policy issues, and using former Cochran
private sector businesses as contacts for U.S. exporters.
``Among the South China Supermarket Executives, (the training)
planted the seed of goodwill and friendship without which business
relationships can hardly be established and sustained.'' (ATO/
Guangzhou)
The FAS Office of Agricultural Affairs (OAA) in Seoul, Korea,
stated: ``As noted by predecessors, the Cochran Fellowship Program is
perhaps the single most important tool available to OAA for achieving
desired dual objectives of development of domestic agricultural systems
and enhancement of U.S. agricultural interests in Korea.''
The FAS Agricultural Attache in Vietnam states: ``FAS/Hanoi is
extremely pleased with the development of the Cochran 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.''
The Agricultural Officer in South Africa writes, ``From our
perspective on what the program has done to promote both U.S.
agricultural interests and USG policy objectives to support the new
multi-racial democracy in South Africa, the Cochran Program has been
one of the key ingredients of our program activities in this country
and the region.''
Submitted Questions
Senator Cochran. Thank you.
I do not have any other questions at this time. We do have
a few that we will submit for the record so that we will
understand the budget request as we have to before we make a
decision on the committee print. But we thank you very much for
your cooperation and your assistance to the committee.
[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
Question. Mr. Schumacher, in your testimony you mention that the
Department has entered into a contract with an independent consultant
who is examining further steps, if any, can be taken to improve the
efficiency of our farm and rural program delivery system. Is this the
same study that was proposed last year to see if FSA and NRCS should be
merged together into one agency?
Answer. The study currently being conducted by Coopers and Lybrand
is the same study that was proposed last year.
disaster supplemental
Question. Supplemental appropriations provided a total of $95
million for the Emergency Conservation Program (ECP) in 1997. At the
end of fiscal year 1997, $79 million was the unobligated balance. As of
March 12, 1998, approximately $9.7 million of that total still remains
unallocated. How much of the remaining balance of $79 million has been
used for disasters occurring in 1997?
Answer. Because of the nature of this program it is not unusual for
the ECP to have a large unobligated balance at the end of the fiscal
year. For fiscal year 1997, the unobligated balance reflected funding
that was allocated to States but not obligated before the end of the
fiscal year. Therefore, although it may appear that the funding is
available for use, the majority of it had been allocated to the States.
Also, the large unobligated but allocated balance was due to the timing
of receiving supplemental appropriations during the fiscal year.
The beginning unobligated balance for fiscal year 1998 was $79
million, of which $57 million had been allocated to States during
fiscal year 1997 and the remaining $22 million is available for new
allocations starting in fiscal year 1998.
As of December 31, 1997, a total of $3.1 million had been allocated
to several States for damages caused by natural disasters, such as
droughts, flooding, Hurricane Norma, and tornadoes.
Question. Has any of the unobligated funds of $79 million been used
for the recent disasters occurring in 1998? If so, how much?
Answer. As of March 24, 1998, a total of $11.3 million has been
allocated to several States for damages caused by recent natural
disasters, such as flooding, ice storms, tornadoes, and typhoons.
Question. Is the $9.7 million of unallocated money available to
meet disaster needs in fiscal year 1998?
Answer. Yes it is. We expect to get additional requests for ECP
funds because of the high level of damage caused by recent natural
disasters. It is very likely that all of this funding will be allocated
well before the end of the fiscal year.
Question. Please list all items and activities which are covered
under the ECP program, i.e. irrigations systems, fences, etc.
Answer. Items and activities covered under ECP practices are:
emergency conservation practices
Practice EC1, Removing Debris from Farmland. This practice provides
assistance to remove debris from farmland damaged by natural disasters
and return that farmland to productive agricultural use.
Practice EC2, Grading, Shaping, Releveling, or Similar Measures.
This practice provides assistance to grade, shape, and relevel farmland
damaged by natural disasters and return the land to agricultural use.
Practice EC3, Restoring Permanent Fences. This practice provides
assistance to restore or replace farmland or ranch land fencing damaged
by natural disasters.
Practice EC4, Restoring Structures and Other Installations. This
practice provides assistance to restore structures and installations
such as dams, terraces, and waterways damaged by natural disasters.
Practice EC5, Emergency Wind Erosion Control Measures. This
practice provides assistance to apply emergency wind erosion control
measures such as contour or cross slope chiseling, or deep plowing on
similar measures, to farmland damaged by natural disasters.
Practice EC6, Drought Emergency Measures. This practice provides
assistance to provide water conservation and enhancement measures to
permit grazing of range or pasture, emergency water for livestock, or
emergency water supply for existing irrigation systems for orchards and
vineyards, on land suffering from severe drought.
Practice EC7, Other Emergency Conservation Measures. This practice
is to allow other emergency conservation practices not covered above.
Question. Please explain how initial ECP needs and estimates are
collected. If these estimates/needs turn out to be incorrect, what is
the procedure to reallocate this money among other States?
Answer. Initial estimates on the amount of ECP funds needed are
obtained from the local county FSA office where the damage has occurred
and communicated through the State office to the National level. ECP
funds, if available, are then allocated based on these estimates. If
ECP funds are not available, these estimates serve as the basis for
allocations should funding become available. If initial estimates
exceed the funds actually needed, the funds are returned to the
National level and made available as needed for disasters in other
States provided the appropriations act making those funds available did
not restrict the use of these funds. If initial estimates are less than
the funding needed, additional funds are provided, if available.
Question. How does the Agency distinguish between unobligated and
allocated funds?
Answer. Allocated ECP funds are funds made available to States to
cover estimated needs as reviewed at the National level. Obligated ECP
funds are those which have been officially approved for disbursement to
pay for completed emergency conservation work; unobligated funds are
all funds that have not been officially obligated. All allocated funds
are potentially obligated funds, but because there is a time lag
between allocation and obligation, a snapshot of the program's
unobligated funds at any given time includes both allocated funds that
have not yet been obligated and funds at the National level that have
not been allocated, if any.
In instances where a State's allocation exceeds the amount actually
needed for obligations to cover completed emergency measures, the
allocated but unobligated funds are, as noted above, returned to the
National level and may be reallocated to another State as needed.
user fees
Question. The fiscal year 1999 President's budget proposes user
fees to cover the costs of collecting and processing information of
interest to private individuals and companies. Please explain this user
fee proposal more fully. Which groups of people would be affected by
this?
Answer. In 1999, FSA proposes to begin to charge fees to cover the
costs of collecting and processing information of interest to private
individuals and companies, such as crop insurance companies,
appraisers, agricultural consultants, other agencies, etc. Information
products developed from these collections shall be priced at the full
costs of processing and dissemination. In FSA county offices, the
information would include acreage and production reports, Highly
Erodible Land Conservation and Wetland Conservation certifications,
CRP/WRP data, and other miscellaneous requests for producer and crop
data which are requested throughout the year by private and public
individuals and companies. These requests may range from one report to
all of these sources of data and can be area specific because of
different farming practices, farmland values, conservation and water
rights issues, pesticide and herbicide regulation issues, landlord and
tenants rights disputes, real estate appraisals, and other types of
land development issues. An estimated $10 million would be collected
through fees from these businesses and other agencies, which would be
available for salaries and expense obligations.
Question. Is this collection of user fees supplementing existing
appropriations for these activities?
Answer. The collection of user fees is substituting for, not
supplementing, existing appropriations. If fees are not realized, up to
223 non-Federal county office staff years could not be funded.
Potential constraints on realizing significant revenue are that FSA
cannot provide any information that would violate the Privacy Act
without specific permission from the applicable program participant,
and the volume of fee waivers could also impact revenue.
Question. What level of appropriations will be spent on these
activities in each of fiscal year 1998 and 1999 without the
implementation of user fees?
Answer. User fee collections are a proposed source of funding and
would finance payroll in order to save budget authority of $10 million.
It has been estimated that these additional fees could generate $10
million to fund FSA salaries and expenses, but these estimates are
tentative. To date, there has been no determination of how customers
would be charged or what the actual charge per request would be. FSA
does not have any data to indicate the current level of expense for
these activities.
salaries and expenses
Question. The net fiscal year 1999 program level, not including the
Common Computing Environment (CCE) earmark of $30 million, totals $946
million. This is $17 million less than the fiscal year 1998 program
level of $963 million. The fiscal year 1999 budget request proposes an
increase of $17.8 million in transfers for administrative expenses. The
increase will support an increase of 200 full time equivalents (FTE's)
at the county level, updated computer systems, systems development and
support. What will be the result of an even further decrease in Federal
staff years and non-Federal county staff years?
Answer. FSA has several sources of funds to support staffing
levels, including funds carried forward from the prior year under
authority of a general provision in annual appropriation acts. Although
total S&E available funds have decreased by $36.5 million, the fiscal
year 1999 ACIF account proposes a requested level of $227.673 million,
an increase of $17.8 million to provide an adequate level of personnel
qualified to perform farm loan activities. The fiscal year 1999 Budget
proposes a net reduction of 1,118 staff years for fiscal year 1999, of
which 263 are Federal staff years and 855 are non-Federal county office
staff years. This is composed of a staff-year decrease of 1,060 FTE's
required by lower funds carried forward from the prior year and the
direct appropriation, partly offset by an increase of 205 FTE's funded
through reimbursements and user fees. While lower available funds
necessitate lower staffing, the decrease is also attributable to
somewhat lower workload (except for farm loan workload) under the 1996
Act. The staffing reductions we are proposing for fiscal year 1999 may
require a reexamination of our county office structure. Any closure
decisions will be made in light of cost effectiveness and quality of
service to the producer.
Question. Will additional county offices be closed?
Answer. Under the 1994 plan, a total of 373 FSA county offices were
scheduled to be closed by the end of fiscal year 1997. Five county
offices were closed at the beginning of this fiscal year to achieve
this closure plan goal. As of January 1998, there have been no
additional closures in fiscal year 1998. We expect to be able to use
the results of the outside contractor study in guiding our actions to
achieve any required office closures through a solid independent
workload analysis of the county-based agencies.
Question. What will the decrease be in Federal staff years and non-
Federal county staff years from fiscal year 1998 to fiscal year 1999 if
the new user fee collections are not realized?
Answer. The anticipated collection of $10 million would fund 223
county staff years, and the total county staffing reduction would be
855 versus 1,078 FTE's. If the fiscal year 1999 proposed user fee
legislation is not enacted, the Agency would need an increase of $10
million in direct appropriation to fund 223 county office staff years.
The user fee collections would not impact Federal staff years.
Question. The fiscal year 1999 budget request proposes a decrease
of $10.9 million for a 263 reduction of Federal staff years. The total
reduction for staff years for fiscal year 1999 is 1,118, with the
remaining reduction resulting in 855 non-Federal county office staff
years. Was this reduction of staff years included in the total 2000
FTE's that were to be eliminated as proposed last year or an additional
reduction of staff years?
Answer. Yes, the reduction of staff years was included in the
original total of 2,119 FTE's that were to be eliminated as proposed in
last year's budget for fiscal year 1998. This fiscal year, FSA is using
$50.8 million in carryover funding from fiscal year 1997, in lieu of
appropriations which were reduced by Congress in 1998, for salaries and
expenses to fund non-Federal staff years. Consequently, a more modest
reduction of Federal and non-Federal staff years was necessary in
fiscal year 1998 because of the use of available carryover funds. This
allowed the Agency to operate consistent with its anticipated fiscal
year 1998 workload. The remaining reductions were achieved through
buyouts, a reduction-in-force, the offering of early outs without
voluntary incentive payments, and normal attrition.
Question. Due to the proposed staffing reductions, closure of FSA
county offices will have to be reexamined. Does the Agency have
preliminary estimates as to how many and the location of these offices
that may be consolidated or closed?
Answer. Once the Agency has an opportunity to analyze the impact of
the results of the independent study which will assess Agency workload
estimates and identify criteria for determining the most efficient use
of office staffing and to consider the prospective impact of
administrative convergence on county office operations, FSA will be in
a better position to identify the number of offices and the specific
locations of consolidations and closures, where necessary.
Question. Mr. Kelly, you state that you will keep the Committee
apprised of any prospective closures. How do you plan to keep the
Committee apprised?
Answer. We intend to continue providing periodic status reports on
possible office closures, consistent with guidance from the Secretary,
to ensure that you and other interested Members of Congress are
apprised of our plans in this area.
Question. For the Service Center Implementation/Common Computing
Environment, the fiscal year 1999 budget request proposes an increase
of $30 million for FSA's salaries and expenses. Natural Resources
Conservation Service and Rural Development will also contribute funds
to this project. How much have these agencies proposed to contribute?
Answer. The Natural Resources Conservation Service and Rural
Development will contribute $15 million and $7 million, respectively,
during fiscal year 1999 towards the Common Computing Environment.
Question. Will the CCE project being completed in fiscal year 1999
require any more financing?
Answer. Hardware and software acquisitions for the Common Computing
Environment will be procured in three phases over several years. Phase
I will take place in late fiscal year 1998 and throughout 1999 at a
cost of about $100 million. Phases II and III will take place in fiscal
years 2000 and 2001 at a cost of about $250 million. This would
complete the hardware and software acquisition for the Service Centers.
Funding sources for the Common Computing Environment beyond fiscal year
1999 have not been identified.
Question. Why does this require an earmark as proposed by the
Agency?
Answer. The $30 million requested under FSA Salaries and Expenses
(S&E) will be combined with funds from the Commodity Credit
Corporation, the Natural Resources Conservation Service, and the Rural
Development agencies to start the USDA Service Center Common Computing
Environment. The appropriations language we are proposing merely
denotes that $30 million of the FSA S&E request is for the CCE and is
not available for any other purpose, including staffing.
Question. Does the Agency or the Secretary of Agriculture have a
proposal to convert FSA non-Federal county committee employees, with
their career tenure, to Federal civil service status? If not, what has
been proposed by the Secretary?
Answer. The Secretary of Agriculture is on record as supporting
pending legislation introduced by Congresswoman Eva Clayton favoring
converting FSA non-Federal county committee employees, with their
career tenure, to Federal civil service status. Conversion of these FSA
non-Federal employees to Federal civil service status would greatly
improve our program delivery and would eliminate the challenges FSA
currently faces in operating two different personnel systems for
employees in county offices.
Question. Carryover funds used in fiscal year 1997 for staffing
expenses will not be available for fiscal year 1998 resulting in a
decrease of $37.8 million. Due to the lack of these carryover balances,
non-Federal county office staff years will result in a proposed net
decrease of 855 FTE's from fiscal year 1998 to 1999. Were these numbers
included in the target reduction number of 2,500 FTE's that you
announced last year?
Answer. Yes, the reduction of staff years was included in the
original total of 2,119 FTE's that were to be eliminated as proposed in
last year's budget for fiscal year 1998. For fiscal year 1998, FSA is
using $50.8 million of the available fiscal year 1997 carryover balance
of $63.8 million to finance fiscal year 1998 staffing and related
costs, leaving an unused balance of $13 million. In fiscal year 1999,
FSA will use the remaining $13 million to help finance staffing costs.
Because of the use of fiscal year 1997 carryover funds, a more modest
reduction of Federal and non-Federal staff years was necessary in
fiscal year 1998. These lower reductions were achieved through buyouts,
a reduction-in-force, the offering of early outs without voluntary
incentive payment, and normal attrition.
Question. Wasn't the Agency aware of these unavailable funds last
fiscal year?
Answer. Yes, the Agency was aware of the funding situation last
fiscal year and took action to notify the Department. The carryover
balances, which resulted largely from States not filling funded
vacancies in 1997 in anticipation of the large budgeted reductions for
1998, were taken into account by Congress in appropriating lower than
requested salaries and expenses funding for 1998. The total available
funds for non-Federal county office activities in fiscal year 1998
included funds carried forward from the prior year. For fiscal year
1998, FSA is using $50.8 million of the available fiscal year 1997
carryover balance of $63.8 million to finance fiscal year 1998 staffing
and related costs, leaving a balance of $13 million. In fiscal year
1999, FSA will use the remaining $13 million to help finance staffing
costs.
Question. There is much frustration in the State FSA field offices
under the current environment at USDA. State Directors feel that they
do not know what is expected of them nor do they know what human
resources will be available from year to year. Without clear goals and
a strategic short term and long term plan of operation the field
offices are left to make inadequate management decisions. Does USDA
know how FSA will proceed in the future with the structuring of their
field offices and does a strategic plan of operation exist? If yes, has
this been communicated to all State Directors?
Answer. A strategic plan has been developed for the Agency which is
included in the USDA strategic plan. FSA is committed to implementing
the concepts in the Blair House Papers giving more responsibility and
accountability to State Directors. An FSA SED conference is being held
March 24 through 27, 1998, in Arlington, Virginia. This conference has
been scheduled to discuss such issues as administrative convergence,
outreach/civil rights, farm loan programs, farm programs, management
issues and strategic planning. A notice will also be released this week
delegating the responsibility for insuring budget and personnel ceiling
constraints to SED's. A task force has reviewed the current delivery
system, but no final decision has been made on the structure of field
offices.
Question. Have State Directors been given the criteria used to
determine their staff ceilings and their budget so they can make
management decisions necessary to stay within the budget? If not, why?
Answer. In an August 22, 1997 memo, State Directors were issued
personnel ceilings for Federal and non-Federal employees for fiscal
year 1998. After the FSA 1999 appropriations are passed, State
Directors will be issued ceilings for fiscal year 1999. The analysis
for determining the allocation of ceilings to each State has not been
determined at this time. Plans are currently being implemented to
delegate to State Directors the authority to manage budgets, ceilings
and personnel within their respective States.
Question. What is the Agency's plan to respond to and address
discrimination complaints?
Answer. FSA is currently staffed with nine EEO counselors located
in various FSA State offices. The counselors are available to FSA
employees in the pre-complaint process. By the end of April 1998, FSA
will be fully staffed with 11 full-time counselors. FSA has established
15 Fact Finder positions in Montgomery, Alabama, to perform fact
finding inquiries into program complaints FSA-wide. This staff will
report to the Director, Civil Rights and Small Business Utilization
Staff. Within the next four to six months, FSA will be implementing a
mediation program in the pre-complaint process. This program is
intended to reduce the number of formal EEO complaints, speed up the
complaint process, and preserve ongoing working relationships. Prior to
implementation of this mediation program, all counselors will receive
mediation training which will give them the necessary skills to act as
intermediaries.
Question. USDA created the service center concept during
reorganization. Service centers are used to provide ``one stop
shopping,'' thus the Agency's customers can perform all of their
business transactions at one place rather than traveling to several
places. Has the service center concept been integrated in all State
field offices?
Answer. The Service Center concept is still in the process of being
implemented in all State field offices. The office closure/opening/
collocation and the LAN/WAN/VOICE installation phases of this
initiative will be completed by December 1998. These two initiatives
provide the foundation for business process reengineering and
subsequent information technology investment. Integration of business
processes is under evaluation, with pilot testing currently underway.
When the pilot testing is completed and the new business processes are
identified, these processes will be implemented in all Service Centers
and the Service Center concept fully implemented.
Question. Why does the administration call a USDA office a
``service center'' when in many cases only one Agency (FSA, NRCS, or
RD) is housed in the office?
Answer. The National Food and Agriculture Council (FAC), at the
request of the Secretary, is reengineering, modernizing, and
streamlining the processes of county-based Service Centers. The
National FAC established the Service Center Implementation Team (SCIT)
to design and implement the changes required to achieve an integrated
Service Center environment that will provide customers with ``one stop
service.'' Under the service center concept, customers will be provided
services by trained and knowledgeable USDA employees who are willing
and able to accommodate customer requests, regardless of a particular
Agency's presence in a Service Center. While there are many specific
benefits for both customers and the partner agencies, the primary
benefit is that of achieving the Secretary's vision of a more efficient
delivery of USDA programs to rural America.
Question. USDA is planning to undergo administrative convergence,
using one administrative support staff for all field offices. Has the
USDA thoroughly studied all options for administrative convergence?
Answer. The Secretary of Agriculture announced administrative
convergence plans in July 1997 to consolidate the administrative
support functions of the USDA county-based agencies to reduce costs and
streamline offices. Phase one created the Administrative Convergence
Action Team (ACAT), comprised of nearly 200 USDA employees,
representing each of the impacted agencies and every aspect of
operations. The ACAT was successful in developing the initial report
that included a thoughtful series of options which set a solid
foundation for the success of this critically important project. In
phase two, Deputy Secretary Rominger and members of the Subcabinet
developed the proposed framework for administrative convergence. Based
on this proposed framework, the Secretary initiated the implementation
phase of administrative convergence on March 16, 1998.
Question. Have plans for implementation been determined and have
State field offices been notified?
Answer. Following the Secretary's initial review of the proposed
framework, USDA's State leaders were given the opportunity to comment
before the final decision was made. A number of thoughtful and
important questions were raised and can only be answered during the
next phase leading up to implementation, which is projected to occur by
October 1, 1998.
Question. Will this convergence be considered as the Agency
undergoes the service center implementation/common computing
environment?
Answer. Yes, the Secretary is committed to the continued re-
invention of basic business processes and the successful establishment
of a common computing environment.
Question. The proposed fiscal year 1999 budget assumes a reduction
in non-Federal county employees and a reduction in Federal employees as
well. What is the rationale for proposing a major reduction while at
the same time the Department has hired Coopers & Lybrand to study the
workload requirements of the field delivery system?
Answer. The net reduction in staffing is driven by further declines
in expected workload stemming from the 1996 Farm Bill and the need to
make hard choices to balance the Budget. The Department entered into a
contract with Coopers & Lybrand to conduct a study of the farm and
rural program delivery system of the county-based agencies, FSA, NRCS,
and RD, to be completed by September 1, 1998. The study will clearly
identify the purposes Agency operations are intended to achieve,
provide an independent assessment of Agency workload estimates,
consider the prospective impact of administrative convergence on county
office operations, identify criteria for determining the highest value
use of office staff, evaluate office operations efficiencies gained so
far, and assemble a profile of the USDA customer base as defined by
eligibility for program benefits. Finally, the study will identify
alternative decision systems or organizational structures for matching
USDA resources with customer needs and preferences. We expect to be
able to use the results of the Coopers & Lybrand independent workload
analysis of the county-based workload study in guiding our actions to
determine the most effective use of office staff which may result in
office closures or additional consolidations. At the time of completion
of the study, all recommendations will be analyzed to see what further
steps, if any, can be implemented to improve the National, State, and
county-based delivery systems.
Question. Does the Secretary support the conversion of county
employees to Federal status?
Answer. Yes, the Secretary supports converting FSA non-Federal
county committee employees, with their career tenure, to Federal civil
service status. Conversion of FSA non-Federal employees to Federal
civil service status would eliminate the difficulties FSA currently has
in operating two different personnel systems for employees in county
offices. These difficulties include the fact that non-Federal FSA
employees cannot compete for FSA Federal vacancies on an equal footing
with Federal employees, non-Federal employees who are RIF'd are not
entitled to assistance and priority placement under the Career
Transition Assistance Program, and FSA is required by law to establish
separate supervisory reporting lines for non-Federal and Federal
employees located in the same county office.
Question. Why has the Department made the decision to fill ACO
positions, Federal only?
Answer. The Secretary favors Federal control of Farm Loan Programs
(FLP) to maintain uniform management and accountability. The Office of
General Counsel has advised that if non-civil service (county
committee) employees are involved in loan making or loan servicing
decisions, the 90-day finality rule would apply to those decisions
which would create additional liability for the Department.
FSA has established Agricultural Credit Officer (ACO) training type
positions in county offices to perform loan making and servicing
according to supervised credit principles when there are not enough
fully trained and experienced credit officers to provide supervised
credit in the manner needed by FSA. Delegating farm loan making
authority and some servicing authorities exclusively to Federal
employees facilitates the effective delivery of FLP in county offices
by having all ACO's under the same personnel system, supervisors, and
guidelines. It promotes Federal control of FLP by ensuring that direct
line authority extends from the Secretary to Federal employees in local
county offices and eliminates FLP liability from the 90-day finality
rule.
Question. The county committee system is the backbone for the field
delivery system. Retaining county committee authority in decision
making is very important to the farming community. Under what authority
did the Department remove from the county committees the eligibility
determination to apply for guaranteed loans?
Answer. The Department of Agriculture Reorganization Act of 1994,
Sec. 227(a), says in part that the Secretary shall use the services of
committees in carrying out the agricultural credit programs under the
Consolidated Farm and Rural Development Act. The statute does not
dictate to what extent the county committees will be used nor is
committee action to determine eligibility required. The degree of
committee involvement in FSA farm loan programs is discretionary. The
Secretary determined that allowing credit officials to determine
eligibility for loan guarantees would reduce application processing
time and streamline the approval process. The removal of county
committees from the loan eligibility process is consistent with
recommendations from USDA's Civil Rights Action Team and has the full
support of lenders using the guarantee program.
We agree that county committee input is very important to the
farming community and the success of FSA programs. The grass roots
knowledge that county committees have and the advice that they give is
very valuable to making decisions regarding farm loan programs, and we
continue to capitalize on that knowledge and rely on their advice. It
is not, however, essential for the county committee to be involved in
determining eligibility on every loan guarantee application, nor is it
an effective use of the committees' time.
Question. Reports have surfaced that the Department has developed a
task force report on the field delivery system. Is this the case?
Answer. A task force was appointed to address the interim and long-
term needs of FSA's delivery system. This is still in the developmental
stage for the Agency. The Secretary has also contracted with Coopers
and Lybrand to provide alternative approaches to organizing and
staffing USDA's county-based operations in delivering services that are
clearly linked to Federal policy and program priorities and that can be
managed to meet Federal budget targets. The study will (1) identify the
purposes Agency operations are intended to achieve, (2) provide an
independent assessment of Agency workload estimates, (3) consider the
prospective impact of administrative convergence on county office
operations, (4) identify criteria for determining the highest value use
of office staff, (5) evaluate office operations efficiencies gained so
far, and (6) assemble a profile of the USDA customer base as defined by
eligibility for program benefits.
acreage statistics
Question. Does USDA have authority to allow producers to report
their planted acreage? Does USDA have authority to share planted
acreage data with private organizations who need such data?
Answer. Section 374(a) of the Agricultural Adjustment Act of 1938
(1938 Act) provides broad authority for collecting land and crop
information in support of programs administered by USDA. The statute
states that ``The Secretary shall provide for ascertaining, by
measurement or otherwise, the acreage of any agricultural commodity or
land use on farms for which the ascertainment of such acreage is
necessary to determine compliance under any program administered by the
Secretary.'' In addition, the 1938 Act and the Federal Agriculture
Improvement and Reform Act require the collection of acreage
information for all quota tobacco and quota peanuts and as a condition
of eligibility for the Noninsured Crop Disaster Assistance Program,
respectively.
However, information collections are subject to approval by OMB
under the Paperwork Reduction Act of 1995. USDA's approval for these
collections has lapsed as the result of OMB concerns about the
practical utility of the information being collected. USDA continues to
accept reports during negotiations with OMB for reapproval.
Information sharing with private organizations is limited by the
Privacy Act, 5 U.S.C. 552a, which prohibits disclosure of information
regarding farm operations without written consent of the individuals to
whom the records pertain. One exemption authorizes disclosure under the
Freedom of Information Act (FOIA), 5 U.S.C. 552(a)(b)(2). However, FOIA
restricts disclosure of information including, but not limited to,
Social Security Number, farm number, yields, crop bases, tillable
acres, and acreage information related to USDA-administered
conservation programs.
Question. Have other groups, organizations or agencies expressed
interest in working with FSA to obtain accurate crop acreage data?
Answer. Within USDA, interest in access to detailed or summary-
level information has been asserted by the Animal and Plant Health
Inspection Service; Cooperative State Research, Education and Extension
Service; Economic Research Service; National Agricultural Statistics
Service; Natural Resources Conservation Service; Risk Management
Agency; and World Outlook Board. USDA's Office of the Inspector General
classifies FSA's collection of this information as a key internal
control for $11 billion in annual program disbursements.
Beyond USDA, many State governments and local entities use the FSA-
collected land and crop information in support of State and local
programs, such as pesticide and fertilizer control programs and local
crop forecasts and analysis. Private crop insurance agents, reinsured
by USDA, also use and rely on FSA-collected information to verify crop
data reported by producers for crop insurance.
Appeals for continued collection and sharing of the information
have been received from the American Farm Bureau Federation, American
Sugar Cane League, National Cotton Council, National Farmers Union, and
a variety of rural land interests, such as the American Society of Farm
Managers and Appraisers.
Question. What is the status of any cooperative efforts between
USDA and NASA which decides the use of NASA facilities, personnel and/
or equipment to collect data using remote sensing, satellite or other
advanced technology?
Answer. USDA and NASA are in the final stages of establishing a
Memorandum of Understanding (MOU) on Cooperation and Coordination in
Science and Technology Research, Development, Transfer, Utilization and
Commercialization. The purpose of the MOU is to provide a framework for
the continued cooperation and coordination in the area of remote
sensing.
Both parties view this agreement as important for improving the
capability to collect data needed to improve precision agriculture
technologies, global crop-condition assessments, and natural resource
management. The Secretary signed the proposed MOU for USDA on February
27 and has forwarded the document to the NASA Administrator for his
signature.
fsa combination leases
Question. During 1997 FSA proposed classifying all combination
leases, those with a share and cash provision, as share leases. Based
on concerns expressed by landlords and tenants who participate in such
leases, FSA delayed implementation of the proposed procedure. Since
these leases are utilized in areas where low prices for cotton and
other commodities are causing production financing difficulties and
since the change would generate minimal savings, if any, would the
Agency consider allowing those who have historically utilized
combination leases continue to do so thereby making the change apply
only to new leases or to those combination leases where both parties
agree to the new determination?
Answer. The reclassification of combinations leases does not mean
that producers are prohibited by FSA from continuing to use such
leases. Audits conducted by the Office of the Inspector General (OIG)
confirmed that the majority of combination leases actually result in
share leases unless a disaster affects the crop. This meant that even
though the terms of the lease resulted in a crop share, FSA was
recognizing the lease as a cash lease in most cases. This resulted in
AMTA payments going to the operator when a portion should have gone to
the owner. OIG views combination leases that are considered cash leases
as a tool for allowing landlords to evade payment limitations. The
change corrects this inequity. The final regulation will be issued in
the near future and will address the issue of which leases/producers
will be subject to its requirements.
boll weevil eradication program and loans
Question. Since the program is continuing to expand, please provide
the Committee with an analysis of whether the program can succeed
without significant funding for Federal cost sharing and for the FSA
loan program--particularly while prices are low and acreage is in
decline.
Answer. We believe the boll weevil eradication program can succeed
with fewer Federal cost-share funds and a flexible loan program. Cotton
acreage has fluctuated significantly over the last two years, largely
due to recent changes in farm legislation. These swings in acreage make
it more difficult to provide the cash flow for the eradication program
in each new area. High acreage during the expensive few years of
eradication will result in high overall program costs. If acreage then
declines in the post-eradication phase as loans are being repaid,
grower assessments may not be sufficient to retire existing debt on
schedule.
Question. Is it accurate that USDA and Land-Grant University
analyses have concluded that the boll weevil program has generated
significant economic and environmental benefits in the Southeastern
States?
Answer. A report written by USDA and University of Georgia
researchers summarized the tremendous economic and environmental
benefits of boll weevil eradication in Georgia. According to the study,
cotton production has increased dramatically each year since the
program was completed in 1990. Average yield has increased from 482
pounds per acre in the pre-eradication period (1971 to 1986) to 733
pounds per acre in the post-eradication period (1991 to 1995). Acreage
has increased from an average of 288,000 to 770,000, and average gross
crop revenues have increased from $70 million to $400 million per year.
In addition, net crop revenues (gross revenues less insect pest
management costs and amount of damage) have increased from $187 to $451
per acre.
The report also identifies environmental advantages to growers and
residents of the State due to a significant decrease in insecticide use
in Georgia cotton. The average number of insecticide treatments has
decreased from 14.4 per acre in the pre-eradication period to 5.4 per
acre in the post-eradication period. In most cases, the materials used
are more specific, and the amount of active ingredient applied during
each treatment has been reduced from pounds per acre to a few ounces
per acre.
Question. How much of the APHIS funds go directly to the field and
how much are attributed to administrative overhead?
Answer. Approximately 86.1 percent of APHIS' funding is allocated
to the field for program delivery costs while 13.9 percent is allocated
for Agency and program-level support costs.
government performance and results act
Question. How are the Agency's annual performance goals linked to
the Agency's mission, strategic goals, and program activities in its
budget request?
Answer. The annual performance goals measure incremental
achievement of the Agency's strategic goals and, ultimately, the
Agency's mission. As such, many of the annual performance goals in the
Annual Performance Plans are similar to the strategic goals encompassed
in FSA's strategic plan. Furthermore, the Annual Performance Plan
reflects the program activities in the Agency's budget request,
summarized on a GPRA basis, including FTE staffing and funding
associated with achievement of annual performance goals.
Question. Could you describe the process used to link your
performance goals to your budget activities?
Answer. As a part of the budget process this year, a fiscal year
1999 Annual Performance Plan was developed and submitted which
contained performance goals relating to the Agency's strategic plan.
The Annual Performance Plan encompasses all program activities included
in the Agency's budget, and reflects the program activities associated
with identified performance goals. Both the Annual Performance Plan and
the fiscal year 1999 budget discuss the need for resources relative to
achieving program performance goals. This linkage also enables
decision-makers to assess the FTE's and funding requirements of the
strategic plan goal encompassing the program activities associated with
achieving annual performance goals.
Question. What difficulties, if any, did you encounter, and what
lessons did you learn?
Answer. Difficulties associated with establishing this linkage
included developing outcome measures for each of the program activities
encompassed in the budget, while maintaining an Annual Performance Plan
that is informative and concise and establishing quantitative
performance goals for program activities to show a definite cause and
effect relationship between the funding requested for program
activities and the expected outcome. There were also some timing
problems associated with linking available funding (e.g., receipt or
establishment of budgetary allowances) with related performance goals.
Question. Does the Agency's Performance Plan link performance
measures to its budget?
Answer. As part of the budget process discussed previously,
regarding linking performance goals to budget activities, performance
measures were incorporated in budget material to indicate expected
performance to be achieved, based on available funding.
Question. Does each account have performance measures?
Answer. Performance measures were developed for each FSA budget
account. Performance measures were developed for the strategic goals
and annual performance goals and then linked to budget accounts. Budget
accounts were aggregated where appropriate to tie in with strategic
goals.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The performance planning structure was aligned with the
structure reflected in the Strategic Plan. As such, annual performance
goals, measures, indicators, and baselines were developed for each
strategic goal and management initiative. The budget account structure,
however, differs from the performance planning structure. The budget
account structure encompasses program and salaries and expenses funding
requirements but does not separately address certain administrative and
support functions, such as outreach, equal employment opportunity, and
information technology initiatives. Instead, these functions are
aggregated and reflected in the Agency's salaries and expense accounts
by goal. Also, the performance plan will report whether or not annual
performance goals were achieved with available funding for those
activities. The budget justification is not currently developed to
justify these types of resources primarily on a performance budget
basis.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. Presently, there are no plans to change the FSA account
structure for fiscal year 2000, since there is linkage between the
account and activity structure in the budget and GPRA program
activities.
Question. How were performance measures chosen?
Answer. Performance measures were developed by Agency
representatives within their respective areas of responsibilities. The
FSA Corporate Affairs Group worked closely with Agency representatives
from program and administrative areas to ensure performance measures
captured significant, vital operations. This ongoing interaction
continues as the Agency strives to develop a greater number of outcome
measures reflecting results, or impacts, of Agency programs.
Question. How did the Agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. In many instances data collection systems and verification
methods were already established prior to the development of
performance measures. As such, managers were able to utilize existing
technology, processes, and resources to collect and evaluate data.
Instances in which data collection systems and/or verification methods
were not available required consideration of several factors to
evaluate the cost versus the benefit of data collection and
verification methods. Factors considered included actual/anticipated
policy or organizational changes within program and administrative
operations, available technology and funding, internal and external
risk factors, and the degree to which FSA operations influence
performance results.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. As reflected in the Annual Performance Plan, some
performance measures exist for which resulting data may not be
available for inclusion in the fiscal year 1999 Annual Performance
Report, which is due in March 2000. Instances in which data is not
available will be reflected in the Annual Performance Report
accompanied by an explanation supporting the reason data is unavailable
and anticipated timeframes to obtain the data. However, prior to
preparation of the fiscal year 1999 Annual Performance Plan Report, FSA
will diligently strive to develop systems facilitating the collection
and evaluation of all required data.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. The Agency was diligent in ensuring that the most critical
performance goals were included in the FSA Annual Performance Plan.
Lower-level, less critical performance goals were evaluated for
inclusion in Division and Branch level plans. As such, we recommend
that the subcommittee track all of the annual performance goals in the
1999 Annual Performance Plan.
Question. In developing your Annual Performance Plan, what efforts
did your Agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. During the development of the 1999 Annual Performance Plan,
Agency managers were apprised of the distinction between output and
outcome measures and were encouraged, to the extent possible, to
develop outcome measures in their area of responsibility. We also
worked with OMB and USDA staff offices to assist in this effort.
Currently, the majority of the performance measures in the Annual
Performance Plan are outputs rather than outcomes. Furthermore, output
measures are often most appropriate for evaluating achievement of
annual performance goals, for often outcomes will take multiple years
to be achieved and evaluated. The Corporate Affairs Group, however,
will continue working with program managers to develop outcome
measures, where applicable.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Agency program managers understand the distinction between
output and outcome measures. However, developing outcome measures is
often not feasible for interim timeframes, such as the short-term
timeframes encompassed in Annual Performance Plans.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. Management initiative number 3 in the Annual Performance
Plan focuses strictly on customer satisfaction. Specifically,
performance measures have been developed to evaluate customer
satisfaction with each of FSA's major programs. The management
initiative also includes a discussion regarding the strategies that
will be implemented to achieve greater customer satisfaction, including
electronic warehouse receipts, paperwork reduction, and various
automation techniques to issue payments in a more timely manner. In the
recent past, the Agency has also used national customer (producer)
satisfaction surveys.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The Agency's Strategic Plan was completed in September
1997, at which time development of the Annual Performance Plan
commenced. However, budget timeframes required submission of
preliminary budget documents in July 1997. As such, the budget and
Annual Performance Plan were prepared to accommodate the timeframes
associated with each of these initiatives. However, for fiscal year
2000, the Annual Performance Plan will be prepared prior to the start
of the budget process. As such, the annual performance goals included
in the fiscal year 2000 Annual Performance Plan will be a primary
influence in budget development.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. The ability to assess the impact of proposed budget changes
on targeted performance will vary among program areas depending on the
extent and nature of proposed funding changes. For instance, the
ability to effectively administer farm loan programs is dependent on
adequate funding levels. As such, farm loan program personnel can
immediately assess the impact on performance and the achievement of
various goals, such as delinquency rates that are related to loan
servicing, if proposed budget numbers are changed, up or down.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the Agency can be properly managed to achieve the desired
results?
Answer. In most instances, FSA will be able to measure and evaluate
program performance throughout the year. However, data will not be
available for all measures included in the 1999 Annual Performance Plan
until new software and/or systems are in place.
Question. The Government Performance and Results Act requires that
your Agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Answer. No, we have not faced that difficulty. The program
activities in the Annual Performance Plan are linked and crosswalked to
the budget account structure. As a result, performance goals have been
developed for each program activity in the Annual Performance Plan that
define the level of expected performance.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. Since there is linkage between the budget and the
activities in the Annual Performance Plan, we believe, at this time,
there is no need to modify the budget account structure. However, until
we have had time to evaluate data reported on the achievement of
performance goals, we cannot speculate on whether modifying our budget
account structure would make linkage to the budget clearer.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your Agency and
to this committee than the present structure?
Answer. We do not propose to modify the budget structure because
linkage exists between the Annual Performance Plan and program
activities in the budget.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. At the present time, we do not think modifying the budget
account structure would necessarily strengthen accountability for
program performance.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. The discussion of external factors is primarily reflected
in FSA's Strategic Plan. The measures in the Annual Performance Plan
are linked to the goals, objectives, and measures in the Strategic
Plan. Therefore, the same external factors identified in the Strategic
Plan will influence achievement of annual performance goals. Including
external factors in the annual performance plan would be a repetitious
presentation of information and would compromise our efforts to make
the plan as concise as possible.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. Management assesses risk in the administration of their
daily operations and determines the impact on resource estimates and
achieving targeted levels of performance. This discussion was not
included in the Annual Performance Plan, for a variety of alternatives
are utilized to manage risk, and including this discussion would result
in a voluminous document.
Question. What impact might external factors have on your resource
estimates?
Answer. That depends on the extent and type of external factors.
For example, with unfavorable weather conditions, it may become
impossible to achieve performance goals established for Agency program
activities, such as for the Non-Insured Disaster Assistance Program
(NAP), with available or requested resources. Another possible impact
might be increased difficulty in determining the appropriate level of
resources needed to achieve a desired program outcome.
Question. Through the development of the Performance Plan, has the
Agency identified overlapping functions or program duplication?
Answer. The discussion of partnerships and coordination in the FSA
Strategic Plan reflects government and private entities with whom FSA
administers complementary program functions. The same partnerships and
coordination also apply to the program activities included in the
Annual Performance Plan.
Question. If so, does the Performance Plan identify the overlap or
duplication?
Answer. The Performance Plan does not identify overlap or
duplication of functions or programs. However, the Agency is involved
in several cross-cutting issues to streamline and consolidate
duplicative and overlapping functions. For example, the USDA Service
Center initiative will collocate the county-based agencies (FSA, NRCS
and RD). Another major initiative underway is the administrative
convergence of the NRCS, FFAS, and RD mission areas.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that, to what extent are your performance measures sufficiently mature
to allow for these kinds of uses?
Answer. The Agency has established measures enabling FSA to compare
targeted to actual performance. However, the Agency is continuing
efforts to develop measures which will better reflect program
performance. As such, newly developed performance measures will need
sufficient time to mature to facilitate a comparison between actual and
targeted levels of performance.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Agency managers develop estimates in view of their existing
knowledge of program operations and anticipated political and economic
environment. Changes in these estimates, and the resulting impact on
resource estimates, require a coordinated effort between Agency program
managers and budget representatives.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. The Agency has identified a need to revise the September
1997 Strategic Plan. However, the Annual Performance Plan was not the
primary influence in the decision to revise the Strategic Plan.
Instead, other factors, such as administrative convergence and the
change in Agency leadership, are the primary factors influencing the
need to revise the Strategic Plan.
______
Questions Submitted by Senator Burns
conservation reserve program
Question. Mr. Kelly, what is the process whereby contracts are
being presented for acreage in the Conservation Reserve Program?
Answer. Producers may offer land for the Conservation Reserve
Program (CRP) through three different methods. One method is through
the CRP general signup where offers are submitted at the local FSA
office during a specified signup period. The local FSA and Natural
Resources Conservation Service (NRCS) make eligibility determinations
and collect environmental benefits data. All offers are evaluated based
on the environmental benefits index (EBI) and ranked using the EBI.
After offers are determined acceptable, NRCS, in conjunction with the
producer and conservation district, develops a conservation plan to
implement the offered conservation practices. After the conservation
plan is approved, the CRP contract is approved by the local county FSA
committee.
The second method to participate is through the CRP continuous
signup. Continuous signup allows producers to enroll at any time during
the year for certain highly desirable environmental conservation
practices such as filter strips, riparian buffers, contour grass
strips, and grass waterways. Producers apply for enrollment in the
continuous signup at the county FSA office. This is a non-competitive
process because of the relatively small acreages of these practices and
extraordinarily high level of environmental benefits to be obtained.
All other land and producer eligibility requirements apply.
The third way to participate is through the Conservation Reserve
Enhancement Program (CREP) where Federal and State resources are
combined to target areas of environmental importance to the State and
nation. States are expected to contribute significant resources toward
the enhancement program such as additional funding for longer-term
(beyond the CRP contract) producer obligations. All CREP agreements are
subject to all CRP land and producer eligibility requirements. CREP
agreements have been signed with the Governors of Illinois, Maryland,
and Minnesota.
Question. Last year there was a great deal of concern about the way
the program was being administered. Can we foresee these same problems
in the coming year?
Answer. We are very pleased with the results of signup 16 and have
noted that only a few concerns have been raised. We agree that some
questioned whether USDA could implement signup 15 under the aggressive
schedule we announced. However, the FSA and NRCS employees conducted
the largest CRP signup ever and announced the acceptability of
contracts using the least amount of time that has ever been used. After
signup 15, FSA and NRCS convened a group of employees from all levels
of the Agencies to identify policies and processes that could be
modified to improve and streamline the program. As a result, there have
been no major issues raised under signup 16. Although there are
isolated areas where concerns have been raised, we believe that these
issues can be resolved administratively.
______
Questions Submitted by Senator Bumpers
fsa staff reductions
Question. You have stated that ``The Farm Service Agency is the
agency that family farmers and ranchers interact with most
frequently.'' Still, is spite of this agency's importance to family
farmers, the fiscal year 1999 budget would make 1,100 additional staff
year reductions. Earlier this year, the agency conducted a RIF of 152
employees, all of which were non-Federal county employees. Is it true
that in spite of this year's RIF, FSA is hiring new personnel?
Answer. Yes. Although the Agency is going through an overall
downsizing, we did identify a need to shift staff resources from the
farm programs to the farm loan programs. To accomplish this, a training
type Agricultural Credit Officer (ACO) position was created to develop
staff as credit officers. Initially, these new positions were being
advertised internally to FSA, both under the county committee (non-
civil service) and through merit promotion for FSA Federal employees.
The position descriptions and qualifications were almost identical and
the State Executive Director and/or State Committee selected the person
who was considered best qualified for the job. Since FSA has separate
ceilings for the county committee (non-civil service) and Federal
positions and is in a downsizing mode, the employee selected remained
in whatever system (Federal or non-civil service), they came from,
allowing what was, in effect, a transfer of staff resources from one
program to another and meeting what we believe was the spirit of the
interchangeability provision of the reorganization act. Unfortunately,
based upon opinions from the Office of the General Counsel, we learned
that loans approved and servicing actions taken by county committee
employees (non-civil service employees) would be subject to the 90-day
finality rule which could have an adverse effect on the farm loan
program. In addition there were issues raised concerning possible
conflicts of interest since the non-civil service employees) are
actually employed by the farmer-elected committees. Given these issues,
the Agency in consultation with the Secretary's office determined that
a change in policy was appropriate and that these ACO positions would
be filled solely as Federal positions They were, however, advertised as
``all sources'' which allowed non-civil service county committee
employees to apply. However, in some cases, non-civil service employees
may be disadvantaged when applying for a Federal vacancy through being
blocked for consideration by a veteran or a displaced Federal employee
with Career Transition Assistance Program (CTAP) reemployment rights.
As of March 27, 1998, 125 of these positions had been filled; 48 were
formerly FSA non-civil service employees, 53 were FSA Federal
employees, and 24 were from outside FSA.
Question. If so, what is barring RIF'd employees from filling the
open positions before you open the announcements to public applicants?
Answer. Non-civil service county committee employees do not have
Federal civil service status and for this reason cannot be considered
as internal candidates for Federal positions. Therefore, in order to
consider non-civil service county committee employees for Federal
vacancies, the vacancy announcement must be open to members of the
general public. Non-civil service county committee employees who are
RIF'd do not have reemployment priority rights to any Federal civil
service vacancies, as Federal employees who have been separated under
the Career Transition Assistance Program do.
Question. In regard to RIF's, do you think non-Federal employees
are being treated fairly?
Answer. FSA extends re-employment priority rights to non-civil
service employees for comparable non-civil service vacancies. Because
Federal Career Transition Assistance Program (CTAP) provisions apply
only to Federal civil service employees, displaced non-Federal county
committee employees do not receive any priority consideration for
Federal vacancies. FSA believes this is an inequity and would have no
objection to extension of CTAP coverage to FSA non-civil service
employees so that they have priority for USDA vacancies, consistent
with the CTAP coverage that Federal FSA employees receive.
Question. If not, what steps can be taken to make the situation
more equitable?
Answer. Because of statutory distinctions between non-civil service
county employees and Federal employees, action by Congress to convert
all of our non-civil service county committee employees, with status,
to Federal positions would eliminate the inequities that now exist and
would provide us with additional flexibility in carrying out required
reductions and in shifting staff resources between programs. Absent
this, exemption of the farm loan programs from the 90-day rule would
allow us to revisit the issue of utilizing non-civil service employees
fully in the farm loan programs with some additional changes in our
current handbooks and regulations. In addition, extension of Career
Transition Assistance Program coverage, as indicated in the above
answer, would also help to alleviate some of the inequities that now
exist.
Question. You mention that ``the Secretary favors converting FSA
non-Federal county committee employees, with their career tenure, to
Federal civil service status.'' What specific steps are being taken to
execute this intention?
Answer. The Secretary of Agriculture is on record as supporting
pending legislation introduced by Congresswoman Clayton, as contained
in H.R. 2185, favoring converting FSA non-Federal county committee
employees, with their career tenure, to Federal civil service status.
Conversion of these FSA non-Federal employees to Federal civil service
status would eliminate the challenges FSA currently faces in operating
two different personnel systems for employees in county offices.
Question. What problems are stopping this process?
Answer. There are other aspects of the bill which have created
concerns. Specifically, we have technical concerns regarding language
that provides funding for farm ownership and operating loan programs.
We also have some concerns with Section 201 of the bill which modifies
restrictions on FSA lending to farmers if they have received debt
forgiveness on a prior loan or if they are delinquent on an existing
loan.
combination leases
Question. In 1997, FSA proposed a change to classify farm leases
that contained elements of both ``cash'' and ``share'' leases (so-
called ``combination'' leases) as share leases. This change would limit
the ability of landowners to participate in the Agricultural Market
Transition Assistance program (Freedom to Farm). Because of the timing
of the proposed change, it was delayed until this year to avoid the
need to redraft leases for the 1997 crop year that had already been
executed. I have heard from producers in my State that they still feel
the proposed change is unnecessary and unfair. Has the Farm Service
Agency taken into consideration the effect of the combination lease
ruling on the Agency's farm credit portfolio?
Answer. On the contrary, this change means that landowners who may
have been previously considered as cash leasing their land can earn
AMTA payments. The change will have some impact on the Agency's farm
credit borrowers because borrowers who are land owners will receive
more money and the operators will receive less money. However,
nationwide, there are very few combination leases. The combination
ruling has no effect on the agency's farm credit portfolio. The 1996
Act took away the authority to lease FSA inventory land. There are
fewer than 447 leases on inventory land, including non-farm property,
currently in effect. None of these leases are combination leases.
Question. What policy objectives will be realized by the
combination lease ruling?
Answer. It is our opinion that treating all combination leases as
share leases will result in more consistent administration of program
provisions by county committees and will be more equitable to all
producers. Additionally, treating all combination leases as share
leases will eliminate their use as a means to circumvent payment
limitation provisions.
Question. If the objectives include savings, what level of savings
will be achieved?
Answer. The payments earned by the farm will not change; only the
distribution of payment between producers on the farm will change. We
recognize that there will be some savings if an affected producer
reaches the payment limitation. This would be verification that fewer
producers will be circumventing that provision as a result of this new
policy. However, as previously indicated, the change was made to treat
producers consistently and equitably and to ensure the integrity of the
payment limitation provisions, not to achieve savings.
Question. Will this change not result in landlords amending their
leases to totally ``cash'' leases and, therefore, have a detrimental
effect on tenants?
Answer. Both totally cash and totally share leases are normal
leases used throughout the country. We do not believe that cash leases
are detrimental to producers. The type of lease negotiated is dictated
by various factors, including provisions of the 1996 Act.
Question. Why do you believe this change does not refute the claim
that the Freedom to Farm provisions were to provide farmers with
``certainty'' of Federal assistance?
Answer. This change does not impact the ``certainty'' of Federal
assistance since the amount of payment earned by the participating farm
does not change and is not tied to market prices. As previously
indicated, the purpose of the change is to treat all producers
consistently and equitably, and to stop the circumvention of payment
limitation rules. The Statement of Managers that accompanied the 1996
Act directed USDA to ensure that production flexibility contract
payment shares could be changed annually to reflect the changes in
leasing arrangements on a farm.
non-insured assistance program (nap)
Question. The Crop Insurance Reform legislation of 1994 created the
NAP program to assist farmers whose production losses are not covered
by crop insurance. Congress is now considering an emergency
supplemental appropriations bill to assist dairy, maple, and other
producers who have suffered from recent storms. Still, as in the case
of maple or dairy, the NAP does either not cover these losses or does
so in a way that does not reflect actual losses. Is there any way to
amend these programs to ensure all farmers are treated fairly and
consistently?
Answer. The 1996 Act Sec. 196 (a)(2)(A) specifically excludes
livestock (and by inference, livestock products) in the NAP definition
of eligible crops: ``. . . the term `eligible crop' means each
commercial crop or other agricultural commodity (except livestock)''.
NAP covers maple sap production losses, on a yield per-tap basis,
which are directly related to a natural disaster. Future year
production losses are not covered.
Sec. 196 (a)(2)(B) specifically includes otherwise ineligible crops
under the food or fiber restriction. The crops specifically included
are: floriculture, ornamental nursery and Christmas tree crops,
turfgrass sod, seed crops, aquaculture (including ornamental fish), and
industrial crops.
Except for Christmas trees and some woody ornamental nursery crops,
NAP does not cover losses to trees, including maple trees or wood lots.
Under NAP, Christmas trees do not have to be intended for harvest
in the year of disaster or loss. The value of the Christmas tree at the
time of loss is considered when assessing damage.
Regarding the assertion that NAP needs to be made more fair for all
producers, it is FSA's position that NAP is equally available to all
producers of crops determined eligible. To allow payments on crops
currently not eligible for NAP benefits would require a change to the
statute.
effect of user fees
Question. During last week's hearing, when asked who would bear the
brunt of proposed FSIS user fees, Secretary Woteki responded by saying
that ``economists'' have determined that meat and poultry consumers
would pay those costs at the supermarket. We know that you could lay
all the economists in the world end to end and they still wouldn't
reach a conclusion. Rather than an answer based on economic theory,
perhaps the answer to my question last week lay with economic common
sense. Do you think the meat and poultry companies are more competitive
in the retail markets or with their suppliers?
Answer. We know that the meat packing industry has become quite
concentrated. For example, the four largest packers accounted for 82
percent of steer and heifer slaughter in 1994, versus 72 percent in
1990 and 36 percent in 1980. Although a concentrated industry, USDA
studies and ongoing monitoring of the market find competition exists.
The number of meat packers bidding for supplies varies by region. The
poultry industry is characterized by vertical integration with poultry
growers producing birds under contract with large integrators. It is
not unusual to find slaughter plants engaged in some further
processing.
Meat packers and poultry firms sell to processors, wholesalers/
distributors, and directly to large retail food chains and restaurants.
They face a large number of buyers who can and do procure from multiple
sources.
Question. Which of these two groups is more ``captive'' to the
companies?
Answer. The Department would not use the word ``captive'' to
describe the relationship of meat and poultry companies to any other
market sector. However, given the level of concentration in the meat
and poultry slaughter and processing industries, these industries are
most likely able to exert some influence on both the price they pay for
live animals and birds and the price they receive from wholesale or
retail customers. The overall industry is structured so that a
relatively few packers and processors purchase most of the live animals
and birds from a relatively large number of producers and then sell
their products to a relatively large number of wholesale and retail
buyers.
Economic studies have consistently found that consumer demand for
meat and poultry products is relatively inelastic. This means that the
quantity demanded by consumers is relatively insensitive to price
changes. In markets where demand is inelastic, consumers will bear most
of a cost increase. This is what we expect will happen with user fees.
Because user fees would be small compared to the base price of meat and
poultry, the quantity purchased by consumers would show little change.
Producers are unlikely to see an appreciable change in either the price
they receive or the quantity they can sell to meat packers and poultry
integrators.
Question. How many beef cattle or poultry producers have loans with
the Farm Service Agency?
Answer. FSA does not track loans by type of producer.
Question. Did FSIS consult with you about the effect of proposed
user fees on agricultural producers?
Answer. No, FSIS did not consult with FSA about any possible
effects of user fees on producers.
flood risk reduction program
Question. What is the status of this program?
Answer. The 1996 Act authorizes the Secretary to offer flood risk
reduction contracts to producers on farms that are frequently flooded
and that have contract acreage under the production flexibility
program. Producers can receive in advance up to 95 percent of the
projected production flexibility contract payments the producer would
otherwise have received from the time of enrollment in the Flood Risk
Reduction Program through September 30, 2002. In return, producers must
terminate their production flexibility contract with respect to the
enrolled acreage, comply with swampbuster and conservation compliance
provisions, and forgo future disaster payments, crop insurance
payments, conservation program payments, and loans for contract
commodities, oilseeds, and extra long staple cotton. There has been no
activity to date, and the fiscal year 1999 Budget reflects no proposal
for program implementation.
boll weevil eradication loan program
Question. What is the identified need for this program?
Answer. This loan program is an important component of USDA's
overall boll weevil eradication strategy. Already regions of this
country are benefiting from complete boll weevil eradication. The
benefits of this program include reduced chemical applications, higher
net farm income, increased land values, and other attributes important
to the vitality of rural America. This program benefits not only
farmers, but everyone interested in a clean environment and economic
prosperity.
These loans are used to enhance the funding of the Boll Weevil
Eradication Program and are made to participating States' individual
boll weevil eradication foundations. There are still large regions of
the country where the Boll Weevil Eradication Program is either in the
very early stages or has not yet begun. With this in mind, it is very
important that we continue assisting affected regions to help protect
the environment and to help sustain rural economies.
______
Questions Submitted by Senator Byrd
Question. Chairman Cochran, Senator Bumpers, members of the
Subcommittee, and Undersecretary Schumacher, I am pleased to be here
today to review the U.S. Department of Agriculture's (USDA) Farm
Service Agency (FSA) programs. As result of the USDA Reorganization Act
of 1994 and the 1996 Farm Bill, FSA staff reductions are occurring
nationwide and the traditional cornerstone of the FSA's mission has
been significantly altered. I have been contacted by FSA employees in
my State of West Virginia who are concerned about further staff
reductions. These employees are also concerned about the equity of
treatment between Federal and non-Federal county committee FSA staff
when separated from their jobs. I have several questions regarding the
FSA in this regard. The proposed fiscal year 1999 budget assumes an
additional reduction of 1,078 non-Federal county committee employees--a
9.9 percent reduction. It also assumes an additional reduction of 223
Federal employees--a 3.8 percent reduction. Can you tell me the
percentage of reductions nationwide of the non-Federal county committee
employees as compared with the percentage of the Federal staff
reductions since the reorganization took place on October 1, 1995?
Answer. The percentage of reductions nationwide of employees from
the 1993 baseline streamlining plan to the fiscal year 1999 budget is a
decrease of 25.9 percent at the Federal office level and 33.3 percent
at the non-Federal county level, a total FSA reduction of 30.8 percent.
Headquarters employees were reduced 34.9 percent over this same period.
Question. In West Virginia?
Answer. Due to reduced funding levels, the fiscal year 1999
staffing reductions proposed in the fiscal year 1999 Budget would
reduce non-Federal county office staffing by 855 staff years and
Federal office staffing by 263 staff years. I cannot provide any
specific details on any reductions that may take place in West Virginia
in fiscal year 1999 because specific Agency or USDA plans for reducing
employees or numbers of offices, by State, have not been finalized as
Congress has yet to act on the President's proposals.
Question. The Federal Crop Insurance Reform and Department of
Agriculture Reorganization Act of 1994 explicitly stated that Federal
employees who were transferred to the FSA from the former Farmers Home
Administration's farm credit program and the non-Federal county
committee FSA employees who were transferred from the former
Agricultural Stabilization and Conservation Service, would be used
interchangeably to carry out the programs of the new FSA. However, I
understand that a decision was made several months ago by the FSA that
the non-Federal county committee employees would be excluded from
carrying out certain aspects of the farm credit program. Specifically,
I understand that non-Federal county committee employees are not
eligible to approve loans or to fully participate in the Agricultural
Credit Officer training program that the FSA recently implemented.
Please explain how this restriction on non-Federal county committee
employees is not in conflict with Congress' intent that all FSA
employees be used interchangeably.
Answer. FSA is fully supportive of using non-Federal county
committee employees and Federal civil service employees interchangeably
to implement FSA programs in local county offices. In fact, the
Secretary has gone on record as supporting Congresswoman Clayton's bill
to convert non-Federal county committee employees to Federal civil
service status. Because of statutory distinctions between non-Federal
employees and Federal employees in such areas as supervisory/employee
reporting relationships, applying for civil service jobs, Career
Transition Assistance Program (CTAP) entitlements, leave transfer,
etc., we feel that legislation converting non-Federal employees is
necessary to make these positions truly interchangeable.
FSA has been using both non-civil service county committee
employees and Federal civil service employees in comparable positions
interchangeably. It is true that after the reorganization that
established FSA, county level trainee type positions were established
so employees could learn the intricacies of the farm loan program and
become credit officers. These new positions are Agricultural Credit
Officers (ACO's) and are different from the Credit Specialists and Loan
Technicians transferred from FmHA and the County Executive Director and
Program Assistant positions transferred from ASCS. Initially, these new
positions were being advertised internally to FSA, both under the
county committee (non-civil service) and through merit promotion for
FSA Federal employees. The position descriptions and qualifications
were almost identical and the State Executive Director and/or State
Committee selected the person who was considered best qualified for the
job. Since FSA has separate ceilings for the county committee (non-
civil service) and Federal positions and is in a downsizing mode, the
employee selected remained in whatever system (Federal or non-civil
service), they came from, allowing what was, in effect, a transfer of
staff resources from one program to another and meeting what we believe
was the spirit of the interchangeability provision of the
reorganization act.
Unfortunately, based upon opinions from the Office of the General
Counsel, we learned that loans approved and servicing actions taken by
county committee employees (non-civil service) would be subject to the
90-day finality rule which could have an adverse effect on the farm
loan program. In addition, there were issues raised concerning possible
conflicts of interest since the non-civil service are actually employed
by the farmer elected committees. Given these issues, the Agency in
consultation with the Secretary's office determined that a change in
policy was appropriate and that these ACO positions would be filled
solely as Federal positions. They were, however, advertised as ``all
sources'' which allowed non-Federal county committee employees to
apply.
Question. Given the ongoing restructuring within the Agency, does
this restriction disadvantage non-Federal county committee employees in
pursuing new staff positions required for the Agency's evolving
mission?
Answer. As mentioned above, we have advertised the ACO positions so
that non-Federal county committee employees can apply and be
considered. As of March 27, 1998, FSA has filled 125 ACO positions, of
which 48 were formerly FSA non-Federal employees, 53 were formerly FSA
Federal employees, and 24 were from outside FSA. In some cases, non-
Federal county committee employees may be disadvantaged when applying
for a Federal vacancy through being blocked for consideration by a
veteran or a displaced Federal employee with Career Transition
Assistance Program reemployment rights. In addition, it does not allow
us to truly use our existing employees interchangeably.
Question. Does FSA plan to repeal the restriction? If not, why?
Answer. We are in the process of finalizing revisions in the
handbook that deals with conflicts of interest and ethics which will
make all FSA employees, Federal and non-civil service, subject to the
same rules. (Non-civil service county committee employees are not
always covered by conflict of interest or ethics statutes; however, the
Agency has and will continue to make them subject to these statutes
through regulation.) We are also looking at ways to ensure that the
farmer-elected county committee cannot, or is not perceived as being
able to, unduly influence the decision of a non-civil service employee
involved in the farm loan program. However, even with these changes, we
will still be faced with the 90-day finality rule and the additional
liabilities created in the farm loan program if non-civil service
county committee employees are fully involved in the program. We are
hopeful that there will be some movement in Congress to convert to
Federal status our non-civil service employees, with status and credit
for their years of service in the county committee system. If this does
not happen, we may, in consultation with the Secretary's office, need
to reassess the policy of filling the Agriculture Credit Officer
positions as only Federal. We do recognize the Senator's concern that
we fully comply with the interchangeability requirement of the
reorganization act and the need to be fair to all of our employees.
Question. I am particularly interested in the effect that the FSA's
policy excluding non-Federal county committee employees from carrying
out certain aspects of the farm credit program had on the Agency's
recruitment of Federal Credit Officer positions, classified as trainee
level. I understand that while the FSA was conducting the reduction in
force (RIF) of 150 non-Federal county committee employees, the Agency
was simultaneously hiring persons from outside the FSA for the new
trainee level Credit Officer positions. Given the experience and
knowledge of the Agency's mission and clientele possessed by the RIF'd
employees--who in my State have a minimum of 8 years with FSA--why did
FSA not initiate opportunities for qualified non-Federal county
committee employees to fill these new positions?
Answer. As mentioned in the previous response, FSA was initially
filling these new type positions in a way that allowed all employees
(non-civil service and Federal) to apply within their respective
personnel systems and allowed us to stay within our separate county
committee non-civil service and Federal ceilings. For the reasons
cited, this policy was changed; however, FSA did announce the ACO
positions with an area of consideration that permitted non-civil
service employees to apply. As noted above, 48 non-civil service
employees were selected among the 125 ACO vacancies. Although our
county committee non-civil service employees are paid with Federal
funds, carry out what is considered Federal work and work under a
personnel system which we have made very similar to the Federal system,
they are supervised by non-Federal farmer-elected county committees and
are not, therefore, considered Federal. We are, therefore, not able to
non-competitively reassign RIF'd non-civil service employees to these
ACO positions.
Question. For employees who have likely served USDA and farmers
well over the years, would such an approach help mitigate the emotional
and economical impact of downsizing on those RIF'd?
Answer. FSA encouraged non-Federal employees to apply for the
Federal ACO positions. Of the 125 ACO positions filled as of March 27,
48 (38.4 percent) were filled with non-Federal employees. Action by
Congress to convert all of our non-civil service county committee
employees, with status, to Federal positions would alleviate the
problems outlined in your question. This would also provide us with
additional flexibility in carrying out required reductions and in
shifting staff resources between programs. Absent this, an exemption in
the 90-day finality rule for farm loan programs would alleviate one
concern and would allow us to revisit the issue of using all employees
interchangeably.
Question. Would such an approach comply with Congress' intent that
all FSA employees be used interchangeably?
Answer. FSA has extensively cross-trained county employees and is
using non-civil service and Federal employees in comparable positions
interchangeably. Conversion of non-civil service employees to Federal
status with credit for their years of service under the county
committee system would allow us to use all employees interchangeably.
Absent this type of action by Congress we will continue to face
challenges in truly being able to treat employees under the two systems
identically as far as career advancement and opportunities for various
positions within FSA. We will, however, continue to do all we can,
within the constraints of the various statutes, to be as fair as
possible to all our employees (non-civil service and Federal), and to
utilize these employees as effectively and efficiently as possible so
we can continue to provide quality service to farmers and ranchers.
Question. I understand that there is yet another component
complicating the downsizing--that is, that the non-Federal county
committee employees who have been RIF'd might not be on equal
competitive footing with their FSA Federal employee counterparts for
vacancies or new job openings, due to the Federal Career Transition
Assistance Program. I would like to hear your views on this matter and,
if this situation is inequitable, the Agency's options on implementing
a downsizing plan that is equitable and fair for all affected FSA
employees. This concludes my questions, Mr. Chairman, and I look
forward to working with you, the Ranking Member, and other Subcommittee
members in conjunction with the Undersecretary, on these important
issues confronting the Farm Service Agency.
Answer. Non-Federal county committee employees who are RIF'd do not
have reemployment priority rights to any Federal civil service
vacancies, as Federal employees who have been separated do under the
Career Transition Assistance Program (CTAP). FSA believes that this is
an inequity and would have no objection to extension of CTAP coverage
to FSA non-civil service employees so that they have priority for USDA
vacancies, consistent with the CTAP coverage that Federal FSA USDA
employees receive.
______
Question Submitted by Senator Leahy
Question. Mr. Under Secretary, one thing that became very clear in
the wake of the January ice storm is that there are some significant
gaps in FEMA and Department of Agriculture programs. As I visited farms
hit by the ice storm, I was struck by the fact that most of these
farmers did not expect to get Federal assistance because of the type of
damage the storm inflicted and the nature of their crops. The greatest
agricultural damage in Vermont was suffered by maple sugarers and dairy
farmers, neither of which fits neatly into existing assistance
programs. The result of these gaps was a great deal of confusion about
who to turn to for help and what kind of help could be provided. FEMA
came out with a report not long ago which helps to lay out some of the
holes in our Federal disaster safety net. In particular, the report
urges the Small Business Administration and the Department of
Agriculture to work together to identify their legislative authorities
and clarify how each can better serve farmers in future disasters. Is
the Department working with FEMA and the Small Business Administration
to identify and fill these gaps in disaster assistance? I hope that one
result of this FEMA report will be a document that clearly lays out for
farmers of all types of crops the kind of assistance they are eligible
for in the event of a natural disaster.
Answer. Representatives of FSA, the Small Business Administration
(SBA), and the Office of Management and Budget (OMB) met on March 20 to
discuss gaps in the Federal disaster safety net. These gaps surfaced in
a report prepared by the Federal Emergency Management Agency (FEMA)
following the New England ice storms.
Both FSA and the SBA are taking a hard look at their respective
statutory and regulatory authorities to determine exactly where the
gaps exist. A list of unmet needs will be established. Once specific
unmet needs are identified, FSA, SBA, OMB, and FEMA will meet again and
work together to determine what can reasonably be done to meet these
needs.
______
Foreign Agricultural Service
Questions Submitted by Senator Cochran
export subsidy programs
Question. Please provide the total amount of bonus awards to U.S.
exporters under the Export Enhancement Program and the Dairy Export
Incentive Program in fiscal year 1997 and estimated for fiscal year
1998.
Answer. The Export Enhancement Program (EEP) was not operational
during fiscal year 1997. For fiscal year 1998, the CCC budget baseline
has an estimate of $150 million for EEP, but the program is currently
not being operated. For fiscal year 1997, Dairy Export Incentive
Program (DEIP) bonus awards totaled $121.5 million. It is difficult to
estimate fiscal year end 1998 awards as bonus levels fluctuate
significantly with changes in market conditions. However, the fiscal
year 1998 estimate for DEIP bonuses in the CCC budget baseline is $98.7
million.
Question. You indicate that the fiscal year 1999 budget includes a
$82.3 million program level for the DEIP. What is the fiscal year 1999
maximum GATT-allowable limit for this program?
Answer. The fiscal year 1999 maximum subsidies under the Uruguay
Round Agreement are as follows:
Non-fat dry milk........................................ $97,926,000
Other dairy products (whole milk powder)................ 5,762,000
Cheese.................................................. 4,317,000
Butterfat............................................... 36,215,000
--------------------------------------------------------
____________________________________________________
Total............................................. 144,220,000
cochran fellowship program
Question. The fiscal year 1999 budget maintains the $3.0 million
fiscal year 1998 level of funding for the Cochran Fellowship Program.
Is additional funding still being provided by USAID and through the
emerging markets program to supplement the direct appropriations for
this program? How much is being provided for fiscal year 1998? What
additional funding is expected for fiscal year 1999?
Answer. In fiscal year 1998, the Cochran Fellowship Program
requested $2.3 million from USAID for the program in the New
Independent States (NIS), and $1.12 million from the Emerging Markets
Program (EMP) for implementation of the program in Vietnam, the NIS,
and in Eastern Europe. Agreements with both U.S. AID and EMP are still
pending, but we believe funding will be forthcoming by at least May,
1998. We are expecting $1.8 million from USAID and $1.12 million from
EMP
In fiscal year 1999, we are requesting $2.5 million from USAID for
the NIS, and about $1 million from the EMP for continuation of our
programs in South Africa, Brazil, and Eastern Europe. The NIS
Coordinator at the State Department has indicated his support for the
Cochran Program in 1999. We also have preliminary support from EMP for
our program in South Africa. We do not at this point have specific
agreements or amounts in place.
Question. Please provide the fiscal year 1997 and 1998 program
participant levels by country and region.
Answer. In fiscal year 1997, a total of 707 participants from 45
countries received training under the Cochran Fellowship Program.
The following provides the fiscal year 1997 participant levels by
region and by country:
Asia.--154 participants from seven countries: Korea (20
participants), Malaysia (21), China (35), Thailand (17), Indonesia
(18), Philippines (26), and Vietnam (17).
Eastern Europe.--182 participants from 13 countries: Turkey (19),
Poland (56), Hungary (9), Czech Republic (10), Slovakia (11), Albania
(6), Bulgaria (11), Slovenia (12), Croatia (10), Latvia (8), Estonia
(9), Lithuania (7), and Romania (14).
Latin America.--87 participants from seven countries: Mexico (37),
Venezuela (13), Trinidad & Tobago (9), Barbados & Other West Indies
(3), Panama (6), Colombia (14), and Chile (5).
Africa.--61 participants from seven countries: Cote d' Ivoire (9),
Tunisia (10), South Africa (30), Namibia (2), Kenya (5), Uganda (2),
and Senegal (3).
New Independent States.--223 participants from 11 countries: Russia
(53), Ukraine (45), Kazakstan (23), Kyrgyzstan (8), Uzbekistan (27),
Turkmenistan (8), Tajikistan (5), Armenia (16), Moldova (21), Georgia
(10), and Azerbaijan (7).
In fiscal year 1998, the Cochran Fellowship Program will continue
work in the above mentioned countries. In addition, pilot programs will
be started in Brazil, Bosnia, Costa Rica, Guatemala, and Tanzania, and
the program will be expanded in size (increase in the number of
participants) in Kenya, Uganda, and Senegal.
We expected to provide training to about 760 participants in fiscal
year 1998. Delay in receipt of U.S. AID and EMP funding until May,
1998, however, will most likely reduce the number of participants from
countries in the NIS and Eastern Europe during fiscal year 1998.
Question. Please provide examples of success of the 1997 Cochran
Fellowship Program.
Answer. The benefits of 1997 the Cochran Fellowship Program to U.S.
agriculture can be categorized under the following topics:
I. Sales of U.S. Agricultural Commodities.--An immediate benefit of
the Cochran Program is the sale of U.S. agricultural commodities or
products that come about from information gained and/or direct contacts
provided by participant training. Each year, we receive information
from past participants, from U.S. companies and associations, and from
various agricultural offices about sales of products or commodities
that are directly and indirectly related to Cochran Program training
activities. The following provide examples of some of our most recent
sales information:
--FAS/Fish & Forestry Products Division reports that a Cochran trip
to U.S. lumber mills for Polish furniture manufacturers was
very effective in promoting U.S. exports of hardwood lumber.
The trip: (i) created personal relationships that resulted in
each participant making orders for U.S. hardwood lumber, (ii)
cleared up misunderstandings about contract specifications, and
(iii) may result in future exports of U.S. hardwood totaling
$25 million.
--Another report from Poland states that a 1997 participant purchased
over 300 metric tons (about $500,000) of U.S. prunes and
several tons of U.S. almonds and sunflower seeds. Another
participant started imports of U.S. shelled peanuts, his first
order in June, 1997, amounting to $25,000.
--A 1995 Polish participant reports that he gained ideas on how to
use U.S. popcorn. Today he imports of over 100 containers/year
of U.S. popcorn (30 containers by June 1997) for use in caramel
corn and other popcorn snacks.
--The Agricultural Office in Sweden reported that Latvian and
Estonian importers contracted for $300,000 per month of U.S.
consumer and confectionery products after their program at the
Food Expo in Chicago.
--A 1996 Slovenian feed mill team returned from their Cochran Program
and ordered 20,000 metric tons of soybean meal--the first of
many purchases.
--The Agricultural Office in Cote d' Ivoire reports that a 1997
participant bought 5,000 metric tons (@ $500,000) of U.S. corn
on a commercial basis upon his return. He also purchased
poultry equipment ($32,000) and day old chicks.
--A 1997 Colombian participant has finalized arrangements to be a
distributor of a line of U.S. consumer ready products and
expects to import 14 containers (@ $400,000) by the end of the
calendar year.
--Almost immediately after a 1997 joint Cochran/CoBank/National
Cattlemen & Beef Association (NCBA) program for Mexican bankers
on the GSM-103 Livestock Program, there were five livestock
sales registered with USDA (about $2.2 million), and two other
sales were reportedly in the works ($3 and $4 million
respectively).
--The Agricultural Office in Vladivostok, Russia reports that three
Russian participants signed sales contracts for U.S. fruit and
vegetables at the Produce Marketing Association (PMA)
exhibition in October 1997.
--The Agricultural Office in South Africa reports that after
training, a South African company interested in U.S. soybeans
for food began working to purchase a large volume of U.S.
soybeans.
--The New Jersey Department of Agriculture reports that New Jersey
seafood exports to China have doubled since a Cochran Seafood
Buyers program in September 1995. Exports now exceed $1 million
per year.
--The Agricultural Office in Beijing states: ``As a result of the
fiscal year 1996 Supermarket Team, an upscale grocery home
delivery service is now purchasing two containers a month of
mixed grocery products.''
--The Agricultural Office in Malaysia states that ``the Cochran
NASDA/FMI program has proven to be very effective in generating
sales of U.S. high value products as the participants are
importers and supermarket managers. Although specific figures
are lacking, the FAS office has received feedback from FMI
exhibitors/suppliers who indicated that they had received trade
leads from the participants and are very positive in
establishing business ties.''
--A Vietnamese participant stated recently that his company has been
importing 2-3 containers per month of U.S. pistachios since
June, 1997. Another Vietnamese supermarket owner has imported 3
containers of consumer ready products to test the market for
U.S. products. Sales thus far are encouraging.
--A 1997 Armenian supermarket owner reports that he has widened his
U.S. product lines to include deli meats, fish, baby food and
cookies after participation in his Cochran Consumer Foods
Program.
II. Constraints to Imports of U.S. Agricultural Commodities and
Products.--Many constraints to the export of U.S. agricultural products
can be categorized as sanitary and phytosanitary (SPS) restrictions to
trade or market access barriers. Cochran training through agencies such
as the Food Safety Inspection Service (FSIS); Grain Inspection, Packers
& Stockyards Administration (GIPSA); Animal and Plant Health Inspection
Service (APHIS), State Departments of Agriculture, Food and Drug
Administration (FDA) and the Environmental Protection Agency (EPA), and
with private agribusinesses, provide technical information to country
counterpart agencies and help to improve the opportunities to export
U.S. products into countries.
During 1997, 59 Cochran fellows from 18 countries participated in
24 programs directly related to providing information on the safety of
the U.S. food and fiber system as well as providing direct contact with
U.S. counterparts.
--The Agricultural Office in Stockholm reports that the meat
inspection program for two Latvian veterinarians has been used
to help establish new sanitary border inspection procedures. He
states that ``such education is essential support to the
already growing import and transit markets for a widening array
of meat and meat products.''
--The Tunisian Agricultural Office reports that the Veterinary Team
``is in the process of developing with APHIS a live cattle and
bovine embryo protocol for U.S. imports in Tunisia, as well as
a memorandum of agreement with Texas A&M University for
promoting the exchange of faculty and qualified students in
areas of mutual interest, such as infections and parasitic
diseases of food animals and nutrition.''
--The Agricultural Office in Indonesia states that the participant
``has used his food safety training to develop a draft
regulation on Food Security as well as input into drafts of the
Indonesian Food Law Regulations.''
--The Agricultural Office in Vienna writes: ``The new Chief
Veterinary Officer in Slovenia is a Cochran alumnus, which
bodes well for relations between his office and FSIS as well as
this office as we work toward agreement on sanitary inspection
certificates to allow U.S. red meat into Slovenia.''
--The Agricultural Office in Korea states: ``The Cochran Program
provides the resources to address food safety issues, perhaps
the largest, singularly most restrictive barrier for U.S.
products in the Korean market.''
III. Foster Business to Business Contacts.--One of the major
objectives of Cochran training is to put the international participant
in direct contact with U.S. agribusiness. Even if immediate sales do
not result, follow-up contact with participants in their home country
may lead to future international opportunities for U.S. business.
Cochran fellows make contact with thousands of U.S. agribusinesses
through product or commodity tours, technical discussions, or via
participation at trade shows. Participation in commodity- or topic-
specific trade shows or association meetings allow participants first-
hand contact with a wide-range of U.S. agribusinesses. Several of the
trade shows that were attended in 1997 by Cochran fellows include the
Food Marketing Institute/National Association of State Department of
Agriculture (FMI/NASDA) Food Expo, Produce Marketing Association (PMA)
Show, Institute of Food Technologists, World Dairy Expo, World Beef
Expo, San Francisco Seafood Show, International Poultry Expo,
International Baking Industry Expo, American Seed Trade Conference,
National Building Products Expo, Woodworking & Furniture Supply, High
Point Furniture Show, National Homebuilders Association Expo, Wine
Spectator Showcase, National Restaurant Show, National Barrow Show,
World Pork Expo, American Feed Industry Association Show, All Candy
Exposition, and the Fancy Food Show.
--The Agricultural Trade Office (ATO) in Guangzhou writes that the
Chinese Supermarket Program ``. . . is beneficial to American
agricultural products because (the team) were so impressed with
the high quality and diversity of U.S. products that some of
them are considering carrying more products in their stores. As
a result, the largest supermarket chain in China is scheduled
to host an American Food Promotion in December 1997 at 11 major
stores.''
--The Director of the Appalachian Hardwood Manufacturers writes about
a Polish team: ``We hope that our members were able to make
good contacts with these companies and begin a business
relationship. These were new companies to our exporters who
were interested in exporting to Poland. This service allows
American companies to have access to new business and contacts
that would be difficult to establish on their own.''
--``Thanks for introducing the group to us. This is good old
fashioned teamwork between the private business sector,
entrepreneurial business persons in the developing countries,
and the American government. It can be a win-win for all.''
(Chairman, McClane Group, Temple, TX)
--``During the last visit of the U.S. Meat Export Federation
representative to Poland, we had a chance to meet with several
former participants. Most who traveled to the 1995
International Meat Industry Convention and Expo in Chicago
started to import pork and offal from U.S. suppliers. ELKOPOL
company became a major player on the Polish market, importing
large quantities of U.S. tripe and pork offal. All claimed that
as a result of their Cochran trip, they build their first
contacts with U.S. suppliers of meat and meat products.''
(Agricultural Office, Warsaw)
--A Russian textile company employee wrote: ``The Memphis Cotton
School offered excellent coverage of all facets of textile
production contract buying. They also provided us with
prospects for increased cotton purchases from the U.S. in the
future.''
IV. FAS Agricultural Affairs Offices.--The primary contact for
Cochran activities in each country is FAS's Agricultural Affairs Office
and Agricultural Trade Offices (ATO). FAS staff describe the benefits
of Cochran training programs to their offices in terms of initiating
and maintaining contacts with public- and private-sector decision
makers, opening lines of communication that are useful for the
resolution of trade issues, building good relations with international
governments, influencing trade policy issues, and using former Cochran
private sector businesses as contacts for U.S. exporters.
--``Among the South China Supermarket Executives, (the training)
planted the seed of goodwill and friendship without which
business relationships can hardly be established and
sustained.'' (ATO/Guangzhou)
--The Cochran Fellowship Program is an important tool for promotion
of a broad array of U.S. agricultural interests in the central
European region, particularly in the spheres of market
development and combating technical barriers to trade.
(Agricultural Affairs Office/Vienna)
--``Post has built upon the Cochran Program relationships and expects
those ties to enable us to further obtain marketing and
regulatory information and influence policy discussions.''
(Agricultural Affairs Office/Nairobi)
--The FAS Office of Agricultural Affairs (OAA) in Seoul, Korea,
stated: ``As noted by predecessors, the Cochran Fellowship
Program is perhaps the single most important tool available to
OAA for achieving desired dual objectives of development of
domestic agricultural systems and enhancement of U.S.
agricultural interests in Korea.''
--The FAS Agricultural Attache in Vietnam states: ``FAS/Hanoi is
extremely pleased with the development of the Cochran 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.''
--The Agricultural Officer in South Africa writes, ``From our
perspective on what the program has done to promote both U.S.
agricultural interests and USG policy objectives to support the
new multi-racial democracy in South Africa, the Cochran Program
has been one of the key ingredients of our program activities
in this country and the region.''
Question. Are available resources sufficient to extend fellowships
to all countries seeking to participate in the Program? If not, what
additional funding would be required to meet these requests?
Answer. Currently, the Cochran Program is funded by three sources
of funds: appropriations, USAID, and EMP. Of the 707 participants in
the Cochran Fellowship Program in 1997, 375 participants (53 percent of
the total) were funded by appropriations, 161 participants (23 percent
of the total) were funded by EMP, and 171 participants (24 percent of
the total) were funded by USAID.
Funding from USAID and the emerging markets office is extremely
important to maintaining the Cochran Program at its present level of
involvement around the world. USAID funding is essential to
implementation of Cochran Program activities in the New Independent
States, and EMP funding provides for essentially all Cochran Program
activities in South Africa and Namibia, Brazil, Vietnam, and for about
50 percent of our participants in 13 Eastern European countries.
The demand for the Cochran Fellowship Program is expanding every
year. The 1998 increase in appropriations has enabled us to initiate
pilot programs and expand the size of our programs in several African
and Latin American countries. In most current countries, the demand for
fellowships far exceeds the available funding, but we have been able to
prioritize our programs to achieve most of our objectives.
FAS Agricultural Offices in Nigeria, Ghana, Pakistan, and several
Middle Eastern countries requested the initiation of the Cochran
Program in 1998. We were unable to meet these requests because of
funding.
We have been working with several Cochran countries on follow-up to
participant training, and on evaluation of the results of the training.
Formal Cochran alumni groups have been formed in Poland and Ukraine and
they are requesting assistance, mostly in terms of information and
contacts with U.S. industry. We currently have a data base of over
4,000 Cochran fellows and would like to initiate a more sustained
system of follow-up and evaluation, using Internet as well as distance
learning technology. This type of follow-up would keep us in regular
contact with former fellows and continue to track the results of the
program.
market access program
Question. I note that the availability of funds for the fiscal year
1998 Market Access Program was not announced until February 17, 1998.
Why is there a delay in the announcement of funds for this program--
nearly 5 months into the fiscal year?
Answer. Last fall, the Foreign Agricultural Service (FAS) began a
new initiative--known as the Unified Export Strategy (UES)--to more
effectively coordinate strategic planning and resource allocation
processes across the various agricultural export assistance programs
administered by FAS. The UES was developed to streamline the
application process for these programs and facilitate better use of
complementary marketing tools and resources. Through the submission of
a single proposal, organizations may apply for assistance under the
Market Access Program, the Foreign Market Development Cooperator
Program, the Emerging Markets Program, Section 108, and make
recommendations for trade policy initiatives, Cochran Fellowships, or
Export Credit Guarantee programs.
The UES was more difficult to implement than originally anticipated
because FAS needed to accommodate a wide range of commodity strategies
without unduly limiting flexibility and imposing new information
requirements. As a result, the program announcement was delayed until
mid-February. FAS established an April 20 deadline for receipt of
applications in order to give applicants sufficient time to prepare
their proposals under the new UES system.
Question. When do you expect fiscal year 1998 MAP allocations to be
made?
Answer. FAS intends to announce 1998 MAP allocations on June 1,
1998.
Question. The Secretary indicated to this Committee that the
Department has taken steps to make the Market Access Program more
targeted and friendly to small businesses. What specific steps have
been taken in this regard?
Answer. Within the MAP's brand program, FAS continues to give
priority assistance to cooperatives and small-sized entities. The
Commodity Credit Corporation reimburses up to one-half of the eligible
costs MAP brand participants incur to promote their brands in targeted
markets. In fiscal year 1997, 84 percent of all brand promotion funds
were allocated to cooperatives and small companies. In addition,
cooperatives and small entities continue to benefit from generic
activities, including participation in subsidized trade shows and
retail promotions organized and coordinated by nonprofit trade
organizations and state regional trade groups--SRTG's.
On February 25, 1998, CCC issued a proposed rule which would make
several changes to the MAP to make it more friendly to small
businesses. These changes include incorporating into the MAP allocation
process the level of export contributions made by U.S. industry
participants; authorizing reimbursement of certain travel expenses for
brand participants and certain necessary packaging and labeling design
expenses; extending the activity payment deadline following the end of
an activity plan year; and permitting reimbursement to participants
based upon issuance of a credit memo as an alternative to a transfer of
funds. CCC has received public comments and intends to publish a final
rule prior to the start of the 1998 MAP.
Question. The explanatory notes on the fiscal year 1999 request
indicate that $250,000 in Commodity Credit Corporation funds will be
available in each of fiscal years 1998 and 1999 for Market Access
Program evaluations. Can you please tell us specifically what program
evaluations are being funded or are planned in each of these years?
Answer. During fiscal year 1998 the FAS Compliance Review Staff
(CRS) anticipates performing financial and compliance reviews of the
export promotion activities for 49 of the 64 participants under the
Market Access Program (MAP). The fiscal year 1999 CRS MAP review
schedule will not be known until September, 1998. However, we currently
anticipate the number of reviews will be comparable to our fiscal year
1998 review coverage.
Question. Please provide the allocations made under the fiscal year
1997 Market Access Program.
Answer. Fiscal year 1997 Market Access Program allocations are
provided for the record.
[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 Kiwi Fruit 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 & 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 & 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
office of the inspector general (oig) recommendations
Question. The Office of the Inspector General has recommended that
FAS (1) streamline functions of the Market Access Program and the
Foreign Market Development Cooperator Program by requiring firms to
submit a single strategic plan and by consolidating their program and
financial data into a single accounting system, (2) issue regulations
for the Foreign Market Development Cooperator Program, and (3)
establish a process to validate the size of companies participating in
the Market Access brand promotion program. Is the agency responding to
these recommendations? What is being done?
Answer. FAS has developed and implemented a new resource allocation
process whereby organizations have the opportunity to combine their FMD
and MAP applications and strategic plans into a single submission
called the Unified Export Strategy (UES). For the fiscal year 1998 MAP
and fiscal year 1999 FMD programs, each applicant will submit a single,
strategically coordinated proposal for various USDA market development
programs including not only the MAP and FMD programs, but also requests
for assistance under the Emerging Markets Program, Cochran Fellowships,
Section 108, and several Export Credit Guarantee programs. The new UES
application will make FAS programs more cost effective by facilitating
better coordinated export strategies, improving accountability for
results, streamlining application procedures, and eliminating
duplicative information requirements.
Beginning with the fiscal year 1999 FMD program, FAS will track,
monitor, and control resources expended under the FMD program with the
financial management system currently used for the MAP. Also in fiscal
year 1999, FAS will make available an electronic venue for submitting
reimbursement claims under the FMD via the Internet. The electronic
submittal of reimbursement claims is currently available and
operational under the MAP. This new feature will reduce the paperwork
burden on program participants and FAS, decrease financial errors and
discrepancies, and expedite the payment process to program recipients.
FAS is in the process of drafting a proposed regulation and intends
to issue a final rule governing the FMD program by January 1999.
FAS currently requires the State Regional Trade Groups (SRTG's) and
other non-profit trade associations participating in the MAP to review
and validate the size of companies participating in brand promotions.
The FAS Compliance Review Staff audits the effectiveness of this
control during their reviews of MAP participants. Beginning with the
1998 MAP, FAS will require a size certification statement for all
companies applying for brand funds through an SRTG or any other non-
profit trade association.
international cooperative administrative support services program
The prepared testimony indicates that the fiscal year 1999 FAS
budget request includes $4 million for overseas administrative services
provided by the Department of State in support of the International
Cooperative Administrative Support Services (ICASS) program, and that,
in fiscal year 1998, $4.4 million has been transferred from the
Department of State for this purpose.
Question. What is the International Cooperative Administrative
Support Service program?
Answer. ICASS program was developed in response to National
Performance Review (NPR) initiatives that introduce a more
entrepreneurial spirit and a greater sense of teamwork among foreign
affairs agencies in managing their overseas administrative
responsibilities. Under ICASS, the Department of State continues to be
the main administrative service provider overseas. However, FAS and
other foreign affairs agencies have increased input into administrative
policy decisions, service standards, and encouraging innovation at
post. At post and in Washington, the ICASS Council and the ICASS
Working Group have generally served to build a team approach to
management while also increasing the transparency of decision-making.
Under ICASS, administrative support costs are more equitably spread
which reflects how the benefits of services are distributed; therefore,
non-State agencies will incur an increased share of administrative
costs.
Question. Why has the State Department transferred funds to the FAS
to support the program this year?
Answer. In fiscal year 1998, the Department of State transferred
$4,408,000 to FAS to fund the costs of administrative services
previously funded by the Department of State, but are now the funding
responsibility of FAS. FAS is only one of many Federal agencies with
overseas offices and personnel which received transfers from the State
Department budget.
Question. Where is the $4 million increase for this program
reflected in the fiscal year 1999 FAS budget request?
Answer. The budget transfer associated with the implementation of
ICASS took place in fiscal year 1998 and is incorporated into the
fiscal year 1998 budget base of $140.0 million. Accordingly there is no
increase requested for ICASS in the fiscal year 1999 budget request
budget activity structure
Question. The explanatory notes indicate that based on an agency-
wide survey measuring the allocation of staff time and including
program costs, the distribution of Foreign Agricultural Service
resources by activity is as follows:
Percent
Market Access..................................................... 24.0
Market Development, Promotion and Outreach........................ 22.2
Market Intelligence............................................... 24.4
Financial Marketing Assistance.................................... 18.4
Long-Term Market and Infrastructure Development................... 11.0
The notes indicate that changes proposed for fiscal year 1999 not
associated with a specific program will continue to be pro-rated among
budget activities based on this distribution. How have you reached your
conclusion that this is an appropriate distribution of the agency's
resources?
Answer. The activity structure of the fiscal year 1999 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 budget activity structure that incorporates
five of the policy objectives included in the FAS strategic plan. In
developing an allocation model, costs that are directly associated with
a specific policy objective are assigned to that objective. Agency
costs that are not specifically associated with a single objective are
pro-rated into each objective based on a distribution formula. This
formula, which is re-evaluated annually, reflects the percentage of
time FAS staff devote to each policy objective based on an agency-wide
survey. We believe this process best displays the costs associated with
individual policy objectives.
overseas currency fluctuations fund
Question. In response to the conference report on the Fiscal Year
1998 Agriculture Appropriations Act, the fiscal year 1999 budget
includes a request to earmark $2 million to establish a revolving fund
account to enable the Foreign Agricultural Service to manage overseas
currency fluctuations. Exchange rate losses would be offset from this
account and exchange rate gains would be deposited into the account.
Would you please tell us how exchange rate losses and gains will be
verified; how often this will be done; and how and when funds will be
withdrawn from the fund.
Answer. Gains and losses will be verified through ongoing quarterly
reviews of individual FAS Counselor, Attache and Trade Office operating
budgets. These reviews will consider the implications of current
exchange rates with those rates used at the time the post operating
budgets were developed. While the timing of fund withdrawals remains
under review, it would most likely occur following the completion of
the third quarter review. Any exchange rate gains would be transferred
into the fund following completion of the fourth quarter post operating
budget review in late September.
Question. What notifications do you plan to provide this Committee?
(i.e., will you notify the Committee when exchange rate losses and
gains are verified and when funds are deposited and withdrawn from the
fund?)
Answer. We would anticipate notifying the Committee in writing of
the results of our reviews of FAS post operating budgets at least on an
annual basis. Additionally, we would be pleased to meet personally with
Committee staff to discuss the results of our quarterly reviews with
respect to exchange rate gains or losses.
performance measure tracking system
Question. The fiscal year 1999 budget requests an increase of
$500,000 to enable FAS to develop a cross-agency performance tracking
and evaluation system to determine success rates in implementing goals
and objectives in the agency strategic plan, and for FAS to ``re-
engineer'' its market intelligence performance measurement and
evaluation tools. Is this request a one-time increase?
Answer. It is not certain at this point whether additional funds
will be necessary beyond fiscal year 1999 to implement the fundamental
changes necessary to transition FAS to a performance-based management
system, as required by the Government Performance and Results Act.
However, the increase is definitely temporary in nature, and will be
used solely to effect full implementation of the Act as a management
tool at FAS.
Question. Please explain more specifically what costs this
additional $500,000 will cover and why additional funds are required
for FAS to evaluate its performance.
Answer. FAS is seeking the help of private sector experts to
develop an agency-wide performance tracking and evaluation system to
verify and validate success rates in attaining goals and objectives
outlined in its strategic plan. The additional funds also will permit
FAS to evaluate and re-engineer its market intelligence process. This
is necessary for three reasons. First, recent management audits by GAO
and a recent study completed by USDA's Economic Research Service
question the efficiency of USDA's market information delivery system.
Second, by taking maximum advantage of enabling technologies, cost
savings in human, information, and program resources from re-
engineering the market intelligence process can be shifted to other FAS
program activities where there is a greater return on investment, e.g,
market access, market promotion, and outreach activities. Third, it
will help focus our market intelligence gathering activities to better
serve the needs of our external and internal customers.
Question. How will the additional funds requested allow FAS to
determine success rates in implementing its strategic plan goals and
objectives? Please be specific.
Answer. The Government Performance and Results Act requires Federal
agencies to develop and implement results-oriented performance
measurement and evaluation systems to assess the public value of
various program activities relative to investment costs. The additional
funds will be used to enlist the services of private sector experts in
developing a meaningful and realistic agency-wide performance
measurement and evaluation system. This system that will help FAS
define its level of success in achieving its strategic goals and
objectives, and provide benchmarks for making appropriate adjustments
in strategic goals and objectives when needed to achieve the maximum
public good for dollars invested.
foreign market development cooperator program
Question. The explanatory notes indicate that a competitive
allocation process has been implemented in the Foreign Market
Development (FMD) Cooperator Program to ensure available resources are
directed to the most cost effective market development activities.
Please describe in detail the competitive allocation process which has
been implemented for the Foreign Market Development (FMD) Cooperator
Program. What criteria are being used to determine the ``most cost-
effective'' market development activities?
Answer. In determining which proposals to approve for funding, FAS
considers a number of factors including the organization's
administrative capability, the conditions or constraints impeding U.S.
exports, and the likely success of the strategic plan. The strategic
plan must identify a clear long-term agricultural trade strategy and a
program effectiveness time line against which results can be measured
at specific intervals using quantifiable product or country goals.
Meritorious applications then compete for funds on the basis of the
following criteria: participant contribution levels, past export
performance, past demand expansion performance, and future demand
expansion goals. This competitive allocation process promotes FAS's
strategic plan goals and objectives, as required by the GPRA, by
disbursing appropriate levels of funds to those applicants that provide
the greatest levels of cost-share (contributions) and can document the
best performance.
FAS has adopted a results-oriented management (ROM) system based on
performance measurements to determine the ``most cost-effective''
market development activities. In keeping with the philosophy of the
GPRA, FMD funding allocations will be based in part on the
effectiveness of Cooperators in meeting their goals and objectives. The
criteria, or goals and objectives, vary between organizations depending
on products, markets, constraints, and market development programs;
however, each organization's objectives will be clearly identified in
its marketing plan. FAS and its industry partners have already
participated in three seminars on ROM--seminars tailor-made to assist
FAS and the industry in identifying appropriate performance measures,
objectives, goals, and the processes for managing our programs based on
measurable results. We also intend to contract with a proven,
experienced entity to work with us to further develop and refine this
effort over the next several program cycles.
Question. The explanatory notes indicate that a $5.5 million
reduction is being proposed in Foreign Agricultural Service (FAS)
activities funded through the Foreign Market Development Cooperator
Program. This reduction is to partially offset the proposed shift in
computer facility operating costs from the Commodity Credit Corporation
to the FAS. The budget indicates that the proposed $5.5 million
reduction in FAS support for the Cooperator Program will be partially
offset by increasing the cost-share factor for program participants.
What is the current cost-share factor and what increase is being
proposed? How much will this save?
Answer. I am pleased to report that participants in the Foreign
Market Development Cooperator Program currently contribute $1.90 for
each $1.00 in FAS funding. This represents an increase in participant
cost sharing of over 40 percent since fiscal year 1994 levels. To fully
offset the reduction of $5.5 million in FAS funding, participant cost
sharing would have to increase to $2.54 for every $1.00 of FAS funding.
Question. As you know, U.S. exporters who utilize the GSM-102
credit guarantee program pay a fee. I believe the fee goes to the
General Fund of the Treasury. I also believe the total fees paid can
range up to $20 million per year depending on the volume of 102 credit
guarantees utilized. Would it be possible to redirect the fees to the
FMD program?
Answer. Under Credit Reform Act of 1990, fees associated with the
GSM-102 program are used in the subsidy calculation which determines
the level of budget authority and outlays for the program. Further,
these fees are deposited to the loan financing account for the export
credit guarantee program, not to the General Fund of the Treasury, to
be used to help offset claims. To use these fees for some other purpose
would require a modification to current credit reform law and would
result in a higher subsidy calculation for the GSM-102 program.
Question. Please provide a table which shows the total amount of
funding available for the FMD Cooperator Program in each of fiscal
years 1994 through 1998 and the amount proposed for fiscal year 1999.
For each of these fiscal years, please show FAS funding for the
program; the amount of nonfederal funds provided by program
participants; and the program carryover balance, both for federal and
nonfederal funds, from one fiscal year to the next.
Answer. I will provide a table which shows the total amount of
funding available for the FMD Cooperator Program in each of fiscal
years 1994 through 1998 and the amount proposed for fiscal year 1999.
[The information follows:]
COOPERATOR PROGRAM FUNDING FISCAL YEARS, 1994-1998
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999 \3\
----------------------------------------------------------------------------------------------------------------
FAS funding \1\............................... 31,410 20,800 24,279 27,500 27,500 22,000
Non-Federal funds \2\......................... 27,594 30,655 31,325 39,862 47,719 53,219
Federal carryover balance..................... 26,200 16,000 11,200 9,200 6,700 .........
----------------------------------------------------------------------------------------------------------------
\1\ Appropriated funding.
\2\ Cooperator contributions.
\3\ Estimate.
Note: No information available on carryover of non-Federal funds.
Question. Please provide a breakdown of how the funds for the FMD
Cooperator Program were allocated in each of the fiscal years 1997 and
1998.
Answer. I will provide for the record a breakdown of how FAS funds
for the FMD Cooperator Program were allocated in each of the fiscal
years 1997 and 1998.
[The information follows:]
COOPERATOR FUND ALLOCATIONS
------------------------------------------------------------------------
1997 1998
------------------------------------------------------------------------
American Forest & Paper Association..... $2,555,000 $1,538,553
American Seafood Institute.............. .............. 129,272
American Seed Trade Association......... 220,824 174,178
American Sheep Industry Association..... 138,353 102,905
American Soybean Association............ 5,249,108 5,292,821
Cotton Council International............ 949,000 2,297,114
EUSAFEC................................. 134,893 ..............
Leather Industries of America........... 173,722 161,220
MIATCO.................................. 159,840 ..............
Millers National Federation............. 7,100 8,717
Mohair Council of America............... 20,000 5,523
NASDA................................... 334,966 ..............
National Cottonseed Products Association 124,936 153,551
National Dry Bean Council............... 71,865 45,841
National Hay Association................ 48,250 50,203
National Peanut Council................. 467,934 498,151
National Renderers Association.......... 926,000 598,164
National Sunflower Association.......... 173,000 258,994
Protein Grain Products International.... 11,000 17,539
SUSTA................................... 160,511 ..............
U.S. Beef Breed Council................. 73,000 25,097
U.S. Dairy Export Council............... 269,630 224,730
U.S. Feed Grains Council................ 5,551,057 4,341,047
U.S. Hide, Skin & Leather Association... 48,500 52,294
U.S. Livestock Genetics Exports......... 385,000 657,891
U.S. Meat Export Federation............. 1,515,000 966,206
U.S. Wheat Associates................... 4,767,500 6,208,474
USA Dry Pea & Lentil Council............ 197,379 67,095
USA Poultry & Egg Export Council........ 1,220,000 1,115,597
USA Rice Council........................ 1,340,000 1,558,393
Western Growers Association............. 10,000 430
WUSATA.................................. 196,632 ..............
Unallocated Funds \1\................... .............. 950,000
-------------------------------
Cooperator total.................. 27,500,000 27,500,000
------------------------------------------------------------------------
\1\ Due to the low carryover balances (which are expected to reach $0 in
1999) and the uncertainty of actual expenditure rates by the
Cooperators, FAS has set aside $950,000 for future obligation in
fiscal year 1998. FAS is monitoring monthly expenditures for each
Cooperator and will obligate the remaining funds as appropriate to
ensure adequate funding for marketing plan budgets.
supplier and facilities credit guarantee programs
Question. Please explain the reason for the new approach proposed
in the budget to present the estimates for the Commodity Credit
Corporation (CCC) export credit guarantee programs to reflect level of
sales expected to be registered rather than the authorized levels. What
is the budgetary impact of this proposed change?
Answer. The new approach proposed in the budget for the CCC export
credit guarantee programs will result in more realistic estimates of
the costs of the programs since the estimates will be based on the
actual level of sales expected to be registered rather than the higher
authorized levels. In the past, when the higher authorized levels were
included in the budget, these costs tended to be overstated
significantly. Actual sales registrations usually turned out to be far
below the level estimated in the budget. The accuracy of the CCC budget
estimates will improve by using these more realistic estimates.
It is important to note that the level of guarantees to be issued
by CCC during the course of the year will not be limited by the budget
estimates, but instead will be determined by market conditions and
program demand. This brings the budget treatment of the guarantee
programs into line with that used for other CCC-funded programs.
Question. Using the new scoring, you indicate that the budget
projects an aggregate program level of $5.0 billion for export credit
guarantees in fiscal year 1998 and $4.6 billion for fiscal year 1999.
What is the reason for the reduction in fiscal year 1999 from the
fiscal year 1998 level?
Answer. The projected program levels for the CCC export credit
guarantee programs of $5.0 billion in 1998 and $4.6 billion in 1999 are
substantially higher than the $2.9 billion of sales registered under
the guarantee programs in 1997. The higher projected program levels for
1998 and 1999 reflect an increase in guarantee programming in response
to the financial turmoil in Southeast Asia and the Republic of Korea.
The reduction in fiscal year 1999 can be primarily attributed to the
reduced programming level projected for Southeast Asia and Korea in
fiscal year 1999. In fiscal year 1998, over $2 billion of CCC export
credit guarantees have already been made available for Southeast Asia
and Korea. For fiscal year 1999, a reduced amount of $1.3 billion in
export credit guarantee commitments has been estimated in the fiscal
year 1999 President's Budget for Korea and the Southeast Asian region
Question. Please provide specific examples of how the supplier and
facilities credit guarantee programs are being used to help finance
U.S. exports.
Answer. These relatively new programs are just beginning to help
finance U.S. exports. For fiscal year 1997, registrations under the
Supplier Credit Guarantee Program (SCGP) totaled $3.74 million for
sales to Guatemala, Indonesia, and Mexico. For fiscal year 1998,
registrations as of March 20 total $2.23 million. USDA has been
aggressively promoting these programs through both domestic and foreign
outreach efforts, and we expect increased program use particularly for
sales to Asian markets. As of March 20, USDA has authorized SCGP
allocations for fiscal year 1998 totaling $323 million to 14 countries
or regions compared to $160 million for 9 countries or regions for
fiscal year 1997. Facility Guarantee Program (FGP) interim regulations
became effective August 8, 1997. USDA has authorized FGP allocations
for fiscal year 1998 totaling $155 million for 13 countries. There is
considerable interest in using this program to help finance projects in
Asia.
proposed staff reductions
Question. What impact will the proposed reduction of 15 staff years
have on FAS market access activities and how will this proposed
staffing reduction be applied?
Answer. Under this proposal, FAS will concentrate available
resources on the highest priority trade policy issues, including
preparation for the next round of multilateral trade negotiations under
the auspices of the World Trade Organization, regional free trade
agreement negotiations (Free Trade Area of the Americas and Asian
Pacific Economic Cooperation forum), and resolution of sanitary and
phytosanitary issues. FAS will also work to use improved computer and
other technical capabilities to assure the continued effectiveness and
integrity of these activities.
We anticipate achieving staff reductions though attrition. While
the budget proposes a pro-rata distribution of staff reductions among
budget activities, the actual impact would likely be determined by
where attrition occurs and the degree to which shifts in staff
resources may be required to meet priority agency objectives.
Question. What impact will the proposed decrease of 15 staff years
have on FAS market intelligence activities and how will this staffing
reduction be applied?
Answer. Under this proposal, FAS will concentrate available
resources on overseas reporting that focuses on the most promising
market opportunities for U.S. agriculture, as well as the activities of
competitor exporting countries. FAS will also work to use improved
computer and other technical capabilities to ensure the continued
effectiveness and integrity of this function.
Question. The explanatory notes indicate that the proposed market
intelligence staff year decreases will force FAS to focus on the most
promising market opportunities for U.S. agriculture, as well as the
activities of competitor exporting countries. What are the most
promising market opportunities for U.S. agriculture? What competitor
country exporting activities are of greatest concern?
Answer. The Asian financial crisis notwithstanding, the most
promising market opportunities over the next ten years are in Asia and,
to a lesser extent, Latin America. While there are promising market
opportunities in many parts of the world, these two regions are largely
responsible for much of the export growth we have experienced over the
past decade and will likely experience over the next decade. At the
heart of this growth has been strong economic growth, economic and
trade liberalization, and rapid expansion of their middle classes.
Japan, China/Hong Kong, Korea, Taiwan, and Southeast Asia lead the
``best prospect list'' in Asia. In Latin America, Mexico and Brazil are
the leading prospects. However, the nations of Central America and the
Caribbean offer excellent prospects with both expected to reach new
record highs in fiscal year 1998.
Competitor country exporting activities of greatest concern include
export subsidies provided by the European Union and Canada, as well as
export monopolies operated by marketing boards in Canada, Australia and
New Zealand. These countries are major competitors for grains, meat,
fruit and value added products. In addition, it is important to track
developments in competitor countries such as Argentina and Brazil which
export substantial quantities of wheat, corn, soybeans, meat and
citrus, and China, which is a major exporter of fruits and vegetables
and other value added products as well as some grains. Finally, recent
developments in currency markets bear close attention as the devalued
currencies in several competitor countries may have a negative impact
on U.S. agricultural export opportunities.
Question. What impact will the proposed decrease of 12 staff years
have on FAS financial marketing assistance activities and how will this
staffing reduction be implemented?
Answer. Increasing the liquidity of foreign importers to buy U.S.
agricultural products is the primary goal of this activity. Under this
proposal, FAS will improve its analytical process to focus appropriate
financial assistance activities on market development needs identified
as priorities in its resource allocation strategy. FAS will also
concentrate available resources on the continued development of new
approaches to expanding liquidity in potential markets using the export
credit programs, and on finding ways to use these programs to better
complement each other and other FAS programs in order to ensure maximum
benefits to U.S. agriculture. FAS will work to use improved computer
and other technical capabilities to assure the continued effectiveness
and integrity of these financial assistance activities.
Question. The explanatory notes indicate that increasing the
liquidity of foreign importers to buy U.S. agricultural products is the
primary goal of the financial marketing assistance activities supported
by the FAS. How have we been successful to date in this area and what
new approaches have been identified to expand liquidity in potential
markets?
Answer. Under GSM-102, GSM-103, and Supplier Credit Guarantee
programs more than $5.0 billion of export credit guarantees have been
made available to date in fiscal 1998. Recipients have used about 40
percent of these allocations during the first half of fiscal 1998, and
the programs have played a critical role in softening the effect of the
Asian crisis on the U.S. agricultural sector. Asian nations have used
more than $800 million of the approximately $2.0 billion of GSM
guarantees allocated to the region. These guarantees have maintained or
restored agricultural trade relationships following the collapse in
trade during late 1997. FAS continues to expand export credit liquidity
through the guarantee programs to Mexico, Pakistan, and other emerging
markets. New approaches to expand liquidity include making more
financing instruments eligible for coverage under GSM-102 and
conducting educational seminars to promote the Supplier Credit
Guarantee program. FAS has implemented a new program to support the
U.S. agricultural sector--the Facilities Guarantee Program. This
program will provide credit guarantees to U.S. participants in projects
to build or improve facilities in emerging markets. These guarantees
could support projects such as refrigeration, grain handling, and
storage facilities that would increase the capacity to purchase U.S.
agricultural products.
Question. What market development needs are identified as
priorities in the FAS resource allocation strategy?
Answer. One of the primary objectives identified in the FAS
Strategic Plan for 1997-2002 is to, ``Focus and expand foreign market
development, promotion, and outreach activities to U.S. exporters and
foreign buyers.'' In meeting this objective, FAS strategic priorities
include: increasing the share of overseas activities carried out in
markets identified as priorities through the MAP and FMD planning
processes; focusing on emerging markets while protecting market share
in mature markets; increasing domestic awareness of export
opportunities, programs and market intelligence, with emphasis on small
and new-to-export firms; and introducing new international buyers to
U.S. products and exporters through U.S. and overseas training,
marketing seminars, and missions.
Over the past year, FAS has developed new processes and procedures
for use in allocating its market development resources. These efforts
effectively support the strategic decision-making initiatives of the
Government Performance and Results Act. For example, beginning February
1998, Market Access Program (MAP) and Foreign Market Development (FMD)
program applicants are required to combine their applications in a
Unified Export Strategy (UES). This UES process and format will for the
first time ever result in the submission of a unified package including
not only MAP and FMD applications but also requests for assistance
under virtually all FAS administered marketing, financial assistance,
and market access programs. For example, in the UES submission, MAP/FMD
applicants are asked to also specify their requests for funding
assistance under the Cochran, Emerging Markets, and Section 108
programs. The UES also accommodates applicant recommendations for
financial and trade policy assistance for consideration by FAS in
allocating guarantee availabilities and staff resources under the GSM-
102/103 and Supplier's Credit programs and in prioritizing its efforts
to open or expand access to overseas markets.
This UES process for our industry partners complements and mirrors
the Country Promotion Planning process recently completed by FAS's
overseas offices and the Product Promotion Planning process which is
now underway in FAS Commodity Divisions. Together these three
initiatives undertaken by industry, FAS country, and FAS commodity
experts will provide FAS decision-makers with the necessary information
base to make sound decisions regarding how limited staff and program
resources should be allocated to achieve our market expansion and food
security goals as outlined in the Agency's strategic plan.
Question. What impact will the proposed decrease of 7 staff years
have on FAS long-term market and infrastructure development efforts and
how will this staffing reduction be implemented?
Answer. Under this proposal, FAS will concentrate available
resources on the highest priority activities in order to maximize the
benefits of increased international agricultural cooperation and
development.
Question. Please identify the highest priority activities to
maximize the benefits of increased international agricultural
cooperation and development.
Answer. The Cochran Fellowship program, our efforts in
international collaborative research, especially in support of SPS
initiatives, and our work on food security issues are the highest
priority activities in international agricultural cooperation and
development at the current time.
Question. Please provide for the record a table providing a
separate breakdown of the funding and staffing reductions proposed for
fiscal year 1999, by activity: (1) to offset increased resources
proposed for the ``overseas buying power maintenance account'', and (2)
for ``support of USDA's international crop estimates and production
intelligence capabilities.''
Answer. I will provide a table providing a separate breakdown of
the funding and staffing reductions proposed for fiscal year 1999 in
order to offset the costs of those two components of our budget
request.
[The information follows:]
REDUCTIONS BY BUDGET ACTIVITY
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Overseas account Crop est. and Total
-------------------- production -------------------
intelligence
Amount SY -------------------- Amount SY
Amount SY
----------------------------------------------------------------------------------------------------------------
Market access....................................... $173 2 $1,115 13 $1,288 15
Market development, promotion and outreach.......... 173 2 1,019 11 1,192 13
Market intelligence................................. 173 2 1,136 13 1,309 15
Financial marketing assistance...................... 173 2 814 10 987 12
Long-term market and infrastructure development..... 87 1 503 6 590 7
-----------------------------------------------------------
Total......................................... 779 9 4,587 53 5,366 62
----------------------------------------------------------------------------------------------------------------
public law 480 program
Question. The fiscal year 1999 budget proposes to maintain the
fiscal year 1998 Public Law 480 Titles II and III program levels in
fiscal year 1999, but to decrease the Title I program level by $124.7
million, from the fiscal year 1998 level of $226.9 million to $102.2
million. What is the reason for the significant reduction proposed for
fiscal year 1999 in the Public Law 480 Title I program?
Answer. This reduction supports compliance with discretionary
spending targets which have been established in conjunction with
efforts to balance the Federal budget. Program resources will be
targeted towards the most promising market development opportunities
which have been identified by the Foreign Agricultural Service in its
resource allocation processes.
Question. What impact will this reduction have on commodity
shipments? Which commodities are likely to be impacted?
Answer. The proposed program level for fiscal year 1999 will
provide estimated commodity shipments of 0.547 million metric tons
grain equivalent (MMTGE) as compared to 1.249 MMTGE estimated for
fiscal year 1998. Wheat and wheat flour, rice, and vegetable oil are
the commodities most affected by the reduced Public Law 480 program
level. The estimated shipment of wheat and wheat flour will be reduced
from 1.099 MMTGE in fiscal year 1998 to 0.386 MMTGE in fiscal year
1999. The estimated shipment of rice will be reduced from 0.072 to
0.016 MMTGE and the estimated shipment of vegetable oil will be reduced
from 0.021 to 0.005 MMTGE.
Question. What appropriations would be required for fiscal year
1999 (for the subsidy costs of Title I agreements, and for ocean
freight differential grants) to maintain the fiscal year 1998 level for
the Public Law 480 Title I program?
Answer. To maintain a $226.9 million program level for Public Law
480 Title I for fiscal year 1999, we estimate that a Title I
appropriation of $196.9 million would be needed to cover the subsidy
costs in the program account. In addition, $20.9 million would be
required for estimated OFD costs.
Question. Please provide for the record the Public Law 480 funding
allocations, by Title, for each of fiscal years 1996 and 1997, and for
fiscal year 1998 to date.
Answer. I will provide for the record the Public Law 480 funding
allocations, by Title, for each of fiscal years 1996 and 1997, and for
fiscal year 1998 to date.
[The information follows:]
Public Law 480, Title I Fiscal Year 1996 Programming
[In millions of dollars]
Total
Country allocation
Angola............................................................ 8.7
Armenia........................................................... 14.4
Belarus........................................................... 9.9
Bolivia........................................................... 8.6
Congo............................................................. 8.0
Cote D'Ivoire..................................................... 10.0
El Salvador....................................................... 12.2
Guyana............................................................ 9.0
Jamaica........................................................... 15.0
Jordan............................................................ 21.0
Lithuania......................................................... 10.0
Moldova........................................................... 13.7
Pakistan.......................................................... 10.0
Philippines....................................................... 15.0
Sri Lanka......................................................... 9.6
Suriname.......................................................... 1.9
Turkmenistan...................................................... 10.0
Ukraine........................................................... 20.0
-----------------------------------------------------------------
________________________________________________
Title I Subtotals........................................... 207.0
=================================================================
________________________________________________
Title I funded Food for Progress:
Albania....................................................... 5.0
Georgia....................................................... 28.8
Kyrgyzstan.................................................... 15.0
Tajikistan.................................................... 11.0
-----------------------------------------------------------------
________________________________________________
Food for Progress subtotal.................................. 59.8
=================================================================
________________________________________________
Grand totals................................................ 266.8
Public Law 480, Title I Fiscal Year 1997 Programming
[In millions of dollars]
Total
Country allocation
Armenia........................................................... 15.0
Bolivia........................................................... 10.0
Cote D'Ivoire..................................................... 10.0
El Salvador....................................................... 9.2
Georgia........................................................... 20.0
Guyana............................................................ 7.8
Jamaica........................................................... 5.3
Jordan............................................................ 20.9
Lithuania......................................................... 7.6
Pakistan.......................................................... 35.0
Sri Lanka......................................................... 10.0
Ukraine........................................................... 10.0
-----------------------------------------------------------------
________________________________________________
Title I subtotals........................................... 160.8
=================================================================
________________________________________________
Food for Progress title I funded:
Kyrgyzstan.................................................... 13.6
Mongolia...................................................... 2.8
Tajikistan.................................................... 8.1
-----------------------------------------------------------------
________________________________________________
Food for Progress subtotal.................................. 24.5
=================================================================
________________________________________________
Grand totals................................................ 185.4
Public Law 480, Title I Fiscal Year 1998 Programming \1\
[In millions of dollars]
Total
Country allocation
Angola............................................................ 10.0
Armenia........................................................... 15.0
Bolivia........................................................... 10.0
Cote d'Ivoire..................................................... 10.0
El Salvador....................................................... 10.0
Eritrea........................................................... 10.0
Georgia........................................................... 15.0
Guatemala......................................................... 10.0
Guyana............................................................ 9.0
Indonesia......................................................... 25.0
Jamaica........................................................... 5.0
Jordan............................................................ 18.0
Nicaragua......................................................... 10.0
Pakistan.......................................................... 10.0
Peru.............................................................. 10.0
Philippines....................................................... 10.0
Sri Lanka......................................................... 10.0
Zimbabwe.......................................................... 10.0
Private trade..................................................... 10.0
-----------------------------------------------------------------
________________________________________________
Title I subtotals........................................... 217.0
=================================================================
________________________________________________
Food for Progress Title I funded:
Albania....................................................... 10.0
Bangladesh.................................................... 10.0
Bosnia-Herzegovina............................................ 10.0
Kyrgyzstan.................................................... 15.0
Mongolia...................................................... 5.0
Mozambique.................................................... 10.0
Tajikistan.................................................... 10.0
Russia (private entities)..................................... 9.0
-----------------------------------------------------------------
________________________________________________
Food for Progress subtotal.................................. 79.0
=================================================================
________________________________________________
Grand totals................................................ 296.0
\1\ Through March 24, 1998.
[Clerk's note.--Due to the volume of title II funding allocations
they do not appear in the hearing record, but they are available for
review in the subcommittee's files.]
TITLE III PROGRAM BUDGET
[In millions of dollars]
------------------------------------------------------------------------
Fiscal year--
--------------------------------------
Program Estimated
Actual 1996 Actual 1997 1998
------------------------------------------------------------------------
Bangladesh....................... 7.5 ........... ...........
Hati............................. 10.0 10.0 10.0
Honduras......................... 5.0 ........... ...........
Nicaragua........................ 4.0 1.4 ...........
Eritea........................... ........... 15.0 5.0
Ethiopia......................... 25.0 10.0 9.9
Mozambique....................... ........... 4.0 5.0
--------------------------------------
Program total.............. 51.5 40.4 29.9
Farmer-to-farmer................. 0.1 0.1 0.1
Claims settlement................ ........... 0.1 ...........
Transfer to title II............. 10.1 ........... ...........
Transfer from title II........... ........... -9.0 ...........
Carry-in......................... -11.7 ........... ...........
Prior year unoblig............... ........... -2.1 ...........
--------------------------------------
Appropriation.............. 50.0 29.5 30.0
------------------------------------------------------------------------
Question. Last year the Department indicated that Public Law 480
Title I funds carried over from one fiscal year to the next were
increasing: $4.4 million was carried into fiscal year 1993, $4.7
million into fiscal year 1994, $16.9 million into fiscal year 1995,
$24.7 million into fiscal year 1996; and $32.9 million into fiscal year
1997. What is the carryover from fiscal year 1997 into fiscal year
1998? What is the estimated carryover from fiscal year 1998 to fiscal
year 1999?
Answer. The carryover from fiscal year 1997 to fiscal year 1998 is
$62.9 million. As of March 24, 1998, the estimated carryover from
fiscal year 1998 to fiscal year 1999 is expected to be $17.0 million.
Question. Why have the carryover balances for the Title I program
been growing from year to year?
Answer. The carryover balances for the Title I program have
increased in recent years because country allocations were withdrawn
for unresolved issues related to the recipient country's prior year
Title I agreements, civil wars within the recipient country, or for
internal issues within the country which led them to change their
purchase decisions. In addition, in some instances countries did not
purchase the full amount of their allocation.
Question. What is being done to increase the focus of the Public
Law 480, Title I program on the private sector?
Answer. Senior level teams have traveled overseas and domestically
to explain the program to potentially interested private sector groups.
Overseas they met in Pakistan and Bangladesh with cotton importers.
Domestically, we have met with USDA cooperators including U.S. Wheat
Associates and the American Soybean Association to review possible
projects in southern Africa and Russia. We are presently pursuing a
regulatory change that would allow USDA to enter into Public Law 480
agreements directly with foreign, private sector entities without a
U.S. partner. This change is expected to increase program flexibility
and private sector use.
overseas offices
Question. Please provide for the record a list of FAS overseas
counselor/attache and trade offices and the amount of funding and full-
time equivalent staffing levels provided for each in fiscal year 1997
and 1998 and proposed for fiscal year 1999.
Answer. A list of FAS overseas counselor/attache and trade offices
and the amount of funding and staffing is provided.
[The information follows:]
FOREIGN AGRICULTURAL SERVICE OVERSEAS COUNSELOR/ATTACHE AND TRADE OFFICES FUNDING AND STAFF \1\ LEVELS--FISCAL
YEARS 1997-99
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1997-- Fiscal year 1998-- Fiscal year 1999--
-----------------------------------------------------------------
Post On-board On-board On-board
Funding employees Funding employees Funding employees
----------------------------------------------------------------------------------------------------------------
Foreign Agricultural Affairs
Austria....................................... 657 4 730 4 752 4
Czech Rep..................................... 48 1 40 1 41 1
France........................................ 960 7 1,043 7 1,074 7
Greece........................................ 280 2 244 2 251 2
Israel........................................ 126 1 143 1 147 1
Italy, Emb.................................... 725 6 723 6 745 6
Italy, Fodag.................................. 215 1 215 1 221 1
Portugal...................................... 145 1 165 1 170 1
Spain......................................... 900 6 901 6 928 6
Switz, Bern................................... 63 ......... 87 ......... 90 .........
Switz, Gen.................................... 779 4 908 4 935 4
Belgium, E.................................... 201 1 213 1 219 1
Belg.Useu..................................... 1,123 6 1,271 6 1,309 6
Denmark....................................... 239 2 211 2 217 2
United Kingdom................................ 726 5 769 5 792 5
Germany....................................... 788 6 780 6 803 6
Ireland....................................... 149 1 162 1 167 1
Netherlands................................... 667 4 712 4 733 4
Sweden........................................ 378 5 364 5 375 5
-----------------------------------------------------------------
Total................................... 9,169 63 9,681 63 9,971 63
=================================================================
Argentina..................................... 778 5 761 5 784 5
Brazil........................................ 525 4 726 4 748 4
Canada........................................ 446 5 470 5 484 5
Chile......................................... 353 3 348 3 358 3
Colombia...................................... 370 4 408 4 420 4
Costa Rica.................................... 296 3 327 3 337 3
Dom. Rep...................................... 329 2 337 2 347 2
Ecuador....................................... 156 2 156 2 161 2
Guatemala..................................... 482 2 497 2 512 2
Mexico........................................ 809 8 828 8 853 8
Peru.......................................... 298 3 337 3 347 3
Venezuela..................................... 531 5 512 5 527 5
-----------------------------------------------------------------
Total................................... 5,373 46 5,707 46 5,878 46
=================================================================
Algeria....................................... 35 ......... 37 ......... 38 .........
Bulgaria...................................... 238 3 232 3 239 3
Bangladesh.................................... 37 1 42 1 43 1
Cote D'Ivoire................................. 280 3 354 3 365 3
Egypt......................................... 406 3 413 3 425 3
India......................................... 417 8 395 8 407 8
Kenya......................................... 234 1 276 1 284 1
Morocco....................................... 227 2 254 2 262 2
Nigeria....................................... 392 2 452 2 466 2
Pakistan...................................... 288 3 275 3 283 3
Romania....................................... 30 1 30 1 31 1
Syria......................................... 40 1 51 1 53 1
Serbia-Mont................................... 34 1 37 1 38 1
So. Africa.................................... 534 5 704 5 725 5
Tunisia....................................... 202 2 73 2 75 2
Turkey........................................ 505 4 558 4 575 4
-----------------------------------------------------------------
Total................................... 3,899 40 4,183 40 4,308 40
=================================================================
Australia..................................... 323 4 348 4 358 4
PRC........................................... 953 4 933 4 961 4
Indonesia..................................... 488 4 659 4 679 4
Japan......................................... 1,412 10 1,430 10 1,473 10
Korea......................................... 653 5 520 5 536 5
Malaysia...................................... 247 3 296 3 305 3
New Zealand................................... 189 2 218 2 225 2
Philippines................................... 533 5 542 5 558 5
Poland........................................ 505 4 501 4 516 4
Russia........................................ 1,126 10 1,194 11 1,230 11
Thailand...................................... 637 5 665 5 685 5
Ukraine....................................... 61 ......... 174 1 179 1
Vietnam....................................... 345 1 367 1 378 1
-----------------------------------------------------------------
Total................................... 7,472 57 7,847 59 8,082 59
=================================================================
Total, FAA.............................. 25,913 206 27,418 208 28,241 208
=================================================================
Agricultural Trade Offices
Sao Paulo, Brazil............................. 354 4 375 4 386 4
Shanghai, China............................... 595 1 660 1 680 1
Guangzhou, China.............................. 461 1 407 1 419 1
Hamburg, Germany.............................. 424 3 463 3 477 3
Hong Kong..................................... 927 4 961 4 990 4
Jakarta, Indonesia............................ 282 1 321 1 331 1
Milan, Italy.................................. 362 2 341 2 351 2
Tokyo, Japan.................................. 2,174 8 1,983 8 2,042 8
Osaka, Japan.................................. 449 3 476 3 490 3
Seoul, Korea.................................. 1,073 4 1,069 4 1,101 4
Mexico........................................ 1,121 5 1,165 5 1,200 5
Riyadh, Saudi Arabi........................... 407 3 383 3 394 3
Singapore..................................... 979 3 946 3 974 3
Dubai, U.A.E.................................. 378 4 369 4 380 4
Caribbean Basin, U.S.......................... 171 1 212 1 218 1
-----------------------------------------------------------------
Total, ATO.............................. 10,157 47 10,131 47 10,435 47
=================================================================
Grand total............................. 36,070 253 37,549 255 38,675 255
----------------------------------------------------------------------------------------------------------------
\1\ Overseas managed on a head count basis, not FTE basis. Total includes FSN's as well as U.S. Foreign Service
personnel.
INTERNATIONAL COOPERATIVE ADMINISTRATIVE SUPPORT SERVICES \1\ FISCAL
YEARS 1990-99
------------------------------------------------------------------------
Fiscal year--
--------------------------------------
1997 1998 \2\ 1999
------------------------------------------------------------------------
Foreign Agricultural Affairs..... 4,871 7,119 7,119
Agricultural Trade Offices....... 1,624 2,373 2,373
--------------------------------------
Total...................... 6,495 9,492 9,492
------------------------------------------------------------------------
\1\ Reimbursement to State Dept., formerly Foreign Affairs
Administrative Support Services.
\2\ Includes a $4.4 million base transfer.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. FAS' program activities are essentially restated as unique
strategic objectives with key operating strategies and performance
goals. Each FAS objective, in turn, is directly associated with FAS'
strategic goals and mission. FAS' two strategic goals are directly
linked to the department's objectives and goals.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. Prior to the 1998 budget, FAS had developed its Long-Term
Agricultural Trade Strategy (LATS) report which identified five key
drivers of long-term success. In the 1998 budget submission, FAS
revised its program activities to correspond to these key drivers. As
FAS began developing and refining its Strategic and Annual Performance
plans, and following consultations with Senate Agriculture Committee
staffers on its initial draft strategic plan, FAS identified that it
had two goals: (1) expand export opportunities for U.S. agricultural,
fish, and forest products; and (2) promote world food security. FAS
recognized that with a few modifications, its five program activities
were actually objectives that support the achievement of FAS' two
goals. The first four program activities (market access, market
development etc., market intelligence, and financial assistance) all
support FAS' goal to expand export opportunities. The last program
activity (long term market and infrastructure development) supports
FAS' goal to promote world food security.
Like other agencies across the Federal Government, FAS learned that
in order to implement GPRA, planning needs to drive the budget. The
five program activities in the fiscal year 1999 budget submission
reflect slight modifications in the five program activities in the
fiscal year 1998 budget. These modifications are a result of FAS'
realization that it needed to re-align its budget activities to its
goals and objectives. As FAS learns more about institutionalizing
performance-based management processes, it anticipates that there will
be further changes required to continually adjust the budget to
accommodate changes in legislation, international trade, and
technology.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. Yes, performance measures contained in the agency's
Performance Plan are linked to each FAS budget activity and are
displayed in FAS' Annual Performance Plan.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. Little difference exists between FAS' performance planning
structure and account and activity structure. Objectives identified
under Goal 1 of the Annual Performance Plan are identical to the first
four budget program activities. The objectives for Goal 2 of the Annual
Performance Plan are grouped in the account and activity structure of
the budget under ``Long-term Market and Infrastructure Development''
for budget presentation purposes.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. FAS currently has no plans to change its account structure
for fiscal year 2000. However, as FAS institutionalizes it performance-
based management processes and as Federal Government agencies
transition to a cost accounting system, FAS may propose changes in its
account structure to facilitate aligning performance goals with all
operating costs and appropriated/non-appropriated program activities.
Question. How were performance measures chosen?
Answer. FAS believes that leadership starts at the top but
performance comes from the front line. Following this principle, FAS'
senior management created a draft strategic plan with objectives and
the Strategic Operations Staff of the Office of the Administrator
facilitated a series of one-day workshops for nearly every division in
the agency. The purpose of these workshops was three-fold: (1) to begin
the education process of all employees and supervisors on GPRA and
performance management; (2) to validate and improve the draft strategic
plan prepared by senior management; and (3) to assist the divisions in
preparing division-level performance plans which identified performance
measures that are aligned to the agency's strategic goals and
objectives. Following these workshops, FAS senior management
participated in the validation of the revised draft strategic plan and
the performance measures identified by the divisions prior to their
submission to OMB and Congress.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. The process of making GPRA a reality in FAS is hardly one
year old and still ongoing. However, FAS believes that its approach of
ensuring that all employees recognize how his/her activities relate to
and contribute to the overall mission and performance goals of the
agency will pay off in superior planning and performance in future
years. By the end of fiscal year 2000, a track record of learning and
evaluation regarding both realistic and verifiable performance measures
and the associated costs will be available.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. No, FAS will be conducting GPRA workshops this April
through June with every division (approximately 23) in the organization
that has direct responsibility for developing and tracking the
performance data necessary to meet the March 2000 performance reporting
requirement. The primary purpose of these workshops is to ensure that
FAS has procedures in place to verify and validate that it is capturing
the right performance data.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. While all measures are important to track to understand the
breadth of FAS' activities, FAS suggests that the subcommittee focus
on: the number of SPS issues resolved each year; the number of research
activities facilitated annually by FAS that encourage the use of sound
science (i.e., Codex Alimentarius) in resolving SPS issues; the number
of foreign participants trained annually in FAS-sponsored seminars on
U.S. food safety; the number of potential exporters identified and
contacted about FAS exporter services; the number of U.S. based
companies exporting agricultural products; and the percentage use of
GSM credit guarantees to countries lacking liquidity to purchase U.S.
agricultural products on the commercial market.
The rationale for putting priority on SPS issues is that they are
vital FAS output goals for the U.S. agricultural industry. SPS issues
raised by foreign countries under the guise of sound science are
artificial trade barriers which significantly limit U.S. export
opportunities. Additionally, FAS provides or administers project funds
for research activities specifically targeted to resolve SPS issues and
trains foreign participants in U.S. food safety standards. These
activities, while supporting different objectives under separate goals,
are linked.
Two of the performance indicators focus on tracking progress in
achieving FAS' outreach objectives; namely, increasing domestic
awareness of export opportunities, USDA export programs, and overseas
market intelligence. The rationale is to reach out directly to
potential exporters, especially small and new-to-export agribusiness
firms, so that strategic partnerships can be built with interested
organizations. FAS assists in educating their members about the rewards
of exporting and how USDA can assist them in developing new markets. By
expanding the number of U.S. firms exporting (primarily high-value
processed food products), FAS believes that the U.S. agricultural
industry will benefit by increasing its global market share of high-
value products.
Lastly, the GSM Export Credit Guarantee Programs will continue to
support cash-strapped countries with short-term credit to finance
purchases of American products. As FAS becomes more adept at deploying
this financing mechanism in countries lacking liquidity to purchase
U.S. agricultural products, U.S. exporters will benefit by increasing
market share and/or maintaining their presence in the market--a
necessary and important element in international trade.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. Using independent analysis from the Economic Research
Service, FAS was able to calculate the impact (i.e., outcome) of the
exports supported by its program on rural communities and the national
economy as a whole. Calculating impact of market development relies on
procedures approved by the Trade Promotion Coordinating Committee
(TPCC) and used in preparation of the annual National Export Strategy
submitted to the Congress. This includes calculating the impact of FAS
market development programs on exports. Estimating national and rural
economic impacts involve combining the export impacts with trade
multipliers associated with direct and indirect effects of agricultural
exports (multiplier effect per billion dollars of agricultural exports
are as follows: national economy = $2.4 billion; rural economy = $800
million; national employment in jobs created = 17,300). These are
published by USDA's Economic Research Service using results from a 417
sector input-output model of the United States economy.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. They are beginning to develop a greater understanding of
the difference. However, in order to fully institutionalize strategic
planning at every level of the organization, strategic planning
workshops were held over the spring and summer of 1997 for every
division in the agency. FAS will be conducting workshops again in 1998
and 1999. These workshops will continue the process of linking what
every employee is doing to support the organization-wide goals,
introducing the concepts of verification, validation, and process
improvement in the context of GPRA. Through this ongoing process of
education and by instituting a quarterly reporting requirement FAS is
making GPRA real.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. For internal customers, FAS will perform two separate types
of surveys. The first is the Peer Evaluations of FAS' headquarters and
overseas offices' performance and customer satisfaction. The second
survey will be a Work-life survey in which the employees and managers
will be asked to identify trends in the work place which inhibit or
promote productivity and employee development.
For external customers, FAS has numerous listening sessions with
various customer groups to identify areas of improvement. For instance,
FAS works in partnership with the Private Voluntary Organization (PVO)
community in implementing the Food for Progress program. FAS has a
yearly listening session where ideas are shared and new initiatives
announced. These listening sessions have helped both groups (FAS and
the PVO's) to focus on reducing red tape and improving specific
projects. Also, FAS has listening sessions with U.S.banks participating
in the GSM Export Credit Guarantee program. Again, these sessions have
identified areas of improvement and cooperation.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The measurable goals of FAS' fiscal year 1999 Annual
Performance Plan and its fiscal year 1999 budget program activities
were developed in tandem and are mutually supportive.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Yes, that is true for the most part. Depending upon the
size of the increase/decrease, FAS would be able to estimate changes in
the associated performance goals and indicators.
Question. Do you have the technical capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. No, we are not yet able to do so. FAS is requesting in the
fiscal year 1999 budget funds to build a performance tracking,
evaluation, and reporting system. Once built and implemented, this
system will provide the information senior managers need to determine
whether FAS will meet/exceed its performance goals or whether resources
need to be re-allocated.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget.
Many agencies have indicated that their present budget account
structure makes it difficult to link dollars to results in a clear and
meaningful way. Have you faced such difficulty?
Answer. To some extent, we have. The traditional FAS budget
activity structure was a combination of organizational linkages and
functional activities which did not fit well in a performance based
management system. This led to our modification of the FAS budget
activity structure in fiscal year 1998.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. Beginning with the fiscal year 1998 budget, the FAS budget
activity structure was modified to reflect our implementation of the
Government Performance and Results Act and transition to a performance-
based management system. In this regard, FAS has adopted a budget
activity structure that incorporates five of the policy objectives
included in the FAS strategic plan. This activity structure was
modified slightly in our fiscal year 1999 submission.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. Currently FAS' program activities relate directly to our
mission and legislated mandates. In general, we believe the current
budget activity structure is satisfactory. However, modifications could
be made as our experience in implementing a performance-based
management system continues to develop.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. Again, we will explore further modifications as our
experience in implementing a performance-based management system
develops.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. Yes it does. Both FAS' strategic and annual performance
plans cite several external factors. These include foreign competitors'
continued use of export subsidies, direct credits and credit guarantee
programs, non-price export promotion, monopolistic marketing boards,
and various technical assistance programs. Additional external factors
outside FAS' span of control include variability in crop production due
to weather conditions, both at home and abroad; effect of foreign
exchange fluctuations on the price of U.S. products abroad; political
instability that may undermine demand in key importing countries; and
reductions in resources of other USDA and Federal agencies with whom
FAS works in partnership to fulfill its mission and goals.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. FAS will continue to use the GSM program to inject
liquidity into developing country markets suffering short-term
liquidity crunches similar to the way it did in Asian countries during
the fiscal year 1998 financial crisis. Additionally, the agency will
use the Export Enhancement Program, Dairy Export Incentive Program,
Market Access Program, and Foreign Market Development Cooperator
program to offset foreign competitors' continued use of export
subsidies, non-price export promotion, monopolistic marketing boards,
and various technical assistance programs.
Question. What impact might external factors have on your resource
estimates?
Answer. The impact will vary depending on the external factors. A
number of the programs administered by FAS fluctuate yearly on the
basis of market conditions and competitor actions, including export
credit guarantees, EEP, and DEIP.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance plan identify the overlap or duplication?
Answer. Yes it does. In conjunction with other agencies within the
Department dealing with SPS issues, FAS has, as a result of a General
Accounting Office review of USDA's approach to resolving SPS issues,
recently been given the responsibility to support the Special Assistant
to the Secretary on International Affairs to coordinate USDA wide goals
and objectives and facilitate the integration of USDA-wide processes to
improve USDA's efficiency and effectiveness in prioritizing SPS issues
and bringing them to resolution. Since this initiative has just begun,
USDA is in the process of determining how all of the USDA agencies will
jointly plan and coordinate this effort.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that, to what extent are your performance measures sufficiently mature
to allow for these kinds of uses?
Answer. The performance measures identified in FAS' fiscal year
1999 Annual Performance Plan are focused primarily on outputs, and are
not sufficiently mature to allow use in measuring program
effectiveness. In recognition of this challenge, FAS requested an
increase of $500,000 in its fiscal year 1999 budget request to enlist
the help of private sector experts in developing an agency-wide
performance tracking and evaluation system that has meaningful and
realistic measures and benchmarks of performance to help define
relative success rates and measure program effectiveness.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Yes. The biggest factor is the lack of a cost-accounting
system which would provide accurate data on costs related to each
budgeted program activity.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No, we do not see the need for revisions within the next
year.
______
Questions Submitted by Senator McConnell
public law 480 title ii
Question. It is estimated that more than 800 million individuals
are chronically undernourished, yet AID failed to program more than $20
million of Title II humanitarian funding in fiscal year 1997. Will AID
use all the current year's appropriation, as well as the unspent funds
carried over from last year, for commodity and processed food purchases
for donation to Title II feeding programs? If not, why not?
Answer. USAID currently expects to utilize in this fiscal year all
funds appropriated for fiscal year 1998 plus the carry-over from fiscal
year 1997.
While current plans are that all available funds will be utilized
this fiscal year, it is possible that there will be an emergency
requirement at the end of the year which will make it advisable to
carry over some funds to next year. In past years, the amount has
always been relatively small. For example, the carry over from 1997 to
1998 was around 2.5 percent of the Title II total and 5 percent of the
amount spent for emergencies. Nevertheless, USAID currently expects to
expend all available funds this year.
Question. If unspent, what impact will it have on domestic farmers,
processors, packagers, and other businesses who normally supply the
program?
Answer. The impact on U.S. suppliers, processors and shippers would
not be great. The funds carried over from one fiscal year to the next
would normally be utilized in the first few months of the following
fiscal year.
Question. Traditional Title II ``relief'' programs donated foods
for the ``poorest of the poor'' for feeding women, children, school
children, orphans, widows and the elderly, disabled, destitute, and
others in the most vulnerable circumstances. AID'S fairly recent policy
change has eliminated traditional ``relief'' programs from Title II
eligibility, restricting approvals to only ``developmental'' programs.
Under this policy, it has been pointed out that Mother Teresa's
programs, were she alive today, would not qualify for Title II
humanitarian assistance. What is the basis for this AID policy?
Answer. USAID does not have a policy that eliminates feeding
activities for the ``poorest of the poor.'' Within the non-emergency
programs, however, USAID does have a policy to give Title II funding
priority to programs where the recipient will eventually be able to
make self-sustaining progress toward food security. We have concluded
this is most likely to occur with ``developmental'' activities which
improve household nutrition or enhance agricultural productivity.
Notwithstanding this policy focus for non-emergency Title II
activities, USAID does support a large number of traditional ``relief''
programs in both its non-emergency and emergency Title II activities.
In all cases, resources are focused on the neediest countries and
within those countries on the most vulnerable.
With emergency Title II programs, the U.S. feeds the starving women
and children we all see on CNN. Recent crises in Bosnia, Rwanda, and
North Korea are examples of where Title II resources have supported
traditional relief feeding activities to maintain the health of the
most vulnerable groups in those societies.
In non-emergency Title II feeding programs, U.S. commodities are
often used in maternal/child health activities and food-for-education
activities benefiting vulnerable groups of women and children. In many
cases, these traditional feeding activities have been integrated with
other developmental resources to increase the likelihood of sustainable
improvements in the health and nutrition of these groups. This category
also finances food-for-work programs for poor farmers and landless
laborers in countries like Bangladesh. The beneficiaries of these
programs are also vulnerable.
USAID also allocates Title II resources to the sorts of welfare
feeding programs which Mother Theresa's Missionaries of Charity manage.
We will continue to do so and have told cooperating sponsors we will
consider modest expansion of these activities. However, the
beneficiaries of emergency programs and of non-emergency programs such
as maternal/child health are also vulnerable and we believe warrant
continued priority.
Question. What has been its impact on private voluntary agencies?
Answer. There has been no adverse impact on our PVO partners. The
U.S. private voluntary organizations which manage Title II participated
in developing the Food Aid and Food Security policy, which emphasizes
the priority of addressing the underlying causes of hunger, and with
which our current programs are in complete harmony. Since the PVO's are
a diverse community, it is understandable that individual organizations
would support some dimensions of the policy more strongly than others.
On balance, there has been general support, even though it has required
some adjustments by some PVO's.
For example, the policy requires Title II to focus on the most food
insecure countries and within those countries on those most in need.
This has meant getting out of countries like Indonesia and Philippines
which, except for emergencies, are making good progress. Conversely,
the policy means greater focus on Africa.
The policy, like Public Law 480, Government Performance and Results
Act (GPRA), and other legislation that apply to USAID and its programs,
also requires greater attention to achieving program results. This has
meant more effort must be devoted to specifying objectives, such as
reducing malnutrition among children, and more effort must be devoted
to monitoring performance. In some cases, the PVO's have been asked to
pay greater attention to the long term impact of the programs. In food-
for-education activities, for example, greater attention is paid to the
educational benefits of the program.
Question. Is the policy responsible for AID not using all Title II
funds in fiscal year 1997, and for likely unspent Title II funds in
fiscal year 1998?
Answer. No, the policy had nothing to do with the carry-over from
fiscal year 1997. The carry-over resulted from management of emergency
Title II funds at the end of fiscal year 1997. No carry-over is
currently expected from fiscal year 1998 to fiscal year 1999.
Question. Did AID comply with the statutory processed, fortified,
and bagged subminimum tonnage requirement for Title II commodities, in
fiscal year 1997? If not why not?
Answer. Based on the traditional method of calculating these
subminimum levels, USAID fell a bit short in fiscal year 1997. The
requirement is that 75 percent of the commodities distributed for non-
emergency programs be in the form of processed, fortified or bagged
commodities. The actual level was 73.3 percent. In addition, not less
than 50 percent of the quantity of the bagged commodities that are
whole grains should be bagged in the U.S. The actual level was 48
percent.
There are two reasons these subminimum requirements were not met in
1997. First, there are commodities such as vegetable oil, soybean meal,
and milled rice that require some processing but which we traditionally
have not included in this calculation. While these are ``processed
commodities'' as that term is used commercially, the legislative
history, while not foreclosing on such a reading, is not explicit as to
the congressional intent of the referenced mandate to include these
commodities in the calculation. Nevertheless, had they been included,
USAID would have met the percentage requirements stated in the
legislation. Second, the levels of monetization have increased in
response to requests from the private voluntary organizations that
manage most Title II non-emergency activities. Monetization allows
flexibility to use proceeds for improved management and to strengthen
development activities. Increased monetization of Title II commodities
under non-emergency activities negatively affects the processed,
fortified, bagged mandate because bulk whole grains and bulk vegetable
oil represent the majority of monetized commodities.
It is important to note that there are substantial amounts of
processed and fortified commodities which go through the Title II
supported emergency programs. For example, in North Korea in fiscal
year 1997 the U.S. contributed 10,000 metric tons of nutritious corn/
soya blend for child feeding.
Question. Will AID comply with the processed, fortified, and bagged
subminimum requirement in fiscal year 1998? If not, why not?
Answer. Based on current plans for implementing programs, it
appears likely that programs will not be in compliance with this
mandate. Commodity requests from our cooperating sponsors for non-
emergency activities currently require only approximately 60 percent
processed, fortified, and bagged commodities. Even if USAID were to
include bulk vegetable oil, soybean meal, and milled rice (that are
also processed but not included in USAID's current calculation), the
percentage would only increase to approximately 69 percent. Again, we
believe that this shift in commodity demand is primarily due to the
increased requirements for monetization activities, which is supported
by its own mandate under Section 203(b) of Public Law 480. So the
factors which led us to fall slightly short of the requirements in
fiscal year 1997 remain in force.
As was the case last year, we expect substantial processed and
fortified commodities will be shipped under emergency programs.
Question. Does AID incorporate the statutory processed, bagged, and
fortified commodity subminimum requirement into PVO program plans and
approvals. If not, why not?
Answer. USAID approves the commodity and bagging specifications for
PVO programs and monitors progress toward meeting these subminimum
requirements on a monthly basis. However, much like Cargo Preference
where it would be logistically impossible to apply the 75-percent
requirement to each individual shipment, USAID does not dictate that
each PVO program earmark a specific proportion of its program to meet
this requirement. To do so would result in an inflexible system that
would severely limit the types of activities our partners could
undertake.
Although historically USAID has substantially complied with the
overall 75 percent subminimum, Public Law 480 permits waiver of these
subminimum requirements if the PVO programs ``will not be best served
by the enforcement of such requirements.'' USAID manages implementation
of the subminimum requirements with a view to the best interests of the
PVO programs and, if necessary, exercises the waiver authority to
support those interests.
Question. In light of the increased number of monetization
programs, is AID taking steps to insure that the processed, bagged, and
fortified commodity subminimum is incorporated into these programs?
Answer. Together with our cooperating sponsor partners, we do look
for opportunities to monetize processed, fortified and bagged
commodities in order to help ensure compliance with these subminimum
requirements. Wheat flour and tinned vegetable oil, as an example, are
monetized and counted toward the achievement of the mandate.
Unfortunately, there is not a ready market in developing countries for
many of the other traditional processed and fortified products, such as
corn soya blend and cornmeal, so in most cases the monetization of
these commodities is not feasible.
______
Questions Submitted by Senator Burns
foreign market development/cooperator program
Question. Mr. Schumacher, is it true that the President's budget
proposes to spend more to renovate the south building than to develop
markets for U.S. agricultural products through the Foreign Market
Development/Cooperator Program?
Answer. The President's budget proposes a funding level of $22.0
for the Foreign Market Development Program (FMD), a reduction of $5.5
million from the current level of $27.5 million. However, it is
anticipated that a higher level of participant cost-sharing will
minimize program disruption. It is my understanding that the budget
also proposes $23.5 million for the continued renovation of the South
Building to correct health and safety hazards and provide modern
facilities.
Question. How much money is needed to be appropriated for the
Foreign Market Development/Cooperator Program for fiscal year 1999 to
maintain marketing plans for the program at the current level?
Answer. We are hopeful that with higher participant contribution
levels, marketing plan levels can continue at the current level with
the $22.0 million appropriation request set forth in the President's
budget.
Question. Why, when U.S. agricultural exports are down, especially
for bulk commodities that use this program, is the Department cutting
the Cooperator program or farmers export program by 30 percent?
Answer. It is simply an issue of money. The FAS budget must absorb
some of the costs that had previously been funded by the Commodity
Credit Corporation. Those costs used to be on the mandatory side of the
budget but now are proposed to be funded on the discretionary side of
the budget. FAS has a very restricted discretionary budget, and we are
forced to absorb these additional costs within the constraints of the
budget. We are hopeful that an increase in participant cost sharing
will help offset the reduced FAS contribution to this program.
Question. What does the President's Budget mean by ``increasing the
cost share'' for the Foreign Market Development/Cooperator Program?
According to my information, the cooperator contributions to the
operation of the FMD/Cooperator Program has consistently exceeded 115
percent. Moreover, if a wheat farmer checks-off $.02 a bushel on a
bushel of wheat that is worth $2.00 less than it was two years ago, his
cost share has already increased. What are you trying to do here?
Answer. The budget assumes a higher level of cost-share
contributions from Cooperator organizations which will help to offset
the reduced Federal contribution. This effort is consistent with House
Committee report language recommending that FAS seek an increase in
cost sharing from participants in the Foreign Market Development
Cooperator Program. For fiscal year 1998, FMD participants currently
contribute $1.90 for each $1.00 in FAS funding.
wheat export strategy
Question. On Wednesday, March 18, 1998, Secretary Glickman told the
House Agriculture Committee that EEP would result in lower wheat prices
because other countries, namely the EU, would compete against an EEP
and drive prices lower. And anyway, our competitors will eventually run
out of wheat leaving the U.S. to supply the remaining import demand.
Jack Hay, a wheat producer from The Dalles, Oregon responded that wheat
producers would take the chance of lower wheat prices if the Department
would move wheat out of the U.S. and expand U.S. market share.
At that same hearing, the Secretary noted that the GSM-102 program
was the centerpiece of the U.S. farm export strategy. This is new since
the Asian financial crisis. In the fall of 1997 several agricultural
groups met with the Department to urge the use of the credit guarantee
programs so that they would not fall victim to cuts like the EEP
experienced last appropriations cycle. The question is--in the absence
of a foreign economic crisis--what is the Department's export strategy?
And what is the Department's strategy for dealing with a U.S. farm
crisis?
Answer. While I am not prepared to speak on all actions the
Department is taking to respond to low prices, what I can do is address
what we are doing to promote and expand markets. USDA's export strategy
is to utilize to the maximum extent possible those programs which are
available and appropriate to assist in opening markets and expanding
U.S. exports. USDA is currently using a wide range of programs to
assist exports including the Export Credit Guarantee Program (GSM-102),
Public Law 480, as well as funding for FMD and MAP. USDA continues to
monitor world markets and our competitors' actions and reserves the
right to use the Export Enhancement Program (EEP) if competitor actions
and market conditions warrant. At the moment, however, we do not
believe these conditions make EEP the appropriate tool to use.
In addition, we are working aggressively to resolve a wide range of
bilateral market access issues. Such efforts have opened up the Chilean
wheat market and are currently under way to address barriers in China,
India, Brazil, and many other countries. We strongly believe that
reducing import barriers to U.S. commodities is the best solution to
long term success for U.S. farm exports, and it is an area where the
U.S. Government can play a critical role. To further this cause, we are
preparing for the next round of WTO negotiations and are assisting in
the Administration's review of economic sanctions.
______
Questions Submitted by Senator Bumpers
asian financial crisis
Question. You mention that the level of agricultural exports in
1997 is down slightly from the previous year due, in part, to the
pending financial crisis in Asia. What US commodities are most at risk
due to the current financial crisis in Asia? How long do you believe
this problem will continue? Do you see long term problems for US
agricultural exports resulting from this problem?
Answer. USDA expects the Asian crisis will reduce overall U.S.
agricultural exports by no more than 3-6 percent in fiscal year 1998
and 1999 from levels that would have otherwise prevailed. In fiscal
year 1998, two-thirds of the total impact on U.S. exports is expected
to fall on high value products, led by horticultural products, red
meats/poultry, and processed foods as these products are more sensitive
to the price and income changes brought on by the crisis. However, in
fiscal year 1999, losses for grains and soybeans are expected to grow
substantially as Asian economies slow further and competitors benefit
from an appreciating U.S. dollar. Beginning in fiscal year 2000, the
negative trade effects will likely begin to ease as Asia's currencies,
economies, and import demand start their recoveries. Assuming we have
seen the worst of the crisis and these countries make the needed
economic reforms, USDA sees no permanent long term damage to U.S.
exports to the region. The most affected countries have well-educated
and highly productive work forces, flexible economies and generally
well-developed infrastructure. There is no reason to believe that these
economies cannot recover much of their previous economic vitality.
market access program
Question. The budget request provides for $90 million, the fully
authorized level. Please provide information on the amounts of MAP
grants made available in fiscal year 1997 including the recipient
commodities, companies, and targeted markets. Also, please provide any
estimates available on this information for fiscal year 1998.
Answer. I will provide that information for 1997 for the record.
Allocations of MAP funding for 1998 have not yet been made, so we
cannot provide any information at this time.
[Clerk's note.--The information does not appear in the hearing
record, but is available for review in the subcommittee's files.]
Question. You mention that European countries spend around $400
million on market promotion of which about half comes from EU member
governments. This suggests that the EU private sector spends about $200
million annually on market promotion. How much do U.S. companies spend
on agricultural market promotion on an annual basis? Aside from the $90
million for MAP, what additional USDA program funding do you categorize
as ``market promotion''? What other federal spending (non-USDA) could
be considered as agricultural market promotion?
Answer. It is difficult to ascertain the exact amount of funding
spent by U.S. companies on agricultural market promotion. According to
Dunn & Bradstreet, there are more than 150,000 food companies in the
U.S., but less than 10 percent of these companies are involved in
exporting. Of the 10,000 companies that are exporting product,
approximately 1,000 have received assistance under the Market Access
Program (MAP). Each company receiving assistance under the MAP is
required to match federal funds on a one-to-one basis. In 1996, more
than 500 companies participated in the MAP and contributed
approximately $22.2 million of their own funds for export promotion
activities. We know that this figure does not begin to scratch the
surface as there are more 9,400 additional U.S. companies involved in
export promotion that are not participating in the MAP and, therefore,
are not obligated to report their expenditures to the Department.
However, according to a recent survey of commodity trade organizations,
the U.S. industry spends in excess of $165 million on agricultural
market promotion. This figure includes over $88 million in expenditures
which are reported as contributions by participants in the MAP and/or
FMD programs.
There are two USDA programs that are categorized as export
promotion programs--the MAP and the Foreign Market Development
Cooperator Program, funded at $22 million in the President's 1999
budget. USDA has a number of other programs, services, and activities
which are ``export-related'', but do not meet the definition of export
promotion as defined by the Technical Working Group of the Trade
Promotion Coordinating Committee. FAS overseas offices also have a
small Annual Marketing Plan budget for use in conducting agricultural
promotion activities in their countries of responsibility.
At this time we are not aware of any other non-USDA programs that
could be considered agricultural market promotion. With its technical
expertise and international market intelligence network, the Department
is best equipped to develop and implement export promotion strategies
for agricultural commodities and products.
trade barriers
Question. The European Union has placed a ban on poultry imports
from the U.S. because of the practice by US companies to use chlorine
as an anti-microbial agent. Is FAS involved in resolving this dispute?
If so, what is the status?
Answer. FAS, in conjunction with the Food Safety and Inspection
Service and U.S. industry representatives, is working with the EU to
resolve the issue regarding the use of anti-microbial treatments in
poultry production. In the Veterinary Equivalency Agreement, the EU
committed to undertake a scientific study on the use of anti-microbial
treatments, including chlorine. The experts which include a person from
the United States have begun their research, and we expect this study
to be completed by mid-1998. If the results are positive, the
Commission has agreed to submit legislation to Member States, reversing
the EU policy. U.S. officials are closely monitoring the progress of
the scientific study.
aquaculture exports
Question. You mention that edible fish and seafood product exports
did not fare as well in 1997 as previous years and had, in fact,
slipped 6 percent from 1996. What portion of the U.S. edible fish and
seafood product exports are farm-raised aquacultural products?
Answer. We estimate that about one percent of 1997 U.S. edible fish
and seafood product exports are farm-raised aquacultural products
including: farmed Atlantic salmon ($14.4 million, 93 percent to
Canada), crawfish ($5.3 million, 99 percent to Sweden (aquaculture
estimated to be half of the $10.5 million of total crawfish exports)),
trout ($3.4 million, 71 percent to Canada and 17 percent to China) and
catfish ($.7 million, 75 percent to Germany and 10 percent to France).
Exports of these particular products were up 2.9 percent over 1996
exports. Additional aquaculture products are exported but it is
difficult to separate farmed versus wild harvest exports.
Question. Will long-term U.S. aquaculture exports increase at a
pace equal to increased domestic production?
Answer. We expect that long-term U.S. aquaculture exports will
increase at a pace equal to or greater than increased domestic
production. Exports of these products grew 4.4 percent and 2.9 percent
in 1996 and 1997, respectively. For 1998, farmed catfish production is
forecast to grow 2-4 percent and farmed salmon production is expect to
remain level; crawfish production rose 6 percent in 1997, and trout
production from September 1, 1996 through August 31, 1997, grew 4
percent. Although the domestic market is the main outlet for U.S.
aquaculture products, as U.S. production grows we expect exports of
some aquaculture products will increase at a greater rate or to a
greater number of markets. For example, the Catfish Institute is
considering expanding market promotion activities beyond Germany to
include Canada and other markets.
use of biotechnology
Question. You mention that biotechnology may provide opportunities
to meet world food security needs and, at the same time, reduce
chemical use, provide safer food, and cut costs. What efforts are
underway to make importing countries more willing to accept products
modified genetically or produced with other biotechnological methods?
Answer. USDA assisted Egypt's Ministry of Agriculture develop a
biotechnology research capability in the early 1990's. In July 1997,
the Egyptian Ministry of Health made a decision requiring the
Genetically Modified Organisms (GMO) Certification of all food and
agricultural imports. FAS alerted the Ministry of Agriculture to the
issue and to the relevance of its research for the issue's resolution.
The U.S. Embassy, in its briefing cable preceding Secretary
Glickman's September trip to Egypt, pointed out that Minister of
Agriculture Youssef Wally took control of the issue and was a major
force behind the decision to ``neutralize'' the GMO certification
requirement. The Embassy emphasized his role in keeping the GMO issue
from becoming a major trade irritant between Egypt and U.S.
While in Egypt Secretary Glickman thanked Ministry Wally and
solicited his support for a reasonable international consensus on the
labeling of biotech (GMO) products. Other countries in the region often
follow Egypt's lead with these decisions. He also acknowledged the
excellent work being done in Egypt in biotechnology and pledged USDA's
continuing support and collaboration with the MOA on this kind of
research.
Because of the importance that biotechnology plays in new
agricultural products, USDA has recently established a Department-wide
working group on biotechnology that will coordinate the Department's
efforts in this area. FAS, in coordination with APHIS, other U.S.
regulatory agencies, USTR, and industry groups, has initiated
harmonization efforts in a number of multilateral and bilateral fora.
The U.S. government holds regular bilateral discussions with the EU
to encourage the EU to evaluate genetically modified products using
scientifically based analysis. USDA is working closely with the
developers of genetically modified products, manufacturers of processed
products, and exporters to keep them informed of developments in the EU
and to help ensure that there is no disruption of trade in products
such as corn gluten feed. FAS is an active participant in the
Transatlantic Business Dialogue Agri-food Biotechnology Initiative.
A biotechnology initiative has been undertaken in the Asia Pacific
Economic Community (APEC) and was endorsed at the recent APEC
Ministerial in 1997. The U.S. hosted a second workshop on risk
assessment of biotechnology products in March 1998.
Bilateral harmonizations efforts continue with Japan. FAS led a
delegation from U.S. regulatory agencies to speak with Japanese press
and consumer groups. In addition, USDA has hosted representatives from
the Government of Japan to gather information on the U.S. approach to
labeling of biotechnology products. To date, Japan has approved 15
agricultural biotechnology products for importation.
In order to mitigate the potential negative effects on trade, FAS
has played a prominent role in developing the U.S. position for the
negotiations of a Biosafety Protocol under the Convention on
Biodiversity and is represented on the U.S. delegation to these
negotiations.
public law 480
Question. The budget request calls for a reduction in Title I of
Public Law 480. What is the reason for this reduction?
Answer. The proposed reduction in Public Law 480 Title I funding is
necessary to help meet discretionary spending targets set in order to
achieve a balanced budget. Public Law 480 Title II and Title III
funding remains unchanged from fiscal year 1998 levels. This will
ensure that adequate resources are available to meet serious food
assistance needs, including emergencies.
______
Questions Submitted by Senator Kohl
foreign market development/cooperator program
Question. How much money needs to be appropriated for the Foreign
Market Development/Cooperator Program in fiscal year 1999 to maintain
marketing plans for the program at the current level?
Answer. We are hopeful that with higher participant contribution
levels, marketing plan levels can continue at the current level with
the $22.0 million appropriation request set forth in the President's
budget.
Question. Why, when U.S. agricultural exports are down, especially
for bulk commodities that use these program, is the Department cutting
the Cooperators program or ``farmers export program'' by 30 percent?
Answer. It is simply an issue of money. The FAS budget must absorb
some of the costs that had previously been funding by the Commodity
Credit Corporation. FAS has a very restricted discretionary budget and
we are forced to absorb these additional costs within the constraints
of the budget. We are hopeful that an increase in participant cost
sharing will help offset the reduced FAS contribution to this program.
Question. What does the President's budget mean by ``increasing the
cost-share'' for the FMD/Cooperator Program? According to my
information, the cooperators contribution to the operation of the FMD/
Cooperator Program has consistently exceeded 115 percent. Moreover, if
a wheat farmer checked off 2 cents a bushel on a bushel of wheat that
is worth $2 less than it was two years ago, his cost-share has already
increased. What are you trying to do here?
Answer. The budget assumes a higher level of cost-share
contributions from Cooperator organizations which will help to offset
the reduced Federal contribution. This effort is consistent with House
Committee report language recommending that FAS seek an increase in
cost sharing from participants in the that participants in the Foreign
Market Development Cooperator Program (FMD). For fiscal year 1998, FMD
participants currently contribute $1.90 for each $1.00 in FAS funding.
agricultural trade offices
Question. What are the Department's plans with respect to expanding
the opening of Agricultural Trade Offices? Is this a wise course of
action when U.S. agricultural exports are declining?
Answer. Agricultural Trade Offices (ATO's) have been established
for the purpose of developing and maintaining markets for U.S.
agricultural, food, forest and fishery products. The Secretary of
Agriculture has been directed by statute to establish not less than six
nor more than twenty-five U.S. Agricultural Trade Offices worldwide.
ATO's are the export market promotion arm of FAS operations overseas.
In recent years, the establishment of ATO's has not increased the
number of FAS American staff overseas. Rather, attache positions have
been converted to ATO's to reflect an increased emphasis on market
development and to take advantage of increased market opportunities for
consumer food products in selected regions.
U.S. consumer-oriented food and agricultural product exports
continue their growth, increasing 4.14 percent to $21 billion in 1997.
While there have been some recent declines due to the financial
situation in Asia and lower prices for bulk commodities, the long term
trend is for continued growth in exports.
Two new ATO's were established in 1997: ATO Sao Paulo and ATO
Caribbean Basin. In the case of Sao Paulo, the Office of Agricultural
Affairs was converted to an ATO with no net change in American or local
staffing. This was done to reflect the increasing export opportunities
for high-value consumer oriented products as well as increased support
needed by visiting Foreign Market Development cooperators, Market
Access Program participants, and other U.S. exporters with expanded
programs in the region. Import liberalization has resulted in
spectacular growth in consumer-oriented exports to Brazil from $74
million in 1994 to over $160 million in 1997, growth of 116 percent.
The Caribbean Basin ATO is responsible for market development
throughout the Caribbean. The Assistant Attache position in Santo
Domingo was converted to the ATO Director position in Miami.
Establishment of this office was long overdue with U.S. consumer food
exports to this region exceeding $570 million in 1997, reflecting
growth of 10.6 percent over 1996 exports.
The Foreign Agricultural Service believes that dedicated market
development support overseas through our U.S. Agricultural Trade
Offices is not only wise but essential to fulfill our mandate to
develop, maintain, and coordinate market development activities in
markets with excellent high-value food product export potential.
fas outreach program
Question. Please explain the value of the FAS Outreach Program and
its direct impact on agricultural exports.
Answer. Increased agricultural exports are generated by established
exporters and new-to-export companies and cooperatives. As background,
Dunn and Bradstreet reports there are approximately 165,000 companies
in the United States producing, manufacturing, packing or marketing
agricultural products, yet less 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 FAS Outreach Program uses its extensive communication network
and relationships with universities, export assistance centers and the
State Departments of Agriculture to effectively convey to companies and
cooperatives alike that real export opportunities exist, and that USDA
can be a full partner with the private sector in expanding sales,
developing new markets and promoting new products. The resultant
increase in exports represents tangible evidence of USDA's commitment
to expanding the number of exporting companies which can be linked to
the efforts of FAS in partnership with State Departments of
Agriculture. Targeting small, medium and new-to-export companies in
addition to cooperatives to provide export assistance and trade
information has led to a higher rate of export participation among
these groups, and in turn increased exports of food, fiber, seafood and
forest products.
______
Questions Submitted by Senator Leahy
uruguay round agreement
Question. I understand that we have reported to the WTO for the
1995/1996 Uruguay Round Agreement (URA) phase-in year that we intended
to ship 64,000 metric tons of nonfat dry milk, and for the following
year (1996/1997), that we intended to ship 67,000 metric tons of nonfat
dry milk. How much of that combined amount of 131,000 metric tons--
which amounts to some 290 million pounds--actually has been shipped? If
it has not been shipped, what steps are you taking to ensure that the
nonfat dry milk will be exported under DEIP?
Answer. Agreements under DEIP in 1995/96 and 1996/97 committed
63,693 metric tons, and 69,890 metric tons, of non-fat dry milk,
respectively. Of the total tonnage committed of 133,583 metric tons for
those two years, approximately 89,607 metric tons were shipped. Buyer
defaults and various other factors accounted for the loss in shipments.
In order to reduce the rate of DEIP non-performance, the Commodity
Credit Corporation recently modified its policy concerning amendments
to DEIP agreements. DEIP exporters now have more flexibility to change
the buyer on DEIP contracts, renegotiate export sales prices, and
extend delivery periods. In addition, we have also regionalized our
DEIP allocations in order to allow for greater program flexibility.
Question. I understand that the URA technically allows countries to
carry-over from one year to the next unused export tonnage. Isn't
reprogramming of canceled, unshipped tonnage, which I believe does not
involve carry-over, thus also permitted under the URA?
Answer. Throughout the negotiations leading to the Uruguay Round
Agreement (URA), it was understood that export subsidies would be
disciplined by annual tonnage and expenditure limits. The European
Union apparently interprets certain language in the URA as allowing for
unused tonnage to be carried forward into another year. Although we
have not yet confirmed whether the EU has acted to carry or roll-over
unused tonnage, the United States and many other countries continue to
have concerns that such an interpretation of the URA could greatly
undermine the export subsidy disciplines in place on a range of
commodities.
Question. Given that reprogramming of unshipped DEIP tonnage is
permissible under the URA, and given that the 1996 farm bill mandates
that USDA make full use DEIP, will you ensure compliance with the farm
bill by reprogramming canceled tonnage that otherwise would not be
shipped?
Answer. Re-programming tonnage that was contracted, but canceled or
unshipped, could adversely affect the URA. Nonetheless, we would view
with great concern actions by other countries along these lines, and we
would have to consider what would be the most appropriate U.S. response
should this occur.
Question. USDA is estimating that it will remove about 62 million
pounds of nonfat dry milk in calendar year 1998 under the milk price
support program, and in fact is currently purchasing about 2 million
pounds of powder per week. Isn't it cheaper for USDA to ``DEIP'' milk
powder overseas than purchase it under price support (assuming that
USDA will have to hold on to the powder it acquires under price support
for a long period or give it away)? Further, aren't DEIP sales more
beneficial to U.S. dairy farmers than price support acquisitions, since
a product that is DEIP'ed is removed from the market forever, but price
support acquisitions overhang the market and serve to weaken prices?
Answer. Under current market conditions, it is cheaper to ``DEIP''
nonfat dry milk than to purchase it under the price support program.
Unfortunately, our entire Uruguay Round subsidy allowances are already
fully dedicated under the DEIP program. Price support purchases may be
cheaper under market conditions that permit short storage periods
before sale back to the market or if the DEIP subsidies were more
expensive. However, the dairy price support program ends at the
beginning of 2000 and the DEIP program offers the opportunity to
develop long-term dairy export markets.
______
Risk Management Agency
Questions Submitted by Senator Cochran
legislative proposal
Question. The Administration proposes in the fiscal year 1999
budget request to pay all administrative expense reimbursements to
reinsured companies from the mandatory Federal Crop Insurance
Corporation Fund. Program changes are proposed as a partial paygo
offset that would take effect beginning in fiscal year 2000. These
include: placing a $100,000 limit on Catastrophic Coverage; reducing
the reimbursement rate on delivery expenses; reducing the subsidy for
buy-up coverage; and limiting the loss ratio to 1.06.
By reducing premium subsidies for higher levels of coverage, Mr.
Ackerman you state that farmers would experience ``a slight increase''
in producers' out-of-pocket costs to pay premiums, about 10 cents/acre.
Farmers of which individual crops would be affected by this most?
Answer. Crops with high values per acre or high premium rates will
be affected more than this average change. For example, almonds will
increase about $1.40 per acre due to an average liability of nearly
$1,700 per acre. Wheat, with a liability of about $75 per acre and
relatively high rates, will increase about 10 cents per acre. Cotton,
with an average liability of $211 per acre, will increase about 46
cents per acre.
Question. By reducing the statutory loss ratio target from 1.075 to
1.060 beginning in fiscal year 2000, producers' out-of-pocket expenses
for premiums rates would increase also. How much does this increase
farmers' out-of-pockets expenses?
Answer. This would increase the costs for an average producer by
about 1.4 percent. The national average, based on premium costs for
1997, would be 10.4 cents per acre.
Question. In the years beyond fiscal year 1999, the agency is
proposing that half of the mandatory offsets would come from proposed
changes in the crop insurance program and the other from USDA sources.
What other USDA sources are being considered?
Answer. The following are proposed Departmental offsets outside of
the crop insurance program: Create a flexible, multi-year program level
authorization for the Export Enhancement Program; and reduce the
expenditures in Cotton Step 2 payments.
crop insurance companies
Question. Mr. Secretary, you indicate in your opening statement
that the weather in 1997 was particularly good and that the Federal
Crop Insurance Program had a very favorable loss ratio of less than
.80, which is well below the statutory requirement of 1.10. Thus the
insurance companies received underwriting gains based on the risk they
retained. Under more normal conditions, the companies would have
received far less.
How much in underwriting gains did the companies receive in 1997?
In 1998?
Answer. At the 1997 Annual Settlement, the companies received
underwriting gains for the 1996 reinsurance year of approximately $248
million based on $1.2 billion of premium retained by the companies and
a loss ratio of 76.1 percent.
At the 1998 Annual Settlement, the companies received underwriting
gains for the 1997 reinsurance year of approximately $359 million based
on $1.3 billion of premium retained by the companies and a loss ratio
of 50.6 percent.
loss ratio
Question. You also mention a legislative proposal that would reduce
the loss ratio, among other things. What will this new loss ratio be?
Answer. The Risk Management Agency (RMA) proposes to reduce the
loss ratio target, contained in Section 506 [7 U.S.C. 1506] (o)(2) of
the Federal Crop Insurance Act, from 1.075 to 1.06.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. RMA's performance goals were derived directly from the
Agency's objectives contained in its strategic plan. RMA documented its
business processes (life cycles) in line with its strategic planning
efforts. These business processes contain the activities that support
the achievement of RMA's performance goals. RMA is currently working to
establish the capability to more directly link program activities,
performance goals, and resource requirements with the strategic plan
components.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. RMA worked to link performance goals directly to program
activities found in the current budget structure. However, the budget
activity structure does not lend itself well to the measurement of
RMA's progress toward achieving its overall mission and goal. Since RMA
receives a single discretionary appropriation for administrative and
operating expenses, it did not report individual program activities for
this account in its fiscal year 1999 budget. Although the Agency did
provide activity information on its mandatory account, the Federal Crop
Insurance Corporation Fund, the current structure is not easily tied to
the Agency's performance goal. Therefore, the Agency decided to take
the approach of establishing annual performance goals and indicators
that gauge progress toward achieving the long-term general goal and
objectives found in its strategic plan. RMA is considering ways to
improve the linkage between its performance goals and budget.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. Yes--RMA's Annual Performance Plan does link performance
measures to its budget, however, RMA chose to focus their performance
measures and indicators on the mission, goal, objectives, and
management initiatives of the Agency rather directly tying them to the
program activities or accounts found in the budget. For example,
performance goal #4 in RMA's annual plan, ``Reduce program
vulnerabilities'' relates to one objective of the Agency, has funding
tied to it through the discretionary A&O Account, but is not a separate
program activity in the budget. RMA is currently working to establish
the capability to more directly link all of these components.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. RMA's performance planning structure and the account and
activity structure in its budget do differ significantly in format and
structure. However, RMA's budget estimates and justifications do
include some linkage to the performance goals and indicators found in
the Annual Performance Plan, as well as goals and objectives found in
the Agency strategic plan. This linkage can be found throughout the
Agency's fiscal year 1999 Explanatory Notes package and 1999 Annual
Performance Plan. In addition, it is important to note that RMA's
performance plan is consistent with the Agency strategic plan and
fiscal year 1999 budget request, as required. The following is a
description of both the performance planning structure and program
activities found in RMA's budget request:
--The performance planning structure in the annual plan outlines the
performance goals and indicators that RMA would like to
accomplish in the given fiscal year. This structure is very
similar to that found in RMA's strategic plan which focuses on
the mission, goal, and objectives of the agency.
--However, RMA's budget account and activity structures are based on
program activities, and currently include two accounts, the
mandatory Federal Crop Insurance Corporation Fund and the
discretionary Administrative and Operating Expense Account. The
FCIC Fund is further broken out by the following program
activities: premium subsidy; delivery expenses; research and
development reform costs; and apportionment for excess losses.
For fiscal year 1999, the A&O account includes only one program
activity--salaries and expenses. RMA understands the need to
translate the performance goals and indicators directly to the
program activities found in the budget, and is considering ways
to achieve this.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. At the present time, RMA does not propose any changes to
the budget account structure for fiscal year 2000. However, if
modifications were made, analysis would be conducted to determine the
appropriate structure for future years.
Question. How were performance measures chosen?
Answer. RMA documented the life cycles for its core business
processes using a cross-functional team. The team contained a diverse
representation of managers and employees from all major functional
areas of the Agency.
These life cycles contained the activities, as well as specific
inputs and outputs to these business processes. RMA selected the
``vital few'' measures that they felt would best allow RMA management
to determine agency results in line with the strategic plan.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. Given current budgetary constraints, RMA has found it
difficult to fund the development of truly meaningful performance
measures. We realize that many of the measures in our fiscal year 1999
budget measure output or workload rather than outcomes. However,
several of our outcome-based measures require customer surveys which
demand an investment of significant financial resources and time. RMA
fully expects there to be lessons learned from the first attempt. These
lessons will be used to improve the Agency's ability to conduct
performance measurement in the coming years.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. RMA did not have complete baseline data to establish all
performance targets for inclusion in its 1999 Annual Performance Plan.
However, RMA has established an implementation plan for the
institutionalization of its documented performance plan measures. This
plan takes into account the March 2000 requirement. RMA's intent is to
have all its performance measures and targets based on current,
reliable, and/or statistically valid information.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. RMA recommends that its performance measures that are
outcome based be used to determine applicable program results. RMA's
output-based measures are intended to help provide additional detail to
assess programs in achieving outcome targets. It should be noted that
RMA's outcome and output measures may not be mature enough for
effective and efficient program management. RMA intends to conduct
quarterly reviews of its available measures and determine their
appropriateness as management tools. RMA fully expects adjustments to
be made to its performance measures as experience is gained in results-
based management.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. In RMA's annual performance planning process, we strove to
include outcome measures for each objective and management initiative
in support of our strategic goal. The intent was to include at least
one outcome measure for each objective and management initiative. RMA
recognizes that work needs to be done to establish or refine these
measures. As mentioned previously, funding and time constraints
precluded the development of some of these measures. As RMA gains
experience with performance planning, our measures will improve and the
benefits that can be derived for the Agency will increase.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Yes--RMA established measures utilizing cross-functional
subject-matter experts serving on a team, some of whom were managers.
These measures (i.e., output and outcome) were presented to and
accepted by the Agency's senior management. RMA understands the need to
train program managers on all GPRA concepts as implementation
progresses.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. RMA has created two projects that will institutionalize the
development and administration of surveys to internal and external
customers. RMA is currently in the definition stage working to
determine: what data elements are needed; what specific questions
should be asked; who should be asked; where are they; what vehicle/
instrument should be used; what should be the frequency of data
collection; and what the cost would be. Examples of internal customers
include: employees and unions. Examples of external customers include:
private reinsured companies and agricultural producers.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. Actually, the fiscal year 1999 budget process began prior
to the developmental stage of RMA's Annual Performance Plan. However,
throughout the budget preparation process, RMA was able to incorporate
portions of our annual plan throughout the fiscal year 1999 budget
request. For example, justifications in the budget request link to the
annual and strategic plans and support the goals within those plans.
The Purpose Statement and Status of Program sections of the fiscal year
1999 Explanatory Notes for the Agency outline the contents of the
annual plan and reflect the resources required to accomplish those
goals and measures. RMA feels that together, these two tools will
provide clear direction to manage RMA's activities for fiscal year
1999. In addition, the annual plan and budget documents clearly define
the Agency's commitment to meet its goals.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Yes--however, RMA is working to improve its ability to
directly link its program activities and performance goals with
resource and budget constraints.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. Yes--however, RMA is working to utilize technology to
improve its current capabilities of reviewing, analyzing, and adjusting
priorities or business processes to ensure achievement of its
performance goals. RMA recognizes the need to coordinate and assimilate
this data into its programs, given that it comes from a variety of
internal and external sources. RMA has established a project designed
to institutionalize Agency reviews on a quarterly basis. RMA must
establish its measure baselines and establish performance targets
before these reviews will be of maximum benefit.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Answer. Yes--RMA has faced difficulties in linking dollars to
results under the current budget structure, especially in the mandatory
FCIC Fund. For example, it was very difficult to produce quantifiable
and measurable performance goals for program activities such as
delivery expenses paid to reinsured companies.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. It is not clear that linkages would be clearer if RMA's
budget account structure were modified. However, RMA's mandatory FCIC
Fund has been reviewed by Congress several times beginning in 1994 with
the Crop Insurance Reform Act and most recently in the development of
the Research Title. While the categories are broadly stated, the
assumptions that underlie them have been analyzed closely.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. If RMA were to modify its account structure, a thorough
analysis would be conducted to determine how it could be improved.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. If modifications were made, the strengthening of
accountability would depend on the analysis stated above. It is assumed
that modifications would more directly link RMA resources and
activities (including FTE's, dollars, and business processes) with
performance goals and provide the Agency with the necessary information
to strengthen accountability.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. Yes--in RMA's strategic plan, they identified several key
external factors that could significantly affect progress in our
efforts to achieve our goal.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. RMA conducted Business Process Reengineering (BPR) that
allowed for the opportunity to address some of these factors. For
example, in the area of improving its delivery partner relationship
with the private sector, the BPR Final Report outlines recommendations
and steps to improve this relationship.
Question. What impact might external factors have on your resource
estimates?
Answer. RMA external factors can have significant impacts on our
resource estimates. For example, depending on the level and degree of
private sector involvement in risk management functions, the
possibility of significant impacts to RMA resources are extensive.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. The performance planning process itself did not identify
any significant duplicative functional or procedural steps.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that: To what extent are your performance measures sufficiently mature
to allow for these kinds of uses?
Answer. RMA's measures have not been thoroughly tested and
therefore proven to be the right measures allowing for proper results
management of the Agency. Through time and empirical evidence, RMA will
refine its measures and management processes and become more confident
in its ability to manage actual performance with targeted performance.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Many of RMA's traditional measures are activity-based. RMA
is in the process of institutionalizing its outcome measures, and
expects that time and experience will improve the accuracy of its
resource estimates.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. No--RMA's fiscal year 1999 Annual Performance Plan was
directly derived from its strategic plan. However, RMA expects that
changes to its strategic plan in the future will result in adjustments
to any following performance plans.
______
Questions Submitted by Senator Bumpers
private insurance company program delivery
Question. You mention that suggested crop insurance reforms might
reduce private company profits by 20 percent. What level of profits
have private insurance companies been making from the crop insurance
programs in recent years?
Answer. The company pre-tax return on retained premium based on the
reinsurance agreement terms effective during that year are as follows:
Actual return on
retained premium
Reinsurance year (percent)
1992.............................................................. 5
1993.............................................................. -19
1994.............................................................. 19
1995.............................................................. 17
1996.............................................................. 21
1997.............................................................. 28
1998 (estimate)................................................... 10
Question. If private companies are realizing sizable profits from
crop insurance, why does USDA need to provide an additional $188 to
$205 million to reimburse the companies for program delivery?
Answer. The Risk Management Agency (RMA) believes that insurance
gains and losses from administrative and operating expenses subsidies
should be treated separately. The basic premise behind risk sharing
provisions of the Standard Reinsurance Agreement (SRA) is for the
companies to share in both gain and loss years. RMA is contracting for
a delivery system with private sector insurance companies. The delivery
of the crop insurance program directly competes with the delivery of
other lines of insurance which private sector insurance companies may
choose to sell. Administrative and operating subsidies are intended
solely to cover delivery expense to ensure that companies do not lose
money in their delivery. Taken together, risk sharing provisions and
the payment of delivery expenses provide an incentive for companies to
sell crop insurance.
The issue of profitability, as with a share of underwriting gains
and losses, was a significant one during the negotiations for the
recently agreed upon 1998 SRA. RMA intends to continue discussions with
the crop insurance industry regarding profitability in the delivery of
the Federal crop insurance program. RMA believes the pre-tax rate of
return provided by the 1998 SRA is similar to the rate of return
received from the insurance company investments in other lines of
insurance and allows insurance companies to continue delivering the
program.
other program reforms
Question. Another suggested reform to achieve savings is to place a
$100,000 cap on payments to farmers for catastrophic risk protection
(CAT). Would this change be fair to producers who might raise crops
with higher market values and higher production costs?
Answer. The matter of payment limitations affects many people in
various circumstances differently. You have cited high value or high
production costs as distinguishing characteristics. The cap would also
affect small scale farmers differently from large scale farmers. The
limit is consistent with those established under ad hoc disaster
programs and the Noninsured Assistance Program (NAP). However, the ad
hoc and NAP programs are subject to a further limitation for farmers
with less than $2,000,000 in gross income from all sources, which is
not proposed under the Department's proposal. Thus, we believe the
proposed limit is consistent with previous Congressional actions but is
relatively more liberal to recognize that this is an insurance program,
not ad hoc disaster assistance.
Question. For example, would a payment of $100,000 to a rice farmer
with high production costs be of equal ``value'' as a $100,000 payment
to a wheat farmer with relatively low production costs?
Answer. A wheat farmer with relatively low production costs per
acre would need to farm significantly more acreage than a rice farmer
to qualify for a $100,000 payment. Hence, even though the costs per
acre are lower, the total costs associated with a $100,000 payment may
not differ materially. If this is the case, the value of the payment
should be roughly equivalent for the two producers.
Another proposed reform is to reduce the statutory loss ratio from
1.075 to 1.060. The immediate result of this change would be to
increase crop insurance premiums.
Question. Have you determined what effect this change will have on
the level of crop insurance participation? If so, what did you find?
Answer. There are no studies that unambiguously estimate what
economists call the price elasticity of demand of crop insurance. The
effect of this action would be to increase premiums by about 1.4
percent. A typical policyholder owed about $1,020 of farmer-paid
premium in 1997. The increase would be about $14. This probably is not
large enough to trigger widespread cancellations. Changes due to
planted acres, yields, or price elections may have a greater effect on
premiums than would this change.
Subcommittee Recess
Senator Cochran. Our next hearing is going to be next week
in this same room. We will hear the budget proposal from the
Food and Drug Administration and the Commodity Futures Trading
Commission at that time.
Until then, the subcommittee will stand in recess.
[Whereupon, at 11:33 a.m., Tuesday, March 24, the
subcommittee was recessed, to reconvene at 10:04 a.m., Tuesday,
March 31.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1999
----------
TUESDAY, MARCH 31, 1998
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:04 a.m., in room SD-138, 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 our subcommittee is continuing its review of the
President's budget request for the next fiscal year. This
morning we are considering specifically the request for funding
of two independent agencies under the subcommittee's
jurisdiction, the Commodity Futures Trading Commission and the
Food and Drug Administration.
Because we have a vote that is scheduled to occur on the
floor of the Senate at 10:30, I hope that we are able to
complete action on the first panel which deals with the
Commodity Futures Trading Commission, and then I will go over
and vote. Senator Bumpers may very well be here at that time as
well. We will either continue the hearing if there is a Senator
here to chair it or temporarily suspend the hearing until I can
return from the floor for that vote.
Prepared Statement
We have a prepared statement from Senator Bumpers which
will be made part of the hearing record.
[The statement follows:]
Prepared Statement of Senator Bumpers
Mr. Chairman: All too often, people hurriedly refer to this
subcommittee as the ``Agriculture'' subcommittee. Sometimes, if
they are generous, they may refer to it as the ``Agriculture
and Rural Development'' subcommittee. It is unfortunate that
people generally fail to recognize that the title of this
subcommittee ends with ``And Related Agencies'' which include
the Commodity Futures Trading Commission and the Food and Drug
Administration, both of whom are with us today.
Ours is also, perhaps, an unfortunate choice of a name to
the extent that these two agencies are collectively considered
as ``Related Agencies''. This term might suggest to some a
relegation of importance to a level somewhere below our usual
recognition of ``Agriculture'' or ``Rural Development''. Let me
assure our guests and my colleagues on the Subcommittee on
Agriculture, Rural Development, and Related Agencies, that the
Commodity Futures Trading Commission and the Food and Drug
Administration do hold responsibilities of great importance to
our nation.
The CFTC may not be a household word to every American and
there may be relatively few Americans who actively participate
in futures trading. However, for anyone who has ever viewed
(with fascination, I am sure) the complex workings of the
futures pits and considered for a moment the effect of the
numbers on the board to investors and financial security all
around the world, the members and staff of the CFTC are not
viewed as simply another agency.
The American economy is strong. Still, we hear rumblings of
market instability on foreign shores and we have seen in recent
years the effect market manipulation can have on a regional and
global scale. As markets become ever more ``global'' in nature,
the role of the CFTC takes on greater importance as a regulator
whose mission it is to ensure protections in the marketplace
for our investors and our producers.
The 1996 Farm Bill eliminated many of the traditional Farm
Safety Net features that farmers had relied on for years to
protect them from an unstable market place. The Risk Management
Agency at USDA has the task of creating programs to reduce the
farmer's risk from nature and, to an extent, from the markets.
The CFTC also holds an important role in offering the farmer
tools that will enable him leverage in the market place to
secure a reasonable price for his products. The use of futures
is complex and, to many unfamiliar with the practice, a
frightening and potentially costly alternative. The CFTC has a
place in working with the farmer as well as the professional
trader to make certain that products on the futures exchanges
are available in a manner meaningful and useful to all. To that
extent, the CFTC plays a role other than as simply a ``Related
Agency'' but with a real responsibility to ``Agriculture and
Rural Development''.
The Food and Drug Administration is one of those agencies
whose responsibilities are often unrecognized but are, in fact,
of extreme importance. A loss of the protections to human
health and safety afforded by this agency are uncomprehensible.
No American can enter a grocery store, a pharmacy, or a
hospital in which protections of the FDA are not in place. I
further believe that no American could imagine the changes to
his or her lifestyle that would occur if those protections were
not in place.
The Food and Drug Administration has taken criticism in
recent years over delays in drug approval and other items. The
Food and Drug Modernization Act of 1997 may do much to correct
some of those problems. Still, regardless of past criticism, I
would not trade the security of our food, blood, and drug
supplies in this nation for that of any other country on earth.
As modern medicine advances, FDA must keep pace and it is the
responsibility of this subcommittee to provide the resources to
keep FDA in step with technology.
FDA, as with USDA, is going through a period of
introspection, consolidation, and downsizing. Just as agencies
experience growing pains during periods of growth, similar
trauma occurs (usually in a more painful manner) in the event
of contraction. The consolidation of the FDA regional field
laboratories presents challenges but will provide a much more
efficient agency with inherent cost savings. I support this
consolidation and encourage the agency to move as rapidly as
possible. I will do what I can on this subcommittee to provide
the resources and direction necessary to effect these changes
as quickly as are prudent.
Over the past several years, this subcommittee has provided
consistent increases for FDA. I am sure that we will do what we
can for the coming fiscal year to help FDA maintain its
commitment to quality, protection, and safety. I note that the
budget submission, again, proposes unauthorized user fees and
we are all aware of the special problems such assumptions
create. I admonish my friends in the Administration, just as I
have to those in previous Administrations, that we should be
presented with a budget submission that can be reasonably
assumed to be enacted. If FDA truly expects to achieve a higher
program level through the collection of new user fees, they
should first secure those fees from the appropriate committees
before suggesting a lower request for new budget authority. We
want to be helpful, but we also demand cooperation.
Mr. Chairman, this is our last hearing for the fiscal year
1999 appropriations bill. As such, it is the last hearing I
will attend in my capacity as a member of this subcommittee.
Let me again express publicly my sincere gratitude for the
opportunity to serve with you these many years and for your
gracious manner in disposing your responsibilities. You have
always been honest and fair and truly a pleasure to work with.
While there are some features of public life I will not miss,
sharing a role on this subcommittee with you and all members,
Republican and Democrat alike, is not one of them. I will miss
all of you.
Introduction of Witness
Senator Cochran. We are very pleased to have Ms. Brooksley
Born who chairs the Commodity Futures Trading Commission as our
first witness, and we have a copy of your written testimony
which we appreciate very much. We will make that a part of the
record in full and invite you to make any comments or summarize
your statement in any way that you think would be helpful to
the committee. We then will have an opportunity for some
questions.
You may please proceed.
Statement of Brooksley Born
Ms. Born. Thank you very much, Mr. Chairman. The Commission
very much appreciates this opportunity to discuss the
President's fiscal year 1999 budget request for the Commodity
Futures Trading Commission.
With me today is Madge Bolinger who is the Director of the
Commission's Office of Financial Management.
The Commodity Futures Trading Commission is a small agency
with an important mission. It oversees the Nation's futures and
option exchanges and the over-the-counter derivatives market.
The Commission also supervises 64,000 commodity professionals
who trade on the floor of the Nation's exchanges or represent
customers. These markets have experienced explosive growth in
the past decade.
The President's fiscal year 1999 budget request for the
Commission is $63.4 million, with a staffing level of 600 full-
time equivalents. This request represents a $5.3 million
increase over fiscal year 1998, or approximately 9 percent. It
calls for an additional 20 full-time equivalent staff-years
over the fiscal year 1998 appropriation, or a 3-percent
increase in staff.
Approximately $3.9 million of the increase is required for
the Commission to sustain its current level of services, and
the remaining $1.4 million would support the requested 20
additional staff-years. The staff increase would raise the
Commission's staff to approximately the staff level it had in
fiscal year 1992.
The Commission is responsible for ensuring the integrity of
the Nation'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
encouraging the competitiveness and efficiency of the Nation's
futures and option exchanges. Through effective oversight
regulation, the Commission enables the commodity futures
markets better to serve their vital price discovery and hedging
functions in the Nation's economy.
The requested increase will be used to enhance the
Commission's enforcement, market surveillance, and oversight
presence in our rapidly changing and growing on- and off-
exchange markets. The largest portion of the requested dollar
increase will be dedicated to the Division of Enforcement,
which will receive an allocation of 10 additional staff-years.
The addition of these staff-years would, in effect, complete
the reorganization of the division, which was begun in 1995.
The division's new flexible organizational structure, which
will be enhanced by the 10 additional staff-years, will allow
the enforcement program to devote necessary staff to special
matters such as quick strike cases and large, complex cases,
including fraud and manipulation cases, without detracting from
the Commission's strong enforcement presence throughout the
industry.
The increase will also enhance the Commission's market
surveillance program. Additional staff-years will be used to
implement the Commission's new integrated market surveillance
system and to maintain an effective surveillance program over
the growing markets. A strong surveillance program is critical
for the Commission to carry out its mission of detecting and
deterring price manipulation and other major market abuses.
The requested increase will also provide the resources
necessary to sustain our oversight over contract market
practices and standards. The increase will provide the
Commission with the resources necessary to address new product
developments, new market linkages, new trading developments,
and other innovations.
Overall, the increase in funding and staffing will
strengthen the Commission and increase its ability to oversee
the growing and vital futures and option markets that are
critical to the Nation's economy.
As part of our commitment to maintaining strong futures and
option markets, one of the Commission's top priorities in
fiscal year 1997 and continuing into fiscal year 1998 has been
to modernize and streamline its regulatory framework. The
growth and change in our markets, as well as revolutionary
technological developments, have necessitated a comprehensive
review of the Commission's regulations. The Commission is
seeking to eliminate undue regulatory burdens while continuing
to provide an effective level of regulation and public
protection.
Toward that end, the Commission has proposed or adopted a
number of regulatory reform initiatives in the last year
relating to exchange markets and commodity professionals, many
of which are described in my written testimony.
An additional area of our regulatory reform efforts
involves a review of our regulatory framework for over-the-
counter derivatives instruments. It has been 5 years since the
Commission exempted some types of OTC instruments entered into
by sophisticated parties from provisions of the Commodity
Exchange Act, other than prohibitions of fraud and
manipulation.
Since that time, the OTC markets have grown dramatically
both in size and in the diversity of the instruments offered.
These developments have prompted the Commission to examine its
approach to this market. The Commission plans to issue shortly
a concept release which will invite comment on how best to
achieve an appropriate balance between the need to ensure that
U.S. entities have the opportunity to remain competitive in the
global financial marketplace and the need to maintain adequate
regulatory safeguards.
We look forward to the input of the industry, users of OTC
derivative instruments, relevant regulatory authorities, and
other interested persons, including members of this
subcommittee, as we go forward with our concept release and
other regulatory reform initiatives.
We believe that the increase that the President has
requested for fiscal year 1999 is essential for the Commission
to fulfill its congressional mandate and to keep pace with
growing complex and dynamic markets.
Thank you very much, and I will be pleased to respond to
questions.
Prepared Statement
Senator Cochran. Thank you, Madam Chairperson. We
appreciate your being here and the fact that you have always
been very willing to discuss with the committee matters that
relate to the Commission's budget and the activities of the
Commission. We will insert your prepared statement in the
hearing record.
[The statement follows:]
Prepared Statement of Brooksley Born
Mr. Chairman and Members of the Subcommittee: I am pleased to
appear before you this morning to discuss the President's fiscal year
1999 budget request for the Commodity Futures Trading Commission
(``CFTC'' or ``Commission''). In my testimony today, I will provide the
Subcommittee with an overview of the proposed budget for 1999, discuss
the need for additional resources for the Commission's programs and
update you on highlights of fiscal year 1997, including the
Commission's efforts to streamline its rules and procedures and to
relieve unnecessary regulatory burdens while maintaining important
customer protections.
request for appropriations in fiscal year 1999
The President's fiscal year 1999 budget request for the Commission
is $63.4 million. That sum represents an increase of $5.3 million (or
nine percent) over fiscal year 1998 appropriations. Approximately $3.9
million of the increase is necessary for the Commission to maintain its
current level of services and operations. The remaining $1.4 million
increase would support the addition of 20 full-time equivalent
(``FTE'') staff years, a three percent increase in staffing. The budget
request would provide the Commission with the resources needed
effectively to perform its legislative mandate under the Commodity
Exchange Act (``CEA'' or ``Act'').
overview of funding levels and operational effects
The Commission has a statutory mandate to oversee the nation's
futures and option markets, including on- and off-exchange transactions
in futures and options. The Commission is responsible for ensuring the
economic utility of these markets by guarding the integrity of the
markets, protecting customers from fraud and other trading abuses,
monitoring the markets to detect and to prevent price distortions and
manipulation, and encouraging the competitiveness and efficiency of the
nation's futures exchanges. Through effective oversight regulation, the
CFTC enables the commodity futures markets better to serve their vital
functions in the nation's economy, price discovery and hedging.
The Commission also 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,
maintain financial integrity, use proper sales practices and provide
adequate risk disclosures to their customers.
For well over a century, futures transactions have enabled
producers, merchandisers and processors of agricultural commodities to
protect against adverse price movements. In recent decades, market
innovations have expanded to include contracts for other physical
commodities such as metals and energy products. In addition, the
derivatives industry has developed new on- and off-exchange futures and
option products that have given financial institutions and others tools
to protect against currency fluctuations, equity index variations, and
interest rate changes. The proven utility of these on- and off-exchange
derivative transactions has resulted in phenomenal growth in their
trading volumes.
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 U.S. futures exchanges. The
commodity futures and option markets have experienced dramatic growth.
Exchange futures and option trading has increased by 100 percent in the
last decade (from 275 million to 555 million contracts). In the last
year alone the number of futures and option contracts traded on
designated U.S. contract markets grew from 499 million in 1996 to
nearly 555 million in 1997, an increase of more than 11 percent. The
Commission's regulatory program has 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 exercises
oversight of the rapidly growing and evolving over-the-counter market
in derivative instruments. The CFTC works with other U.S. financial
regulators and with the international regulatory community to address
disclosure and market integrity issues in the global market. This
enormous market, currently estimated to have a notional value well in
excess of $27 trillion world-wide, has emerged in the past decade.
Growing managed funds.--The CFTC regulates commodity pool operators
(``CPO's'') and commodity trading advisors (``CTA's''). Funds committed
to professional management for futures trading have grown
exponentially, from $115 million in 1975 to over $35 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 (``NFA''). Since 1986, the CFTC has
approved over 450 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 assure that 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. 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
own oversight and enforcement programs. In 1995 Congress reaffirmed
these obligations by adopting a reauthorization of the Commission
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 poses regulatory
challenges to the CFTC, including the need to police futures and option
trading advice and sales offered illegally via the Internet.
cftc resources
During the past four years, both the Administration and Congress
have recognized the need for additional resources at the CFTC to
maintain effective oversight over the growing and evolving futures and
option markets. Accordingly, the CFTC has received increased
appropriations to maintain current service levels from year-to-year, to
provide additional resources to the Commission's Division of
Enforcement and to permit investments in technology to increase the
Commission's ability to conduct adequate market surveillance.
The proposed increase in funds for fiscal year 1999 is necessary to
enable the Commission to keep pace with the rapid growth in volume and
the profound changes resulting from novel transactions, new trading
systems, new market practices, advances in technology, and the
globalization of the markets. The additional resources would be
dedicated primarily to maintaining an effective enforcement,
surveillance and oversight presence in these rapidly changing and
growing markets. In addition, the Commission must remain responsive to
technological developments, business changes, and market evolution so
as not to burden innovation and financial market growth with regulatory
inefficiencies and outmoded regulatory structures. The Commission began
a comprehensive regulatory review and reform initiative in fiscal year
1997, which is ongoing in fiscal year 1998 and will continue into
fiscal year 1999. Without the requested additional resources, the
Commission would not be suitably equipped to carry out effective
enforcement, market surveillance and regulatory reform.
Much of the requested increase will be dedicated to the Division of
Enforcement, which will receive an allocation of ten additional FTE
staff years. That allocation of resources would make the Division's
employment level the strongest since fiscal year 1992. The addition of
these staff years would in effect complete the reorganization of the
Division, which began in 1995. The ten additional FTE's will be devoted
to investigation and prosecution of matters involving fraud, quick-
strike cases, and large, complex cases, including manipulation cases.
The Division's new flexible organizational structure will allow the
Enforcement program to devote necessary staff to respond appropriately
without detracting from a strong enforcement presence across the
industry.
The Commission's fiscal year 1999 budget request would also add
five FTE staff years to further the Commission's market surveillance
efforts. These FTE's are necessary to continue the effort started in
1997 to implement new software for the integrated market surveillance
system and to maintain an effective surveillance program for a dynamic
industry. One of the major enhancements of the system is the ability to
obtain and analyze daily large trader option data. (Previously large
trader option data was obtained on a weekly basis.) The system also has
the benefit of reducing the overall reporting burden of certain
commodity professionals, who will report large trader data only to the
CFTC rather than to multiple exchanges. Full implementation of the new
system, together with the Commission's current surveillance system,
will enhance the Commission's ability to detect and deter price
manipulation or other major market abuses.
The final five additional FTE staff years will be allocated to the
Division of Trading and Markets. The Division of Trading and Markets
has taken the lead in developing many of the regulatory reform
initiatives that have been undertaken or are being considered by the
Commission. A number of those initiatives are discussed in the
Commission's highlights of fiscal year 1997 described below. Additional
resources are needed to develop innovative regulatory approaches to
address new product developments, market linkages, and trading
mechanisms and to assure that clearing organizations, firms holding
customer funds, and other commodity professionals operate safely and
consistently with the public interest. The resources will also enhance
Commission oversight of contract market standards and practices.
The requested increase in funding and staffing will strengthen the
Commission and will increase its ability to oversee the growing and
vital futures and option markets that are critical to our nation's
economy.
highlights of fiscal year 1997
regulatory streamlining
One of the Commission's top priorities in fiscal year 1997 and
continuing into fiscal year 1998 has been to modernize and to
streamline its regulatory framework. Much of the Commission's
regulatory regime dates back to its early years as an agency. The
explosive growth and change in our markets as well as revolutionary
technological developments have necessitated a comprehensive review of
the Commission's regulations. The Commission must ensure that its rules
have adapted to changes in the marketplace and continue to provide an
effective level of regulation and public protection. Toward that end,
the Commission has proposed or adopted a number of regulatory reform
initiatives in the last year, some of which I would like to highlight
here today.
Fast-Track Review for Contract Designations and Rule Changes
In fiscal year 1997, the Commission implemented new ``fast-track''
procedures for processing certain contract designation applications and
exchange rule changes. These procedures significantly streamlined the
review process for most new exchange contracts and many exchange rules,
permitting approval within ten days for many types of contracts and 45
days for certain other contracts.
Prior to the adoption of fast-track procedures, the Commission had
already reduced its average contract approval time to about 90 days.
During the seven months of fiscal year 1997 that the fast-track rules
were in place, 15 new contract designations were filed with the
Commission, seven of which were eligible for fast-track treatment. The
Commission approved all eligible contracts within the fast-track
period. Even contracts not subject to the fast track procedures--such
as stock index futures contracts, which must be submitted to the
Securities and Exchange Commission (``SEC'') for comment--were approved
in record time. For example, during fiscal year 1997, the Commission
approved the Chicago Mercantile Exchange's (``CME'') E-Mini S&P 500
contract and the Chicago Board of Trade's (``CBOT'') Dow Jones
Industrial Average contract within days of receiving the statutorily
required SEC comment letters.
Reporting and Disclosure Requirements
The Commission also streamlined many of its reporting and
disclosure requirements. The agency amended its reporting requirements
to permit filing by large traders of CFTC Form 40, Statement of
Reporting Trader, only when requested by the Commission rather than
annually. In an important development for CFTC registrants who are also
SEC registrants, the Commission adopted rule amendments to harmonize
certain financial reporting requirements with the requirements of the
SEC. The Commission also approved in principle two-part risk disclosure
documents for commodity pool offerings, which potentially would
highlight the core information required to be provided to customers.
In early September 1997, the Commission proposed amendments to its
rules reducing the risk disclosure obligations of futures commission
merchants (``FCM's'') and introducing brokers (``IB's'') as to
financially sophisticated customers. The Commission approved the rules
on February 20, 1998, and expects the rule amendments to speed the
account opening process for the customers identified in the rule. The
rule provides flexibility to FCM's and IB's to design their own
disclosure of risk by eliminating certain mandatory risk disclosure
information and procedures. This proposal responded directly to
industry calls to permit different regulatory treatment of
sophisticated customers where appropriate.
Electronic Media
The Commission has adopted a number of initiatives designed to take
advantage of the increased efficiencies and reduced costs made possible
through the use of electronic media. In June 1997, the Commission paved
the way for FCM's to use electronic media to communicate with their
customers. The Commission's Advisory permits FCM's to deliver
confirmations and account statements solely by electronic media to
customers who consent to electronic transmission in lieu of receiving
paper documents. Also in June, the Commission authorized CTA's and
CPO's to provide risk disclosure documents to their customers via
electronic media. The Commission's interpretation enables CPO's and
CTA's to provide customers with a risk disclosure summary and a
hyperlink connection to the entire risk disclosure document.
The Commission also adopted measures to permit the electronic
filing of documents with the Commission. In April 1997, the Commission
adopted a rule allowing CTA's and CPO's to file their required
disclosure documents with the Commission electronically. The Commission
has also undertaken a program to permit FCM's to file required
financial reports with the Commission electronically. These electronic
media initiatives should increase the timeliness of information flow,
reduce the administrative costs of commodity professionals and allow
members of the industry and their customers to reap the benefits of
technological advances.
Streamlined Requirements for Commodity Professionals
The Commission's streamlining efforts have brought significant
benefits to FCM's, CTA's and their customers. For example, in June
1997, the Commission approved an interpretation permitting streamlined
procedures for allocation of customer orders which are bunched for
execution by CTA's. The Commission provided relief to FCM's with
respect to the capital treatment of short option positions to permit
more FCM's to carry such positions for customers and to facilitate
efficient use of capital without creating undue financial risk.
Delegations to the National Futures Association
To improve the efficient use of Commission resources, the
Commission has focused on whether it could delegate additional
functions to the NFA. The NFA is a self-regulatory organization of
commodity professionals designated by the Commission under the CEA to
perform certain regulatory functions. During the past year, the
Commission delegated additional authority to NFA in several areas
including registration decisions relating to floor brokers and floor
traders with disciplinary histories, various registration and
processing functions relating to non-U.S. firms, and the review of
disclosure documents required to be filed by CPO's and CTA's.
enforcement
During fiscal year 1997, the Commission focused enforcement efforts
on matters involving allegations of fraud in a variety of contexts. For
example, the Division of Enforcement pursued cases against commodity
professionals which failed to register with the Commission, as
required, and which violated the anti-fraud provisions of the Commodity
Exchange Act. The Division filed cases alleging fraud in the offer and
sale of various off-exchange instruments, including precious metals
contracts and foreign currency contracts marketed to the general
public. The Division also pursued cases against firms and individuals
using fraudulent advertising and solicitations.
In fiscal year 1997, the Division of Enforcement also investigated
allegations related to certain hedge-to-arrive contracts involving
grain elevators. As a result, in fiscal year 1997 the Commission filed
three separate administrative complaints alleging violations of various
provisions of the CEA and Commission regulations in connection with
certain of these hedge-to-arrive contracts. The Commission filed an
additional complaint in fiscal year 1998. The Division of Enforcement
continues to investigate other individuals and entities in connection
with hedge-to-arrive contracts.
contract designations
In fiscal year 1997, the Commission reviewed and approved 51
applications for new futures and option contracts. Several of these
contracts reflect innovative approaches designed to meet specialized
hedging needs. For example, the Commission approved contracts based on
inflation-indexed debt instruments issued by the U.S. Treasury,
including the CBOT inflation-indexed Treasury bond, long-term Treasury
note, and medium-term Treasury note futures and option contracts. These
contracts, the first based on inflation-indexed debt securities, were
designed specifically to deal with the unique hedging needs of
institutions exposed to risk arising from holding the inflation-indexed
instruments recently issued by the U.S. Treasury.
international regulatory cooperation
The CFTC, along with British and Japanese authorities, co-sponsored
an international regulators conference on physical delivery markets in
London in November 1996. Regulators from 17 countries issued a
Communique agreeing on certain basic principles of regulation of such
markets. The participants also agreed on a year-long work program for
the development of international ``best practices'' standards on
contract design, market surveillance, and information sharing. Such
best practices standards were agreed upon at a meeting of international
regulators on October 31, 1997, in Tokyo. To date 17 regulators from 16
countries have subscribed to the standards. International best
practices standards help to protect the U.S. markets from the impact of
events on foreign markets due to poor market regulation abroad. They
also assist in leveling the international regulatory playing field for
markets and commodity professionals.
establishment of office of international affairs
In late July 1997, the Commission created, within the Office of the
Chairperson, an Office of International Affairs to enable the
Commission to continue its leading role in international regulatory
initiatives and to keep abreast of global changes. Over the past
several years, there has been enormous growth in the international
marketplace. New exchanges have been established around the world,
foreign trading volume has grown, new regulatory bodies have been
created abroad, and the need for cooperation and understanding among
international regulators and exchanges has become paramount. The Office
of International Affairs will enhance the Commission's ability: (1) to
respond quickly to market crises that have global systemic
implications; (2) to remain an effective supervisor in a global
marketplace where no one regulator has all the information or resources
to regulate its markets or its firms; and (3) to eliminate unnecessary
impediments to global business while preserving core protections for
markets and customers. The Office of International Affairs will play a
key role in an evolving process toward international harmonization of
regulations which ensure market innovation and access while maintaining
needed customer and market protections.
agricultural trade options
Agricultural options--both on- and off-exchange--were traded in the
United States at least from the time of the Civil War until the 1930's.
However, concerns about fraudulent sales practices, failure to perform
over-the-counter obligations, and the use of exchange-traded options to
manipulate the prices of agricultural commodities prompted numerous
industry and government efforts to limit or eliminate trading in
agricultural options. In 1936, Congress banned all sales of options on
certain agricultural commodities listed in the CEA. In 1982, Congress
lifted the 1936 statutory ban, allowing the Commission to permit
options on certain agricultural commodities listed in the Act. The
Commission permitted exchange trading in these agricultural options in
1984. However, the regulatory ban on off-exchange agricultural options
remains.
In May 1997, the Commission's Division of Economic Analysis issued
a White Paper on this issue. The paper analyzed: (1) the current
regulatory environment; (2) recent developments in agriculture that
have expanded the need for risk-shifting strategies; (3) the benefits
and risks of agricultural trade options; and (4) possible ways to
strike a balance between the benefits and the risks. The staff analysis
identified, for the consideration of the Commission, risks and benefits
of lifting the ban. The Commission sought public comment on the issue
through a Federal Register notice and by holding meetings in
Bloomington, Illinois and Memphis, Tennessee.
The Commission published a proposal in the November 4, 1997 Federal
Register to establish a three-year pilot program that would lift the
ban on certain agricultural trade options subject to regulatory
protections. Under the rules as proposed, entities which handle the
agricultural commodity in normal cash market channels would be able to
offer to buy or sell options on that commodity with other commercial
counterparties for business-related uses. These options would require
physical delivery of the commodity if exercised and could not be
repurchased, resold or otherwise canceled prior to the expiration or
exercise of the option. Entities offering to buy or sell the options
would be required to become registered as agricultural trade option
merchants, to report to the Commission on their transactions, to
provide their customers with disclosure statements and to safeguard
their customers' premiums. As a condition of registration, such
entities would be required to meet a financial requirement,
successfully complete a proficiency exam and periodically attend ethics
training. The Commission also proposed to exempt from the prohibition
and the other proposed rules described above individuals or entities
which have a net worth in excess of $10 million. Finally, the
Commission proposed to remove the prohibition on the offer and sale of
agricultural options for physicals on designated exchanges. The
Commission is currently considering all comments received on its
proposal and expects to conclude its consideration of the matter soon.
delivery specifications for chicago board of trade futures contracts
In December 1996, the Commission voted unanimously to notify the
CBOT under section 5a(a)(10) of the CEA that the delivery terms of the
CBOT corn and soybean futures contracts no longer accomplish the
statutory objectives of ``permit[ting] the delivery of any commodity .
. . at such point or points and at such quality and locational price
differentials as will tend to prevent or diminish price manipulation,
market congestion, or the abnormal movement of such commodity in
interstate commerce.'' That decision was based on a substantial
reduction of the delivery capacity in Chicago under the CBOT contracts.
The Commission's notification gave the CBOT until March 4, 1997, to
submit proposed amendments to its corn and soybean contracts to achieve
the statutory objectives. On April 15, 1997, the CBOT approved proposed
contract changes. Nearly 700 comments were received by the Commission
relating to the CBOT's proposed delivery amendments, many expressing
objections. On September 15, 1997, the Commission published a proposed
order to change and to supplement the CBOT's proposed amendments for
the corn and soybean futures contracts. After providing the CBOT an
opportunity to be heard, the Commission issued its final order on
November 7, 1997.
Since issuance of the final order, the CBOT has submitted new terms
for its corn and soybean futures contracts for the Commission to
consider. The CBOT's board of directors, on February 10, 1998, approved
additional revisions to its current proposal. The CBOT's full
membership approved the additional revisions on March 19, 1998. The
revised proposal has since been submitted to the Commission and is
currently under review.
audit trail and dual trading
Accurate audit trails have been an aim of the Commission since its
inception. In the past year, the Commission reviewed compliance with
statutory and regulatory requirements regarding audit trails and dual
trading in order to assure that trade monitoring systems are in place
which, to the extent practicable, enable effective detection,
deterrence, and prosecution of trading abuses, as required.
During 1997 the Commission took action on all pending exchange
petitions for exemption from the statutory dual trading ban provisions
of the CEA, except for the New York Mercantile Exchange's (``NYMEX'')
petition. (NYMEX asked for a delay in Commission action in light of its
recent relocation to new facilities with new audit trail systems.) The
Commission issued unconditional dual trading exemptions to the
Commodity Exchange, Inc. (``COMEX''), the Coffee, Sugar & Cocoa
Exchange (``CSCE'') and the New York Cotton Exchange (``NYCE''), each
of which demonstrated that it met the statutory requirements.
On November 7, 1997, the Commission issued separate proposed orders
granting the CME and the CBOT conditional dual trading exemptions in 7
and 13 affected contract markets, respectively. In addition, the
Commission granted the CME an unconditional dual trading exemption for
its S&P 500 futures contract market. The Commission's proposals to
grant conditional exemptions for the other affected contract markets
were based on the Commission's finding that the exchanges' trade
monitoring systems for these markets did not meet all the requirements
of the Act and Commission regulations. Specifically, neither exchange
was able to demonstrate that 90 percent or more of its imputed trade
times are reliable, precise, and verifiable as demonstrated by being
imputed within a timing window of two minutes or less. Both the CME and
the CBOT were provided opportunities to present written and oral
comments to the Commission, and each has done so. The Commission
expects to issue final orders for both exchanges shortly.
use of the internet
The Commission has taken several steps designed to make information
and assistance more available to the general public. In addition to its
Internet monitoring and surveillance program, commenced in fiscal year
1996, the Commission has used its home page on the World Wide Web as a
means of providing the public with brief summaries of the types of
abuses commonly investigated and prosecuted by the CFTC. The
Commission's website also 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. The website also includes information about individuals and
firms who are the subjects of pending enforcement actions or who have
been found liable for violating federal commodities laws in an
administrative or a civil action previously brought by the Commission.
Similarly, the website includes the names of individuals and firms with
sanctions in effect. Finally, the website provides individuals with the
Commission's entire reparations complaint package.
automation of administrative functions
During fiscal year 1997, the Office of Proceedings implemented a
new case tracking system. The new system tracks the progress of each
case from receipt through disposition in the Office of Proceedings,
appeal to the Commission and appeal to Federal court. This system not
only assists case management within the agency, but allows the Office
of Proceedings to provide better information on the status of cases in
response to public inquiries.
The Commission took additional steps during fiscal year 1997 to
make more extensive use of automation to streamline financial and
fiscal processing. For example, the Commission now has the capability
to transmit electronic disbursement requests to the Philadelphia
Finance Center, thereby eliminating the need for magnetic tape
generation and costs associated with overnight delivery. In addition,
the Commission can now make disbursements directly to financial
institutions for vendors and employees and has implemented an
electronic travel manager system that reduces paperwork and increases
productivity.
commission year 2000 computer compliance initiatives
The Commission has been engaged in conducting analyses and taking
corrective actions related to the so-called Year 2000 problem since
1993. The Commission's internal systems needed to be Year 2000
compliant at that time in order to process futures and option contracts
with expiration and delivery dates in the year 2000. The Commission
implemented modifications to our mission-critical mainframe systems to
accomplish correct turn-of-the-century processing. At that same time
the Commission adopted a policy that all new systems developed would be
Year 2000 compliant.
In response to OMB Bulletin 96-02, our other mainframe systems are
also being reengineered and converted to Year 2000 compliant client/
server-based systems. That work is scheduled to be completed by
September 1999. During the next 24 months, we will be reviewing,
correcting and testing equipment and software so as to ensure the
Commission's compliance.
The Commission is also working with the regulated industry and
other regulators on Year 2000 compliance matters. Last year, the
Commission contacted each of the futures exchanges about its
responsibilities as a self-regulatory organization (``SRO'') to ensure
internal compliance, as well as the compliance of its member firms.
More recently the Commission has requested that SRO's produce
additional materials that will demonstrate such compliance. In
addition, the Commission has sent a questionnaire to FCM's asking them
to report material facts on their compliance plans.
Finally, the Commission is working with other regulators, the
Futures Industry Association and the Securities Industry Association to
develop stress testing for computer systems in advance of the year
2000. This cooperative effort should help determine domestic and global
preparedness of the financial markets.
pending legislation
Last year I expressed the Commission's concerns with legislation
pending before the Senate and House Agriculture Committees (S. 257 and
H.R. 467, respectively) to amend the CEA. In the Commission's view the
bills, if adopted, would result in pervasive deregulation of our
futures and option markets, posing dangers to the public interest.
While both bills remain pending before the Senate Committee on
Agriculture, Nutrition, and Forestry and the House Committee on
Agriculture, we understand that no action is currently scheduled. The
Commission has addressed many of the issues raised in the bills and, as
illustrated above, has adopted regulatory reform measures to meet many
of the concerns underlying the bills.
The Commission has reconstituted its Financial Products Advisory
Committee (``FPAC'') to serve as a forum for industry members to
discuss the Commission's regulatory reform proposals. The Commission
welcomes any regulatory reform suggestions from the industry, market
participants, members of Congress and other interested persons.
Separately, the CFTC has been monitoring the progress of the
Financial Services Act of 1997 (H.R. 10). The Commission's review of
the proposed legislation has revealed that it could create conflicts
with the CEA, and the Commission has recommended that the bill should
include a general savings clause making clear that the legislation is
not intended to affect the provisions of the CEA or the jurisdiction of
the CFTC.
conclusion
The Commission appreciates this opportunity to report to the
Subcommittee on its accomplishments of the past year and to reiterate
its commitment to fulfilling its statutory mandate to oversee the
United States' vibrant futures and option markets. As we look ahead to
fiscal year 1999, the Commission seeks additional appropriations to
complete its restructuring of the Division of Enforcement, to improve
its market surveillance abilities, and to respond to the changes in the
markets with adoption of regulatory reform initiatives. We look forward
to working with Congress on these matters, and I would be happy to
respond to any questions you may have.
Thank you.
______
Biographical Sketches
brooksley born
Brooksley Born was sworn in as Chairperson by Acting Chairman John
E. Tull on August 26, 1996. Ms. Born was nominated by President Clinton
on May 3, 1996, and confirmed by the Senate on August 2, 1996, for a
term expiring in April, 1999.
Ms. Born practiced law at the Washington, D.C., firm of Arnold &
Porter from 1965 until her appointment to the CFTC. As a partner in the
firm, Ms. Born specialized in representing institutional and corporate
clients in complex litigation, primarily in the federal courts, and in
futures regulation matters.
Ms. Born is an active member of the District of Columbia Bar and
the American Bar Association (ABA), having served on the Boards of
Governors of both organizations. She currently serves on the Boards of
the American Bar Foundation and the National Women's Law Center.
Ms. Born was in 1972-1973 an Adjunct Professor of Law at Georgetown
University of Law Center and a Lecturer at Law at Columbus School of
Law, Catholic University of America, in 1972-1974.
A native of San Francisco, California, Ms. Born received her A.B.
degree from Stanford University in 1961 and her Juris Doctor degree
from Stanford Law School in 1964, where she graduated first in her
class and was President of the Stanford Law Review. She is a member of
Order of the Coif. She has also been honored by the National
Association of Public Interest Law, the National Legal Aid and Defender
Association, and the National Women's Law Center. She received the
Woman Lawyer of the Year Award from the Women's Bar Association of the
District of Columbia in 1981.
______
madge a. bolinger
Madge A. Bolinger has served as the Director of the Office of
Financial Management since 1987.
A native of Massachusetts, Ms. Bolinger began her Federal career
with the Commodity Futures Trading Commission in 1976 following receipt
of a Bachelor of Science degree from Miami University. Prior to her
appointment as the Director, Ms. Bolinger held positions in budget and
program analysis and automated data processing.
Impact of Tokyo Communique
Senator Cochran. Madam Chairperson, we notice that in your
statement, you referred to an international set of standards
that were discussed and were the subject of a communique--the
Tokyo Communique I think it is called--relating to the 16
countries that met to consider uniform standards in this
regulatory area of responsibility.
What, if any, budget impact is there on the Commodity
Futures Trading Commission that would flow from these
standards?
Ms. Born. I do not think that there is any budget impact
from the standards, Mr. Chairman. The standards that were
adopted as best practices standards by the world's regulators
of leading commodity markets are already complied with by the
Commission and consistent with the Commodity Exchange Act.
Indeed, many of the principles in the Commodity Exchange Act
have been incorporated into those guidances and are now adhered
to by the other 17 countries.
Losing Business to Overseas Exchanges
Senator Cochran. One of the problems that was brought to my
attention within the last year was the concern by some of the
exchanges here in the United States that we were losing
business to overseas exchanges. Has that been reversed or does
that continue to be a problem, or is it a problem that is
serious and should have the attention of the Congress?
Ms. Born. In fiscal year 1997, there was no further erosion
of the U.S. portion of world trading in these instruments. In
fact, the U.S. exchanges contract volume increased by 11
percent during fiscal year 1997, and that was approximately the
level of growth abroad as well.
Senator Cochran. You mentioned that most of the new money
that would be appropriated under this request would go to
enforcement, not all, but a substantial amount in terms of the
FTE's and total dollar allocation.
Is there a major problem of any kind that you are
investigating now or do you foresee the need for any special
enforcement activity? You mentioned market manipulation as a
possible area that could receive additional attention. Is that
the only area that troubles you?
Ms. Born. No; fraud is a pervasive problem in our
jurisdiction as well. We just issued yesterday a consumer
warning about prevalent fraudulent schemes relating to foreign
currency markets which are being advertised over radio and
through the Internet and by telemarketing which are targeting
retirees and various immigrant populations, encouraging them to
invest their savings in the foreign currency markets. Of
course, the money disappears rapidly.
Senator Cochran. Do you have jurisdiction similar to the
Federal Trade Commission or other Federal agencies where you
can bring your resources to bear on practices like that, even
though these may not be exchanges? We normally think of the
Commodity Futures Trading Commission as dealing with futures
traders operating out of Chicago or New York or some of the
other major cities. What is the opportunity that you have or
the power that you have to reach out and do something about
things like that?
Ms. Born. Well, the statute requires that futures and
option contracts generally are traded on exchanges. So, we can
bring enforcement actions against what we call bucket shops,
that is, confidence artists who are selling off-exchange
futures or option contracts illegally. We can bring actions
against them on two grounds. One is fraud and the other is the
fact that they are trading off exchange. There are some
limitations to our over-the-counter jurisdiction, but we
certainly can go against bucket shops.
Senator Cochran. Do you find yourself cooperating with the
Department of Justice or other Federal agencies in this effort?
Ms. Born. Very much so. We often cooperate with the
Department of Justice and the U.S. Attorney's offices in the
areas where we are investigating bucket shops or Ponsi schemes
and proceed in cooperation with them, they bringing criminal
actions which we cannot bring, and we bringing civil actions
which we do have power to bring. In addition, we cooperate with
State securities commissioners, with the SEC, with the banking
regulators, and others as appropriate.
Over-the-Counter Derivatives Market
Senator Cochran. One other over-the-counter activity that
we have had brought to our attention is the possible conflict
with the Securities and Exchange Commission regulations for
dealers that are active in the over-the-counter derivatives
market. What can you tell us about that and the plan that the
CFTC has, if any, to deal with this conflict?
Ms. Born. Well, the SEC published proposed rules at the end
of the year that would regulate certain over-the-counter
derivatives dealers. Based on a GAO report in 1997, the SEC has
jurisdiction over approximately 1.4 percent of the instruments
that are traded in the over-the-counter derivatives markets--
that is, options on securities and options on securities
indexes. We have jurisdiction over other instruments.
We were quite concerned with the SEC's proposal because it
would extend over instruments that are within our jurisdiction
and it would indeed make certain over-the-counter instruments
permissible for over-the-counter derivatives dealers to trade
in that we have forbidden under our statute and regulations.
We did put in a comment letter to the SEC pointing out
these problems and urging the need for regulatory cooperation
and coordination on this matter, suggesting that each agency
should act within its own jurisdiction but try to coordinate
our actions.
We also at the same time announced that we are planning to
release a concept release on our over-the-counter derivatives
regulations. The last time we acted as a Commission in this
area was in 1993 when we adopted a certain reduced regulatory
regime for specified over-the-counter derivatives instruments,
and we plan within the next month to issue a concept release
reaching out to the market, the over-the-counter derivatives
dealers, and the end users of those derivatives to ask them
whether our regulations adopted 5 years ago still are
appropriate for a market that has grown tremendously during
that period.
New System for Market Surveillance
Senator Cochran. One of the other areas you say you need
additional funds or you plan to use the additional funds in the
budget request is for market surveillance, and you talk about a
software system that will require some additional FTE's to put
in place and to implement. This is a new system, as I
understand it.
Could you tell us a little more about what that is for and
why the new system is needed?
Ms. Born. Certainly. This was a system for which all the
funds were obligated in 1996 and which is an ongoing project
that will be completed in fiscal year 2000. It was designed to
upgrade our market surveillance by permitting the Commission to
receive not only daily reports from futures commission
merchants on large futures positions of the accounts they
carry, but also large options positions, so that the computer
system will then be able to analyze the overall position of
large traders in our markets. This is part of a very
significant program in the Commission to detect market
manipulation in its incipiency and to try to move in quickly to
deter any further price distortion or problems coming from
attempted price manipulation.
Senator Cochran. When we mention the word ``computer,'' I
think about the fact that some agencies are doing better than
others in getting ready for the year 2000 and the implications
for the computer systems.
Are you spending any amount of this year's funds to prepare
for that, and if not, why not?
Ms. Born. We are indeed. Our agency identified the year
2000 problem in 1993, earlier than some agencies because we had
to think about futures contracts out into the future, and
realized that soon we would be faced with futures contracts
expiring in the year 2000. So, we took immediate steps to get
our market surveillance and contract market systems compliant
with the year 2000 or to adopt plans to get them compliant. We
propose to have all our systems compliant by June 1999.
We are also working very closely with the exchanges and the
National Futures Association and the Futures Industry
Association to make sure that both the exchanges and the 64,000
commodity professionals are year 2000 compliant by the year
2000.
Cost of Preparing for Year 2000 Transition
Senator Cochran. What do you estimate--or can you
estimate--the total cost of preparing for the year 2000
transition? Is there any way to do that?
Ms. Born. For our markets and our traders, I think it will
be many billions of dollars. I do not have an estimate.
Senator Cochran. What about the agency itself? Is there a
way to identify the costs that have been sustained or that will
be between now and 2000?
Ms. Born. We could certainly attempt that. Some of the
costs may be difficult to determine as they go back to 1993. In
addition, some of the costs are included in the overall costs
associated with our compliance with OMB's mandate to move from
a mainframe computer to a client server system which has been a
more or less simultaneous effort. So, it may be a little hard
to pare out of the overall reorganization that part that
relates just to the year 2000 computer compliance issue, but we
could make an attempt.
Streamlining Operation of the Agency
Senator Cochran. I know that you have been trying to
streamline and make more efficient the operation of the agency,
and you have talked about that in your statement.
One of the things that you have done is to delegate some
additional functions to the National Futures Association. I
know that has been a subject of some interest for several years
now. Would you judge that to have been a successful effort?
Have these steps enabled the Commission to still maintain its
regulatory supervision but at the same time maybe achieve some
savings in the operation of the Commission?
Ms. Born. Yes, indeed; I think it has been a great success.
The NFA does a wonderful job in the functions that we have
delegated to it. What we have tended over the years--and this
is also true in the last year--to delegate to the NFA are those
tasks under our jurisdiction which involve very staff-intensive
efforts like registration of the 64,000 commodity
professionals, reviewing all the disclosure documents that
those professionals are required to prepare whenever there is
any significant change in their operations.
By delegating those very staff-intensive activities, I
think we have been able to keep our staff at a relatively small
size. If we get the increase we are requesting now, we will be
only at the level we were in 1992, and that, despite enormous
increases in the markets we are overseeing and the number of
people we are overseeing as well.
Fraud or Abuse in Off-Floor Transactions
Senator Cochran. I understand the Commission is considering
a proposal to permit noncompetitive, off-floor transactions,
that is, allowing exchanges to adopt rules for sophisticated
market participants to privately negotiate the terms of large
transactions and then report the transactions to the exchange.
Do you think there are systems in place to protect the
exchanges and customers against fraud or abuse in these
transactions?
Ms. Born. We actually do not have any proposed rules out.
What we put out, a couple of months ago, was a concept release,
reaching out to the exchanges, to commodity professionals, and
to big traders, asking whether they would see a benefit to our
changing our rules to allow exchanges to permit this kind of
activity, and if so, what kinds of protections would be
necessary. The comment period is still open. I think we put it
out originally for 60 days, but have gotten a request to keep
it open another 30 days.
So, I cannot answer that question yet, Mr. Chairman.
Senator Cochran. The jury is still out.
Ms. Born. Indeed.
Senator Cochran. Well, I appreciate so much your testimony
this morning. It has been very helpful to our understanding the
budget request and what the funds will be used for if we are
able to approve them, and I hope we can. I know the work of the
Commission is very important. The integrity of the exchanges is
important, and the process can be very helpful to agriculture
producers and consumers and our Nation's economy as well, all
tied to the successful operation of this important agency.
Submitted Questions
We think you have done an excellent job as chair of the
agency and we commend you for that. Thank you very much for
your cooperation and you are dismissed. We will submit
additional questions to be answered for the record.
We will suspend the hearing temporarily while I go over and
vote on this amendment to our budget resolution, and I will be
back soon.
[A brief recess was taken.]
[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
regulatory streamlining
Question. One of the efforts undertaken by the Commission was the
expedited review of new contracts and exchange rule changes. How has
this ``fast-track'' procedure for processing contract market
designation applications and exchange rule amendments been received by
the futures exchanges and employees of CFTC responsible for
implementing the procedure?
Answer. Since its implementation, the vast majority of new contract
proposals were filed, and ultimately approved, under the fast-track
procedures. Since fast-track went into effect, 45 new contracts have
been approved, of which 37 were deemed approved under the fast-track
procedures. The seven non-fast-track approvals included five equity
index contracts which were not eligible for fast-track, two currency
contracts which the exchange removed from fast-track procedures, and
one contract which was approved under regular procedures before the end
of the fast-track period. Two of the equity index contracts were
approved in 52 days, and the other two were approved in 77 days. The
currency contracts were approved in 70 days. In that same period, over
100 rule changes have been submitted, of which about half were
submitted under the fast-track procedures. Many of the submissions,
although eligible for fast-track treatment, were made under the regular
procedures of regulation 1.41(b) at the discretion of the submitting
exchange. Rule changes approved to date that were submitted under fast-
track were either deemed approved in 45 days, as provided by the fast-
track procedures, or they were approved sooner by the Commission under
its regular review procedures.
Question. What problems, if any, has reducing the approval time for
new contracts and rule changes to anywhere from 10 to 45 days presented
to the futures exchanges and the Commission?
Answer. The Commission's staff is reviewing the fast-track
procedures to determine if any modifications are warranted. In general,
the fast-track provisions appear to be working well both for the
futures exchanges and the Commission. Accordingly, we would expect that
any modifications would be nonsubstantive and would be designed to
address primarily technical problems with the procedures.
Question. What are the eligibility requirements for fast-track
treatment of a new contract or rule change?
Answer. Filings under fast-track are at the discretion of the
exchange. New contract applications eligible for 10-day fast-track
procedures include: (1) futures contracts using cash settlement rather
than physical delivery, based on any commodity except those covered
under the CFTC/SEC Accord, such as stock index and corporate bond
contracts and certain enumerated agricultural commodities; (2) physical
delivery futures contracts on major currencies; and (3) options on
futures. New contract applications eligible for 45-day fast-track
include physical delivery and cash-settled futures and option contracts
based on any commodity except those covered under the CFTC/SEC Accord.
Under the fast-track procedures, an exchange may list a contract for
trading on the ``effective date,'' which is the day following the end
of the 10- or 45-day period, unless the date is extended or fast-track
review is ended. Under fast-track, the initial 10- or 45-day effective
date may be extended once for an additional 30 days. For applications
not meeting fast-track requirements, or if requested by the exchange,
fast-track review is ended and the regular review procedures for new
contract applications apply.
Question. How, if at all, has this ``fast-track'' procedure
improved the ability of the futures exchanges and the Commission to
conduct their business?
Answer. The fast-track procedures were designed to address concerns
expressed by US futures exchanges about Commission contract approval
time rather than to improve the Commission's conduct of its business.
The exchanges had indicated that faster contract approval times would
enhance their global competitiveness by enabling them to bring
innovative products to market more quickly. The fast-track procedures,
therefore, should foster the domestic exchange's competitiveness.
The fast-track procedures also should provide the exchanges with
more certainty about the likely approval date of contracts awaiting
Commission approval. With more precise information about possible
approval dates, the exchanges can better make necessary arrangements to
launch the new products, such as education and marketing efforts,
computer programming, as well as possible redesign of the trading
floor.
Question. CFTC has adopted several initiatives to encourage the use
of electronic communication of information, such as filing required
disclosure documents and required financial reports with the Commission
electronically, and delivering monthly statements, trade confirmations,
and risk disclosure documents to consenting customers electronically.
How have these efforts served to streamline regulation?
Answer. The Commission, like most federal regulators, developed
many of its regulations at a time when almost all formal communication
took place in a written, hard copy form. In recent years, however,
technological advances that foster faster, more efficient communication
have transformed business practices. Both Commission registrants and
their customers have discovered the advantages of electronic
communication for day-to-day business transactions. As a result, the
Commission initiated a process of analyzing its regulations for
unnecessary limitations on electronic communication. Where adequate
measures exist to safeguard its regulatory interests, the Commission
has increased the communication options available to registrants and
their customers by permitting them to use electronic communication in
fulfilling regulatory obligations. By moving toward a regulatory
framework that is more technologically neutral, these initiatives
permit registrants to respond more quickly to ongoing advances in
communication technology.
Question. How many commodity trading advisors, commodity pool
operators, futures commission merchants and customers have participated
in these programs so far?
Answer. Two general types of communication are affected by the
Commission's electronic communication initiatives: communication
between registrants and their customers and communication between
registrants and the Commission. The initiatives affecting the first
category have been in place for less than a year, and the Commission
does not have substantial data on either the number of registrants who
have developed programs to communicate eligible documents to customers
electronically or the number of customers who have agreed to accept
electronic communications in lieu of hard copy disclosure.
The initiatives affecting communications between registrants and
the Commission have been in effect for a little more than a year.
During this period, approximately 18 commodity pool operators or CPO's,
and 86 commodity trading advisors, or CTA's, have electronically
submitted disclosure documents for Commission review. In addition,
Commission staff have been communicating their comments on these draft
disclosure documents electronically to the CTA's and CPO's. As a
result, the overall efficiency of the review process has been
materially enhanced.
As of March 31, 1998, there were 225 firms registered as futures
commission merchants, or FCM's, and seven were filing financial reports
electronically with the Commission as part of a testing phase. The
Commission anticipates that, by the end of April 1998, approximately 54
FCM's will be filing their financial reports electronically, and more
will be added during the remainder of 1998.
Question. Do you anticipate that all reporting will be done
electronically within the next fiscal year?
Answer. No. The Commission's current policy is that the use of
electronic communication should be voluntary, not mandatory. In the
short term, it is unlikely that all eligible registrants and their
customers will elect to use the electronic communication option.
In an effort to minimize development costs incidental to the
Commission's initiative for electronic filing of financial reports by
FCM's and introducing brokers, or IB's, the Commission is collaborating
with two futures exchanges that have already developed an electronic
filing system for their members. The Chicago Mercantile Exchange, or
CME, and the Chicago Board of Trade, or CBT, jointly developed a
software program called WinJammer that permits electronic filing of
financial reports with the exchanges. The Commission is also using the
WinJammer software for its electronic filing system. The National
Futures Association, or NFA, an industry-wide self-regulatory
organization supervised by the Commission, maintains an independent
electronic filing system. Commission staff are working with NFA to
adapt the data structure of its system to be compatible with the data
structure of the system used by the Commission. Eventually, the
Commission intends to have a single regulatory database that combines
data from all FCM's into a single database for regulatory purposes.
Almost 60 percent of the FCM's who are members of CME and CBT will
be capable of filing financial reports with the Commission
electronically by the end of April. In the near term, the Commission
plans to focus on bringing the remaining CBT and CME firms on line
while working with NFA to extend the electronic filing system to
registered FCM's who are not members of these exchanges. The Commission
intends ultimately to expand its electronic filing system to include
introducing brokers.
Question. Are there any concerns on the part of professional market
participants, customers, or the CFTC that the electronic filing of
documents may compromise the security or reliability of the information
contained in those documents?
Answer. The electronic filing of documents raises issues relating
to data security and integrity that are somewhat different from those
raised by systems that rely on hard copy format. For example, the
traditional method for authenticating a written submission--a
signature, sometimes supported by a verification--is not easily
adaptable to an electronic filing system. Moreover, due to its nature,
electronic media may be easier to alter, and there is less likelihood
of detecting the alteration than in hard copy media. Procedural or
technological techniques must be used to reduce the risk of alteration.
Question. If so, what has been done to assure those using the
electronic filing system of the security of the system?
Answer. The Commission has taken a variety of steps to address
relevant security/integrity issues. For communications between
Commission registrants and the Commission, required measures have
varied with the nature of the information being provided. Permitting
FCM's to provide important financial information electronically raises
issues concerning the reliability of the information provided and the
confidentiality of the communication system. The Commission has
addressed these concerns by requiring firms to use Commission-issued
personal identification numbers, or PIN's, in submitting financial
information to the Commission. A firm's use of its PIN is deemed the
equivalent of a manual signature for purposes of the Commission's
attestation requirement. PIN's are issued by the Commission only after
the authorized signer for the registrant has filed with the Commission
a signed attestation that will be kept permanently on file. Moreover,
the electronic filing system being used by the Commission provides a
safeguard to minimize the likelihood of an unauthorized interception
and alteration of financial data transmitted by an FCM. Financial data
files are encrypted prior to transmission and unencrypted by Commission
personnel prior to processing and review.
Security/integrity issues are of somewhat lesser concern in the
system for electronic filing of CTA and CPO disclosure documents with
the Commission because the documents at issue generally do not include
confidential financial information and are subject to review and
discussion prior to circulation to the public. Registrants who file
electronically must use their NFA identification number to authenticate
their submission and receive an electronic receipt as evidence that the
Commission received the electronic submission. At the time the
Commission adopted this initiative, consideration was given to
requiring encryption procedures to guard against unauthorized
interception of disclosure documents transmitted to the Commission
electronically. The Commission determined that such a requirement was
unnecessary in light of the voluntary nature of the program, but did
state that Commission staff would cooperate with registrants who
voluntarily adopted an encryption procedure.
For communication between Commission registrants and their
customers, the Commission has placed a strong emphasis on the necessity
for informed consent by customers. Because customer participation in
these initiatives is voluntary, informed consent gives customers an
opportunity to balance the efficiency benefits of electronic
communication against the potential costs related to security/integrity
concerns. For example, prior to transmitting confirmation, purchase and
sale or monthly account statements to customers electronically, FCM's
must generally obtain a signed, hard copy revocable consent from their
customers. Similarly, CTA's and CPO's who fulfill their initial
disclosure obligations by means of electronic delivery must obtain both
a revocable consent and an acknowledgment of delivery of the required
risk disclosure statement from their customer. While customer consent/
acknowledgment may be communicated electronically, the Commission
requires that CTA's and CPO's verify the authenticity of the consent/
acknowledgment by using a PIN or another electronic methodology that
uniquely identifies the specified person who has provided the consent/
acknowledgment.
As for the reliability of information registrants communicate to
the customers electronically, the Commission has required that
registrants make a hard copy of the relevant information available to
customers. This permits customers to monitor the reliability of the
registrant's electronic communications. The Commission has also stated
that FCM's should implement supervisory systems and procedures
necessary to assure timely and appropriate delivery of required
information and to detect and deter misconduct in connection with the
delivery of such information. In addition, the Commission has noted
that FCM's should take reasonable steps tailored to the particular
electronic medium being used to ensure the confidentiality of personal
financial information transmitted electronically. It also has directed
self-regulatory organizations to enhance their audit programs to review
these precautions.
enforcement
Question. The budget justification indicates that the ten
additional staff years requested would complete the reorganization of
the Enforcement Division which began in 1995. How has this
reorganization improved the ability of the CFTC to fulfill its
enforcement responsibilities?
Answer. The reorganization of the Division of Enforcement has
improved the efficiency and effectiveness of its operations, which has
enhanced the CFTC's ability to fulfill its enforcement
responsibilities. Prior to August 1995, the operating units of the
Division were organized in three sections, each of which reported to
one of three Deputy Directors in headquarters. The sections were:
Western Operations, comprising the Central Regional Office in Chicago
and the Western Regional Office in Los Angeles; Eastern Operations,
comprising the Eastern Regional Office in New York and the Southern
Regional Office in headquarters; and Manipulation and Special
Operations, comprising three specialized units at headquarters--the
Manipulation and Trade Practice Unit, the State/Federal Liaison Unit,
and International Operations.
To enhance flexibility and responsiveness, the headquarters units
were reorganized: the Manipulation and Trade Practice Unit, the State/
Federal Liaison Unit, and the Southern Regional Office were replaced by
four general investigation/litigation teams which are referred to as
HQ1 through HQ4. International Operations was moved to the Office of
Chief Counsel. Two of the deputy positions were eliminated, resulting
in the four headquarters teams and the three regional offices reporting
to a single Deputy Director and, ultimately, to the Director. The
Deputy Director reviews and assigns all investigative referrals to
Division staff and reviews all recommendations that the Division of
Enforcement makes to the Commission. The position of Counselor to the
Director was established, in part, to assist with the review of
recommendations through the Director's office.
As to the litigation teams themselves, each of the four
headquarters teams is now headed by an Associate Director, and each
regional office is headed by a Regional Counsel. The Management
Analysis Officer has been given responsibility for supervising all
administrative staff in Washington. This responsibility previously had
been assigned to the unit within which a particular administrative
employee worked.
In addition to the major structural changes described above, the
Division has made organizational changes in the regional offices.
Within the last six months, the Central Regional Office has been
reorganized to include both attorneys and investigators in the same
teams; a similar structure already existed in the Eastern Regional and
Headquarters offices. Previously, investigators in Chicago reported
through a separate supervisory structure. In addition, there is now a
separate intake team in that office to perform preliminary
investigative work. Also, the Eastern Regional Office has created the
supervisory attorney positions, designed to provide more supervisory
structure to investigations and litigation in that office. Finally, the
Division's Office of Chief Counsel now has primary responsibility for
preparing briefs in appeals to the Commission of Administrative Law
Judges' initial decisions. Previously, the teams that handled the
litigation before the ALJ had primary responsibility for appeal briefs.
The restructuring achieved several things. First, specialized units
at headquarters were replaced by general investigation/litigation teams
so that any one of the teams could respond immediately to any matter
requiring investigation and legal action. The Division believes that
this, in combination with the Deputy Director's handling of referrals,
has evened workloads and enhanced the Division's ability to respond
efficiently to new matters. The elimination of the two deputy director
positions similarly was intended to streamline the review process, to
enhance consistency in the policy review process, and to even workloads
of the Division's seven operational units.
Second, designating the Office of Chief Counsel, in lieu of
investigation/litigation teams, to handle all appeals to the Commission
has left more time for the teams to pursue their investigations and
cases. Just as important, centralizing this responsibility with the
Office of Chief Counsel has ensured that the Division handles matters
on appeal to the Commission consistently and more effectively.
Finally, shifting the responsibility of management of
administrative staff to the Management Analysis Officer has reduced the
amount of time investigation/litigation teams spend on administrative
and personnel matters and allows more efficient utilization and
oversight of support personnel. The changes in Chicago and New York are
similarly designed to permit more effective management and oversight of
the work of the attorneys and investigators, with the goal of
performing the work and overseeing personnel more efficiently and
effectively.
Question. If you receive the requested Enforcement staff-year
increase, do you have a plan of action to recruit and hire the
necessary employees to fill these positions in a timely manner?
Answer. The Division plans to use the additional FTE's to fill both
professional and administrative positions in several different offices.
If we were to receive the requested funding increase, the Division
would immediately implement an active recruiting plan. With regard to
professional positions, the Commission posts all vacancy announcements,
including the Division's, on its CFTC website and forwards vacancy
announcements to the Office of Personnel Management for inclusion on
its nationwide Current Job Openings website. The Division also
advertises in large, general circulation newspapers in the region where
the job opening is located.
To focus more directly on qualified candidates, the Division also
advertises in selected legal periodicals and--depending upon the
experience required for particular openings--forwards vacancy
announcements to law school placement offices. Also, each year
representatives from the Division participate in a limited number of
recruiting programs run by law schools. The Division's objective is to
draw from the largest, most qualified, pool of candidates. For
administrative staff, the efforts are similar, but do not include
recruiting through educational institutions or professional
periodicals.
Question. Please highlight for the Committee the cases of
misconduct in connection with the hedge-to-arrive contracts and futures
and options trading which were investigated by the Enforcement program
of the CFTC in fiscal year 1997, and those which have been investigated
so far in fiscal year 1998. How many cases were investigated? What were
the outcomes of the investigations? Which provisions of the Commodity
Exchange Act or CEA, and Commission regulations were violated? What
measures have been taken to protect the public and the industry from
future similar violations of the rules and regulations?
Answer. In the spring of 1996, the Commission's Division of
Enforcement commenced an investigation into certain grain transactions
referred to as hedge-to-arrive or HTA contracts. The Commission's
interest in HTA's arose from its surveillance of the grain markets
during the volatile market conditions in 1995 and 1996, and the effect
these conditions had on certain types of contracts entered into by
grain elevators, marketers, and producers. The nationwide investigation
involved discrete lines of inquiry, some of which resulted in filed
cases and some of which the Division is still actively pursuing. Under
the CEA and Commission's rules, these investigations must remain
confidential, so I am unable to discuss them in any detail in this
forum.
I can tell you, however, that the investigation has thus far
resulted in the filing of four separate administrative complaints
alleging violations of various provisions of the CEA and Commission
regulations in connection with certain HTA's. Three were filed in
November 1996, and one was filed in December 1997. All of these cases
are pending before administrative law judges, and have not yet resulted
in final judgments. Until there is some final adjudication of these
issues, it would be inappropriate to speculate as to what violations
may have occurred. Moreover, because these cases may come before the
Commission on appeal, it would not be appropriate for me to discuss the
merits of the matters. Accordingly, I will describe them to you
generally to give you an idea of the types of violations alleged.
One complaint charges that a grain elevator offered and sold HTA
contracts that constituted illegal futures contracts. This case
involves alleged violations of Section 4(a) of the CEA, which prohibits
offering or entering into illegal futures contracts. This matter is
captioned In re Grainland Cooperative, CFTC Docket No. 97-1.
A second case charges a cooperative grain elevator with offering
and entering into illegal futures and options contracts; an individual
with acting as an unregistered commodity trading advisor or CTA, and
with fraud in connection with his marketing and promotion of, and his
entry into, illegal futures and options contracts; and a futures
commission merchant and one of its employees with aiding and abetting
the unregistered activities and trading without proper authorization.
This case involves alleged violations of Section 4(a) of the CEA;
Section 4c(b) and Regulation 32.2, entering into illegal agricultural
options; Section 4m(1) acting as an unregistered CTA; Section 4o(1)
fraud by a CTA; Section 4b fraud in connection with futures contracts;
Section 4c(b) and Regulation 33.10 fraud in connection with options;
Regulation 4.13(b) failure to file an exemption statement or to deliver
to pool participants disclosure documents or account statements;
Regulation 4.41(a) solicitation of agreements to guide clients
commodity interest trading without delivering requisite disclosure
documents; and Regulation 1.37(a) failure to maintain records of
persons exercising control over customer accounts. This matter is
captioned In re Wright, et al., CFTC Docket No. 97-2.
A third complaint alleges that a cooperative grain elevator
violated Section 4c(b) of the CEA and Commission Regulations 32.2 and
33.10 by selling illegal agricultural options and engaging in fraud in
connection with its marketing of the illegal instruments. This matter
is captioned In re Southern Thumb Coop Inc., CFTC Docket No. 97-3.
Finally, a fourth complaint, captioned In re Competitive Strategies
for Agriculture, Inc., et al., CFTC Docket No. 98-4, alleges fraud in
connection with illegal futures contracts, failure to supervise by a
registered introducing broker, or IB, and failure to identify a branch
office of a registered IB. The sections of the CEA and Commission
regulations alleged to have been violated include Section 4(a); Section
4o(1); Section 4b(a); Regulation 166.3 failure to supervise; and
Regulation 166.4 failure to properly identify a branch office to the
public.
With respect to measures taken to protect the public and the
industry from future similar violations of the rules and regulations,
the Commission has taken a number of steps. Specifically with regard to
HTA contracts, in May 1996, the Commission's Division of Economic
Analysis issued two policy and guidance statements relating to HTA
contracts. The first concerned the mutual decision by producers and
elevators to use cash payments in unwinding, working out or terminating
such contracts, and the second addressed the risk implications of
particular features and practices associated with HTA contracts for the
future delivery of grain. The statements were publicized by a press
release, were posted and remain posted on the Commission's website, and
were published in the Commerce Clearing House reporter. Similarly, the
Commission has issued press releases regarding the filing of each of
the enforcement cases discussed above, and the Commission's website
provides access to full-text copies of each of the complaints. Also in
1996, Commission employees participated in a series of town meetings
hosted by state authorities to discuss risk management and risk
associated with the use of HTA contracts. Commission staff has also
fielded numerous inquiries from the public regarding these instruments
and will continue to do so.
More generally, the Commission has taken a number of steps to
educate the public and the industry on risk management issues. For
example, as the Committee is aware, the Federal Agricultural
Improvement and Reform Act of 1996 requires the US Secretary of
Agriculture to provide, in consultation with the CFTC, ``education in
management of the financial risks inherent in production and marketing
of agricultural commodities.'' In 1997, the Commission entered into an
agreement with the USDA which established the basis for a joint risk
management education effort directed at farmers and third parties who
deal directly with farmers regarding tools to mitigate risks. In
September 1997, the two agencies held a risk management education
summit to establish the basis for a nationwide education effort.
Finally, the Commission has engaged in extensive efforts to keep
the public and industry informed of its policy on agricultural trade
options. The Commission recently adopted a three-year pilot plan that
lifts the ban on off-exchange agricultural trade options, another
possible vehicle for farmers to hedge price exposure. In connection
with its adoption of the program, which was announced on April 9, 1998,
the Commission has engaged the public and industry in an extended
dialogue regarding these instruments. In December 1995, the Commission
held a public roundtable at which commodity industry experts,
regulators, academics and market users exchanged their views regarding
the prohibition of agricultural trade options. In May 1997, the
Commission released a staff white paper entitled ``Policy Alternatives
Relating to Agricultural Trade Options and Other Risk-Shifting
Contracts.'' In June 1997, the Commission published advanced notice of
proposed rulemaking in the Federal Register seeking comment on whether
it should propose rules to lift the ban. It also held a series of field
meetings at which members of the public had an opportunity to address
the Commission and to ask questions regarding the ban.
As a result of the recommendations contained in the white paper and
the comments received from the public, in November 1997 the Commission
published notice of a proposed rulemaking in the Federal Register
regarding the pilot plan. The proposed program provided for streamlined
registration of those selling the instruments, required that customers
be provided with disclosure statements and account information,
provided certain financial protections, and required that options
vendors file reports on their market activity. After a public comment
period in which over 440 comments were received, the Commission adopted
a three-year pilot program.
Question. Please provide the Committee a description of the
reorganization of the Enforcement Division which has taken place since
1995, including the funding and personnel resource changes during each
fiscal year.
Answer. As a result of the reorganization described earlier, since
the fall of 1995, the Division has put in place an almost entirely new
senior management team, including a new Director, Deputy Director,
Chief Counsel, Counselor to the Director, two Associate Directors and
three Regional Counsels. In terms of total numbers, since 1995,
Division staff has increased from 144 in 1995, to 147 in 1996, and to
154 in 1997. Division obligations, which include all program costs,
were $12.8 million in 1995, $13.9 million in 1996, and $16 million in
1997. For the same time periods, the Commission's obligations were $49
million, $53.5 million, and $54.7 million.
market surveillance, analysis and research
trading and markets
Question. The President's budget for fiscal year 1999 requests five
additional full-time equivalent positions for the Market Surveillance,
Analysis and Research Division and the Trading and Markets programs.
Please explain the need for these staffing increases.
Answer. The five additional FTE's in the Division of Trading and
Markets are needed to enhance the Commission's regulatory reform and
streamlining efforts, address new product developments, and sustain
Commission oversight over contract market practices and standards.
Two of the additional FTE's are needed to continue development of
innovative regulatory approaches, to address new product developments,
market linkages and trading mechanisms, and to develop rules that
foster the competitiveness of clearing organizations, firms holding
customer funds, and commodity professionals in dynamically evolving
market conditions without loss of customer protections. The
globalization of markets, the blurring of distinctions among financial
institutions, and the explosive growth of technology have made it
essential that the Commission's rules are appropriately adapted to
market conditions.
Three additional FTE's are needed for the Contract Markets
subprogram. One is needed to provide increased efficiency in reviewing
new programs and to be certain that increasingly innovative linkages
between US and offshore markets, as well as cash and futures markets,
maintain appropriate customer and market safeguards without imposing
undue burdens or adversely affecting equitable access to the
marketplace. The second is needed to assist in developing new
initiatives regarding appropriate regulatory standards for
sophisticated market participants who trade on, or are subject to the
rules of, a contract market. The third is needed to address the
increasingly complex oversight of SRO practices to assure appropriate
incentives to maintain effective compliance programs. The Commission is
expanding the ways in which it reviews SRO programs, reviewing both
individual programs and particular practices across all exchanges
(horizontal reviews), and developing a compendium of `best practices'
that can provide guidance to increasingly linked markets worldwide.
The additional resources will allow the Division to be more
responsive to market participants and the public by reviewing rules to
determine if they should be streamlined and modernized in light of
technological and market developments; providing guidance and relief to
foster innovative transactions and trading systems; maintaining US
leadership in setting internationally accepted standards for the
regulation of markets and trading; addressing intermarket issues
through the President's Working Group on Financial Markets; and
encouraging technological improvements and market innovation.
establishment of office of international affairs
Question. Chairperson Born, in your prepared testimony you state
that the Office of International Affairs was created in July 1997,
within the Office of the Chairperson, to ``enable the Commission to
continue its leading role in international regulatory initiatives and
to keep abreast of global change.'' What funding was used to create
this office? How many FTE's are being used to staff this office, and
from where were they taken?
Answer. The Office of International Affairs was funded and staffed
with eight positions from the Office of Trading and Markets. The
reassigned staff represented the Commission's principal expertise in
the international area. The reorganization was accomplished within the
Commission's fiscal year 1997 FTE ceiling and budget. The Office of
International Affairs reports to the Office of the Chairperson.
Question. How has the creation of this office affected other
offices within the CFTC, both in dollars and FTE's?
Answer. The creation of the Office of International Affairs
resulted in a transfer of approximately $900,000 and eight FTE's from
the Division of Trading and Markets to the Office of the Chairperson.
Question. What role has the Office of International Affairs had in
dealing with the Asian financial crisis and its effect on the
commodities and futures markets in the United States and around the
world?
Answer. During the recent Asian volatility crisis, Commission staff
from the Office of International Affairs, or OIA, has assisted in
obtaining information from and providing information to foreign
regulatory authorities as needed. For example, OIA staff successfully
assisted a US futures commission merchant who initially experienced
delays in receiving funds from a Malaysian broker by communicating with
the Malaysian Securities agency and urging a quick resolution of the
matter. In addition, OIA staff assisted in obtaining regulatory
information from authorities in Japan and Hong Kong and transmitted
that information to the Commission's operating divisions to assist in
surveillance of our domestic markets.
Separately, OIA staff has participated in several international
fora addressing these issues. For example, at the Commission's annual
international regulators' conference in March of this year, organized
in large part by OIA staff, Hong Kong, Brazil and Mexican authorities
made presentations on the impact of Asian volatility on each of their
markets, their immediate regulatory response, and their views on what
their longer-term response may be.
Question. How cooperative have other countries been in sharing
information and resources?
Answer. The collapse of Barings Plc., a UK firm, in 1995 resulted
in a greater awareness of the need for regulators to share information
and to implement emergency procedures domestically that help to
minimize the spread of systemic risks resulting from defaults. Since
that incident, cooperation from other countries in sharing information
with the Commission generally has been good. For example, during the
sell-off in world equity markets in the fall of 1997, the Commission
received early information of the steps being taken by Japan to address
the financial situation and also information on the status of specified
Japanese firms with some proprietary business on US derivatives
markets. When the staff requested additional specificity about certain
firms, the information was provided promptly. When the Japanese
authorities suspended trading in a particular firm, they took care,
consistent with recommendations made at the Windsor Conference, to
permit the continued margining, offset and transfer of futures
positions of customers. Also, in January 1998, during increased
volatility in the Asian currency and equity markets, the Hong Kong
Securities and Futures Commission notified the CFTC of one US-related
firm with an exposure in the Hong Kong futures market which had reached
a trigger level under the Declaration on Cooperation and Supervision of
International Futures Markets and Clearing Organizations.
Additional examples of information sharing are the increasing
number of formal arrangements entered into by the Commission with
foreign regulators. Since amendments were made to the Commodity
Exchange Act in 1992, the Commission has entered into 44 formal and
informal arrangements for cooperative enforcement and regulatory
information sharing with authorities in 21 jurisdictions. The formal
arrangements include 13 Memoranda of Understanding; two Agreements; one
exchange of Diplomatic Notes pursuant to a Treaty, signed by the
Department of State on behalf of the Commission; and one joint
communique. In 1997, the Commission signed two new formal arrangements
for cooperative enforcement and regulatory information sharing: a Joint
Communique on the Exchange of Information for Cooperation and
Coordination signed on May 27, 1997, by the Commission and the
Financial Services Board of South Africa; and an MOU between the
Commission and Germany's Bundesaufsichtsamt fur den Wertpapierhandel
concerning cooperation and consultation in the administration and
enforcement of futures laws.
A principal feature of the response to Sumitomo's losses, and an
action item from the one-year work program commenced in London in 1996
and concluded in 1997 in Tokyo, was amendment of the multilateral
support for exchange of large exposure information known as the
Declaration on Cooperation and Supervision of International Futures
Exchanges and Clearing Organizations. Those amendments were
specifically designed to assure that all relevant regulatory
authorities could be signatories and to clarify that disruptions
related to manipulative and other abusive activities were covered and
were successfully completed in November 1997 and March 1998,
respectively.
The CFTC has also entered into a variety of arrangements with
foreign authorities for the purpose of sharing information regarding
regulatory matters. In October 1997, the CFTC concluded a new
arrangement with the SEC, the Bank of England and Financial Services
Authority to facilitate information sharing for prudential and risk-
assessment purposes with respect to US, UK and/or third-country owned
broker-dealers, FCM's or banks which conduct operations in both the
United Kingdom and United States.
In addition to these formal arrangements, the Commission receives
information informally through the many relationships established over
the years with foreign regulators through its participation in
international organizations such as IOSCO.
Question. Are there any concerns on the part of the Commission,
market participants, or customers that participation in the
international marketplace will compromise the security of the United
States futures markets?
Answer. The recent volatility that has shaken world equity and
currency markets has demonstrated more vividly than ever before that
the markets are inextricably linked through common products and related
market participants. Therefore, events that occur in one market can and
frequently do cause global regulatory concerns. The shocks to the world
financial system caused by the 1995 collapse of Barings Plc., a UK firm
which traded on numerous world futures markets including Singapore,
Japan, Hong Kong and the UK, and the 1996 copper losses suffered by the
Sumitomo Corporation, a Japanese firm trading on the London Metal
Exchange, illustrate that this is true for derivatives markets as well
as securities markets.
The CFTC has played a leadership role in the international
community in improving world standards for oversight mechanisms to
reduce potential problems from market disruptions and for handling of
defaults and protection of customer funds. The CFTC believes that more
can be done to improve the integrity of global markets and is actively
participating in ongoing international initiatives.
The CFTC also maintains an immediate crisis management response to
global events in order to secure further the futures markets and its
participants. For example, in the Barings and Sumitomo crises the CFTC
promptly assessed the effects on US interests in the following areas:
the extent of direct participation or trading activity by the affected
firm or its affiliates in the US futures markets; whether the firm
operated a US futures commission merchant, that is, a firm which
carries customer positions; the extent to which other US FCM's were
clearing or executing trades through the firm on foreign markets; the
extent to which US FCM's with subsidiaries that clear through exchanges
in which the firm was a member could be affected by substantial losses
on those exchanges as the result of clearing assessments or other loss
mutualization provisions; and the potential impact on US exchange
member firms if heightened volatility resulted from a firm's failure.
agricultural trade options
Question. Please provide for the Committee a description of the
three-year pilot program that would lift the ban on off-exchange
agricultural trade options.
Answer. Trade options are off-exchange options offered for
business-related purposes to a producer, processor, merchant, or
commercial user of a commodity. On April 8, 1998, the Commission
removed the prohibition on off-exchange trade options on the enumerated
agricultural commodities pursuant to a three-year pilot program. The
interim rules for the pilot program permit only agricultural trade
options which, if exercised, will result in delivery of the commodity.
Also, the interim rules permit only those entities which handle the
commodity in normal cash market channels to solicit, to offer to buy or
sell, or to buy or sell such options.
Under the interim rules, vendors of such options would be required
to become registered as agricultural trade option merchants, to report
to the Commission on their transactions, to provide their customers
with disclosure statements, and to safeguard their customers' premiums.
The Commission is exempting from the prohibition and these interim
rules individuals and entities which meet a substantial financial
requirement, as it proposed. As part of the same action, the Commission
also removed a longstanding prohibition on the offer or sale of
exchange-traded physical options on these commodities.
The Commission promulgated interim rules because this is a pilot
program and intends to reexamine the rules during and at the conclusion
of the pilot program.
Question. What costs, if any, will be incurred by the Commission
for this program?
Answer. The Commission will incur costs related to its oversight of
trading under the pilot program. These relate to oversight of
compliance with the interim rules and the cost of analyzing and
studying the relative merit of the interim rules including possible
surveys of market activity. The direct costs of registration and
receiving required quarterly reports from agricultural trade option
merchants will be borne by the National Futures Association which has
been delegated these functions by the Commission.
audit and dual trading
Question. The Commission is working with USDA's Risk Management
Agency on a risk management education program for agricultural
producers. Can you give me an update on this initiative?
Answer. The Federal Agricultural Improvement and Reform (FAIR) Act
of 1996 requires the U.S. Secretary of Agriculture to provide, in
consultation with the CFTC, ``such education in management of the
financial risks inherent in the production and marketing of
agricultural commodities as the Secretary considers appropriate.''
Consistent with this mandate, in 1997 the CFTC entered into a
memorandum of understanding with USDA which establishes the basis for a
joint risk management education effort. This effort is intended to be
broad in both scope and content, focusing on integrating basic
information on risk management from all relevant sectors, including
crop insurance as well as futures and options. The education effort is
being directed toward two audiences: third parties (such as insurance
agents and commodity brokers) who deal directly with farmers on a
variety of tools to mitigate risks, and the farmers themselves. To
initiate the education program, the USDA held, and the CFTC
participated in, a risk management education summit on September 16 and
17, 1997, which attempted to establish the basis for a consistent
nationwide education effort.
Current initiatives involve development of educational materials
and programs for ultimate delivery to farmers, including the February
10, 1998, issuance of an announcement of availability of grant funds
and request for proposals for agricultural risk management education.
In addition, a series of regional conferences, with an emphasis on more
``hands on'' training for third-party influences, will be held through
1998, beginning with a conference in Spokane, Washington, on March 24
and 25.
Commissioner David Spears has replaced former Commissioner Joseph
Dial as the Commission's designee to the Risk Management Education
Steering Committee which oversees this entire risk management education
effort.
electronic trading
Question. Has electronic trading become a widely used mechanism of
trading in the industry? If so, which professional market participants
and customers use electronic trading, and how often and under what
circumstances is it used?
Answer. Currently, there are three electronic trading systems in
operation at domestic futures exchanges: the Chicago Board of Trade's
Project A system, the Chicago Mercantile Exchange's Globex system, and
the New York Mercantile Exchange's ACCESS system. Since the inception
of Globex and Project A trading in 1992 and ACCESS in 1993, the number
of contracts traded and the volume of trading on these systems have
continued to grow. Electronically traded volume, however, remains a
very small percentage of overall futures trading. For example, volume
on Project A during 1997 totaled approximately 6 million contracts, as
compared to pit trading at the CBT of approximately 243 million
contracts over the same time period. Therefore, electronic trading is
not as widely used in the US futures industry as pit trading. Since
these systems operate almost exclusively after the close of regular pit
trading hours, the participants on electronic trading systems are
generally institutional customers with facilities for overnight
trading. These customers generally need to access these overnight
markets to respond to global events that may influence their overall
trading strategies.
Question. Have there been any regulatory problems in relation to
the electronic trading of futures contracts, to date? If so, what
measures were taken by CFTC to adjust to the regulatory demands of
electronic trading? If not, do you foresee any future problems with the
regulation of electronic trading?
Answer. To date, there have been no major regulatory problems with
respect to electronic trading of futures contracts. Notwithstanding
this, however, Commission staff have been examining electronic trading
systems from a domestic and international perspective to develop facts
and analysis with respect to the surveillance and compliance
experiences at various exchanges. This information will be relevant to
the Commission's consideration of the regulation of electronic trading
systems generally, and with respect to such specific issues as the
applicability of the statutory dual trading prohibition to these
systems.
Question. What effect, if any, do you anticipate electronic trading
will have on traditional pit trading?
Answer. At this point in the evolution of domestic electronic
trading systems, it is difficult to predict what effect electronic
trading systems may have on traditional pit trading. To date, domestic
electronic trading systems have been developed as after-hours trading
mechanisms to complement, rather than compete with, traditional open
outcry pit trading. With one exception, the Chicago Mercantile
Exchange's E-Mini S&P 500 contract on its Globex system, contracts in
the US can be traded electronically only after the close of regular
trading hours. The E-Mini contract, which began trading in September
1997, is traded concurrently both on Globex and in the pit during
regular trading hours.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request? Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. The agency's annual performance goals represent the
estimated workload to be accomplished during the year based on the
activities established in the CFTC Strategic Plan. Each performance
goal is linked directly to an activity and an outcome objective.
Performance goals are shown for most of the fifty activities. The
activity level is the lowest of three levels set forth in the Strategic
Plan. Each of the fifty activities supports one of the nine outcome
objectives. Each of the nine outcome objectives supports one of the
three strategic goals. This makes it possible to link a performance
goal directly to an activity and an outcome objective.
Traditionally, the CFTC budget request has been displayed by
program and subprogram activity only. This year, program and subprogram
activities are linked to the outcome objectives and goals of the
Strategic Plan. For instance, the Trading and Markets program
contributes to outcome objectives in all three goals. Therefore, it is
possible to review how the performance goals in the Annual Performance
Plan are linked to the Strategic Plan and to the program activities in
the budget request.
This cross-cutting display of budgetary resources required
Commission staff to revamp the budget formulation system. One positive
result is the ability to formulate the annual budget request and
understand its impact by program activity as well as by goal.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. Yes, the performance indicators or measures in the annual
performance plan are linked to the budget through the use of annual
performance targets. The cost of reaching annual performance targets is
shown in summary fashion on the annual performance plan in the table
entitled, Budget Request by Program Activity. This table shows the
amount of funding each program activity or account will require to
accomplish each goal. There is one table for each goal. Each program
activity or account has performance measures.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The performance planning structure is organized by goal
while the budget justification structure is organized by program
activity. There is a cross-cutting analysis in each structure. The
program-based analysis of the budget request is augmented by a
programmatic distribution of resources by agency goal. The goal-based
analysis of the Annual Performance Plan disaggregates resources by
program. Our intent in displaying information in both formats is to
engender greater understanding of how the Commission's resources
contribute to the accomplishment of the agency's mission.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. We do not anticipate any changes to the account structure
for fiscal year 2000 at this time.
Question. How were performance measures chosen?
Answer. The performance measures were developed collaboratively by
the CFTC Strategic Planning Task Force and the Commission's program
managers during the development of the CFTC's strategic plan. After the
Commission adopted a mission statement, three agency goals, and
corresponding outcome objectives and activities, the Task Force
prepared a set of corresponding performance measures, which the
Commission approved.
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. To date, the Commission has used existing reporting systems
to collect all data. For example, data concerning the distribution of
labor were collected principally through the Management Accounting
Structure Code system, otherwise known as MASC. These data reflect the
hours spent on various Commission activities and are provided bi-weekly
by every employee concurrent with production of the payroll. These data
are augmented by each division's informal systems for tracking and
recording time spent on various projects and activities and the results
or outcomes produced. As a result of the Commission's strategic
planning experience, program managers have determined that new data may
need to be tracked to produce a more complete and reliable picture of
performance. To the extent possible, the Commission will seek to
utilize and refine existing systems rather than develop new systems.
More will be known after the first full year of tracking and analyzing
data for the fiscal year 1999 Annual Performance Plan. Costs may be
incurred in altering current systems and/or in developing better
methods of data collection and verification. The costs will need to be
weighed against the long term benefit of enhanced performance data.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. Performance data are being tracked for the first time in
fiscal year 1998 for some performance goals. While some data may not be
available, it would be unwise to infer too much from data covering such
a short period. The Commission is approaching the GPRA initiative as an
iterative process to build on its positive experiences from year to
year with a goal of understanding how we best accomplish our mission
and at what cost.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. The CFTC's recommended performance goals from its fiscal
year 1999 Annual Performance Plan correspond to four broad indicators
of success: markets free of disruption; registered and fit market
professionals and financial intermediaries; self-regulatory
organizations with sound financial practices and effective enforcement
programs; and swift and aggressive investigation and prosecution of
wrongdoing, with sanctions and fines levied for the maximum remedial
and deterrent effect.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. The process of working across professional disciplines and
programs via the Strategic Planning Task Force ensured the inclusion of
a significant number of performance measures. The fiscal year 1999
Annual Performance Plan includes, 12 performance goals and 46
quantitative performance indicators for Goal One; nine performance
goals and 76 quantitative performance indicators for Goal Two; and nine
performance goals and 80 quantitative performance indicators for Goal
Three. It is our goal to assess these goals and indicators after the
first year to determine their usefulness and effectiveness.
government performance and results act
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. The Commission's program managers understand the concept of
moving from measuring outputs to measuring outcomes. As we put together
measurement tools and develop a system for tracking and reporting on
the fiscal year 1999 Annual Performance Plan, we will continue to
search for ways better to measure outcome. It is often difficult for
regulatory agencies to demonstrate the causal relationship between
efforts and stated desired outcomes. As we have expressed to the Office
of Management and Budget and our Congressional oversight staff, we
welcome any suggestions.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. The Commission's strategic goals are all broadly aimed at
serving the broad and diverse set of customers who use the US futures
and options markets. Accomplishing our goals helps to provide globally
competitive US futures and option markets free of disruption and
accessible to the public through registered and fit market
professionals. The Commission also meets customer needs through its
goal of ensuring that the self-regulatory organizations operating in
the industry have sound financial practices and effective enforcement
programs. Most broadly, the Commission serves all market users and the
public through swift and aggressive investigation and prosecution of
wrongdoing.
Beginning in fiscal year 1999, the Commission will monitor progress
toward each of these customer goals through its annual performance
plan.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The format of the CFTC's fiscal year 1999 budget and annual
performance plan allows analysis from both a program perspective and
performance planning perspective. Every staff-year can be attributed to
a program and every staff-year can be attributed to one, or more,
agency goals. As the agency's priorities change, so will the resources
devoted to specific activities and goals. Because activities are linked
to our program accounts the Commission is able to develop a budget that
reflects agency priorities.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Generally, the answer is yes. The CFTC budget can be
analyzed by program or by goal; any change in the budget will impact
either a specific program or goal or all programs and goals depending
on the nature of the change.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. The agency does not have a comprehensive technological
system for measuring an reporting data. To achieve the goal of tracking
performance and reporting on it regularly, we rely on the labor-hour
distribution system which is a by-product of our payroll system to
capture data on how the Commission staff spend their time by project.
We combine this data with data from a variety of data collection
systems for reporting performance. Currently we analyze performance
twice a year, once with the development of the OMB Budget Estimate and
later with the development of the President's Budget. The Commission's
GPRA Task Force is studying the feasibility of using our existing
quarterly review process to incorporate additional types of measures
reportable under GPRA. It may be possible to use this process to
measure the accomplishment of performance goals on a more regular
process.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Would the linkages be clearer if your budget account structure were
modified? If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. The CFTC has no plans to modify the budget account
structure currently in use. CFTC financial staff devoted considerable
resources in fiscal year 1997 to the reconfiguration of the
Commission's budget formulation system to capture and report data by
goal, outcome objective, and activity in addition to the current budget
account structure which is by program and subprogram activity.
Aligning the new requirements created by GPRA to the existing
budget account structure allows the Commission to report on resource
requirements in both formats while ensuring that we may continue to use
of the underlying financial data from the Commission's payroll and
labor distribution systems without altering significantly either of
those systems.
However, challenges remain as the Commission seeks to modify the
current labor distribution, or Management Account Structure Code
System, to better align it with the structure of the activities set
forth in the strategic plan.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement? If so, what steps have you identified
to prepare, anticipate, and plan for such influences? What impact might
external factors have on your resource estimates?
Answer. Yes, the Strategic Plan identified ten external challenges
or factors that may impact planning and goal achievement at the
Commission. They are: the volume of trading in futures and commodity
options; the number and sophistication of market users; the variety of
markets traded; the growing use of over-the-counter derivatives; the
structural changes in the financial services industry; the
globalization of financial markets; the effect of federal law and
policies; the advancement of technology; the standards, resources and
priorities of other organizations, and; events that destabilize the
commodity markets such as the 1987 stock market break, the 1995
collapse of Baring Bank and the 1996 copper market events precipitated
by the Sumitomo Corporation.
The possibility exists for any number of these external factors to
influence Commission priorities or to place additional demands, whether
short or long-term, on the Commission staff. It is the Commission's
intent to meet these challenges by using existing resources
effectively, finding efficient methods--such as the Global Markets
Advisory Committee--to strengthen its capacity to respond to these
challenges, and seeking the appropriate level of budgetary resources
each year to fulfill its legislative mandate.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. In developing the Performance Plan, the Commission did not
identify overlapping functions or program duplication, although the
Plan did highlight the linkages between the agency's programs. One of
the positive outcomes of the process was a greater understanding of how
each program contributes to the agency's goals.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that, to what extent are your performance measures sufficiently mature
to allow for these kinds of uses? Are there any factors, such as
inexperience in making estimates for certain activities or lack of
data, that might affect the accuracy of resource estimates?
Answer. As mentioned earlier, performance measures data are being
tracked for the first time in fiscal year 1998 for some performance
goals. While some data may be available, it would be imprudent to infer
too much from ``unseasoned'' data. The Commission is approaching the
GPRA initiative as an iterative process and hopes to build on its
positive experiences from year-to-year. Our ultimate goal is to
understand how the agency best accomplishes its mission and at what
cost.
Perhaps the most challenging question facing the Commission is how
to measure deterrence of wrongdoing, manipulation, and fraudulent
activity at its incipiency It is very difficult to establish a
measurable causal relationship between regulatory oversight that relies
in large measure on deterrence and specific activities of the market
and market users.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. As of this date, the CFTC has no plans for a substantive
revision to the Strategic Plan released in September 1997. We will
continue to evaluate the Plan internally and as we receive any further
comments on it. The Commission continues to invite comments on our
Plan, which can be found on the Commission website at http://
www.cftc.gov.
______
Questions Submitted by Senator Bumpers
new products for a farm safety net
Question. Since passage of the 1996 Farm Bill, farmers' concerns
are growing about the lack of an adequate safety net to protect them
from an unstable market. For years, various financial instruments under
the jurisdiction of the CFTC have been considered as tools farmers
could use to lock in a satisfactory price for their products. Is CFTC
actively working to help develop products to help provide a farm safety
net against unstable prices? If so, what are some of these products?
Answer. The CFTC has no statutory authority to develop risk
management products such as futures and options. It, however, has taken
actions that should facilitate the development of such products by US
futures exchanges and agricultural firms and institutions.
Examples of recent Commission actions that have facilitated the
development of agricultural risk management products include: adoption
of a pilot program to permit the trading of agricultural trade options;
lifting the ban on US exchange-traded options on physical agricultural
commodities--previously, futures exchanges could list options only on
agricultural futures contracts; continuing efforts to streamline its
contract designation process, resulting in significantly reduced review
times for new contracts and the virtual elimination of designation
backlogs; and the release of a statement of guidance on hedge-to-arrive
contracts and prudent risk-reduction practices.
Question. Is CFTC working with USDA's Risk Management Agency to
develop useful risk management products for farmers?
Answer. As required by the statute, the CFTC consults closely with
USDA's Risk Management Agency to help provide risk management education
to farmers and ranchers and to provide any technical assistance
required by USDA. For example, the Commission has provided technical
assistance to that agency in its development of a dairy option pilot
program.
fast-track procedures
Question. In fiscal year 1997, CFTC implemented new ``fast track''
procedures to approve certain types of contracts and to better
streamline CFTC activities. What are some of the elements of this
``fast-track'' procedure?
Answer. In April 1997, the Commission implemented fast-track
procedures for processing certain contract designation applications and
rule changes to contract terms and conditions. These procedures
streamlined the review process for most types of contracts so that the
administrative process for approval could be completed in time periods
as short as 10 or 45 days following receipt by the Commission. These
procedures were intended to cut in half the average, 90-day, period
during which new contracts and substantive rule changes had been
pending with the Commission.
Filings under fast-track are at the discretion of the exchange.
Filings must comply with the form and content requirements of the
Commission's rules, and may not be amended except as requested by the
Commission. Under the fast-track procedures, an exchange may list a
contract for trading on the ``effective date,'' which is the day
following the end of the 10- or 45-day period, unless the date is
extended or fast-track review is ended. Under the fast-track
procedures, the initial 10- or 45-day effective date may be extended
once for an additional 30 days if the proposed rule raises novel or
complex issues which require additional time for review. For
applications not meeting fast-track requirements, or if requested by
the exchange, fast-track review is ended and the regular review
procedures for new contract applications apply.
Question. What safeguards are in place to assure the soundness of
contract approvals on an expedited basis?
Answer. The abbreviated review periods established by the
Commission under the fast-track procedures have not adversely affected
the soundness of the contract approval process. The Commission
continues to assess the legality of exchange proposals and their impact
on the public interest. Moreover, to be eligible for fast-track filing,
applications must be complete upon submission. Applications that are
complete can be more readily reviewed within the specified time frames.
When applications are not complete or contain deficiencies, the
Commission has the authority to remove them from fast-track to conduct
a more extensive review.
To ensure that proposed contracts meet the approval standards and
that public interest issues are addressed within the streamlined time
frames, the Commission has modified certain of its internal processing
procedures, including the standardization of its approval documents and
streamlined review procedures. While the overall effect on Commission
staffing has been neutral, the most substantive resource impact has
been to change the timeline of the reviews rather than the total work.
In this regard, the new procedures require that the workload be
concentrated in the time periods immediately following submission of
the proposals to the Commission, rather than being spread out more
uniformly over a longer period of time. In addition, the Commission has
encouraged informal discussions with exchange staffs about potential
proposals prior to their submission so that issues may be identified
and corrected by the exchanges prior to submission as well as to
facilitate the Commission's reviews.
Also, the Commission's website has been enhanced to include a page
showing all pending new contracts along with provisions for downloading
the proposed terms and conditions and filing electronic comments or
questions. The address is http://www.cftc.gov/dea/pending/newcontr.htm.
This enhancement will enhance the public's ability to monitor pending
proposals and to submit comments related to public interest or other
concerns.
``sophisticated customers"
Question. Last month, CFTC approved rules designed to speed up the
account opening process for certain customers. The rule allows
flexibility for ``futures commission merchants'' and ``introducing
brokers'' to design their own ``disclosure of risk'' procedures. You
state that this rule is a response to a request by industry to provide
different regulatory treatment for ``sophisticated customers'' where
appropriate. What is your definition of ``sophisticated customer?''
Answer. In February 1998, the CFTC approved rule changes that
eliminated requirements that futures commission merchants and
introducing brokers provide certain defined categories of customers
with Commission-mandated risk disclosure statements and obtain from
these customers written acknowledgment of receipt of these statements
as part of the account-opening process. The customers affected by this
rule change, who are carefully defined in the rule amendments, would
generally be considered ``sophisticated'' because they are
institutional investors, entities regulated by federal or state
agencies, high net-worth individuals or regulated foreign entities
which perform similar functions to qualifying US regulated entities.
Specifically, these customers include securities broker-dealers, banks,
insurance companies, and other regulated financial intermediaries;
investment companies with total assets in excess of $5 million;
employee benefit plans subject to ERISA with total assets exceeding $5
million or whose investments are managed by specified investment
professionals; corporations and other entities with total assets
exceeding $10 million or having a net worth of at least $1 million; and
natural persons with assets exceeding $10 million.
These recent rule amendments built upon other CFTC efforts to
streamline registrants' disclosure obligations. For example, since
1992, the CFTC's rules have allowed commodity pool operators and
commodity trading advisors to meet less onerous disclosure requirements
in pool offerings and managed accounts offered to investors who satisfy
certain net worth or other financial requirements. In this regard, it
should be noted that the CFTC rules do not use the term sophisticated
customer, nor do these rules apply a single definition for qualifying
customers. Instead, the standards used to define categories of
customers for whom specific relief can be claimed have been developed
in each instance to assure that the overall customer protection goals
of the Commodity Exchange Act are fully maintained.
Question. Are there any provisions of this rule that could result
in inadequate CFTC oversight of market activities?
Answer. The CFTC does not believe that these rule changes will
reduce its ability to oversee the commodity futures or options markets
or in any way erode customer protections. These rule changes provide
futures commission merchants and introducing brokers with relief from
mandated disclosure requirements when opening accounts for certain
defined categories of customers. Futures commission merchants or
introducing brokers relying on this relief continue to have obligations
under other CFTC rules to provide all their customers with information
material to a specific transaction. Moreover, in adopting these rule
amendments, the CFTC carefully considered comments made by members of
the public. In fact, the CFTC removed government entities from the list
of customers for whom this relief could be claimed after the Government
Finance Officers Association indicated that its members would benefit
from continued receipt of the CFTC-mandated risk disclosure statements.
Question. Is this rule a precursor of deregulation of certain
sectors of the futures industry?
Answer. These rule amendments are not a precursor of deregulation
of certain sectors of the futures industry. They are part of an ongoing
CFTC effort to reduce unnecessary regulatory burdens on registrants
while assuring that customers and the futures and options markets
themselves continue to receive the high levels of protection required
by the Commodity Exchange Act.
cftc and the sec
Question. In the past, there has been discussion about merging the
functions of CFTC with the Securities Exchange Commission. What are the
views of the CFTC to that proposal?
Answer. The Commission previously has opposed specific proposals to
merge the CFTC and the SEC. It has been the Commission's view that a
merger would not result in appreciable cost savings or increased
efficiency, nor would it result in any other clear benefits.
Furthermore, it has been the Commission's view that the public interest
is best served by retaining an expert and independent agency that can
devote full attention to the futures and option markets. The Commission
believes that a more productive approach would be to continue close
communication and coordinated action between the two agencies on issues
of common concern.
In creating the CFTC as an independent agency in 1974, Congress
determined that the regulator for commodity futures and option risk-
shifting instruments should not be part of an agency regulating the
underlying cash markets, whether that agency is the Department of
Agriculture, the Securities and Exchange Commission, or the Department
of Energy. Congress recognized that price neutral regulation of risk-
shifting activity would suffer if placed within a larger agency with
different, and perhaps at times conflicting, priorities.
The existing regulatory structure also reflects a functional
regulatory approach to the financial markets which the Commission
supports. The jurisdiction of the CFTC and the SEC is divided based on
the function of the particular financial instrument. The CFTC regulates
futures and option contracts that serve a price discovery or hedging
function, and the SEC regulates securities that serve a capital
formation purpose. The separate regulatory framework for futures and
options that has evolved over the decades reflects the different
purposes that those instruments serve.
Question. What, if any, overlapping exists between the two
agencies?
Answer. As I mentioned earlier, the two agencies regulate
instruments and markets that serve different economic functions. We do
not believe that there is any overlap between the regulatory missions
of the two agencies. However, the markets for commodity futures and
securities are interrelated and share common participants. Accordingly,
the agencies routinely coordinate and cooperate in carrying out their
separate regulatory missions.
Question. Please describe CFTC's relationship with the SEC.
Answer. Because the markets are inter-related and share common
participants, the CFTC and the SEC often work together closely in an
attempt to ensure a consistent regulatory approach and an effective
enforcement program.
In the regulatory area, the agencies have worked together over the
years to ensure that circuit breakers (e.g., price limits and trading
restrictions that are triggered when the stock market and stock index
futures markets move a certain number of points) operate across markets
in a coordinated fashion. The agencies have also coordinated their
financial reporting rules in order to avoid placing unnecessary and
duplicative regulatory burdens on market professionals. These are just
a few examples how the CFTC and the SEC have worked together in the
regulatory area and how that coordination has benefited the markets.
In the enforcement area, the staff of the Commission's Division of
Enforcement and their counterparts at the SEC routinely cooperate in
their efforts to police wrongdoing in the nation's financial markets.
From time to time conduct comes to the attention of the two enforcement
offices that implicates both the futures and securities laws. In those
circumstances, the offices join forces, often devising coordinated
investigation strategies for gathering and sharing information. In this
way, duplication of effort is avoided and expertise and resources are
shared. Where appropriate, we also coordinate the filing and settlement
of enforcement actions to ensure a consistent governmental response to
misconduct.
electronic communication security
Question. You mention that CFTC has adopted measures to permit the
electronic filing of documents with the Commission. As more and more
governmental and market transactions are handled through electronic
communications such as E-mail, what is CFTC doing to help ensure that
computer-based communications are reliable and not susceptible to
invasion by computer ``hackers'' who might place at risk the integrity
of market transactions?
Answer. The Commission's electronic filing and analysis systems for
financial reports and disclosure documents are independent of the
systems used to track market data, such as large trader and trade
practice data. Accordingly, the security of the latter data is not
threatened by recent Commission initiatives.
The Commission has taken a variety of steps to address relevant
security/integrity issues in the course of its recent initiatives. For
communications between Commission registrants and the Commission, such
measures have varied with the nature of the information being provided.
Permitting FCM's to provide important financial information
electronically raises issues concerning the reliability of the
information provided and the confidentiality of the communication
system. The Commission has addressed these concerns by requiring firms
to use Commission-issued personal identification numbers, PIN's, in
submitting financial information to the Commission. A firm's use of its
PIN is deemed the equivalent of a manual signature for purposes of the
Commission's attestation requirement. Moreover, the electronic filing
system being used by the Commission provides a safeguard to minimize
the likelihood of an unauthorized interception and alteration of
financial data transmitted by an FCM. Additionally, financial data
files are encrypted prior to transmission and unencrypted by Commission
personnel prior to processing and review.
Security/integrity issues are of lesser concern in the system for
electronic filing of CTA and CPO disclosure documents with the
Commission because the documents at issue generally do not include
confidential financial information and are subject to review and
discussion prior to circulation to the public. Registrants who file
electronically must use their NFA identification number to authenticate
their submission and receive an electronic receipt as evidence that the
Commission received the electronic submission. At the time the
Commission adopted this initiative, consideration was given to
requiring encryption procedures to guard against unauthorized
interception of disclosure documents transmitted to the Commission
electronically. The Commission determined that such a requirement was
unnecessary in light of the voluntary nature of the program, but did
state that Commission staff would cooperate with registrants that
voluntarily adopted an encryption procedure.
international market stability
Question. You mention your meetings in London in November of 1996
and in Tokyo last October in an effort to establish international
standards for market transactions. Over the past few years, we have
seen dramatic shocks to the markets originating in foreign countries
that sometimes had a regional or global effect. In some cases, these
incidents were direct results of improper market manipulation. Please
describe the state of market stability and security from international
market incidents?
Answer. The Commission's recent international initiatives have
encouraged international action to address the issues of systemic risk
posed by our linked markets and have encouraged the worldwide adoption
of higher regulatory standards. These international initiatives are
designed to enhance international supervisory cooperation and emergency
procedures, to establish concrete standards of best practices that set
international benchmarks for regulation of futures and derivatives
markets, to encourage improved transparency in those markets, to
improve the quality and timeliness of international information
sharing; and to encourage jurisdictions around the world to remove any
legal or practical obstacles to achieving these goals.
These structural measures can assist market authorities in dealing
better with crises and in safeguarding customer funds and assets in
case of defaults. In addition to such structural measures, the
relationships established over the years with foreign regulators, both
through formal memoranda of understanding and informal relationships,
facilitate the Commission's ability to obtain critical information and
to assist US firms in addressing the consequences of market events.
The Commission continues to work in these areas to improve the
design of regulatory programs to withstand market shocks and to improve
the execution of existing programs. I would like to submit for the
record a list of recent Commission initiatives addressing systemic
risk.
[The information follows:]
Barings & Windsor Conference.--Following the collapse of Barings
Plc., a UK firm which traded on numerous world futures markets
including those in Singapore, Japan, Hong Kong and the UK, the CFTC co-
chaired a meeting in Windsor, England, with the UK Securities and
Investments Board--which has since been renamed the Financial Services
Authority, or FSA. That meeting, and the resulting Windsor Declaration,
set in motion a series of international initiatives at both the
regulatory and market level intended to enhance the resilience of the
financial marketplace against shocks or stress caused by such defaults.
These initiatives included:
--the development of procedures to coordinate and to respond to a
market crisis once it has materialized;
--initiatives to increase transparency of market protections and
procedures, including proposals for the strengthening of
protections accorded customer funds deposited for investment or
safekeeping; and
--initiatives to encourage the development by all markets of default
procedures intended to isolate risks to the defaulting firm and
to restrict potential impact on other firms or markets.
Development of Large Exposure Information Sharing Arrangement.--In
an era in which exchange member firms and market participants typically
trade on multiple exchanges, no one regulator or market authority will
have the information necessary to evaluate the risks to its markets.
For example, at Barings, a rogue trader with high exposures in
Singapore claimed that his positions in the Japanese markets were risk
reducing, but there was no regulatory mechanism available to any single
regulator to verify this claim. A notable accomplishment resulting from
the Windsor meeting was the signing in March 1996 at Boca Raton,
Florida, of the Declaration on Cooperation and Supervision of
International Futures Exchanges and Clearing Organizations, an
arrangement under which the occurrence of certain triggering events
affecting an exchange member's financial resources or exposures prompts
the sharing of information among regulators. The Declaration, which has
been signed by 26 regulators to date, and a companion agreement among
self-regulatory organizations which has been executed by approximately
65 exchanges and clearinghouses, facilitate the identification of large
exposures by firms that could have a potentially adverse effect on
multiple markets.
Sumitomo & Tokyo Communique.--Similarly, in November 1996,
following the revelations of huge losses at Sumitomo and the related
adverse effects on the global copper markets, the CFTC and the UK SIB,
along with the relevant Japanese authorities, the Ministry of
International Trade and Industry (``MITI'') and the Ministry of
Agriculture, Forestry and Fisheries (``MAFF''), co-sponsored an
international regulators conference in London on physical delivery
markets in international commodities. The London conference focused on
the special problems that physical delivery markets pose for regulators
and considered how contract design, market surveillance and
international information-sharing can reduce the potential for, and
assist in the management of, manipulation and other market disruptions.
The 17 countries participating in that meeting issued a Communique
agreeing on certain basic principles of regulation and on a year-long
work program.
That effort culminated on October 30 and 31, 1997, at a conference
in Tokyo, Japan, jointly chaired by the CFTC, the Japanese MITI and
MAFF and the UK FSA where representatives of regulators from 16
jurisdictions responsible for supervising commodity futures markets
announced the completion of the work program contained in the London
Communique issued in November 1996. At the end of the meeting, the
regulators issued a Tokyo Communique which, among other things,
endorsed two guidance papers, one on best practices for the design and/
or review of commodity contracts and another on market surveillance and
information sharing. The guidances represent the first occasion on
which regulators responsible for overseeing commodity derivative
markets have agreed to international standards for the supervision of
these markets.
Significantly, the regulators at the Tokyo meeting agreed that they
should move beyond the mere adoption of statements and expressly
committed to seeking the removal of domestic legal and other barriers
to ensure access to information that permits them to detect and deter
abusive practices and disorderly conditions in the markets, including
information on concentrations of positions and the overall composition
of the market. This commitment is significant because many regulators
need new or expanded powers in order to attain this goal.
Enhancements in Boca Declaration: removal of restrictive language
and addition of manipulative activities to scope.--The Tokyo Communique
also encouraged regulators to participate in, and to make use of, the
arrangements for sharing large exposure information which are set out
in the ``Declaration on Cooperation and Supervision of International
Futures Markets and Clearing Organizations.'' However, we recognized
that restrictive language in the Declaration made it impossible for
certain regulators of commodity markets to join in that arrangement.
Accordingly, in 1997 the CFTC and UK FSA, as co-chairs of the Windsor
Declaration, successfully led an effort to remove such restrictive
language from the Declaration. We are pleased to report that the
following regulators have subsequently signed the declaration: Japanese
MITI and MAFF, the New Zealand Securities Commission, the Securities
Commission of Argentina, the Capital Markets Board of Turkey and the
Securities Commission of Taiwan.
Participants in the Tokyo Conference also determined that the
utility of the Declaration could be enhanced by further amending the
Declaration to clarify its application to potential manipulative or
abusive practices. Again, the CFTC joined with its Japanese and UK
colleagues to lead this initiative which was successfully concluded and
announced at the international regulators conference in Boca Raton,
Florida on March 20, 1998.
Question. In what ways will the international standards reduce the
threat of spreading international market disruptions?
Answer. At the end of the meeting in Tokyo in November 1997, the
participating jurisdictions issued the Tokyo Communique which, among
other things, endorsed two guidance papers--one on best practices for
the design and/or review of commodity contracts and another on market
surveillance and information-sharing. The guidances represent the first
occasion on which regulators responsible for overseeing commodity
derivative markets have agreed to international standards for the
supervision of these markets.
By creating international best practices standards, we hope to
establish world-wide regulatory benchmarks which can help each
regulator to assess how its standards and practices compare with the
benchmarks and to consider possible regulatory improvements. We
anticipate that market authorities, both regulators and markets, will
refer to the standards of contract design as providing an international
consensus as to the elements that should be considered in order to
reduce the possibility that a commodity contract may be susceptible to
manipulation or other disorderly conditions.
Contract design, however, is merely part of overall market
regulation. Accordingly, the regulators issuing the Tokyo Communique
also endorsed standards of best practices for market surveillance and
information-sharing. Among other things, the guidance on market
surveillance and information sharing recommends that regulators have
access to information about the exchange positions of large traders.
Also, they should have access to traders' related cash and over-the-
counter positions so that they can assess fully the risk of such
persons' positions to the markets.
Significantly, the regulators at the Tokyo meeting agreed to move
beyond the mere adoption of statements and expressly committed to
seeking the removal of domestic legal and other barriers to ensure
access to information that permits them to detect and deter abusive
practices and disorderly conditions in the markets, including
information on concentrations of positions and the overall composition
of the market. This commitment is significant because many regulators
need new or expanded powers in order to attain this goal.
The best practices guidances adopted in Tokyo demonstrate an
international consensus on how to regulate derivatives markets and a
commitment on the part of regulators to enhance their regulatory
effectiveness.
The CFTC also has actively participated in the ongoing project of
the International Organization of Securities Commissions, or IOSCO, to
articulate the basic elements of an effective regulatory regime for the
supervision of securities and derivatives markets. We expect a
consultative document to be released in May, setting forth thirty
Principles of Securities Regulation and collating, in a user-friendly
fashion, all existing IOSCO guidance on effective regulation of
financial services.
Question. What additional steps, if any, should the United States
take for protection against international market disruptions?
Answer. Domestically, the Commission continues to evaluate its
regulations to ensure that necessary safeguards are in place to respond
to market events and that its regulations are updated to address
changes in the marketplace. The Commission supports various on-going
international initiatives and inter-governmental dialogue to improve
the transparency of market information. The Commission also supports
enhanced disclosure of information about relevant rules in place in
specific markets to permit end-users of markets to advise themselves
adequately about specific risk. The Commission also supports
improvements in the protections available worldwide to address the
insolvency of financial services firms without adversely affecting the
liquidity of the markets in which they transact or the ability of
solvent customers of insolvent firms to manage their position risk;
improvements in the capacity to share information on the whole position
of market participants, including over-the-counter, cash and futures
markets positions, wherever located; better policing and oversight of
markets generally; and appropriate coverage of over-the-counter risks.
These issues were identified by the Commission in the Windsor
Declaration and the Tokyo Communique, but may require new national law,
removal of national barriers or other action at an international level.
While reforms are in process, the work necessary is by no means
complete--nor can it be accomplished by a single jurisdiction acting
alone.
The CFTC has paid close attention to addressing preparations for
and containment of market risks in its domestic markets. We have
updated our contingency plan, developed programs to promote readiness
for Year 2000 and Euro conversion, engaged in stress testing, performed
oversight audits of markets and firms, required upgrades of firm
internal controls, and modified core regulations to address evolution
of the market. We continue to be vigilant as markets evolve.
______
Question Submitted by Senator Harkin
Question. Has the CFTC encountered problems in having access to any
kinds of information on livestock prices and markets it would need to
investigate claims, should they arise, about market manipulation in the
futures markets?
Answer. Reliable cash prices that accurately reflect supply and
demand conditions are critical to the Commission's market surveillance
program. One aspect of that program is assessing how well futures
prices reflect the cash market as a futures contract approaches
expiration. For physical delivery futures contracts, this entails an
analysis of the basis or the difference between the futures price and
the relevant cash price for the commodity. For cash-settled futures
contracts, the futures price will ultimately be set at the specified
cash price used for settlement. Consequently, for these markets the
surveillance issue is whether the cash price is representative of the
market or is susceptible to manipulation to benefit a futures position.
For domestic agricultural markets, the reliability of available
cash price quotations has increasingly been of concern to Commission
surveillance staff. In the cattle market, cash prices at terminal
markets are of declining importance due to the prevalence of direct
marketing from feedlots to packers at prices that may not be reported.
Several cash-settled contracts, like live hogs, boneless beef, and the
new pork belly contract, are settled on the basis of prices reported by
the USDA. The staff also has some concerns about the thinness of the
underlying cash prices for some of these commodities. Moreover, some
USDA price reporters are concerned that, by sharing with the CFTC the
confidential data price they collect, they may jeopardize the
willingness of some firms to report price data to the USDA.
Accordingly, the Commission would support initiatives to strengthen the
USDA's ability to collect and publish reliable price data.
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
JOSEPH A. LEVITT, DIRECTOR, CENTER FOR FOOD SAFETY
JANICE F. OLIVER, DEPUTY DIRECTOR, CENTER FOR FOOD SAFETY
MITCHELL R. ZELLER, DIRECTOR, OFFICE OF TOBACCO PROGRAMS
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Introduction of Witnesses
Senator Cochran. The subcommittee will please come to
order.
We resume our hearing for the purpose of considering the
annual budget request that has been submitted by the
administration for funding for the Food and Drug
Administration. We are very pleased to have Dr. Michael
Friedman, who is the Lead Deputy Commissioner of the Food and
Drug Administration, here with us with colleagues. We invite
you to introduce those who are with you.
We have your written testimony which we appreciate very
much. We will make that a part of the record in full and
encourage you to make any summary comments or other statements
that you think would be helpful to our committee in
understanding the budget request. You may proceed.
Statement of Michael A. Friedman
Dr. Friedman. Thank you very much, Mr. Chairman.
As the Lead Deputy Commissioner of the Food and Drug
Administration, it is my privilege to be here today to present
our proposed budget for fiscal year 1999.
With me are Mr. William Schultz, our Deputy Commissioner
for Policy; Mr. Robert Byrd, our Deputy Commissioner for
Management and Systems, both from the Food and Drug
Administration. Mr. Dennis Williams accompanies us. He is the
Deputy Assistant Secretary for Budget at the Department of
Health and Human Services. They and others from the FDA are
here to help respond to your questions.
As you recognize, sir, FDA is an agency that serves a vital
and unique role in promoting and protecting the public health.
The public demands are great. All Americans expect that the
food they eat will be safe and wholesome, that the medical
products they use, drugs, biologicals, and devices, will be
safe and effective, that children will be protected from the
harmful effects of tobacco, and that information on the
products regulated by FDA will be useful and understandable.
These are important public health responsibilities and we
take them very, very seriously. Our commitment is an enduring
one and our high level of performance in the last year
demonstrates our ability to make good on that commitment.
As you know, one of our most visible activities is the
review of new products before they go to market. I am proud to
say that the agency has performed at historically high levels
this past year. For example, FDA reviewed and approved 144 new
drugs and biologicals last year, a record number, as well as
125 therapeutic supplements. We were 100 percent on time in
meeting our pharmaceutical review deadlines. We conducted the
reviews in a median of only 12.2 months. That is for both
standard drugs and priority products. At the same time we also
reviewed a record number of generic products, more than 400.
The Center for Devices and Radiological Health approved 48
major new devices, 5 more than the previous year, even as it
cut review times by one-third. Eighteen of these devices
presented important diagnostic or therapeutic advances such as
the first surgical implant to restore partial hand movement in
quadriplegics, a deep brain stimulator for helping to control
tremors in people with Parkinson's disease, and the first laser
system for treating tooth decay.
Overall, FDA's output, as measured by the number of annual
approvals for all new products reviewed by the agency, has
improved 17 percent per year for each of the last 4 years. This
level of performance is even more noteworthy since in each of
the last 4 years, FDA's workload, as measured by the number of
all types of applications we receive, has steadily risen at the
annual rate of 12 percent per year. As you recognize, our
workload is doubling every 6 years, and we fully expect the
number of new applications to continue to rise at this very
exciting but very challenging rate.
The engine of practical scientific progress is fueled by
increased support for biomedical research, at NIH now at a
level of $13.6 billion, and very substantial investments by
private industry, more than $25 billion per year. These
organizations are working to turn scientific discoveries into
practical, marketable therapeutics.
As a result, we foresee a medical product pipeline filled
with novel and promising remedies for years to come. The very
uniqueness of these products challenges FDA's own scientists to
remain on the cutting edge. We must improve both our intramural
scientific and research programs and foster better links with
external scientific bodies in order to be able to understand
and appropriately evaluate and regulate the very newest
products.
In addition, FDA manages important new responsibilities,
such as the expanded food safety programs and the tobacco
regulation. Moreover, the agency must be prepared for the
unexpected, the next outbreak of a novel foodborne pathogen
such as E. coli O157:H7 or unexpected problems with
therapeutics already on the market such as the diet drugs
fenfluramine and dexfenfluramine which were recalled last year.
Last, let me say a couple of words, if I may, about the
challenges presented by the FDA Modernization Act of 1997, this
major piece of legislation intended to improve the regulation
of medical products, foods, and cosmetics.
The timely implementation of this ambitious law will be a
substantial challenge to FDA. The act directs FDA to publish 42
regulations, 23 guidances, 13 other publications in the Federal
Register, as well as 25 other tasks such as postmarketing
approval studies, electronic application submissions, and so
forth. This will consume a considerable amount of FDA resources
for which there is no specific budget allocation.
We, of course, are committed to carrying out the
congressional directives delineated in the act, even though
many FDA programs have not benefited from funding increases
over the last several years.
To meet these expectations and to support the agency's
activities, FDA requires $1.26 billion in fiscal year 1999. The
appropriation request includes $970 million in budget
authority, $281 million in user fees, and $13 million in other
reimbursable activities.
Sir, I want to acknowledge that the proposed budget is
complicated and I am sure you will have many questions that we
will do our very best to answer, but before I close, I would
like to thank you, sir, and the committee for your past
commitment to bettering the health of our citizens.
Last year you authorized $24 million for the President's
food safety initiative. We are using that money to take several
very important steps to improve the safety of the Nation's food
supply. These include increasing surveillance for potential
outbreaks, improving consumer education, increasing focused
research aimed at detecting pathogens and eliminating them,
developing strategies to prevent microbial contamination of
food, developing microbial risk assessment techniques, and
strengthening the coordination between Federal, State, and
local authorities. These are very important steps, but the road
to safer food is long and difficult.
In our fiscal year 1999 proposal, we are requesting an
additional $50 million. We plan to further enhance the
foodborne illness surveillance program, as well as to expand
our coverage of imported products. Research will focus on
developing improved methodology for detecting microbial
contaminants in food, technologies to eliminate or prevent food
contamination, and enhancing our understanding of how microbial
resistance to food preservation techniques and to antibiotics
occur.
I also want to acknowledge the committee's support for our
efforts to reduce tobacco use by youngsters. With the $34
million the committee provided last year, we have taken
important first steps to protecting the Nation's youth from
tobacco products. We have established compliance programs in 10
States already, signed contracts with 3, and are negotiating
with the next 15. North Carolina signed the first contract for
this year, and we expect to have compliance programs in all 50
States by the end of the year.
With the budget increase proposed for the next fiscal year,
FDA will expand the enforcement and outreach efforts designed
to ensure that retailers do not sell tobacco products to
minors.
I believe it is clear, Mr. Chairman, that the investment of
each American taxpayer dollar in the Food and Drug
Administration is a solid investment in promoting and
protecting the public health. Americans expect their FDA to be
caring, to remain vigilant, to promote their health and well-
being, and to protect them from all types of health hazards.
This is an important trust. It is a trust this agency will do
its very best to keep.
If I may close, Mr. Chairman, with one personal comment, I
on behalf of the agency want to recognize the contributions of
Senator Bumpers, convey to him our best wishes as he moves on
in his retirement this year. He has dealt fairly and
thoughtfully with complex issues and it has always been a
pleasure to work with him.
Mr. Chairman, I appreciate very much this chance to address
you, to answer your questions, and we look forward to working
with you. Thank you, sir.
Prepared Statement
Senator Cochran. Thank you very much, Dr. Friedman. We have
your complete statement and it will be inserted in the hearing
record.
[The statement follows:]
Prepared Statement of Michael A. Friedman
Mr. Chairman, members of Congress, ladies and gentlemen, my name is
Michael Friedman. I am the lead deputy commissioner for the Food and
Drug Administration and it is my privilege to be here today to tell you
about our plans and expectations as presented in the Administration's
proposed budget for fiscal year 1999. And, of course, I am happy to
answer your questions.
FDA is an agency that serves a vital role in promoting and
protecting the public health. Our primary obligation is to the public--
but we recognize the value of positive interaction with industry,
academia and other governmental bodies. Moreover, we value a close and
cooperative relationship with Congress.
But it is the public that we serve and it is the public that has
high expectations about the performance of my Agency. Americans expect
that the food they set on their family table will be safe and
wholesome. The public expects that new medical products--drugs,
biologicals and devices--will be safe and effective and available in a
timely way. The nation expects that children will not use tobacco. And
it expects that the information provided on the products that FDA
regulates will be useful and understandable.
These are important public health responsibilities and we take them
very seriously. Our commitment is an enduring one, but our practices
are the subject of re-evaluation and renewal. Important progress was
made with the FDA Modernization Act of 1997 toward achieving the
expectations of the public and Congress.
overview
Today, I would like to examine these public expectations, highlight
the actions FDA has taken in the past year and project what we
anticipate doing in the next.
Food Safety
Stimulated by recent, publicized outbreaks of food-borne illnesses,
food safety has become a subject of increased attention and concern.
What's more, public health experts worry that the risks of food-borne
disease may be rising as Americans grow older, eat out more, and food
is more widely distributed and therefore more vulnerable to
contamination. In addition, we face new threats, such as the emergence
of novel pathogens like E. coli O157:H7, the strain that led to the
recent recall of more than 25 million pounds of hamburger and sickened
consumers of unpasteurized apple juice on the West coast just over a
year ago, and a drug-resistant strain of salmonella called DT104.
Outbreaks like these, and the President's ongoing concern about
food safety, prompted him to launch the National Food Safety Initiative
last year. Congress responded by allocating $24 million to the FDA's
food safety initiative for the current fiscal year, as well as giving
additional funds to other relevant federal agencies. With these
resources, FDA took specific steps to improve the safety of the
nation's food supply, including: increasing surveillance for potential
outbreaks, improving consumer education, increasing research aimed at
improving detection of pathogens, producing strategies to prevent
microbial contamination of food, developing microbial risk assessment
techniques and strengthening the coordination between federal, state
and local governments.
In addition, we have moved rapidly on a number of fronts to improve
the safety of the nation's food. At the end of last year, FDA began
implementation of the HACCP rules on seafood. As you know, HACCP stands
for Hazard Analysis and Critical Control Point (HACCP). It is a
scientifically designed program that identifies the steps in food
production where contamination is most likely to occur and then puts in
place preventive measures. FDA recently announced its intention to
develop HACCP regulations for fresh fruit and vegetable juices and
proposed regulations to require fruit juice makers to label their
products so consumers will know which are treated to prevent
contamination and which are not. We also called on manufacturers to
voluntarily label their products as soon as possible, even though the
regulation is not yet in effect.
In July 1997, FDA hosted a public meeting on the risks of
Cyclospora. We also convened a federal interagency meeting on food
safety research and began drafting a federal plan to set research
priorities. That plan should be available this spring. FDA also helped
set up a public-private partnership on food safety education along with
industry, consumer groups, states and other federal agencies.
In December, after a thorough scientific review, FDA approved the
irradiation of meat products for controlling disease-causing
microorganisms. The decision applies to fresh and frozen beef, lamb and
pork. The Agency concluded that irradiation is safe and does not
compromise the nutritional quality of these products. Studies show that
it does reduce the number of disease-causing microbes in or on meats.
Last summer, FDA acted to prevent the contamination of feed for
American beef, sheep and goats with the agent that causes bovine
spongiform encephalopathy or BSE. BSE is a brain-infection by an
incompletely understood infectious agent related to a degenerative
disorder in humans called Creutzfeldt-Jakob disease. A cluster of
Creutzfeldt-Jakob cases in England was associated with eating English
beef contaminated with BSE. The resulting outcry seriously damaged the
British beef industry. Although there has not been a documented case of
BSE in the U.S., FDA acted to protect the safety of America's red meats
by banning production practices that raised the risk of BSE
transmission.
And finally, on the food front, FDA's Center for Food Safety and
Nutrition (CFSAN) has worked hard to reduce the backlog of food
additive petitions. By eliminating lower priority activities and
through hard work and improved management, the center cut the number of
pending petitions in half--from a high of 295 in 1995 to 143 in 1997--
and the center continues to make decisions on more petitions than it
receives. CFSAN fashioned pragmatic solutions without compromising
scientific rigor.
This year, FDA is asking for an additional $50 million for food
safety in fiscal year 1999. With it, we plan to enhance food-borne
illness surveillance, as well as increase coverage of imported products
by expanding lab certification. Research will focus on developing
improved methods of detecting microbial contaminants in foods,
technologies to eliminate or prevent food contamination and
understanding microbial resistance to food preservation techniques and
antibiotics.
To help implement the National Food Safety Initiative, FDA made key
personnel changes in January. We reassigned Joseph A. Levitt, an
innovative and effective manager within FDA who has served as the
Agency's acting deputy commissioner, to take the directorship of the
Center for Food Safety and Nutrition. In addition, FDA hired Dr. Robert
L. Buchanan, a leading authority on food microbiology and quantitative
risk assessment for microbial foodborne pathogens with the USDA's
Agricultural Research Service, to be a senior scientist for the
National Food Safety Initiative. Other high-level recruitment is
underway. This team will lead CFSAN into the next century as it
implements an ambitious agenda to improve the safety of the nation's
food supply.
In addition, under the President's Initiative to Ensure the Safety
of Fresh Fruits and Vegetables, FDA, working with the Department of
Agriculture, will develop and finalize good agricultural practice and
good manufacturing practice guidances for use by the domestic and
foreign produce industry. To minimize microbial contamination, FDA also
will provide technical assistance and educational outreach to the
domestic and foreign produce industries to promote adoption of the
voluntary guidance. To support these activities, research is being
accelerated to develop techniques that prevent microbial contamination
of produce from the farm to the table.
FDA will move aggressively to deliver on America's expectation for
a safe and wholesome food supply, and to work cooperatively with sister
agencies in the federal government as well as state and local
officials. Each makes a unique and valuable contribution to the safety
of the food we eat.
Pharmaceuticals and Biologicals
In addition to safe food, Americans expect that they will have
timely access to new pharmaceutical and biological agents that are safe
and effective. Since the 1962 Kefauver-Harris Amendments to the Food,
Drug and Cosmetic Act, FDA has acted as the gatekeeper, allowing new
therapeutic products onto the American market after clinical studies
prove their worth. This scientifically complex and time-consuming
procedure of reviewing applications has sometimes bogged down in the
past. Since 1992, however, FDA significantly picked up the pace of pre-
market approvals for drugs and biologics after Congress authorized
additional resources through the Prescription Drug User Fee Act of
1992.
Last year, FDA received a record number of new drugs and biologics
for review and the Agency approved a record number of them, 144. Among
these were 62 new molecular entities or NME's, a record number of these
important new products, which went on the market for the first time in
this country. NME's often represent hope for patients by providing new
treatments or by providing significant improvements over existing
therapies, either through heightened effectiveness or reduced side-
effects.
And the Agency has done all this even as it reduced the time it
takes--on average--to get a drug through review and onto the market
from 14.8 months in calendar year 1996 to 12.2 months in calendar year
1997. That's for all types of drugs, both priority drugs and standard
drugs. FDA has met the agreed to deadlines negotiated by the Agency,
Congress and the industry. For the last two years, we have approached
or hit 100 percent on-time performance.
With the renewal of the Prescription Drug User Fee Act last year,
FDA will increase the number of reviewers and support staff under this
program to 820 in fiscal year 1999, ensuring that the Agency will be
able to continue to perform at its current high level.
The evidence of PDUFA's success comes not only from the performance
statistics, but also from the strong support FDA received from industry
for its renewal, as well as the prestigious Innovations in Government
Award given for the improvements in the drug and biologics approval
process. The award is sponsored by the Ford Foundation, Harvard
University's John F. Kennedy School of Government in partnership with
the Council in Excellence in Government.
FDA launched a number of other initiatives related to drugs and
biologics in the last year. For example, FDA proposed a rule that would
provide health care professionals with the information necessary to
prescribe medications more safely for children. The proposed rule would
assure that labeling for certain new and already marketed drug products
contain information on the use of the drug in pediatric populations. In
some cases, companies have been allowed to put pediatric information on
the label after extrapolating from adult studies along with safety and
pharmacokinetic data obtained from trials in children.
Currently, many widely used medicines are not properly labeled for
use in children, forcing pediatricians to estimate the proper dose of
an adult medicine for use in a child. Too often this can lead either to
the side effects of an overdose or a therapeutic failure when too small
a dose is given. FDA's pediatric labeling initiative is complemented by
the provisions of the FDA Modernization Act of 1997 that grants a six
month period of market exclusivity for studies of the pediatric use of
certain drugs.
FDA moved to ensure that women are included in early clinical
trials of drugs and biologics designed to treat life-threatening
diseases. In the past, women have been excluded because they might be
pregnant at the time that they receive the experimental therapy. The
Agency's proposed rule would give it the power to suspend a clinical
study if the sponsor routinely excluded men or women from the clinical
study because of potential toxic risks to offspring or reproductive
organs.
Under the PDUFA renewal, FDA has promised to improve its drug-
review performance still more. Under the previous version of the
program, FDA had 12 months to review a standard drug and six months to
review priority drugs. We have been meeting those deadlines. Under the
new program, FDA will gradually ratchet down approval times for
standard drugs by an additional two months.
In addition to requesting the increased resources authorized in
fiscal year 1999, the President's budget also requests supplemental
appropriations for fiscal year 1998 of $26 million in additional
revenue for the Agency to begin, in earnest, the enhancements
envisioned in the reauthorization of PDUFA. With the resources provided
by this renewal, FDA expects to continue its high level of performance
and provide American patients with speedy access to drugs and biologics
while maintaining the Agency's customarily high scientific standards.
Medical Devices
Third, Americans expect that the medical devices used to detect and
treat their illnesses--from diagnosing breast cancer to treating
Parkinson's disease--will be safe and effective and that they will have
access to them in a timely way. In addition, we need to be sure
products include information on how and when to use them and what
patients can expect when they are cleared for market. That means FDA
must work closely with manufacturers throughout product development and
clinical study so useful information is generated efficiently. That
also helps FDA act quickly to review, independently, the data on safety
and effectiveness.
Since 1994, when Congress provided the Center for Devices and
Radiological Health (CDRH) with some additional resources, the center's
staff has made substantial and sustained improvements in the quality
and speed of its reviews. In the past year, CDRH approved a record
number of pre-market applications (PMA's), eliminated all remaining
backlogs and improved review times in every product category.
Forty-eight PMA's were approved in fiscal year 1997, five more than
the previous year. Nearly all were for new products and 18 of them
represented important diagnostic or therapeutic advances. The average
time to approval decreased from 26 months in fiscal year 1996 to only
17 months in fiscal year 1997. Key device approvals last year included
the first surgical implant to restore partial hand movement in
quadriplegics, a deep brain simulator to help control tremors in people
with Parkinson's disease and the first a laser system for treating
tooth decay. At the same time, CDRH eliminated the backlog of PMA's and
PMA supplements.
The center also made substantial improvement in its 510(k)
application review times, cutting almost in half the peak average
review time of 194 days in fiscal year 1994. These 510(k) applications
are for medical devices substantially like devices already approved for
marketing.
CDRH has every hope of its ability to maintain this high
performance level as it begins the complex implementation of the FDA
Modernization Act of 1997. Unlike the provisions that renew the
Prescription Drug User Fee Act, the legislation does not provide CDRH
with additional resources, so all of the costs to implement FDAMA and
meet performance expectations must come out of the device program's
budget. The center's leadership is deeply concerned about the effect
this will have on existing programs and resources, but they are
committed to making every effort to provide American patients with
speedy access to safe and effective medical devices.
Tobacco
Fourth, Americans expect that their children will be protected from
the seduction of tobacco products and the addictive nicotine that they
contain. In February 1997, the first provisions of FDA's final rule on
tobacco went into effect, making it a violation of federal law to sell
cigarettes or smokeless tobacco to anyone younger than age 18. The new
rule also requires retailers to ask for photo ID from anyone younger
than 27 before selling tobacco products.
To enforce the new provisions, FDA established contracts with its
first 10 states--Arkansas, California, Colorado, Florida, Illinois,
Massachusetts, Minnesota, Pennsylvania, Texas and Washington--to
conduct enforcement surveillance. In the current fiscal year, FDA will
sign contracts with the remaining states and U.S. territories that are
willing to join with us so they can conduct the enforcement inspections
of retail operations.
The Agency also launched an education campaign last year to inform
retailers of their responsibilities under the new rule--including a
nationally broadcast teleconference--and a training program for state
officials.
FDA's tobacco rule was challenged in federal district court by
tobacco manufacturers and others. The court upheld the Agency's
jurisdiction and the age and photo ID provisions were allowed to
proceed but other portions of the rule were not upheld or suspended
pending appeal. FDA appealed these adverse rulings and is currently
awaiting a decision by the U.S. Circuit Court of Appeals.
For fiscal year 1999, the Administration is asking for a $100
million increase in the tobacco program for additional enforcement and
evaluation activities as well as compliance outreach, including trade
advertising and direct mail targeted to retailers, advertising on
radio, print and billboards, public education aimed at parents,
community organizations and voluntary health groups. FDA also
anticipates beginning a scientifically based product regulation
program, including setting up a system to review and analyze product
ingredients.
When all the provisions of FDA's final tobacco rule are
implemented, FDA believes that it will significantly reduce the number
of young people who become addicted to tobacco and will achieve the
Administration's goal of cutting by half the 3,000 teenagers who become
regular smokers every day.
Information
Fifth, Americans expect that they will be able to make individual
decisions and choices about their personal health and the health of
family members. To do that, they expect and need to receive reliable,
useful and understandable information about the products that FDA
regulates.
Some 1.3 million times a year, Americans misuse their medicines and
are injured, causing thousands of preventable hospitalizations
resulting in estimated annual costs of $20 to $75 billion. To reduce
the risk of medical misadventures, FDA helped launch the Medguide
program last year. Under Medguide, private contractors will develop and
distribute scientifically accurate and unbiased information that gives
patients sufficiently specific, comprehensive and easy to understand
directions on the proper use of their medications. The goal is to
provide a Medguide brochure every time a patient fills a prescription.
The Agency also proposed new, easy-to-understand labeling for over-
the-counter drugs. Consumers spend some $18 billion a year on OTC drugs
currently. The instructions and warnings on their labels are neither
standardized nor easy to use. The new regulation is designed to give
consumers the kind of information they need to make informed
decisions--just like the food label--in a format that is easier to read
and understand. As a result, patients will know how to use OTC products
correctly and better understand their risks and benefits.
A new guidance proposed by FDA last summer will make it easier for
pharmaceutical manufacturers to advertise prescription drugs directly
to consumers. The guidance clarifies the requirements for
advertisements on television and on radio, including information about
any major risks, as well as instructions for how consumers can easily
obtain more detailed information about the drug's approved uses and
risks. This new guidance will help promote greater consumer awareness
about prescription drugs.
To speed the flow of information between FDA and industry, the
agency is rapidly moving into the age of electronic submissions of
applications for marketing approval for drugs, biologics and devices. A
paperless approach has the potential to increase efficiency, speed up
the review process and even make it easier to retrieve information when
problems arise after a drug is approved. The full impact of electronic
filing has yet to be appreciated but the Agency's leaders expect it to
be profound.
Information is also the engine of scientific advancement. FDA
actively tries to ensure that it stays on the cutting edge through
excellent intramural scientific programs and collaborations with sister
agencies such as the NIH and the CDC and academia.
As a science-based organization, FDA will continue to search for
the best ways to gather and digest the mountains of new information
pouring out of the nation's biomedical research centers and present it
to consumers in ways that are timely and useful.
Other Achievements
FDA's many accomplishments cannot be covered in a single document.
There has been important progress in many centers and activities, from
re-engineering the drug approval process in the Center for Veterinary
Medicine to breaking ground for the new regional laboratories in
Arkansas, next to FDA's National Center for Toxicological Research, and
another at York College in Jamaica, N.Y.
I should specifically mention that OASIS, the Operational and
Administrative System for Import Support, became fully operational in
every U.S. port of entry where FDA-regulated products come into the
country by sea, land and air. This computerized system electronically
links all FDA inspection offices with the brokers who bring foreign
products into the country. Based on the information supplied by the
broker, OASIS can give automated and immediate clearance for the
imports or trigger an inspection by a FDA official.
The implementation of this system comes at a critical time for
FDA's Office of Regulatory Affairs, which manages the nation's imports
of foods and medical products. The quantity of FDA-regulated imports
has nearly doubled from 1.5 million at the beginning of the decade to
more than 3 million entries or shipments today. Yet the number of FDA
inspectors and analysts has increased only slightly from just under 700
in 1990 to just over 800 today. Without the OASIS system, FDA would
have a difficult time monitoring the products flowing into this country
and keeping out those that pose a threat to our citizens.
the budget
The President has requested $1.26 billion for FDA's budget in
fiscal year 1999. To support this program level, the appropriation
request includes $970 million in budget authority, $281 million in user
fees, and $13 million in other reimbursable activities. This amount
will allow the Agency to carry out a core of critical activities and
move forward with new initiatives to protect and promote the health of
the American people.
The fiscal year 1999 budget for FDA contains the first annual
performance plan for the Agency. FDA priorities, goals and objectives
for the year are detailed in the performance plan as well as in the
budget. Moreover, the plan is closely linked to the resource levels
requested in the budget.
User Fees
The budget proposal for fiscal year 1999 includes $281 million in
user fees. Nearly $153 million in currently authorized user fees will
be collected, including $132 million under the enhanced Prescription
Drug User Fee Act and $21 million in other existing user-fee programs
to support Mammography Quality Standards Act inspections, export
certification and the certification of color additives.
What's more, the budget proposes $128 million in additional
proposed, but not yet authorized, user fees. These new fees, if
authorized by Congress, would cover a portion of the cost of the full
range of premarket and postmarket activities in most of FDA's program
areas including foods, human drugs, biologics, animal drugs and medical
devices.
FDA provides a vital public service by promoting health and
protecting consumers from unsafe and impure regulated products.
Additionally, industry derives a direct commercial benefit from
consumers' confidence in FDA's review process and product surveillance,
which provides a substantial guarantee of safety. Given the benefits to
both the public and the industry, and given that workloads are growing
far faster than government resources, FDA believes it is reasonable to
share some of the cost between the taxpayer and the industry.
Consumers, through tax dollars, already substantially support FDA's
activities. In order to maintain necessary funding program levels in an
era of fixed, disciplined resource allocation under the balanced budget
agreement, the Agency is proposing user fees to help support the whole
range of FDA activities.
FDA will work with Congress and the Agency's many constituencies,
including the regulated industries, to further develop the proposed
fees in conjunction with agreed-upon performance measures and goals
that will be linked with the proposed resource levels.
concerns for the future
Although the Agency's performance has been steadily improving, we
have concerns about the future. Our portfolio of important public
health responsibilities continues to grow. New and sometimes unexpected
issues, such as concerns about imported foods, safety of novel
technologies and the emergence of new pathogens, arise continually.
Rising Workload
FDA will continue to face a growing workload. The number of
applications for all of the types of products that FDA reviews each
year has been going up at 12 percent per year for the last four years.
With PDUFA funding for drugs and biologics and innovative management
initiatives in all of the centers, we have kept pace with the growing
workload; in fact, we have exceeded it. As measured by the number of
annual approvals for all new products, our output has increased 17
percent per year Agency-wide.
We are concerned that we may not be able to continue to achieve
annual improvements in performance, especially if we do not receive the
level of resources included in the President's budget. If the workload
continues to rise at 12 percent per year, it will be a great challenge
to continue to increase performance given budget projections.
Fluctuating Staffing
FDA's staffing has not grown with increased responsibilities. Over
the past five years, the Agency has steadily reduced staff in many core
functions supported by appropriations alone even as it increased staff
in areas supported by user fees. The overall staff levels rose slightly
from the beginning of PDUFA in 1992 from a total of 8,868 FTE's to a
high of 9,242 FTE's in fiscal year 1995. After that, there has been a
modest decline, though an increase is expected in fiscal year 1999 as
FDA expands with the renewal of PDUFA.
In addition, total FTE's will rise this year as the Agency adds
staff for food safety and tobacco. These, however, are focused programs
that have received specially designated appropriations. While these
specialized programs continue to grow, core FDA functions have seen a
steady decline in non-PDUFA FTE's from the fiscal year 1992 level of
8,868 to a low of 8,444 in the current fiscal year, a 4.8 percent drop.
The Agency leadership is concerned that the performance
improvements made in the past few years may not be maintained if
staffing continues to shrink and workloads continue to increase.
Increasingly Full Pipeline
There's little doubt that the workload pressures will continue to
rise in the future. The National Institutes of Health, with an annual
budget of $13.6 billion, is an engine of biomedical research and
medical progress. The basic research that it supports in universities
and private labs across the country will lead to the development of
many new medical products.
At the same time, the industry's research and development
investment of some $21 billion in drugs and nearly $4 billion in
medical devices last year continues to grow as companies try to
transform the advancing medical science into new products. The payoff
is a product development pipeline filled with promising new
therapeutics, some of which are strikingly novel.
For society, the benefit from this investment in basic research is
great. For FDA, as society's technological midwife for medical
products, the burden also is great as it struggles to manage the
burgeoning flow of new products to the market.
In addition, new issues arise and add to our workload. Let me give
you an example:
PostMarket Surveillance
As more medical products move through the development pipeline and
receive FDA approval every year, the number of therapeutics on the
market has reached record proportions. Because FDA has a never-ending
responsibility for every product--from the time it is first used until
it becomes obsolete and is withdrawn from the market--the Agency must
remain vigilant for unanticipated or rare, but serious, problems that
might arise after patients begin to use it.
In recent years, much less attention has been paid to postmarketing
surveillance, FDA's responsibility to understand what happens to a
product after it is approved and marketed. This is a critical part of
FDA's responsibility because approved drugs and devices sometimes cause
unexpected consequences, such as the discovery of heart-valve damage
caused by the diet drugs fenfluramine and dexfenfluramine last year. As
you know, we moved quickly to take fenfluramine off the market.
Postmarketing surveillance becomes even more important for devices
as the FDA Modernization Act of 1997 is implemented. The act directs
the Agency to consider how postmarketing surveillance can reduce the
amount of efficacy evidence required to get a device on the market.
Clearly, the need for this kind of surveillance is growing rapidly.
Industry is developing more and more new products; FDA is approving
them at record rates. At the same time, FDA launched MEDWATCH to get
doctors to report adverse events and cross-drug reactions. The program
is accumulating information so rapidly that the number of reports is
going up logarithmically. We will be increasingly challenged to
properly analyze those trends.
With this budget, the Agency expects to respond to the problem
through increased efficiency, use of information technology--for
example the computerized Adverse Event Reporting System that is being
implemented for pharmaceuticals--and by partnering with health
professional organizations, academia, industry and our international
regulatory colleagues. If these approaches are not successful, however,
unexpected adverse effects from already approved therapeutics could
become a serious problem in the future.
Emergencies and Other Uncertainties
When FDA discovers that an approved therapeutic is injuring
patients or a food product is contaminated with a pathogen, the Agency
must react quickly and competently. The rapid removal of the diet drug
Fenfluramine, the quick action of tracking down the source of E. coli
contamination in apple juice, requires substantial Agency resources. As
the technology for surveillance improves for food-borne illnesses and
as more and more pharmaceuticals and medical devices reach the
marketplace, FDA predicts that there will be an increasing number of
these kinds of emergencies.
In addition, we know that FDA will face future uncertainty and
novel problems. No one could have predicted the first drug tampering
cases let alone the advent of animal--and the potential of human--
cloning or avian flu spreading to humans. No one can say what future
crises will arise, but we do know they will come. And when they do,
they will consume unbudgeted resources.
Consider, for example, the avian flu. FDA reacted quickly to the
first reports, consulting with sister agencies such as CDC, NIH, DOD
and USDA as well as international health agencies such as the World
Health Organization and vaccine manufacturers. Once the critical parts
of the virus were identified, FDA acquired recombinant H5 HA antigen
from a biotech company and injected it into sheep to produce
standardization reagents for vaccines that might have to be developed
on an emergency basis. A high-security, biological containment lab at
FDA is being used to safely study the virus while preventing the
unintended release of the H5N1 avian flu into domestic poultry or
people. FDA already is working with NIH to permit testing of
experimental purified H5 HA vaccine to prevent the spread of avian flu
in America.
Based on the past, the Agency knows that the unexpected lies ahead.
We need to think about ways to prepare for it.
International Issues
FDA has experienced a dramatic increase in its international
operations. It has been an active participant in the development of
common approaches to the international approval of new medical
therapeutics under the International Harmonization Conference with the
European Union. It has also entered into Memoranda of Understanding and
Mutual Recognition Agreements for a variety of activities including
inspection of international production facilities for pharmaceuticals
and medical devices as well as increased inspection responsibilities
for imported foods. International activities, however, have proved to
be more and more complex and resource intensive than expected.
As global trade in FDA-regulated products continues to grow
exponentially, the Agency will face an increasing challenge to its
ability to protect American citizens while maintaining good
relationships with other countries.
Implementing FDA Modernization
Lastly, let me say a few words about the FDA Modernization Act of
1997. This major piece of legislation focused on modernizing the
regulation of medical products, food and cosmetics. The act directed
FDA to carry out a number of programs that will include publishing 42
regulations, 23 guidances, 13 other publications in the Federal
Register as well as 25 other tasks, such as mutual recognition
agreements and global harmonization, postmarketing approval studies and
electronic applications and submissions, and seven reports. This will
consume a considerable amount of FDA resources for which there is no
specific budget allocation. We, of course, are committed to carrying
out the congressional directives delineated in the act.
conclusion
I believe it is clear that the investment of each American taxpayer
dollar in the Food and Drug Administration is a solid investment in
protecting the public health. From the programs I have described, you
can see that when Congress invests its trust and resources in FDA, the
Agency uses the money well and is productive.
This is an Agency staffed by professionals. We deliver on the
expectations of Congress and the American public. When we have
sufficient resources, we meet our goals because we are disciplined.
When confronted with problems, we make the hard public health choices
to ensure the greatest good for the largest number of Americans.
Because FDA is a science-based Agency, it is judicious in the
problems it chooses and the way it goes about solving them. We know
what's important and we invest where it will do the most good.
Americans expect their FDA to remain vigilant, to promote their
health and well being and to protect them from all sorts of hazards.
That is an important trust. And it is a trust this Agency will not fail
to keep.
Thank you.
______
Biographical Sketches
michael a. friedman
As Lead Deputy Commissioner, Michael A. Friedman, M.D. is the
senior manager for the Food and Drug Administration. He will act in
this capacity until a new Commissioner of Food and Drugs is named/
confirmed. In addition, he continues his duties as Deputy Commissioner
for Operations, overseeing the operations of the Agency's 6 Centers and
the Office of Regulatory Affairs, including all field offices. He
manages high priority scientific and public health issues both within
and across Centers and participates in a broad range of public health
issues sponsored by the Department of Health and Human Services. As a
member of the Agency's senior management team of Center Directors and
Deputy Commissioners, Dr. Friedman is involved daily in negotiations
and discussions of food and drug issues with regulated industries,
patient and consumer groups, congressional staff, other federal and
state agencies, and representatives of foreign governments.
Dr. Friedman received a B.A. degree in English from Tulane
University, New Orleans, Louisiana and an M.D. degree from the
University of Texas, Southwestern Medical School, Dallas, Texas. 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 appointment as Deputy Commissioner for
Operations, Dr. Friedman served as the Associate Director of the Cancer
Therapy Evaluation Program from 1988-1995 and from 1985-1988 as Chief
of the Clinical Investigation Branch within the Division of Cancer
Treatment at the National Cancer Institute, 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, the American Federation for Clinical 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 is 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.
______
robert j. byrd
Appointed to this position in December 1995, Mr. Byrd is
responsible for Strategic Planning and Management Systems, and
providing leadership and direction in all phases of management
operations. Mr. Byrd is the Chief Financial Officer for FDA and the
Commissioner's Chief Advisor on all aspects of managing FDA resources.
Mr. Byrd is also responsible for providing cost effective, customer
focussed management support for the operating programs, including
financial management, human resources management, facilities
management, procurement, grant and contract management, safety and
security, information systems, and effective planning and assessment of
Agency programmatic activities.
Prior to joining FDA in 1994 as Associate Commissioner for
Management, he was recruited into the U.S. Department of Agriculture's
Senior Executive Service Career Development Program as a management
specialist, 1992-1994. There, he designed a model for integrating
procurement management within USDA. Many of the elements of his model,
which was presented to the Vice President and to the Secretary of
Agriculture, were incorporated into the ``Report of the National
Performance Review.''
He also served as Assistant Secretary, Services and Logistics in
Maryland state government from 1990-1992. Prior to that, Mr. Byrd
served in Maryland's Department of General Services as Director of
Operations, 1986-1990; Executive Assistant to the Secretary, 1984-1986;
Administrator, Special Projects, 1981-1984; Executive Director Maryland
Minority Educational Fund, 1976-1981; Administrator, Architect/Engineer
Selection Board, Maryland state government, 1975-1984; Accountant/
Auditor, Maryland Department of Transportation and Maryland Department
of General Services from 1973-1975. Mr. Byrd received a B.B.A. from
Loyola College and an M.B.A. with honors from Loyola College in 1987.
His awards include the Governor's Citation for Outstanding State
Service, MD, 1983 and 1992; Governor, Comptroller, and Treasurer's
Distinguished Service Award, MD, 1984; FDA's Award of Merit, 1996; and
FDA Commissioner's Special Citation, 1997.
______
william b. schultz
Mr. Schultz is the Deputy Commissioner for Policy at the Food and
Drug Administration (FDA). As the Deputy Commissioner, Mr. Schultz
oversees the Agency's policy development activities and the processing
of all FDA regulations. He is the principal advisor to the Commissioner
on policy matters before the Agency and bears primary responsibility
for coordinating FDA's policies with other government agencies and
countries. He also oversees implementation of the President's Tobacco
Initiative and the development of the Agency policy positions on
legislative matters before Congress.
Prior to his appointment, Mr. Schultz served as Counsel to the
House Subcommittee on Health and the Environment, which was chaired by
Congressman Henry A. Waxman of California. Mr. Schultz was the Counsel
principally responsible for the following laws: Nutrition Labeling and
Education Act of 1990; Safe Medical Devices Act of 1990; the
Prescription Drug User Fee Act of 1992; Generic Drug Enforcement Act of
1992; and DES Education and Research Amendments of 1992.
Prior to becoming Counsel to the Subcommittee, Mr. Schultz was a
Senior Attorney at Public Citizen Litigation Group, where he litigated
cases in state and federal court (at all levels) on a variety of
issues, including food and drug law, automobile safety, nuclear power,
voting rights and anti-trust. He also represented Public Citizen before
Congress and has written a number of articles, principally on food and
drug law issues.
Between 1982 and 1996, he was an Adjunct Professor at Georgetown
University Law Center, where he taught Civil Litigation and Food and
Drug Law.
Mr. Schultz served as a Law Clerk to United States District Judge
William B. Bryant.
He received his J.D. from the University of Virginia Law School and
his B.A. from Yale University.
______
dennis p. williams
Dennis Williams has served as Deputy Assistant Secretary for Budget
since 1984.
Dennis provides advice and assistance to the Assistant Secretary
for Management and Budget, and the Secretary, on program policy and
management issues dealing with the Department's budget. He is
responsible for the formulation of the budget for HHS and its
presentation to the Office of Management and Budget and to Congress.
From 1982 until 1984 he served as the Director, Division of Welfare
Budget Analysis in HHS. Before that, starting in 1980 until 1982 he
served as Chief, Health Care Financing Branch, Division of Health
Budget Analysis.
From 1977 until 1980 Dennis was a Program Analyst in the Division
of Health Budget Analysis.
Prior to his appointment at HHS, Dennis served from 1968 until 1971
as a Program Specialist with the Office of Economic Opportunity and
from 1965 to 1967 with the Peace Corps in Turkey. He was awarded a
doctorate in International Relations at the Johns Hopkins School of
Advanced International Studies in 1976.
Food Safety Initiative
Senator Cochran. We appreciate the cooperation that we have
received from you, Dr. Friedman, in the work of this agency. I
know that as an acting director, you have been called on to do
an awful lot of heavy lifting. We have admired the efforts that
you have made to assume responsibility for the actions of the
agency and to try to provide strong leadership as the acting
administrator.
The questions I have are centered primarily on the
substantial increases in the budget request. Specifically, the
first item is the food safety initiative. You pointed out that
there had been an additional $24 million provided for this food
safety initiative for the current fiscal year. Now we see an
additional $50 million increase over that amount being
requested for this initiative.
It seems like an awful lot of money and at a time when we
do not anticipate an increase in allocation to this
subcommittee. So, if we provide increases in funding, they have
to come from other programs. We do not have the luxury of just
reaching up in thin air and pulling down new money to support
these increases. So, that presents us with some hard choices
that we have to make.
So, we need to know what is being done in this area that
justifies taking $50 million from some other program either at
FDA or from some other agency that is funded in this
appropriations bill. So, it is going to be a hard sell I think.
You pointed out surveillance, education, research, imported
products requirements.
Dr. Friedman. Let me do my very best to make that case to
you, sir.
Senator Cochran. Why do you need so much more money?
Dr. Friedman. It is a very appropriate question and I want
to convey to you both the reasons why we think this is a very
important investment in our future and the recognition of how
many worthwhile activities compete for your committee's
attention and resources. I do recognize that as a very
significant tension.
You recognized the background upon which all of these
discussions occur. Our current assessment of the number of
illnesses from foodborne infections is rather imprecise, but at
a low it is a little over 6 million and at a high, perhaps 33
million individuals become ill each year in the United States
from foodborne illness. The dollar figures associated with
their loss of ability to work and function is significant. More
critical, of course, are the perhaps 9,000 deaths that occur
each year from foodborne illness.
The background upon which we are facing food threats is a
very substantial one. Our population is becoming older and more
sensitive to foodborne infections. The kind of foods that we
eat are changing dramatically, much more imports. Our imports
have virtually doubled over the past 7 years and are going up
at an even more rapid rate as our consumers want to have fresh
produce or other products available year-round from all over
the world.
Not only that, but the micro-organisms themselves have
changed. We have seen the evolution of more virulent, more
deadly micro-organisms. The E. coli O157:H7 is one example but
by no means the only one. There is a Salmonella subtype. There
are Campylobacter microbes that are becoming more virulent and
more deadly.
When you put all this together, you realize that America
has a very safe food supply now, but that our citizens want
this to remain safe and even safer and that the challenges that
we confront in the future are going to be very substantial.
I am sorry for that long introduction. I know you
recognized that but I thought it was worth just restating it.
We are working very closely and very cooperatively with our
colleagues in the Centers for Disease Control and Prevention,
at the U.S. Department of Agriculture, at the Environmental
Protection Agency, with State and local authorities to try and
have the most integrated, most powerful system for preventing
infection, detecting infection, and dealing with it once we
identify it.
The paradigm is that we want to control all the possible
contaminations from the farm where the food is produced, until
it reaches the consumer's table. It is a formidable challenge
to cover that entire range, but if you think about the vast
number of food types, the vast number of opportunities for
infection--I do not want to seem arrogant--this is a modest
request and one that we agonized over because we did not want
to come to this committee asking for an exorbitant amount. We
think the programs identified here are really very sensible
scientifically from a public health point of view. We do
recognize how difficult it is to make these budgetary
allocations, but this is what I think our citizens want as one
of their primary desires and I think we can make a very strong
case for it, sir.
Senator Cochran. There is one part of the program that we
understand includes expanding the effort to inspect seafood
under the new HACCP requirements. What level of funding is
being allocated for the hazard analysis and critical control
point requirements and the implementation of a seafood
inspection program?
Dr. Friedman. This year we are committing to fully
implementing the seafood HACCP program with some $8 million to
recruit an additional 80 seafood inspectors.
In addition to that, though, there are extensive activities
in terms of education for State and local regulatory officials,
but also educational activities for the seafood processors and
the industry people as well.
This looks to be so far a very promising start. This was
the pilot program which the U.S. Department of Agriculture has
been watching very closely as they model their own HACCP
program. It seems to be one where there is a good deal of
cooperation between industry, local authorities, and Federal
authorities. At this point, sir, we are enthusiastic about it.
It is the pilot program in some sense. We are deeply committed
to a full and vigorous implementation of the HACCP program for
seafood.
We are of course, examining and will be moving to HACCP
programs for juices this year as well.
Senator Cochran. The budget justification that has been
submitted to the committee indicates that FDA intends to expand
implementation of HACCP and other food safety assurance systems
in the food industry. What expansions and new systems do you
intend to implement?
Dr. Friedman. Our juice program is No. 1 in that regard.
Senator Cochran. What is that?
Dr. Friedman. Fruit juice.
Senator Cochran. OK. I just did not understand what you
said.
Senator Bumpers. You say you are planning to expand it to
fruit juices?
Dr. Friedman. Yes, sir; that is right. That will be the
next area.
I think that we want to only expand HACCP programs in those
areas where there is scientific basis and where there is an
expectation that such a system, as attractive as it is
intellectually, will actually be practical and will in fact
offer the consumer something positive.
Mr. Schultz.
Mr. Schultz. If I could just comment. I think this
represents a new philosophy by the FDA and really reflects the
sort of Reinventing Government approach of this administration.
We are moving away from what we did before, which was having
inspectors go in plants. We were accused, I think sometimes
justifiably, of nitpicking, and it was a very confrontational
relationship with the industry.
With HACCP, we are starting with the areas where there is
the greatest concern, the greatest risk. It involves FDA
working with the company to develop what is called a HACCP
plan, which is a plan that says how often do you clean the
counters, how often do you check the temperature in the
refrigerator, where do you have to have pasteurization or
something equivalent in the case of juice. Then, what our
inspectors do is they come in, they look at the plan, and they
look at the records, not just what is happening that day, such
as is the floor dirty? But looking back in time what happened
when they checked the temperature, when they did this, and when
they did that.
It is much more effective in terms of food safety and I
think it is much more constructive. Obviously, where there are
serious violations, we will bring enforcement actions, but the
idea is to get away from the single day, nitpicking kind of
approach, and really focus on what is important.
Senator Cochran. It does sound like that is the kind of
thing that inspectors do in city governments or in local
governments. Are there not agencies involved in going around
and certifying restaurants and other food establishments where
people buy food to see if the counters are clean, et cetera? Or
am I missing something here? Why do we need a Federal agency
doing that?
Dr. Friedman. Well, State and local inspectors inspect at
the retail level. I think the value of having Federal
inspectors is a couple of fold. One is in setting the
principles. For example, the State of Alaska has recently come
to us and so much appreciated our seafood HACCP program, the
scientific basis of it, the clarity of it, the logic of it.
They are incorporating it as their State program and following
it there.
In terms of dealing with international suppliers who may
not supply just one city or one locality but many parts, we
have a very important role to play there. In terms of
interstate commerce where seafood is distributed widely across
parts of the country, we have a very important role to play
there.
In terms of having certain authority to set the standards,
I think that we have a very valuable contribution, but I must
recognize the important role that State and local authorities
do play in this. We work closely with them in that regard.
Senator Cochran. Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman. First, let me
apologize to you for being a little late. I have a
responsibility on the Energy Committee as ranking member, and
they had a big----
Senator Cochran. Knock down, drag out?
Senator Bumpers. Yes; exactly. [Laughter.]
Dr. Friedman. Thank you for being here, sir.
Senator Bumpers. Like a train wreck, I did not want to miss
it, but I have sat where you have sat many mornings by myself
in this committee holding these hearings, and I know what that
can be like.
Dr. Friedman, let me first thank you. My staff tells me
that you paid a great tribute to me before I got here. I wish
you would have saved it. I would like to have heard it.
[Laughter.]
But I know that everything you said was true and a lot
more. [Laughter.]
Dr. Friedman. I edited those remarks, sir, yes.
Senator Bumpers. Thank you very sincerely for your kind
remarks. I have had an excellent relationship with you and Dr.
Kessler, all the FDA directors.
In any event, I have the highest approval rating in my
State I have ever had, even when I was a young, dynamic, good
looking Governor, which tells you that when you tell them you
are going to exit, they all love you. [Laughter.]
Dr. Friedman, let me just ask you a few questions. I hope
these have not been asked before, but do not hesitate in
telling me if this question has been presented to you before.
I wanted to ask you, first, how long have you been
inspecting seafood and how is that going?
Dr. Friedman. Well, I do not have the exact date of when we
began inspecting seafood.
Senator Bumpers. Let me tell you. A couple of years ago.
Dr. Friedman. Do you mean under the HACCP program?
Senator Bumpers. Pardon?
Dr. Friedman. Under the HACCP program?
Senator Bumpers. Yes; I am sorry. Under the HACCP program.
I am sorry. I left that out.
Dr. Friedman. Mr. Levitt, who is the Director of our Center
for Food Safety, may be prepared to deal with more of these.
The full implementation of HACCP only occurred this last
December.
Senator Bumpers. This past December?
Dr. Friedman. The full implementation.
Senator Bumpers. I guess it is fair to say then, Mr.
Levitt, you have not had enough experience yet to know how it
is going to work, have you?
Mr. Levitt. We are clearly in the first year of its
implementation, and we consider this both a learning experience
for us and the industry. One thing we are doing, I think No. 1,
we have a goal of inspecting every seafood processor within the
calendar year.
Senator Bumpers. Where are you in that goal now?
Mr. Levitt. Well, we are a quarter of the way into the
year.
Senator Bumpers. You are at 25 percent?
Mr. Levitt. I am not positive we are at 25 percent as yet,
but we have been doing it for the first quarter of the year.
What we are doing, which I think is a little unusual, is we
are providing feedback letters to companies after the
inspection. Again as Mr. Schultz said, the traditional mode is
for FDA to have a very kind of arm's length relationship with
the industry. We are trying to do this much more cooperatively
and after the inspections, we are providing written feedback to
companies of potential areas we think improvement could be made
in their HACCP program in an effort to use this program as a
way to raise the standards overall and enhance the safety of
the program.
So, we consider this first phase of implementation to be
both the first year that companies are expected to have a full
seafood HACCP program in place, but also recognizing there is a
learning curve involved. So, we are trying to provide
constructive feedback on how they can make it even better.
Irradiation of Food
Senator Bumpers. Do you permit irradiation of seafood?
Anybody?
Mr. Schultz. No.
Senator Bumpers. You do not irradiate seafood. Is there a
specific FDA prohibition against irradiating seafood?
Mr. Schultz. In order to irradiate food, we treat that as a
food additive, so a sponsor has to come and ask permission, and
I do not know that kind of request has been made for seafood.
Senator Bumpers. But do you have an answer for them if it
is made?
Mr. Schultz. Well, we have to look at the data.
Senator Bumpers. Do you have any data?
Dr. Friedman. This is Janice Oliver, Deputy Director in our
Center.
Ms. Oliver. Good morning.
Senator Bumpers. Ms. Oliver.
Ms. Oliver. We have some data that has been supplied to us
on irradiation for seafood and we have petitions that are in-
house that I cannot comment on. But we also have some
additional data that the seafood industry is gathering at the
present moment to supply us.
Senator Bumpers. While you are there, Ms. Oliver, you may
be the one to answer this. What percentage of the poultry in
this country is irradiated? Does anybody know the answer to
that?
Mr. Schultz. Small.
Dr. Friedman. I believe it would be a USDA issue.
Senator Bumpers. I know this is USDA's responsibility but I
thought you might have some idea.
Dr. Friedman. My understanding is it is a small percentage
but I cannot give you a quantified number on that.
Senator Bumpers. Let me ask you this. If I wanted to start
irradiating foods, for example, poultry, would I have to come
to you and ask your permission?
Mr. Schultz. The answer is yes, and it has been done and we
gave the permission.
Senator Bumpers. So, it is done on an individual basis. The
poultry industry does not have ad hoc authority to just go
ahead and start, what shall I say----
Mr. Levitt. Irradiation is considered a food additive under
the Food, Drug, and Cosmetic Act and needs prior FDA approval.
Irradiation has been approved for particular products including
poultry and most recently for red meat.
Dr. Friedman. Currently, there are several food commodities
that can be irradiated to kill microbes, spices, poultry, red
meat. It is perfectly permissible.
Senator Bumpers. Do you have any idea what percentage of
the red meat in this country is being irradiated?
Dr. Friedman. Again, sir, my understanding is that it is
small. I am not sure that the labeling has been fully worked
out by the U.S. Department of Agriculture. We have been working
with them on that. I know they are committed to that, but they
could give you a better sense of the exact status.
Senator Bumpers. Did FDA develop this process of doing
something to the chicken to eliminate all salmonella?
Dr. Friedman. It is a very interesting product, sir. The
competitive exclusion, is essentially colonizing the chicks'
intestines with friendly, less harmful organisms to keep the
more harmful organisms from setting up colonies there. This
particular product was developed by USDA researchers. They
then, working with a private company, submitted that
application to the Food and Drug Administration. We reviewed
the application. Our Center for Veterinary Medicine in fact
agreed that it did exclude some of the harmful bacteria, and as
you know, that was approved recently.
There are a number of other products also under
consideration for the same kind of thing. This is a very
interesting microbiologic technique that has even been used in
humans in some situations.
Senator Bumpers. I do not know whether this is pervasive in
the industry or not, but I am hearing from some of them that
because of a new requirement--and it may be related to this--
they are having to use 2 gallons of water more per bird than
they have in the past. Do you know what that is about?
Dr. Friedman. I do not, sir. I think USDA may be able to
provide that answer.
Senator Bumpers. Well, I am advised that that is an FSIS
thing. I am sorry.
Dr. Friedman. No, no; it is perfectly OK, sir.
Senator Bumpers. Do you have any idea how foreigners treat
irradiation, what their view of it is?
Dr. Friedman. I know that irradiated products have been
available in foreign countries.
Senator Bumpers. There is some resistance to it, is there
not?
Dr. Friedman. There is a small symbol that is put on
irradiated food. I have not seen specific data suggesting how
many people find it an attractive treatment and how many people
are worried about it. I do not know that information, sir.
Medguide Program
Senator Bumpers. Mr. Chairman, I guess this is close to my
last question. I have two questions.
Last year you launched the so-called Medguide program to
give consumers better information about the drugs they were
buying. Now, that works pretty well for me. I take a few
medications and they always give me this little poop sheet. But
I thought 2 years ago we also decided that FDA would be the
final determiner of what information is given on all these
different drugs that required that. Is that correct?
Mr. Schultz. Maybe I could try that.
Senator Bumpers. All right.
Mr. Schultz. What was worked out with the Congress last
year was a two-step program. The first step would be to let the
industry and industry groups voluntarily try and do Medguides
and to reach certain goals. So, we are currently in that
voluntary phase where we are looking at two things. One is how
often do consumers actually get a piece of paper when they get
a prescription drug, and the answer today is fairly frequently.
Senator Bumpers. Virtually all the big drug companies do
that, do they not?
Mr. Schultz. The drugstores do, the drug chains, yes.
Senator Bumpers. That is what I am talking about.
Mr. Schultz. The computer has just helped us immensely
because there are companies that basically put out packages of
the information and then the pharmacist can very easily print
it out on an inexpensive printer.
The second issue, though, also very important, is what is
the quality of the information. That varies quite a bit. So, I
think the effort over the next few years is going to be to get
that information up to a very high quality, not such that FDA
is writing it, or saying exactly what the words have to be, but
making sure the key elements are there. We will then do a
survey in the year 2000 to see if, I believe the goal is, 75 or
80 percent of people get adequate information. If the answer is
no, then the FDA could play a more active role.
Senator Bumpers. I think all drugs have an admonition, do
not drink if you take this drug, do they not?
Dr. Friedman. Not all drugs.
Senator Bumpers. Not all of them?
Dr. Friedman. No, sir.
Senator Bumpers. Just the ones that I buy? [Laughter.]
Dr. Friedman. I know that you are not proposing new
regulations for us in that regard.
Arkansas Regional Laboratory
Senator Bumpers. Finally, I talked to you, Dr. Friedman, in
the office about the disappointment those of us in Arkansas
experienced when we found out we were not in the budget for
phase 3 of NCTR, the National Center for Toxicological
Research.
Let me ask you. As you know, the consolidation of the
laboratories by FDA which was designed to save money and become
more efficient--as long as Arkansas was one of them, I was hot
for it, of course, and we are one of them and I thank you and
Dr. Kessler for that.
But I am just curious. We have got the money and we are
under construction on phases 1 and 2. I forget the amounts this
year. I think in 1998 we got $14 million for phase 2. My
question is, What impact will that have on the efficiency of
that laboratory or its ability to do what it is supposed to do
without phase 3 being built at least sometime in the immediate
future?
Dr. Friedman. As you recognize, sir, the first two phases
have to do with the construction of the laboratory components
for our regulatory activities. The attractiveness of having our
regulatory laboratories interacting directly with our applied
scientific laboratories--it is an obvious opportunity that we
want to take advantage of.
Phase 3 is constructing office/conference space for the
staff not only for our regulatory affairs staff, but also for
some of our scientists at NCTR. We will use temporary
buildings. We will use other facilities to have offices for
these individuals.
Our consolidation plan for our field laboratories is moving
forward. We have been very successful. I have been very
gratified with how that has been handled so far. We are
consolidating. We will be appreciating real savings and
efficiencies.
Nonetheless, we recognize that not having phase 3 will mean
that we cannot be as efficient at our Arkansas facility as we
possibly could be. As you know, sir, we requested the money
this year. We are planning to do so again next year. We think
this is a legitimate, valid project for us to be engaged in. As
you recognize, the Department recognizes, we all struggle with
the competition for very important things that need resources.
We will put this forward again, sir.
Senator Bumpers. Dr. Friedman, I appreciate your remarks.
Mr. Chairman, if I may just in closing say that I have been
a fairly unabashed supporter of the Food and Drug
Administration. Three years ago, I believe it was, there was a
mad dash in the Congress to force FDA to speed up the licensing
of drugs. While that is always a highly desirable goal, it is
not a goal if you are going to sacrifice any of the kinds of
experiments and information you need to protect the consumers.
Every time I talk about how we as Americans are so lucky
because when we eat our food, we know it has been inspected,
and when we take medicine, we know that the medicine has been
tested and tested and tested.
Dr. Kessler was a little bit on the defensive but certainly
not because of anything I said. It is very easy to sit up here
when you are down there and browbeat you and demand that you do
certain things more expeditiously, but I never joined that herd
because if it takes longer to be sure that you are not
dispensing a drug that is going to have some terrible side
effect--and oftentimes those do not show up for years. So,
sometimes I know that it is just a roll of the dice almost when
you do license these drugs because they have not been tested
long enough to know for sure that somebody is not going to have
liver cancer 10 years from now and it is going to be traced
back to that.
So, as I say, I have always thought you did an excellent
job. Dr. Kessler's role in this tobacco brouhaha is legendary,
and he was always tough-minded and deserves a lot of credit for
it.
As I say, I think you do a very fine job. We have had a
great relationship with you in my State at the National Center
for Toxicological Research, and we appreciate that.
So, since this will be the last time I will have this
bittersweet experience of having FDA before me, I just wanted
to make those comments to you to assure you that I will
continue to feel that way. If I were king--I have said many
times I should be. [Laughter.]
I would take the space station--better still, I would just
take the cost overruns of the space station. [Laughter.]
And split it between you and the National Institutes of
Health. I might give NIH a lot more than I would FDA because
they are actually on the cutting edge of doing the medical
research in this country. You are not going to get anything out
of the space station. We never have.
I mean, I am a proponent of the space program. Do not
misunderstand me. But the space station is now--and I am in my
``I told you so'' mode this morning. For 7 years I have tried
to kill that sucker without success, and now we are looking at,
the first time, the admission of NASA that just the building of
it, not the deployment and the operation of it, is going to
cost $6.6 billion more than we had been led to believe. That is
just the opening salvo.
As I have said many times, when NIH can only approve about
27 percent of the good medical applications for good research
that they get and us getting ready to spend well over $100
billion over something that has no payback, unless you are
intent on going to Mars, as I say, I would just take the cost
overruns and give it to you and NIH and the Centers for Disease
Control. I will add them too.
Thank you, Mr. Chairman.
Irradiation of Food
Senator Cochran. Thank you very much, Senator Bumpers.
Dr. Friedman, I have one other question on this food safety
issue and that relates to irradiation. I understood that FDA
had issued an order, regulation finding that irradiation, when
used for the purpose of killing bacteria and other things that
made food harmful, was safe and it could be used in the food
processing industries. Is that a correct statement?
Dr. Friedman. It is correct, sir, for a number of kinds of
food. It is true for muscle meats of animals like beef and pork
and sheep. It is true for poultry. It is true for certain
spices. There are a number of kinds of foods where it has been
approved for the killing of bacteria, yes, sir.
Senator Cochran. My concern is that we are spending a lot
of money on visual inspections of carcasses to try to find
things that are unhealthy or could cause people to get sick if
they ate the food. But we are not spending anything in the food
processing industries that I know anything about on
irradiation, or at least it is a very small amount devoted to
that right now.
You point out that one of the things that you are doing
with the money in the food safety initiative is education. Why
are you not spending some money educating the public that
irradiation is safe so that there will not be the fear of it
that exists right now?
Dr. Friedman. I think the public's perception of
irradiation and the attractiveness of irradiation to the public
is an important consideration, and I know that the livestock
industry, meat producers are certainly focusing on this very
much.
As you appreciate, sir, even if irradiation were uniformly
applied to all products today, that would be very good for that
particular moment, but if the consumer then did not properly
handle it, did not clean the surface, did not wash his or her
hands, did not store it properly, did not cook it properly, the
opportunities for contamination at the home or at the retail
store or at the restaurant are still very substantial. We are
looking at the range of educational activities.
I think for some consumers, for some products, irradiation
makes a great deal of sense, and we believe that it is safe. We
believe it is appropriate, and that is why we approved it. We
have said that publicly and continue to do so.
I think that how we use our scarce education dollars over
the whole range of responsibilities is something that we are
still looking at.
Senator Cochran. I may have it wrong but it just seems to
me that the Federal regulations right now require a lot of
things to be done in food inspection that are unnecessary or
that do not really meet the problem head on. Yet, when we come
up with new technological advances, the Federal Government does
very little to advance the use of that and to try to help
acquaint the general public with the benefits of it, the
processing industries with the benefits of it, and to go to the
next step. It may be because it is like I said about the food
safety initiative and the additional $50 million that you need.
It is a hard sell unless we are going to get some benefits from
it.
Dr. Friedman. We certainly expect to get benefits from it.
I think that the remarks that you are making are important
remarks, but probably are more appropriate to be directed at
USDA than ourselves in that regard since they are the ones who
are developing the labeling for meat irradiation.
In addition, though, you make a very important point about
how you use your inspectional resources. Just to reprise what
Mr. Schultz said, one of the really attractive features about
the HACCP program is that it is prevention, it is
scientifically based, it uses our resources much more
efficiently. We are really trying to explore this because we
agree with you. To inspect every piece of seafood is not a very
efficient use of our time and may not even be the very best way
to do it. We believe that looking at the processes, having a
scientifically validated way of doing things just makes a lot
more sense. It is not only more practical but it makes a lot
more sense. I think your points are very cogent in that regard.
Senator Cochran. Mr. Schultz, you appear to want to say
something.
Mr. Schultz. No, no; I cannot improve on it.
I think that there are two issues on irradiation that you
are alluding to. One is, is it really safe? Nobody is going to
get irradiated, but what does it do to the nutrients in the
food? We looked at that, as Dr. Friedman said, for meat and
poultry and are ready to look at it for other products.
Then there is this major consumer acceptance issue. Because
of the word ``irradiation,'' people are afraid of it. I think
you make a very valid point, and we ought to, with USDA, look
at this issue of consumer education. It is a little bit of a
chicken and egg issue since nobody is using it, it is a little
odd to start the education now. But I think it is something we
should look at.
User Fees
Senator Cochran. I hope you will. I think that would be a
wise use of some of your resources.
In the budget request, there are proposals for new user
fees. Could you tell us how much in user fees you are
suggesting be imposed on industries, which industries, and how
much do the user fees amount to?
Dr. Friedman. Our budget outlines several kinds of user
fees.
Senator Cochran. I am referring to all of them. I want you
to hang it all out. Tell us what the administration is
proposing. I am tired of just stating it myself. I want you to
tell what you are proposing.
Dr. Friedman. Very good. I will ask Mr. Byrd to assist me
in this.
We are asking for a component for prescription drug user
fees which was reauthorized in our 1997 FDA Modernization Act
which I believe were $132 million. In addition, there is
approximately $128 million of new user fees which are
distributed in a way that Mr. Byrd can outline for you.
Senator Cochran. Mr. Byrd.
Mr. Byrd. We are distributing the $128 million of new user
fees: $10 million for the food additive petitions, $12 million
for generic drugs, $25 million for devices, $10 million for
animal drugs and feed, $57 million for postmarket surveillance,
and $12 million for import reviews, a total of $128 million in
new user fees.
Senator Cochran. Who would pay the postmarket surveillance
user fees, that $57 or $58 million?
Mr. Byrd. That is right. That is intended to be paid by
establishments.
Senator Cochran. What kind of establishments?
Mr. Byrd. Well, the medical device establishments, the
businesses. When we talk about establishments, we mean the
businesses.
Senator Cochran. What businesses? I want people to know who
you are going to tax or who you are going to ask to pay for
these things.
Mr. Byrd. Medical device businesses, the food
establishments. When I say food establishments, I mean those
food--that part of industry that makes food and distributes
food, processes food. Human drug establishments. Those are the
pharmaceutical and biologics industries. Those are the
establishments that we are referring to when we talk about
postmarket surveillance.
About $31 million of that $57 million would come through
the food establishments, about $7 million through human drug
establishments, about $11 million for medical device
establishments, about $4.6 million for biologics
establishments, and about $4 million for animal drugs and feeds
establishments.
Youth Tobacco Prevention Initiative
Senator Cochran. The budget also proposes a substantial
increase in funding for the youth tobacco prevention
initiative. In looking at the budget request, it appears that
compared with this fiscal year where $34 million was provided
to the administration for this initiative, next year's request
is for $100 more million. So, a total of $134 million is
requested for that initiative. Is that correct?
Dr. Friedman. Yes, sir; that is correct.
Senator Cochran. Like the budget request for the additional
$50 million for the food safety initiative, there is no offset
anywhere suggested, and it is unlikely that the committee is
going to get an allocation any higher than it got this year.
So, we are confronted with a new $100 million request for this
initiative that either has to be taken from other programs
administered by the Food and Drug Administration, or from
programs administered by the Department of Agriculture or the
Commodity Futures Trading Commission that come under the
jurisdiction of this committee because we are not anticipating
an increase in allocation under the budget resolution. There is
in effect an agreement that was entered into last year called
the Balanced Budget Act which imposed restraints on spending.
That applies to this next fiscal year just as well as it did
the current fiscal year.
Dr. Friedman. Yes, sir.
Senator Cochran. So, this is a part of reality that we are
confronting this morning in looking at FDA's budget request.
The part I specifically want to ask about I guess is, as we
try to decide what to put in the bill as we recommend it to the
full Senate, we have to justify to the Senate that these are
going to be funds that are well used and that are needed and
that there is legal authority to use them.
As I understand it, $24 million of the request is for
tobacco product regulation. Is there legal authority for the
Food and Drug Administration to spend $24 million in product
regulation?
Dr. Friedman. I will ask Mr. Schultz or Mr. Zeller if you
would please help with that.
Mr. Schultz. Well, I think it is straightforward. As you
know, the agency has said it has jurisdiction over tobacco
products, and there are some new products coming along. Now,
the jurisdiction issue is in litigation. The district court
upheld jurisdiction. It is on appeal to the fourth circuit. It
has been argued. But, we believe we have jurisdiction and the
district court upheld it. So, that would mean as new and novel
products come along, the agency would have the obligation to
review them.
Senator Cochran. The additional $51 million over this
current year's level is for enforcement and evaluation. What is
to be enforced and evaluated? What do you intend to enforce?
Dr. Friedman. The enforcement activity referred to is the
prohibition of selling tobacco products to underage youth.
These are to be moneys distributed to States. One of the really
attractive features about this program is its distributed
nature, the fact that there are not a lot of FDA staff who will
be working on this here in the Washington area. It is at State
and local communities where this money will be distributed to
check and see whether there is compliance with the restrictions
on selling tobacco products to underage youth and asking for
identification before such a sale is made to a young
individual.
Senator Cochran. I am curious to know whether you are going
to make decisions on allocating the funds on the basis of
whether States have already settled cases with the tobacco
industry and obtain funds for this purpose already on their own
initiative. Will that be a factor in determining who gets the
money?
Dr. Friedman. I do not believe it will be.
Mr. Schultz. What we have done is we have asked the States
that are interested to submit contract proposals to us.
Basically, their people are going out and doing the
inspections. If they find violations, then we send warning
letters and can impose fines.
I do not know that the State settlements are really to
enforce our 18-year-old restriction, although they obviously
involve a lot of money that could be used for good purposes in
terms of tobacco.
Senator Cochran. How many States have actually applied for
these funds in the current fiscal year? You have $24 million
available for the enforcement and outreach program this year.
Have you made any allocations of these funds to the States?
Dr. Friedman. I would ask Mr. Zeller who is most conversant
with that to speak.
Mr. Zeller. Last year we signed 10 contracts on a pilot
basis. The total for those first 10 contracts was just under $2
million. So far this fiscal year we have signed renewals with 4
of the first 10 States. We have signed three new contracts,
North Carolina, Nevada, and Rhode Island, and we are in
negotiations with another 12 to 13 States. We have yet to
receive word from a single State that they definitely will not
be applying for funding to help us in the enforcement this
year. So, we remain confident by the end of the fiscal year, we
will have signed contracts with 50 States. We even have
interest from some of the territories.
Senator Cochran. So, you think you are going to spend all
the $24 million by giving it to the States?
Mr. Zeller. The overwhelming majority of the $24 million is
for the States. It is not 100 percent. We are setting aside
some money for followup enforcement action that we could take
at the Federal level. We do not want to reveal how much of the
$24 million is for the States, but the great bulk of it is for
State contracts.
Senator Cochran. I may have missed something, but I am not
familiar with the details of the Federal laws regarding
violations of the prohibitions against selling tobacco to
underage people. Does the Federal Government presume to
prosecute and deal with offenders, or is this something that
comes under the State and local jurisdictions?
Mr. Zeller. A violation of our final rule is pursued by
FDA.
Senator Cochran. So, it is a rule. It is not a law then. It
is not a Federal criminal law.
Mr. Zeller. No; it is a civil violation of the rule. For a
first violation, since the program is new, the retailers get a
written warning from FDA, and then civil money penalties begin
with a second violation. We have sent out and received our
first set of civil money penalty payments. For the second
violation, the fine is $250.
Senator Cochran. What if these acts are also prohibited by
local statutes or ordinances? Do you respect the right of local
law enforcement officials to deal with that?
Mr. Zeller. Absolutely, as long as they are coordinating
with us so that we know what actions they are taking
separately. There is nothing that would happen to the States by
signing contracts with us to enforce the Federal regulation
that would impede their ability to proceed separately under
State law.
Senator Cochran. So, what is the policy? If someone has
already been punished, in effect, or disciplined in some way
for violating these rules, you do not come in and try to put a
Federal penalty on them on top of the local penalty?
Mr. Zeller. Only if we have been able to document a
violation of the Federal regulation. Prior violations of the
State or local ordinance have no effect on when a particular
penalty would kick in under the FDA rule. We have to document
individual violations of our regulation.
Senator Cochran. Compliance outreach is a part of the
program, and in this year $10 million was allocated for that
purpose, as I understand it. Next year you are proposing to
spend $35 million. What will you do with the additional funds
in the area of compliance outreach?
Dr. Friedman. I think it is important to put in perspective
both what the goal is--that is, to help educate and work with
the retailers so they understand what the regulations are and
understand the importance of not selling tobacco products to
underage youth--and also to recognize really the vast amount of
money that is spent advertising tobacco products.
This is a considerable amount of money, $35 million, but
compared to $5 billion, which is what the tobacco industry
spends on advertising products, it is a drop in the bucket.
There are some States like California, for example, that have
programs that are more expensive and larger than what we are
proposing for the whole Nation.
The goal here is to help educate the retailers so that
their sales staff, cash registers at a 7-Eleven or some other
kind of store, will understand the necessity of assuring that
it is an adult who is buying the product and understanding that
the owner of the store may be at risk for a financial penalty
should that not be properly applied.
Mr. Zeller.
Mr. Zeller. Let me give you some detail on how we would
propose to spend the increase. With the money for outreach this
year, just over a month ago, the Vice President announced a
national multimedia advertising campaign to the tune of about
$7 million out of the $10 million. It is a combination of
radio, newspaper, billboard, and in-store advertising. And the
way it works is each time we sign an enforcement contract with
the State, when the compliance checks are ready to begin, we go
in and we make a media buy. It will average about $100,000 to
$150,000 per State this year. What that means is, if it is a
smaller State, we will be in two media markets. If it is a
larger State, we will only be in one media market and only for
about 4 weeks. So, that is basically what the $7 million buys
you.
If we can get the money that we are requesting for next
year, we will take what is a very modest presence, getting the
word out to retailers and, just as importantly, to the public.
And we will be able to do more media next year, and we think
that it is very important to bring the enforcement and the
outreach together. It will enhance retailers' understanding and
hopefully compliance with the rule. We have extensively
researched this package. We will be researching and monitoring
the effectiveness of each of the media buys as they are done
over the course of the year, and we will be able to report our
progress when we come back next year.
Senator Cochran. Is it the assumption of the agency that
these activities are authorized by law now, or are you assuming
that the Congress will pass legislation that will authorize the
Federal Government to make these expenditures?
Mr. Schultz. In this case, this particular issue was before
the district court. After Judge Epstein issued his decision, he
had to decide which part of the rule to let go into effect and
which part to hold back on until there was a further decision.
He allowed this piece, the prohibition on the sale, to go into
effect.
Senator Cochran. I am talking about the part that we were
just talking about, compliance outreach. This is advertising,
as I understand it, buying 7 million dollars' worth of
advertising. You have already done that.
Mr. Zeller. We have signed the contract and then the agency
that has the money will then, on a State-by-State basis, place
the ads as each of the contracts are signed. We will be in the
first 10 States by the end of the spring. The program started
about a month ago in Little Rock, AR.
Senator Cochran. Has the agency ever done any advertising
of this kind for any other products or any other subject matter
area under its jurisdiction?
Dr. Friedman. I think in terms of public education, there
are a variety of things that we have done.
Mr. Schultz. I think we have done some. We do have explicit
legal authority to use publicity in connection with----
Senator Cochran. I was just curious as to whether you have
done it before.
Mr. Schultz. I do not think on this scale.
Dr. Friedman. Certainly not on this scale.
Senator Cochran. You have not, for instance, advertised
that irradiation has been found to be safe in food.
Dr. Friedman. No, sir; but we have advertised through a
variety of activities, important health messages, nutritional
messages, women's health messages, through written materials
that we have made widely available through our website, through
personal speaking activities of FDA staff. I think in the
overall trend of wanting to get good information to the public
about things that are important to their health, we certainly
do have a track record.
Blood Safety
Senator Cochran. Changing the subject to blood safety,
there has been a good deal of concern over whether or not the
Federal Government has been doing enough or been aggressive
enough to address blood safety concerns of the hemophilia
community and other users of blood products. I know that FDA
has taken steps to enhance inspections of blood product
manufacturing facilities and to improve enforcement of better
manufacturing practices.
My question is, Do you intend to spend any funds that are
provided in next year's appropriations for the purpose of
helping to ensure, through collaborative efforts with the
Centers for Disease Control or others, surveillance or
detection of problems with blood products and then doing
something to help ensure their safety?
Dr. Friedman. This has been one of our areas of greatest
activity this current year. There is a very distinguished
physician who has joined our Center for Biologics to have as
his primary activity the coordination of the blood safety
program, Dr. David Feigel, who had a very distinguished career
in coming up with AIDS treatments previously. He and a team
that he has assembled plus the staff in our Center for
Biologics, many of whom are absolutely first rate, have done a
remarkable job in coming up with a plan which aggressively and
ambitiously improves our blood safety system.
There are resources that are being devoted to that this
year. There will be resources from our Center for Biologics and
from the Commissioner's office that will be devoted to this
next year. There are, for example, inspectional resources from
our field activities.
We face some difficult choices this year, and there are
some areas that have had to be deemphasized in terms of having
fewer inspections. I have made sure that our inspections go up,
both the number of inspectors and the number of inspections, is
in the blood and blood product area. This is a very deeply held
commitment from our agency at this time.
Senator Cochran. Are there any efforts to convene a working
group, as the committee directed last year, to develop a system
to notify patients of adverse events in the blood supply
system?
Dr. Friedman. We have reached out I think extraordinarily
successfully already this year to link our Blood Safety
Committee to certain communities through the chairmanship of
our new Surgeon General and Assistant Secretary for Health. Dr.
Satcher recently testified before House Members on lookback for
hepatitis C and activities that we were going to be engaging
in. FDA has a role in that. They are very important activities
for education that we have been working on. If I may, let me
give you one or two examples of how that has worked this past
year.
There was a product for hemophiliacs that was made with a
tiny amount of a protein that came from a patient who was later
found to have Creutzfeldt-Jakob's disease. There was no
indication that this material would spread that disease, but
there is a lot we do not understand about that very subtle
neurologic, degenerative disease.
What we did was to work directly with the hemophilia
communities, informing them of this, advising them about it,
getting their input as to how exactly we should deal with this
particular product. I think there was a very fruitful exchange
between those communities, who are very sensitive and very
knowledgeable about these risks, the manufacturers and our own
regulatory authorities.
New Product Applications
Senator Cochran. In the area of new product applications
and approvals, you talked about the fact that this is growing
at a fairly substantial rate each year. I think you said 12
percent per year for the last 4 years.
Dr. Friedman. Correct, sir.
Senator Cochran. Applications being submitted for all types
of products that FDA reviews.
To what extent does this reflect an expansion by FDA on its
own of its application requirements and to what extent does it
reflect a rise in the number of products companies are seeking
to market that have traditionally been approved by FDA?
Dr. Friedman. It is a very good question. The vast majority
of this--and I do not have the exact percentage, but I would
venture to guess more than 90 percent of this represents simply
the robustness of industry. As a Nation we have been investing
in basic biomedical research for the past two decades. I think
that has been one of the most valuable investments that we as a
Nation could ever make. The fruits of that are being born now
both in private industry and in our public institutions,
universities, government organizations, and so forth. What we
are seeing is a vast wave of new products for things that we
have traditionally been involved in, and the pressure on us is
both the novelty of these products, the sheer number of these
products, and the fact that we are dealing with disease areas
for which there have never been treatments before in the past.
It is a very remarkable time. It is a very exciting time, and
we want to make sure that we make the best of possible
judgments about these products and the speediest possible
judgments about these products.
Senator Cochran. Well, there is no doubt that the Food and
Drug Administration has an enormous responsibility in terms of
the consequences of what you do on public health and our
country in general in many respects. We appreciate the
leadership you have provided, Dr. Friedman. We know it is a big
job, and we have been impressed with your high level of energy
that you brought to the task and your personal enthusiasm for
trying to do the best possible job at that agency. And we
commend you for that. I am impressed and congratulate you on
the job that you have done personally.
I frankly think the agency has bitten off more than it can
chew and you are taking on a lot of responsibilities that could
very easily be handled by State and local authorities and other
agencies of the Government, and I think you ought to take a
hard look at that. I know within your own agency and in the
administration and the Office of the Vice President and the
President, there is a tremendous amount of political appeal
about all these new ventures that you are getting into, and I
will not attempt to list them all. But it seems to me that it
is time to go back to the basics, take a look at the basics and
what your original mandate from the Congress required of the
agency. I think some of the traditional responsibilities are
being short-changed.
You do not have the money to do it all. Obviously, if you
look at the budget request, you are requesting way more money
than you are going to get. There is just no way in the world
for the agency to get all the funds that have been requested.
So, it is either pie-in-the-sky time or somebody has got to
wake up and realize that it is unrealistic to ask for this kind
of money under the budget agreement that we have that governs
the appropriation of dollars.
I assume that if you get a bill through Congress, for
example, to provide a lot of new revenues from the tobacco
companies, that could be a source of additional revenue if it
is earmarked for the FDA. But I am not sure the Congress is
going to earmark all of it for the FDA.
Anyway, I am troubled by the tendency in this
administration to continue to expand the authority and the
reach and the activities of the Federal Government. This is not
just things that come under the jurisdiction of this budget
request but so many others too. But I made that speech the
other day in another appropriations subcommittee, and I do not
want to hear it again. [Laughter.]
And I know nobody else wants to hear it again, so I will
not make it again.
But let me thank all of you for cooperating with our
subcommittee and being here to help us understand the budget
request. We will do the best we can.
Dr. Friedman. Thank you, sir, very much.
Submitted Questions
Senator Cochran. We have additional questions that we will
submit to you in writing to be answered for the record.
[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. FDA's fiscal year 1999 budget includes $74 million for
the Administration's food safety initiative, a $50 million increase
over the fiscal year 1998 level of $24 million. What is being
accomplished with the $24 million provided for this initiative and what
is the justification for the significant increase requested for this
initiative for fiscal year 1999?
Answer. The fiscal year 1998 Food Safety Initiative, FSI, request
represented the first installment on a major government-wide effort to
reduce foodborne illness through significant enhancements to food
safety and public health systems that were designed in the early part
of this century. The requested fiscal year 1999 FSI increase represents
a second installment, and has two major objectives. One is to permit
FDA to work jointly with other federal agencies, including USDA, EPA,
and CDC, and the states to strengthen and expand the food safety
activities underway and build on gains made with the fiscal year 1998
resources. The second objective is to increase the emphasis on ensuring
the safety of domestic and imported fresh produce in response to the
President's October 2, 1997, directive to ensure the safety of fresh
produce.
With the requested resources, FDA and its federal and state
partners will be able to respond more rapidly and effectively to a wide
range of health threats posed by foodborne hazards, including emerging
pathogens, natural toxins, and antimicrobial resistant pathogens. These
expanded efforts are needed to permit the Nation's food safety
regulatory systems to deliver on national goals related to protecting
and improving the health and well-being of our citizens.
One example is in research conducted at FDA's National Center for
Toxicological Research, NCTR. Part of their research focus with fiscal
year 1999 funding will be in the areas of pathogen identification,
antibiotic resistance, microbial risk assessment and foodborne
contamination, to include exploring the prevalence of resistance
determinants in microorganisms and how these determinants are affected
by selective pressure from the environment. Other studies will be
initiated to evaluate the bioremediation of veterinary drug residues in
the environment and to develop procedures to measure pathogens in
animal feeds.
Other examples of this increased effort are to enhance surveillance
systems by expanding the ongoing systematic collection, analysis, and
interpretation of antimicrobial susceptibility surveillance data, which
will enable FDA to ensure accurate and valid information that can be
used to minimize further the transmission of resistant pathogens
through the food chain. FDA plans to increase the overall capacity--the
number of microbial isolates in the database--of the National
Antimicrobial Susceptibility Monitoring Program by 20 percent in order
to ensure a high likelihood of detection of emerging resistance trends
in zoonotic enteric pathogens. Educational partnership agreements with
state and local agencies will be initiated and use existing mechanisms
such as Cooperative Extension and professional associations to
strengthen and implement programs to educate producers, veterinarians,
state and local regulators about proper drug use and the incorporation
of HACCP principles to reduce foodborne pathogens into industry quality
assurance programs to ensure public health by minimizing the occurrence
of residues in edible tissues. Improved and more standardized risk
assessments would permit the ranking of food safety concerns to provide
for better public health protection and more efficient utilization of
resources. These initiatives will also improve the utility of
confidence in risk assessment among scientists and the general public
by providing for more transparent risk analysis. These initiatives will
provide better risk assessments in order to set priorities, to evaluate
surveillance plans, risk reduction strategies, and research programs
for improving food safety.
The second objective of the fiscal year 1999 Food Safety Initiative
is to increase the emphasis on ensuring the safety of domestic and
imported fresh produce in response to the President's October 2, 1997,
directive to ensure the safety of fresh produce. The President's Fresh
Produce Initiative is designed to expand the scope and focus of the
original FSI and to develop and implement strategies required to
address more effectively critical safety issues associated with fresh
produce. Over the past several years, several major foodborne illness
outbreaks have been associated with the consumption of fresh fruits and
vegetables or fruit and vegetable products. These include outbreaks
linked to Cyclospora contamination of raspberries imported from
Guatemala and domestically-produced apple juice contaminated with E.
coli O157:H7. Also, Salmonella contamination has been found on melons
and other produce.
There are several important food safety issues that necessitate a
special focus on hazardous microbial contamination of fresh produce.
One is the low rate of monitoring provided annually for imported
produce products. With existing resources, FDA examines for microbial
contamination only about 0.2 percent of the approximately 430,000
import entries of fresh produce for microbial contamination. Also, it
is anticipated that the per capita consumption of fresh produce will
increase significantly in the future as health conscious consumers
follow government dietary guidance and take advantage of the
scientifically established benefits of these products. Current
estimates indicate that there will be a 33 percent increase in the
importation of fresh produce between now and fiscal year 2002. FDA
needs resources to develop and implement science based strategies to
minimize levels of contaminants that may be injurious to human health
in these foods.
Under this initiative, FDA is developing with USDA and the
agricultural community draft Good Manufacturing Practices--GMP's--and
Good Agricultural Practices--GAP's--guidance for use by producers,
domestic as well as foreign. FDA is accelerating research to develop or
improve the detection and intervention/prevention techniques for
pathogens, develop and implement education and technical assistance
programs to promote appropriate appreciation of the guidance, and
develop appropriate specific guidance on an as needed basis. The
resources requested for this new initiative will promote use of
voluntary GAP/GMP guidance through education and technical assistance
to domestic and foreign producers; and evaluate growing, harvesting and
production practices in countries that export fresh produce to the U.S.
Moreover, the President directed that a legislative proposal be
developed to expand FDA's authority over imported foods to be similar
to that already provided to USDA for meat and poultry products. The
bill permits the agency under appropriate circumstances to declare
foods or specific commodities from a country to be adulterated if FDA
determines that a particular facility or country's food system does not
provide the same level of protection that is provided for comparable
domestic products, and thus, refuse them entry into the United States.
FDA will continue to work with foreign governments and producers to
take any steps necessary to help ensure that imported food products
meet U.S. food safety requirements or otherwise achieve the level of
protection required. If FDA determines that the steps needed to address
an existing or potential risk have not been taken and that the affected
products therefore will not meet U.S. food safety requirements or
otherwise achieve the level of protection required, FDA is authorized
to deny such products entry into the United States.
For fiscal year 1998, FDA has accomplished a significant number of
activities under the Food Safety Initiative that will contribute to a
safer food supply. This is due in part to the cooperation received from
other entities that are involved in food safety, such as the Department
of Agriculture and the Centers for Disease Control and Prevention, I
would be happy to provide a listing of these accomplishments by each of
the six categories.
I would first like to share a success story that was possible with
the funding provided in fiscal year 1998. The National Antimicrobial
Susceptibility Monitoring Program--NASMP--was initiated in 1996. It
began as a collaboration among FDA, CDC, and USDA to monitor bacterial
foodborne pathogens for changes in antimicrobial susceptibility, using
Salmonella as a sentinel organism. The goals of the program are: to
identify resistance as it emerges and to identify patterns of
resistance, to allow timely response to changes in susceptibility
through information sharing and other mechanisms, and to identify areas
that require more detailed investigation. This initial effort was the
precursor to the FSI Early Warning System for Foodborne Disease
Surveillance related to antimicrobial resistance. The 1998 FSI monies
allowed extensive expansion and augmentation of the NASMP. Isolates
which are tested through this program originate from clinically ill
animals and humans, healthy farm animals, and animals at slaughter. The
number of isolates is increasing annually to obtain an increasing
representativeness of the sample, including the incorporation of
produce and animal feed isolates and new bacterial species such as E.
coli and Campylobacter.
Having an established surveillance system enabled the Federal
partners to identify the presence of a multi-drug resistant Salmonella
typhimurium DT 104--StmDT104--in humans and animals. StmDT104 had been
responsible for human disease outbreaks in the United Kingdom and was
recognized as widespread in distribution and increasingly prevalent in
the United States. This early warning of a potential epidemic, such as
that seen in the United Kingdom, was achieved through the NASMP and
enabled CDC to warn state health departments of STMDT104's presence,
and allowed augmented monitoring for this pathogen. As a result public
health officials were prepared for the Vermont dairy farm outbreak and
were in a position to take preventative steps to minimize the spread.
This farm is currently part of an ongoing investigation as part of the
NASMP investigational activities. Continuing work in 1998 includes
international collaborations between USPHS epidemiologists and
researchers in the U.K. The funding requested would allow for continued
expansion of this program.
[The information follows:]
fiscal year 1998 food safety initiative accomplishments
Surveillance
Worked with CDC and other federal agencies to expand the FoodNet
sites from five to seven (with an eighth site to come scheduled online
in fiscal year 1998), and expanded the scope of data by adding two new
State Health Department partnerships/FoodNet sites to the National
Antimicrobial Resistance Monitoring Programs, increased Salmonella,
Campylobacter, and E. coli isolates (human database).
Worked with CDC to create a national electronic network for rapid
fingerprint comparison for pathogens that will link FDA, USDA and
states together to allow the rapid sharing of information and permit
quick determinations about whether outbreaks in different states have a
common source.
Increased animal Hazard Analysis Critical Control Point, HACCP
bacterial isolates (veterinary database).
Expanded the scope of data by adding three new veterinary
diagnostic laboratories to further facilitate the comparison of
veterinary and human resistance trends.
Expanded data in animal database by initiating Campylobacter
isolates testing.
Expanded the information on resistance by initiating multi-
resistant Salmonella strain testing.
Developed a plan to conduct molecular microbiological and genetic
studies to clarify the role of across species transmission of
resistance.
Developed a plan to evaluate antimicrobial use databases--promote
prudent use of antimicrobials.
Will sponsor a public meeting related to research on antimicrobial
resistance between August 31 and September 2, 1998.
Coordination
Worked with other federal agencies to form the Foodborne Outbreak
Response Coordinating Group (FORCG) consisting of representatives from
FDA, the Centers for Disease Control and Prevention, United States
Department of Agriculture, Environmental Protection Agency, Council of
State and Territorial Epidemiologists, Association of State and
Territorial Public Health Laboratory Directors, Association of Food and
Drug Officials, National Association of City and County Health
Officials, and National Association of State Departments of Agriculture
to improve responses to foodborne illness outbreaks.
The information provided will be used to develop guidance for
handling future outbreaks. An actual outbreak response was evaluated to
determine which of the currently used response procedures worked well
and which needed improvements.
Inspections
Expanded efforts to implement HACCP systems in the seafood
industry. Major accomplishments related to seafood HACCP include:
--Trained over 1,137 federal, state, and local regulators in seafood
HACCP. An additional 6,861 persons, including industry
officials and state and federal inspectors, were provided a
three-day basic HACCP course by the Seafood HACCP Alliance in
cooperation with FDA. Also, 30 partnerships were established
with states to conduct seafood HACCP inspections.
--In the process of hiring 80 investigators and microbiologists for
seafood HACCP implementation.
--After the HACCP regulation became effective in December 1997,
initiated verification inspections to ensure that domestic
seafood establishments have effective HACCP systems in place.
FDA plans to complete initial verification inspections in 2,700
domestic seafood establishments this fiscal year and to date,
more than 500 of these inspections have been conducted.
--Published a proposed rule to require a warning statement on fruit
and vegetable juice products that have not been processed to
destroy pathogens and a proposed rule to require HACCP in fresh
juice production.
Published draft guidance containing criteria FDA intends to use to
decide whether another country's regulatory system for food safety
provides a level of protection that is equivalent to the U.S. system.
We are currently reviewing the comments received.
Developed Recommended National Retail Food Program Standards that
identify the components of an effective retail food regulatory program
at the state and local level.
Developed a draft HACCP Principles at Retail Guide.
Education
Established the Partnership for Food Safety Education with other
federal agencies, industry, state associations and consumer groups. The
Partnership is a broad-based coalition committed to educating the
public about safe food handling and preparation. Using the combined
resources of the industry, several consumer and public health
organizations, and the federal government, the Partnership will conduct
a multi-year food safety education campaign to make American consumers
aware of food safety problems and provide information on how these
problems may be prevented.
The Partnership launched the ``Fight BAC!'' consumer food safety
education campaign. The ``Fight BAC!'' campaign features colorful, 30
second television public service announcements that focus on food
safety in the home. The television spot highlights four basic safe food
handling steps that consumers may use to prevent food contamination.
These steps include washing hands and surfaces often, preventing cross-
contamination, cooking foods to proper temperatures, and refrigerating
foods promptly.
Cooperated with other federal agencies on a Food Safety Education
Conference, and conducted consumer research on consumer behaviors to
develop effective food safety advisory and juice warning labels.
Formed the ``Food Safety Training and Education Alliance for
Retail, Food Service, Vending Institutions, and Regulators,'' (FSTEA)
to promote the use of safe food handling techniques by retail food
service workers.
Risk Assessment
Established an interagency Risk Assessment Consortium with
particular focus on microbiological risk assessment. The Consortium
includes representation from FDA, USDA, National Institutes of Health,
CDC, and EPA and operates out of the Joint Institutes for Food Safety
and Applied Nutrition located at the University of Maryland. Among the
goals of the Consortium are to inventory existing data research and
expertise; establish a clearinghouse of risk assessment related data
and models; and determine long-term research needs.
Formed a dose response workgroup that is tentatively planning a
public meeting in July 1998.
Initiated a comprehensive review of available risk assessment
methodologies and data.
Initiated a process to establish the clearinghouse of available
methodology and data repository for use by all Consortium members.
Research
Developed DNA fingerprinting methods for a variety of pathogens to
increase the ability to trace the source of foodborne disease
outbreaks.
Standardized DNA fingerprinting methods for Vibrio cholerae, Vibrio
vulnificus, toxigenic Staphylococci, Group A Strepotococci, Listeria,
Salmonella and pathogenic E. coli.
Published a draft GAP/GMP guidance document to help producers and
processors minimize microbial hazards in fresh fruits and vegetables.
Held six grassroots and one international meeting with the
agricultural communities and other interested parties to gather input
for the development of GAP's/GMP's.
Developed enhanced methods for the more rapid isolation and
detection of a variety of foodborne pathogens from produce and juices.
Prepared, in collaboration with other federal agencies, a multi-
year research plan to accelerate research associated with improving the
safety of fresh produce. This plan focuses on research to develop and
improve methods for detection, prevention and control of microbial
contamination in these products.
Established intramural FSI microbiological staff.
Began validation of detection procedures for all FSI research and
surveillance programs.
Will begin development of detection procedures--meat, milk, eggs,
animal feeds--for feces, and environmental pathogens.
Will evaluate procedures to detect salmonella in animal feeds.
Will initiate research to reduce pathogens in animal feeds.
Will initiate research to determine impact of animal feed pathogens
on the food supply.
Plan to initiate research to reduce resistant pathogens from
antibiotics used in food producing animals including fish.
Plan to initiate evaluation of procedures for reducing pathogen
load in food producing animals including extended withdrawal periods
and competitive exclusion products.
Will develop food animal management procedures to mitigate the
proliferation of resistant pathogens.
Will begin evaluation of effects of multiple drugs/routes of
administration/multiple exposure on resistance development and pathogen
load.
Plan to initiate studies to determine the cause and factors which
impact the development of resistant pathogens and the transmission of
resistance between pathogens in food producing animals and the
environment.
Question. What are the specific goals of the food safety
initiative?
Answer. The May 1997 report to the President on the Food Safety
Initiative established several major goals related to improving the
safety of the Nation's food supply. These goals include decreasing
foodborne illness; building a new national early-warning and
surveillance system to help detect and respond to outbreaks of
foodborne illnesses earlier, and give federal agencies and states the
data needed to prevent future outbreaks; improving responses to
foodborne illness outbreaks; improving risk assessment capability,
particularly microbial risk assessment, to determine the likelihood
that exposure to a hazard, such as a foodborne pathogen, will result in
harm or disease in humans; developing better methods for more rapidly
detecting, preventing and controlling foodborne safety hazards,
especially microbial pathogens and mycotoxins; improving the safety of
the food supply through more effective inspection and compliance
strategies; and using innovative food safety education programs to
ensure that food preparers and handlers at each point of the food chain
are fully informed of food safety risks and appropriate safe handling
practices.
The FSI also has a set of goals that relate to our work in the area
of animal drugs and feeds, including reversing the resistance trend of
animal pathogen development and reducing the transfer of resistant
animal pathogens to humans; developing, through the National
Antimicrobial Resistance Monitoring System, timely information upon
which to base public health decisions relating to the control of
resistant foodborne pathogens and to be proactive in assisting
practitioners in the appropriate use of antimicrobials; developing
alternative strategies to antimicrobial drug use in food-producing
animals such as improved management techniques and novel drug
treatments including competitive exclusion to reduce both the overall
prevalence of animal-carried pathogens and specifically target animal
carried resistant pathogens; and working to identify and limit animal
feed contaminants from entering the human food supply.
Question. How has the food safety initiative improved the safety of
the food supply since its implementation last year?
Answer. Though we are only mid-way through fiscal year 1998, FDA
has still accomplished a significant number of activities under the
Food Safety Initiative that will contribute to a safer food supply.
This is due partially to the cooperation and interactions occurring
with other entities that are involved in food safety, such as the
Department of Agriculture and the Centers for Disease Control and
Prevention. I would be happy to provide a listing of these activities
by each of the six categories.
[The information follows:]
fiscal year 1998 food safety initiative activities
Surveillance
By the end of fiscal year 1998, FoodNet sites will be operating in
areas that are representative of the geographic and demographic
population distribution in the U.S. Data from these sites currently
allow FDA and other agencies to identify outbreaks and link outbreaks
in different locations. By the year 2002, the FoodNet sites will be
able to produce the volume and quality of baseline data against which
federal agencies can more accurately measure declines in foodborne
illnesses, the effect of intervention measures and increases in
illnesses that require the need for new interventions. In addition,
data produced by the sites will permit FDA and other federal agencies
to establish more realistic and measurable performance goals and
targets for their food safety programs.
FDA, USDA and several states are now linked to the CDC national
electronic network for rapid DNA fingerprint comparison of microbial
pathogens. This new system allows data on microbial pathogens
associated with outbreaks to be exchanged and compared in 10 to 30
minutes. This eliminates the necessity of mailing cultures of pathogens
in order to compare isolates from patients and from incriminated foods
and reduces the time for comparisons from days to minutes. This
capability will allow the agencies and states to link more rapidly
distant outbreaks, to identify the implicated food, and to trace it
back to the source.
Coordination
The Foodborne Outbreak Response Coordinating Group (FORCG), which
consists of representatives from FDA, CDC, USDA, EPA, the Council of
State and Territorial Epidemiologists (CSTE), the Association of State
and Territorial Public Health Laboratory Directors (ASTPHLD), the
Association of Food and Drug Officials (AFDO), the National Association
of City and County Health Officials (NACCHO), and the National
Association of State Departments of Agriculture (NASDA), will help
ensure that responses to foodborne illness outbreaks are more rapid and
more effectively coordinated. This is critical since each day saved in
responding to a foodborne illness incident can significantly reduce the
number of illnesses that occur as well as their economic impact.
As a ``test case'' to evaluate a typical illness outbreak response,
FORCG completed an evaluation of the response to an actual outbreak.
Results of evaluation are being used in the development of SOP's for
sharing information on outbreaks among agencies and with the public.
Inspections
HACCP systems are a key component of FDA's strategy for reducing
the incidence of foodborne illnesses. HACCP, which places emphasis on
identifying and properly controlling points in a food processing system
where safety problems could occur, is designed to prevent food safety
hazards. Because HACCP systems are designed to prevent food safety
problems, wide spread use of these systems in the food industry will
result in safer end products, help eliminate the cost and delay of end
product testing, and will permit FDA to use its food safety inspection
resources more efficiently and focus on the highest risks.
With the FSI resources provided in the fiscal year 1998
appropriation for the Food Safety Program, FDA is expanding efforts to
verify that domestic seafood establishments have HACCP systems capable
of ensuring the safety of seafood products. FDA is planning to conduct
2,700 initial verification inspections this fiscal year and the States
will conduct approximately 2000 additional inspections under contract.
Without the FSI funding, FDA would have taken at least 2 to 3 years to
conduct these 2,700 initial seafood HACCP verification inspections.
FDA published a Notice of Intent to mandate the application of
HACCP systems for fruit and vegetable juice products and require a
warning statement on fruit and vegetable juice products that have not
been processed to destroy pathogens. The expansion of HACCP to fresh
fruits and vegetable juices will help ensure that these products do not
contain hazardous contaminants that could cause foodborne infections
and the warning labels will alert consumers, particularly parents, to
the potential health hazard.
Education
The Partnership for Food Safety Education permits FDA and other
federal agencies to leverage the resources of industry, consumer groups
and professional associations to increase the effectiveness and breadth
of food safety education activities. ``Fight BAC!'' and other education
campaigns undertaken by the Partnership will help prevent foodborne
illnesses by making American consumers aware of proper safe food
handling practices. More than 50 national and local organizations from
the public health, government, consumer and industry sectors have
agreed to support the campaign and disseminate educational materials.
There is also a web site where consumers, health professionals,
educators and the media can obtain the latest information on preventing
foodborne illness.
Consumer research conducted on consumer behaviors, and to identify
barriers to safe food handling, is the basis of developing effective
food safety advisories, and juice warning labels. This research helps
FDA determine the most effective medium for reaching the consumer and
provides information required to more effectively focus future
education activities to achieve changes in unsafe food handling
behaviors.
Risk Assessment
The Risk Assessment Consortium, which was established in November
1997, permits FDA and other federal agencies to work with academia to
advance collectively the science of microbial risk assessment and
assist federal agencies (HHS, USDA and EPA) to protect consumers more
effectively from foodborne illness. Through its efforts to coordinate
and guide overarching federal microbial risk assessment research, the
Consortium will help eliminate duplication and increase the
effectiveness of efforts to improve the speed and accuracy of
techniques for assessing risks associated with microbial pathogens and
other hazardous foodborne contaminants. The development of microbial
risk assessment techniques, now in their infancy, will be a critical
tool agencies use in targeting their food safety activities and
resources on the highest public health risk.
Research
The more rapid isolation and detection methods developed for a
variety of foodborne pathogens will permit the Agency to identify more
accurately foodborne safety hazards and increase the ability to trace
more quickly the source of foodborne disease outbreaks.
Fresh Produce Initiative
The information FDA, USDA and other federal agencies obtained
through the six grassroots and one international meeting with the
agricultural communities and other interested parties has been
incorporated into the draft GAP/GMP guidance for fresh produce. This
guidance is designed to prevent foodborne illnesses by providing
producers and processors information on how they can minimize microbial
contamination in fresh fruits and vegetables.
The Interagency Research Planning Document developed in conjunction
with USDA and other agencies will ensure that analytical development
and other research conducted on microbial pathogens and mycotoxins is
properly focused and coordinated. This will help both agencies
eliminate any duplications of effort and ensure that available research
resources are focused where the greatest needs exist.
Question. Please explain how the ``early warning'' and surveillance
system to detect and respond to outbreaks of food borne illness and
provide the data needed to prevent future outbreaks works, how it is
being enhanced through the President's food safety initiative, and what
FDA's role is in this system.
Answer. This system, FoodNet, is an active surveillance program,
currently functioning at seven sites located around the U.S., that will
provide more accurate and comprehensive baseline data on foodborne
illness in this country. The sites currently cover 20 million people or
8 percent of the U.S. population.
FoodNet has the capability to detect widely dispersed outbreaks.
Local health departments have long been able to detect outbreaks of
several people being made ill from a single occasion such as a banquet.
Widely distributed outbreaks from commercial ice cream or bean sprouts
consumed in homes were rarely discovered by the old passive
surveillance system. FoodNet investigators, at the state level, contact
clinical microbiology laboratories regularly to obtain information on
all cases of bacterial and parasitic diseases most often associated
with foodborne diarrheal illness. The sites submit regularly selected
microbial isolates for DNA fingerprinting. State-of-the-art computer
networks compare these isolates looking for matches that could indicate
widely dispersed common source outbreaks. FoodNet staff enlist many of
the cases in case-control studies to estimate probable sources of
infection. When unusual patterns are noted in any of this data, special
studies are begun to pinpoint the source of the problem. This newly
expanded capability will mean more discovery of foodborne disease risks
and more interventions to protect the public.
The FoodNet data collection technique has already demonstrated its
usefulness. For example, in the 1980's, CDC surveyed for the occurrence
of listeriosis over a period of years at the request of FDA. The data
showed that the incidence of listeriosis decreased as a result of
measures initiated by the Agency and industry. These studies were the
predecessor to the FoodNet system. The data currently being generated
is proving useful, despite a relatively low level of funding support.
Data from the sites has contributed to investigations of foodborne
outbreaks, such as a multi-state outbreak of E. coli O157:H7 detected
in Illinois and Connecticut associated with California lettuce.
Food Safety Initiative funding will allow CDC, with support from
FDA and USDA to increase the number of FoodNet sites and greatly expand
the good work already underway. With the addition of an eighth site
later this year, FoodNet will improve its representation of the U.S.
population, both demographically and geographically. Food safety
initiative funding is being used to conduct focused surveys to learn
more about the occurrence of specific pathogens and foodborne illness,
food sources of contamination, e.g., for Campylobacter, based on data
derived from the FoodNet system. All FoodNet sites have received
increased assistance in DNA fingerprinting capabilities through the
addition of FSI funds. FDA's role in this system is to provide support
funding for the system, participating in the design of ancillary
studies (e.g., case-control studies for hemolytic uremia syndrome), and
using FoodNet data to design more effective intervention measures to
reduce the risk of foodborne illness and to develop policy and
regulations to enhance food safety.
With regard to animal drugs and feeds, in 1996, FDA, CDC and USDA
established the National Antimicrobial Resistance Monitoring System, a
nationally based program to prospectively monitor changes in
antimicrobial susceptibilities of zoonotic enteric pathogens from human
and animal isolates. Beginning in fiscal year 1998, the Monitoring
System was moved into the Food Safety Initiative and substantially
expanded and enhanced.
FoodNet has been used as the foundation for the human arm of the
National Antimicrobial Resistance Monitoring Program. The FoodNet sites
plus ten additional sites, consisting of state or county public health
laboratories, are submitting human Salmonella, E. coli, and
Campylobacter isolates to CDC's Foodborne Disease Laboratory for
susceptibility testing to 17 antimicrobics.
Veterinary isolate testing is conducted at the United States
Department of Agriculture's Russell Research Center in Athens, Georgia.
Isolates are collected from three primary sources: clinical samples
from the APHIS National Veterinary Services Laboratory in Ames, Iowa;
on-farm studies of health animals from the APHIS National Animal Health
Monitoring Surveys; and, as of January 1998, healthy animal samples
collected for Salmonella monitoring at all large slaughter plants as
part of the Food Safety and Inspection Service mandatory HACCP
requirement. In addition, samples from large epidemiology studies
undertaken by USDA are added to the collection. The Salmonella isolates
are collected and serotyped by USDA as part of their mission. These
isolates are then susceptibility tested in Athens under an interagency
agreement with FDA. Only Salmonella was tested until 1998, when
Campylobacter and E. coli were added.
The objectives of the Monitoring System are to provide descriptive
data on the extent and temporal trends of antimicrobial resistance
among enteric pathogens in human and animal populations, provide timely
information to physicians and veterinarians, prolong the lifespan of
approved drugs by promoting the prudent use of antibiotics, investigate
areas for more detailed investigation, and guide research in the area
of antibiotic resistance. The capability to investigate resistance
patterns and trends identified through the Monitoring System are
essential elements to facilitate timely and appropriate public health
response activities.
Question. How are federal agencies coordinating with each other and
with other state and local public health agencies to detect and respond
to food-borne disease outbreaks?
Answer. An interagency Foodborne Outbreak Response Coordinating
Group--FORCG--has been formed with representatives of FDA, CDC, USDA/
FSIS, EPA, and organizations of state health and regulatory officials.
This group is evaluating the current system of outbreak response at the
local, state, and federal levels to determine what works well and where
improvements might be made to make the response faster and more
efficient. As a first step, a subgroup of FORCG conducted a retroactive
analysis of an actual outbreak response to identify what worked well
and where improvement was needed. Among the areas identified for
improvement were: communication among the various agencies; more rapid
sharing of information and data among the agencies, and providing
timely, accurate information about an outbreak and implicated products
to the public. FORCG is now working with state organizations to develop
standard operating procedures for more rapid communication and sharing
of information and data among the agencies and with the public.
Another example is the National Antimicrobial Resistance Monitoring
System which was initially developed by expanding or redirecting
existing programs in several federal agencies. FDA is in the planning
stages to develop and conduct veterinary prescribing practices and
producer antimicrobial use surveys in collaboration with USDA for
feedlot cattle. The survey will begin in 1999, and will combine
antimicrobial use information with on-farm sampling by nesting within
the ongoing USDA National Animal Health Monitoring Survey. USDA's
Agency Animal and Plant Health Inspection Service works directly with
the National Agriculture Statistics Service to develop representative
samples and we anticipate the quality of results will be much better
than any obtainable through a contractual arrangement with a private
organization. This process will also allow several agencies to share
and use the data obtained from the survey.
The federal agencies have also worked closely with states in
developing the Monitoring System. The sources of human isolates are the
FoodNet state sites plus ten additional state sites. As of January 1,
1998, we also established veterinary sentinel sites in the states of
California, Washington, and New York. A recent collaborative effort was
undertaken in response to an outbreak of salmonellosis among residents
of a Vermont dairy farm. FDA, CDC, and USDA jointly initiated the
investigation of this illness caused by Salmonella Typhimurium DT104, a
multi-resistant pathogen, on the Vermont farm and surrounding area. The
investigation is on-going in order to determine the status of DT104
colonization and shedding in cattle and other animal species on the
farm is on-going.
Question. Please provide a breakdown of how the funds provided to
FDA for fiscal year 1998 for the food safety initiative and requested
for fiscal year 1999 are being allocated to: (1) surveillance, (2)
coordination, (3) inspections and compliance, (4) education, (5)
research, and (6) risk assessment.
Answer. I would be happy to provide a table showing this break-down
as reflected in our fiscal year 1998 and fiscal year 1999 budget
requests, as well as our most recent estimate for fiscal year 1998, for
the record.
[The information follows:]
FOOD SAFETY INITIATIVE FUNDING
[Dolars in millions]
------------------------------------------------------------------------
Fiscal year--
---------------------------------------
Category 1998 1998 1999
request estimate \1\ request
------------------------------------------------------------------------
Surveillance.................... $3.16 $3.18 $2.40
Coordination.................... 0.55 0.55 0.20
Inspections/compliance \2\...... 7.87 8.99 27.40
Education....................... 2.07 1.84 3.70
Research........................ 6.40 5.96 9.20
Risk Assessment................. 3.95 3.48 7.10
---------------------------------------
Total..................... 24.00 24.00 50.00
------------------------------------------------------------------------
\1\ Estimates as of March 30, 1998.
\2\ Inspections/compliance estimates are about $1 million higher than
originally planned to reflect unanticipated costs associated with
fiscal year 1998 activities for the Fresh Produce Initiative. This
increase was derived from small reductions from some of the other food
safety activities.
Question. For both fiscal year 1998 and the fiscal year 1999
request, provide a detailed list of the specific activities being
funded or proposed to be funded by FDA under the above categories of
the food safety initiative, including the funds and full-time
equivalent positions allocated to each activity.
Answer. I would be happy to provide tables showing a detailed list
of food safety activities that will be funded with both the fiscal year
1998 appropriation and the proposed fiscal year 1999 level.
[The information follows:]
FISCAL YEAR 1998 FOOD SAFETY INITIATIVE ACTIVITIES
[Dollars in millions]
------------------------------------------------------------------------
Activity FTE's Amount
------------------------------------------------------------------------
Surveillance......................................... 8 $3.18
FoodNet
Methylmercury study
Voluntary retail HACCP pilot program
S.E. Tracebacks
State Health Department partnerships--increase
Salmonella, Campylobacter, and E. coli isolates
(human database)
Animal HACCP bacterial isolates (veterinary
database)
Veterinary diagnostic laboratories to compare
veterinary and human resistance trends
Campylobacter isolates testing
Multi-resistant Salmonella strain testing
Molecular microbiological and genetic studies for
species transmission of resistance
Evaluate antimicrobial use databases
Public meeting on antimicrobial resistance
research
------------------------------------------------------------------------
Coordination......................................... 3 0. 55
------------------------------------------------------------------------
Inspections & Compliance............................. 85 8.99
HACCP implementation and training
Lab certification
Federal/State Partnerships
Retail
Foreign Country Education & Technical Assistance
Workshops/Public meetings
Sample analyses
Import lot screening
Guidance & legislative regulation development
------------------------------------------------------------------------
Risk Assessment...................................... ....... 3.48
Risk Assessment Consortium--Develop modeling
techniques
JIFSAN
HACCP review
Food consumption survey
Sample retrieval for dose measurements
------------------------------------------------------------------------
Research (many of these projects will carry into 13 5.96
fiscal year 1999)...................................
ISSC--Vibrio vulnificus
Pfiesteria Piscicida workshop
Toxicological forum
Evaluation of vacuum packed hot smoked salmon
Sampling for Pathogens on Produce
Molecular Characterization-Maverick Strains of E.
Coli
Effects of Environmental Conditions,
Pytochemicals, Modified Atmosphere Packaging and
other Parameters for the Growth and Survival of
Foodborne Pathogens on Produce, Particularly
Sprouted Seeds
Molecular Mechanisms for Pathogen Emergence
Identification and Characterization of Virulence
Determinants for Salmonella enteritidis and
Vibrio vulnificus
Cyclospora Detection and Viability Assessment
Characterization of Pathogenic Aquatic Eucaryotes
and their Toxins
Control of Viral and Bacterial Human Pathogens in
Seafood
Assessment of Technologies for Pathogen Reduction
or Elimination
Mycotoxins
Virulence Assessment and Molecular Pathogenisis
of Salmonella typhimurium DT 104 and Shigella
Minimizing Biogenic Armine Formation in Seafood
and Other Commodities
Quantification of Effects of processing on
Foodborne Pathogens for minimally processed
foods
Survival of Food Pathogens during the 60-day
Aging Period of Hard Cheeses Made from
Unpasteurized Milk
Pathway Analysis: Assessment of the Pathogen
Transmission Capabilities of Disease-Carrying
Insects
Effect of a Variety of Stress Factors on the
Immune Systems of Poultry and Subsequent
Infection of Shell Eggs by Salmonella
enteritidis
Levels of Vibrio vulnificus and Vibrio
parahaemolyticus in Retail Seafood
Development of gastroenteritis animal models and
biomarkers for food-borne pathogens to serve as
surrogate models for human disease
Develop Alternative Modeling Tools to Assessing
Dose Response/Severity Sampling for Pathogens on
Produce
Molecular Mechanisms for Pathogen Emergence
Identification and Characterization of Virulence
Determinants for Salmonella enteritidis and
Vibrio vulnificus
Cyclospora Detection and Viability Assessment
Characterization of Pathogenic Aquatic Eucaryotes
and their Toxins
Quantification of Effects of processing on
Foodborne Pathogens for minimally processed
foods
------------------------------------------------------------------------
Education............................................ 6 1.84
Strategic plan for consumer education
Food Code--Consumer Advisory Research Focus Group
Evaluate FSI education in schools
Fight BAC! brochures
Juice safety mailings
USDA/FDA Foodborne Illness Education Information
Center
Consumer Hotline
National Food Safety Education Month
Partnership for Food Safety Education
Multi-lingual and special population education
Education forums and local alliances
------------------
Total.......................................... 115 24.00
------------------------------------------------------------------------
FISCAL YEAR 1999 FOOD SAFETY INITIATIVE ACTIVITIES
[Dollars in millions]
------------------------------------------------------------------------
Activity FTE's Amount
------------------------------------------------------------------------
Surveillance......................................... 13 $2.40
Postmarket surveillance data
New sentinel site for the collection of animal
microbial resistance data
Collaborate with APHIS to evaluate drug
prescribing practices and animal production drug
use
Integrate veterinary diagnostic laboratories into
an international database for evaluating health
risks from veterinary drug use
Monitoring
FoodNet support
------------------------------------------------------------------------
Coordination......................................... 2 0.20
------------------------------------------------------------------------
Inspections/compliance............................... 159 27.40
HACCP implementation and training
Lab certification
Federal/State Partnerships
Retail
Foreign Country Education & Technical Assistance
Workshops/public meetings
Sample analyses
Import lot screening
------------------------------------------------------------------------
Risk Assessment...................................... 15 7.10
Continuation of fiscal year 1998 activities
Multi-disciplinary risk assessment team
Framework to identify and fully characterize
potential human health risks
Strategies to characterize the impact of animal
drug use on the pathogen load and resistance
patterns
Identify data gaps regarding the ecology of on
farm microbial pathogens--Salmonella,
Campylobacter, and E. Coli O157
Data and modeling techniques--understand casual
relationship between antimicrobial drug use in
animals and human disease
Introduce HACCP planning in the rendering
industry--emphasizing controls against BSE
infective agent
------------------------------------------------------------------------
Research............................................. 44 9.20
Continuation of projects begun in fiscal year
1998
Detection procedures--meat, milk, eggs, animal
feeds, feces, and environmental pathogens
Detection procedures for all FSI research and
surveillance programs
Evaluate procedures to detect salmonella in
animal feeds
Reduce pathogens in animal feeds
Determine impact of animal feed pathogens on the
food supply
Reduce resistant pathogens from antibiotics used
in food producing animals including fish
Develop food animal management procedures to
mitigate the proliferation of resistant
pathogens
------------------------------------------------------------------------
Education............................................ 17 3.70
Educational partnerships with veterinary
practitioner and producer organizations to
promote good production practices
Producer quality assurance programs to foster
appropriate agricultural drug use
Incorporate food safety into veterinary
curriculum and veterinary continuing education
programs
Educational partnerships with other federal
agencies, state, and local agencies
------------------
Total.......................................... 250 50.00
------------------------------------------------------------------------
Question. Provide a list, in priority order, of the FDA food safety
initiative activities proposed to be funded for fiscal year 1999.
Answer. The $50 million request for fiscal year 1999 would allow
FDA--as part of the intergovernmental efforts in food safety with the
Department of Agriculture and the Centers for Disease Control and
Prevention, among others--to continue with some of the important steps
begun in fiscal year 1998 in the areas of surveillance, coordination,
inspections/compliance, education, research, and risk assessment. This
request would also allow the Agency to fulfill commitments made by the
President to improve the safety of domestic and imported fruits and
vegetables. We strongly believe in the programs outlined in our budget
request, and cannot, at this time, put these initiatives in priority
order. Each is essential to improving for the long term the safety of
the foods available from all sources to the American consumer. If
provided an amount less than the full request of $50 million, we would
be forced, after consultations with USDA and CDC, to restructure our
plans and reduce coverage and efforts in certain areas.
inspections and compliance
Question. FDA indicates that it is particularly concerned about the
safety of produce and the potential risks associated with produce
imports. The food safety initiative proposes to expand inspection and
compliance efforts. How much of this money in each of fiscal years 1998
and 1999 will go towards inspections at the border?
Answer. There are no funds in the fiscal year 1998 budget for the
Food Safety Initiative directed to the expansion of inspection of fresh
fruits and vegetables at the border. In the proposed fiscal year 1999
budget, we have requested an additional $2.7 million for sample
analysis, some of which will be used for analysis of samples collected
from entries of imported foods. Another $5.3 million would support
screening activities at the border. However, monitoring at the border
has been acknowledged by FDA, GAO, and other experts as not the most
efficient utilization of resources, as it is a reactive process. In
addition to the efforts included in our fiscal year 1999 request, we
will target resources for our monitoring activities on products that
have a high potential for pathogen contamination or have a history of
violations of public health significance.
Question. How much will go to increasing inspections of fresh
produce?
Answer. We will refocus import activities and target resources
toward more prevention activities that should be more effective in
preventing entry of foods likely to be contaminated with pathogens.
These activities will include foreign country evaluation, education and
technical assistance and outreach activities to promote appropriate
application of the GAP's/GMP's guidance, verifying use of the guidance,
and inspections, but only when an outbreak has occurred.
Question. Will a risk-based selectivity system be used to determine
which food products are inspected? Which foods would that involve?
Answer. Yes. One of the principles underlying effective food safety
programs is that efforts should be focused on the hazards that
represent the greatest risk to consumers. This is a key attribute of
HACCP programs, and is why this approach to food safety is being
increasingly adopted by industry and regulatory agencies. The Food
Safety Initiative correctly identified our inability to measure
accurately the risks associated with different microbial food safety
concerns as a serious impediment to the adoption of risk-based systems
such as HACCP. To that end, the initiative has called for the
development of microbial risk assessment methods and databases.
Question. Will part of the food safety initiative inspection and
compliance funding be used to pay for U.S. inspectors dispatched to
foreign plants?
Answer. Funds are requested in the fiscal year 1999 budget for
seafood HACCP implementation that may be directed towards evaluating
HACCP implementation in foreign countries. In the fiscal year 1999
budget request for the Food Safety Initiative and the Produce
Initiative, FDA has requested $11.9 to support foreign country
education, evaluation and technical cooperation and assistance. We will
also provide further GAP/GMP guidance, as a need is indicated, for use
by the fresh and minimally processed produce industry. Providing the
type of expertise and assistance that results in safety mechanisms
being built into food production systems will have a far more profound
impact on the safety of products offered for import than merely
depending on end product testing at the borders.
Question. Does FDA currently have personnel that go into other
countries to inspect foreign facilities?
Answer. Yes, FDA does have personnel that go to foreign facilities
to conduct two types of inspections: low-acid canned food inspections
and those related to foodborne disease outbreaks from food exported to
the U.S. For fiscal year 1998, FDA plans on using three fully-supported
FTE for 40 foreign inspections related to the low-acid canned foods
program. While we can never accurately predict the number of
inspections that will be needed for foodborne disease outbreaks, for
the past three years, in the foods area, we have conducted 72, 9, and
29 inspections, for fiscal years 1995 through 1997, respectively.
Question. Is the FDA budget authority request for fiscal year 1999
adequate to cover both increased domestic and foreign inspections, as
well as any needed infrastructure?
Answer. The fiscal year 1999 request is part of a multi-year
initiative designed to restructure various aspects of the existing food
safety system in order to reduce the estimated numbers of deaths and
illnesses related to foodborne pathogens. The fiscal year 1999 budget
request will provide the resources necessary to carry out the
initiatives proposed in that document. We would continue with the next
steps for the fiscal year 1998 Food Safety Initiative, as well as
expand our efforts in the area of domestic and imported fresh fruits
and vegetables. This latter effort would include evaluation, not
inspection, of foreign growing, harvesting, and processing systems in
order to provide guidance on improving the safety of these products.
The $50 million request for fiscal year 1999, plus the initial funding
of $24 million provided in fiscal year 1998, will allow the Agency to
move toward its goal of reducing the deaths and illnesses associated
with foodborne outbreaks.
Question. How many new inspectors does FDA plan to hire for fiscal
year 1999? How many inspectors are on board (FTE) currently (fiscal
year 1998)? What was FDA's inspection staffing level for fiscal year
1997?
Answer. The fiscal year 1999 budget request includes 104 Consumer
Safety Inspectors/Officers for the Foods program. The food activities
performed by these positions include, but are not limited to, providing
foreign technical assistance, screening and review of import entries,
policy and guidance for fresh produce development, and HACCP for juices
and continued implementation of seafood HACCP. These Consumer Safety
Inspectors/Officers will monitor the safety of food imports by sampling
and screening at the border with improved methods and targeted sampling
techniques. They will also evaluate food production systems in foreign
countries and provide technical assistance and education, as necessary,
to improve the capability of those systems to provide safe products for
export to the U.S. A large part of this work will be in the area of
fresh fruits and vegetables.
FDA's Foods inspection staffing level in fiscal year 1997 was 407
total investigative positions and in fiscal year 1998, 455 total
investigative positions.
Question. The justification indicates that FDA examined
approximately 0.2 percent of fresh produce entering the United States
in fiscal year 1996. What are your goals for expanding FDA's inspection
of imported fresh produce in each of fiscal years 1998 and 1999?
Answer. FDA does not plan increase coverage for fiscal year 1998
but intends to maintain the same coverage as that in the previous
years. Because the number of fresh produce imports is expected to rise,
FDA will still need to increase resources to continue to match past
levels. The fiscal year 1999 President's Budget includes a substantial
focus on imported fresh fruits and vegetables, and specifically
providing technical assistance and information, based on the fresh
fruit and vegetable GAP's/GMP's, to foreign countries and the foreign
produce industry that will enable them to improve the safety of produce
exported to the U.S. In following years, increased coverage of imports
in general will include increased monitoring of imported fresh produce.
Question. The justification indicates that the Administration is
proposing legislation ``to expand FDA's authority over imported foods
to equal that already provided to USDA.'' What does this mean? What new
authority is the Administration proposing to give the FDA?
Answer. This bill permits the agency, under appropriate
circumstances, to declare foods or specific commodities from a country
to be adulterated if FDA determines that a particular facility or
country's food system does not provide the same level of protection
that is provided for comparable domestic products, and thus, refuse
them entry into the United States.
FDA will continue to work with foreign governments and producers to
take any steps necessary to help ensure that imported food products
meet U.S. food safety requirements or otherwise achieve the level of
protection required. If FDA determines that the steps needed to address
an existing or potential risk have not been taken and that the affected
products therefore will not meet U.S. food safety requirements or
otherwise achieve the level of protection required, FDA is authorized
to deny such products entry into the United States.
Question. How many MOU's are in existence and with which countries?
What is the substance, scope and objectives of these agreements?
Answer. FDA has 55 international agreements. This includes
memorandums of understandings, memorandums of cooperation, and
exchanges of letters. A manual containing all international agreements
is being sent under separate cover. I would be happy to provide the
information for the record.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Effect
Number Country Sponsor Title date Term date
----------------------------------------------------------------------------------------------------------------
225-80-8000.................. Australia........ CFSAN......... Dry Milk Products..... 11/28/79.. Indef.
225-86-2001.................. Australia........ CFSA N-S...... Shellfish 9/12/8 6.. Indef.
Certification.
EOL.......................... Australia........ CDRH.......... Insp Info on Med Dev 2/17/93... Indef.
GMP (EOL's).
225-97-8003 EOL.............. Australia........ FDA........... Orphan Products....... 8/13/97... Indef.
225-96-4004.................. Belarus.......... CDER CBER..... Info Exchange on Drugs/ 3/27/96... 3/25/99.
Biologics.
225-75-2027.................. Belgium.......... CFSAN......... Dry Milk Products..... 11/6/74... Indef.
225-75-2027.................. Canada........... CDER.......... GMPs Exchange of Drug 10/1/73... Indef.
Plan Inspection Info.
225-75-6001.................. Canada........... CDRH.......... Exchange Info on 12/16/74.. Indef.
Compliance Prgm
Efforts.
225-75-2021.................. Canada........... CFSA N-S...... Shellfish Sanitary 4/30/48... Indef.
Controls.
225-76-4003.................. Canada........... CFSAN......... Monitoring Food, 7/26/88... 7/26/98.
Beverage & Sanitary
Srvs on Common
Carriers.
225-79-8400.................. Canada........... ORA-GLP....... GLP's Phase I /Non- 5/10/79... Indef.
Clinical Labs.
225-96-4001.................. Canada & Mexico.. FDA........... Scientific and 10/30/95.. Indef.
Regulatory Fields of
Health.
225-89-2001.................. Chile............ CFSA N-S...... Exported Oyster, Clams 5/18/89... 5/18/99.
& Mussels.
225-90-8400.................. Chile............ ORA........... Safety of Imported 10/27/89.. 10/27/99.
Fresh Fruit.
225-96-4006.................. Chile............ CFSAN......... Fish & Fishery 5/13/96... 5/13/01.
Products.
225-88-2002.................. China............ CFSAN......... Certification of 12/26/88.. Indef.
Ceramicware.
225-75-2001.................. Denmark.......... CFSAN......... Dry Milk Products..... 1/19/79... Indef.
225-84-8000.................. Finland.......... CFSAN......... Certification of 3/4/84.... Indef.
Imported Food
Products.
225-86-8400.................. France........... ORA-GLP....... GLP's Phase II Info. 3/18/86... Indef.
Exchange of
Toxicological Labs.
225-75-2024.................. France........... CFSAN......... Caseins............... 1/15/87... Indef.
EOL.......................... France........... CFSAN......... Cert Program for 1/21/87... Indef.
Listeria in Cheese.
225-89-4001.................. Germany.......... ORA-GLP....... GLP's Phase II (Joint 12/23/88.. Indef.
with EPA).
225-79-4008.................. Iceland.......... CFSA N-S...... Shellfish Safety of 12/28/78.. Indef.
Fresh/Frozen.
225-97-2001.................. Ireland.......... CFSAN......... Certification 11/5/96... 11/5/01.
Requirements for
Caseins.
225-89-4000.................. Italy............ ORA-GLP....... GLP's Phase II........ 12/19/89.. Indef.
225-75-2018.................. Japan............ CFSA N-S...... Shellfish Improving & 10/24/62.. Indef.
Standardizing
Sanitation Practices.
Note Verbal.................. Japan............ ORA-GLP....... GLP's................. 4/15/83... Indef.
EOL.......................... Japan............ CFSAN......... Puffer Fish........... 10/24/88.. Indef.
225-87-2002.................. Korea............ CFSA N-S...... Shellfish 4/8/87.... 4/7/97.
Certification.
225-88-8001.................. Mexico........... OHA........... Cooperation in 2/22/88... 2/22/98.
Scientific &
Regulatory Field of
Health.
225-79-4009.................. Mexico........... CFSA N-S...... Control of Fresh/ 11/12/88.. 11/12/98.
Frozen Bivalve
Mollusca for
Exportation.
225-89-4002.................. Mexico........... ORA........... Regulation of Raw 11/28/88.. 11/28/98.
Agricultural Products.
225-74-2011.................. Netherlands...... CFSAN......... Dry Milk Products 1/8/79.... Indef.
Examined for
Salmonellae.
225-89-4003.................. Netherlands...... ORA-GLP....... GLP's Phase II........ 12/20/88.. Indef.
225-81-2000.................. New Zealand...... CFSA N-S...... Shellfish Sanitation.. 10/30/80.. Indef.
225-96-2004.................. New Zealand...... CFSA N-S...... Fish & Fishery 12/20/95.. 12/20/00.
Products.
225-76-2000.................. New Zealand...... CFSAN......... Dry Milk Products 11/11/75.. Indef.
Facilitate & Improve
Importation
Procedures.
225-95-2000 EOL.............. New Zealand...... CFSAN......... Horticultural Produce 3/13/9 5.. Indef.
Pesticides.
225-82-2001.................. Norway........... CFSAN......... Importation of Rennet 2/26/82... Indef.
Casein.
225-97-2000 EOL.............. Norway........... CFSAN......... Listeria Program for 10/15/96.. Indef.
Smoked Salmon.
225-86-2002.................. Philippines...... CFSAN......... Certification of Food 9/18/86... Indef.
Products.
225-96-2005.................. Russia........... CFSAN......... Food Products......... 3/29/96... Indef.
225-94-8001.................. Russia........... CDER.......... Drugs & Biological 2/2/94.... 2/2/97.
Products.
225-94-8001 Revised Annexes.. Russia........... CDER.......... Drugs & Biological 1/30/96... Indef.
Products Annexes.
Statement of Intent.......... Russia........... CDRH.......... Medical Devices Info.. 1/30/96... Indef.
225-78-1001.................. Sweden........... CFSAN......... Dry Milk Products..... 11/7/77... Indef.
225-79-4011.................. Sweden........... ORA-GLP....... GLP's Phase I /Non- 5/25/79... Indef.
clinical Labs.
225-75-4057.................. Sweden........... CDER.......... Upgrade Quality of 10/17/72.. Indef.
Drugs in
International
Commerce.
225-75-4058.................. Switzerland...... ORA........... Inspection of 10/28/68.. Indef.
Production of Swiss
Drugs.
225-85-8401.................. Switzerland...... ORA-GLP....... GLP's Phase II 4/29/85... Indef.
Exchange Info.
225-98-8001 EOL.............. Taiwan........... CDRH.......... Info Exchange on 1/9/98.... Indef.
Medical Devices.
225-80-2001.................. United Kingdom... CFSA N-S...... Processing/Labeling of 9/7/82.... Indef.
Fresh/Frozen Clams.
225-86-6000.................. United Kingdom... CDRH.......... Mutual Recognition of 6/6/86.... Indef.
Medical Device
Inspections.
----------------------------------------------------------------------------------------------------------------
Question. How many MOU's have been established in the past two
years?
Answer. There have been nine international agreements signed since
the beginning of 1996. I would be happy to provide the information for
the record.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Effect
Number Country Sponsor Title date Term date
----------------------------------------------------------------------------------------------------------------
225-97-8003 EOL.............. Australia........ FDA........... Orphan Products....... 8/13/97... Indef.
225-96-4004.................. Belarus.......... CDER CBER..... Info Exchange on Drugs/ 3/27/96... 3/25/99.
Biologics.
225-96-4006.................. Chile............ CFSAN......... Fish & Fishery 5/13/96... 5/13/01.
Products.
225-97-2001.................. Ireland.......... CFSAN......... Certification 11/5/96... 11/5/01.
Requirements for
Caseins.
225-97-2000 EOL.............. Norway........... CFSAN......... Listeria Program for 10/15/96.. Indef.
Smoked Salmon.
225-96-2005.................. Russia........... CFSAN......... Food Products......... 3/29/96... Indef.
225-94-8001 Revised Annexes.. Russia........... CDER.......... Drugs & Biological 1/30/96... Indef.
Products Annexes.
Statement of Intent.......... Russia........... CDRH.......... Medical Devices Info.. 1/30/96... Indef.
225-98-8001 EOL.............. Taiwan........... CDRH.......... Info Exchange on 1/9/98.... Indef.
Medical Devices.
----------------------------------------------------------------------------------------------------------------
Question. How are MOU's being used to improve food safety?
Answer. FDA's overall policy for initiating, developing, and
monitoring MOU's was set forth in a 1995 Compliance Policy Guide, 60 FR
31485, June 15, 1995. As stated in that document, it is FDA's policy to
pursue development of MOU's that will further the Agency's public
health mission.
The majority of MOU's and other arrangements currently in effect
were developed to improve food safety by establishing a formal
mechanism under which a foreign government can address and correct an
identified non-compliance situation associated with a particular food
or class of foods from the particular country. These types of MOU's are
referred to as compliance MOU's. They contain provisions which
delineate actions by the foreign government and industry aimed at
preventing continuation of a previously identified problem and provide
that the foreign government certify that specific foods offered for
import will comply with the relevant United States regulations. FDA
audits such foreign government certification through paper reviews and
laboratory analyses to verify the performance of the foreign government
and industry.
Other less formal MOU's and agreements allow FDA to use its limited
inspectional resources more efficiently by cooperating with the
government of the producing country to help ensure production of safe
food. These arrangements normally contain provisions aimed at
preventing any safety problems associated with a particular food. The
arrangements accomplish this goal through well-controlled production,
storage and transportation practices, and sufficient foreign government
oversight and testing, which provides FDA with reasonable assurance
that exports of the particular food from that country comply
consistently with applicable United States regulations. FDA oversees
the arrangement through appropriate audits, but is able to redirect its
limited inspectional resources toward those imported products which are
not subject to such rigorous government oversight in the producing
country. This type of arrangement is a fundamental step in the process
of reaching equivalence between the regulatory system of the United
States and that of a foreign country.
Question. Please provide the Committee with an update on the status
of the implementation of the seafood Hazard Analysis Critical Control
Point (HACCP) requirements.
Answer. HACCP implementation has involved four primary elements,
each of which are interrelated: education and technical assistance for
the industry; education of FDA and state inspectors; regulatory
inspections of seafood processors; and Federal/State seafood HACCP
inspection partnerships.
Under Education and Technical Assistance for the Industry, HACCP is
a system of preventive controls for safety that are operated by the
industry. For each processor to be able to operate its own HACCP
system, the processor must understand both the food safety hazards that
are reasonably likely to occur for the products being processed and the
controls that are available to minimize or eliminate the hazards. On a
day-to-day basis, a processor's core HACCP activities are monitoring
key processing points to ensure that they are operating in a manner
that produces a safe product and recording the results of that
monitoring.
To help processors understand these concepts and activities, FDA
participated in the development of low-cost training for industry in
HACCP principles and their application to seafood. This course has been
attended by several thousand individuals nationwide. The Agency also
developed guidance for processors, entitled ``Fish and Fishery Products
Hazards and Controls Guide,'' which provides advice on hazards that are
reasonably likely to occur in various situations and on controls that
are known to exist for those hazards. This guide also includes a
simple, fill-in-the-blank HACCP plan and instructions on how to
complete it.
For Education for Inspectors, HACCP-based regulatory inspections
involve auditing processor's HACCP systems to determine whether they
are appropriate for the circumstances and are being operated properly
on a day-to-day basis. Effective auditing involves expertise and
judgment on the part of the inspectors and the regulatory agency. The
FDA regulations do not require that processors submit their HACCP plans
to FDA for approval in advance of the first HACCP-based inspection. FDA
does not have the resources to conduct such reviews. Moreover, it is
difficult to effectively judge a HACCP plan without actually seeing the
processing operation. Thus, FDA's inspectors must be trained in how to
evaluate HACCP plans and systems during routine inspections. To prepare
FDA's inspectors, the Agency sent them to the course developed for
industry, described above, and to an additional course that FDA
designed for seafood inspectors on auditing technique. This course has
also been made available to state inspectors and has been well
attended.
Under Inspections, the seafood HACCP requirements became effective
on December 18, 1997, after a two year grace period. FDA started
conducting HACCP-based inspections shortly thereafter. The Agency's
goal is to inspect all 3,800 U.S. seafood processors, other than
processors of raw molluscan shellfish, which are inspected by States
under a Federal-State cooperative program, within one calendar year of
the effective date.
Even with the training and the guidelines, the Agency has long
recognized that the development of HACCP systems in many processing
plants will involve a period of trial and error. Thus, it has always
been the Agency's expectation that the first round of inspections after
the effective date would reveal that a significant percentage of HACCP
systems need some improvement. This expectation is turning out to be
the case, but it is not regarded as a special problem at this stage of
implementation. As planned, FDA's inspections are focusing on
evaluating HACCP systems and providing feedback to the firms. During
the first round, FDA anticipates that regulatory action will be
initiated when, in addition to HACCP system deficiencies, the products
themselves contain contaminants or are in imminent danger of becoming
contaminated.
FDA is permitting the industry to challenge the conclusions from
these inspections. While FDA's inspectors will initially compare each
processor's HACCP system to the advice in the guidelines described
above, processors are free to choose alternative approaches so long as
their HACCP systems provide a level of safety that is equivalent to
that provided in the guidelines' approach. Moreover, processors are
free to challenge the scientific validity of the approach taken in the
guidelines. FDA is always interested in learning about better ways to
ensure safety and in making improvements in its own guidelines. In
developing alternatives to the guidelines or challenging their
validity, processors should be able to establish the scientific
validity of their systems for the Agency to evaluate.
Under Federal-State Seafood HACCP Inspection Partnerships, the FDA
seafood HACCP program provides the opportunity for the Federal
government and the states to operate inspection systems that are
consistent in both philosophy and detail, based on HACCP as the common
element. It is possible for the first time to have a consistent,
national, Federal-State cooperative program for seafood safety as well
as to aggregate the results of both Federal and state inspections into
a common national database. It would also enable both the Federal
government and the States to leverage their resources by sharing the
workload. An integrated Federal-State system would enhance consumer
protection by substantially strengthening the domestic program for
seafood safety.
In virtually all states that have significant seafood processing,
the States conduct their own inspections, often as an offshoot of state
licensure of processing establishments. Many of these states inspect
their processors at least once per year, with some mandating as many as
four inspections per year. Except in certain circumstances, however,
FDA traditionally has not been able to fully coordinate its seafood
inspection activities with those of the states because of
inconsistencies between the programs and the costs associated with
developing common data bases. As a result, Federal and State
inspections have tended to overlap.
To take advantage of the opportunity that HACCP provides, FDA
developed a model Federal-State partnership for seafood HACCP
inspection; and a computerized national seafood HACCP inspection
database into which both FDA and state partners could enter the results
of their inspections. The Agency also set aside some funds to make
available to potential state partners to upgrade their inspection
capabilities through the acquisition of equipment or other means. Much
of those funds have already been committed to States. FDA has also
entered into seafood HACCP inspection partnerships with some states and
is pursuing agreements with many others. About 30 states have entered
into partnerships or are considering doing so.
Question. What level of funding is being allocated for seafood
HACCP in fiscal year 1998? How much is included in the fiscal year 1999
request for this purpose?
Answer. The fiscal year 1998 President's Budget included an
increase of $8.0 million to implement seafood HACCP, the regulation for
which became final in December 1997. The fiscal year 1999 request
includes an additional $3.4 million.
Question. The budget justification indicates that FDA intends to
expand implementation of HACCP and other food safety assurance systems
in the food industry. FDA has indicated that in addition to seafood, it
intends to expand HACCP to fruit juice. What other expansions and new
systems does FDA intend to implement?
Answer. In addition to fruit juices, the Agency is also evaluating
the feasibility and practicality of applying HACCP to the retail food
industry and to production of animal feeds. FDA has also engaged in
other HACCP pilots with industry. Expanded activities will include
working more closely with industry, academia, and professional and
trade associations by providing technical assistance, training, and
guidance to appropriate entities. In addition, FDA will continue to
work with the Department of Agriculture towards the adoption of the
Food Code. FDA will work with other agencies to increase the percentage
of domestic produce produced consistent with the new voluntary GAP's/
GMP's guidance and FDA will monitor and evaluate the effectiveness of
that guidance. FDA will evaluate fresh fruit and vegetable production
in areas in the U.S. and foreign countries where there is evidence that
a potential public health hazard exists and GAP/GMP guidance has not
been applied. FDA will evaluate ways to increase coverage of imports
through such means as increased personnel, increased partnerships, and
innovative partnerships with the states.
Question. The prepared statement indicates that the Operational and
Administrative System for Import Support (OASIS) became fully
operational in every U.S. port of entry where FDA-regulated products
come into the country. What was the total cost of this system? Please
provide the resources, both dollars and staff years, which FDA
allocated to this system in each fiscal year since its initiation, and
under which activity of the budget these funds were provided.
Answer. OASIS development was done by private contractors, to whom
$10.5 million has been paid for their system development work. FDA did
not spend any staff years on system development of OASIS, since the
development work was performed by private contractors. The increase in
FTE utilization for OASIS in fiscal year 1996 was largely because that
is when the Agency was at the height of the roll out of OASIS to FDA
field offices nationwide, and were utilizing FDA personnel to get the
computer equipment ready at these sites, to provide training to our
field users of OASIS, and to furnish on-site support to the start up of
the system. All of the budget activities, except for NCTR and Tobacco,
were used to fund the development costs of OASIS as the ORA import
inspection program includes formal entries from all other budget
activities. I would be happy to provide, for the record, the
information requested.
[The information follows:]
[Dollars in millions]
------------------------------------------------------------------------
Fiscal year Amount FTE's
------------------------------------------------------------------------
1988-91........................................... $2.0 .........
1992.............................................. 0.7 .........
1993.............................................. 0.8 .........
1994.............................................. 0.7 4.0
1995.............................................. 3.4 2.0
1996.............................................. 0.8 11.0
1997.............................................. 0.9 5.0
1998.............................................. 1.2 4.0
---------------------
Total....................................... 10.5 26.0
------------------------------------------------------------------------
Question. What is included in the fiscal year 1999 request for
OASIS? Please provide dollars and staff years.
Answer. OASIS will require $600,000 in fiscal year 1999 for system
maintenance to be performed by the development contractor. These are
funds that relate to the development of OASIS as have been reported in
previous years.
Question. Will OASIS allow FDA to regulate imports with fewer
inspectors and analysts? If yes, what is the savings in each of fiscal
years 1998 and 1999?
Answer. We do not anticipate the OASIS will allow the Agency to
monitor the increasing volume of FDA regulated imports with fewer
inspectors or analysts. In fiscal year 1992, there were approximately
1.5 million entries of FDA regulated products. In fiscal year 1997,
there were approximately 3.9 million entry lines of FDA regulated
products offered for entry. This does not include those informal
entries with a value less than $1,250, which is to be raised to $2000,
effective July 2, 1998, and some formal entries, which may not be
electronically processed. Entry lines is a more realistic way of
determining the volume of imports which FDA must evaluate. Since each
entry could contain more than one line of FDA regulated product, as on
average an entry contains 1.7 lines, the number of entries
underestimates the challenge posed in maintaining an effective import
inspection system.
The efficiencies and economies that OASIS has brought to the
processing of import entries has enabled FDA to handle this increased
volume of work. However, OASIS does not affect the number of products
that FDA examines in the field, or collects for laboratory examination.
Nor does it affect the staffing needed to examine product in our
laboratories. The benefit from OASIS in terms of examinations and
analysis is to help ensure that the most meaningful entry lines are
selected for examination and analysis.
food safety education
Question. FDA indicates that it will invest its resources in new
and innovative education and information sharing strategies for
improving food handling practices of consumers and retail food service
establishments. USDA has been carrying out and increasing its
activities in this area as well. What is the division of labor between
the FDA and other agencies, such as USDA, in food safety education and
information sharing to prevent duplication of effort?
Answer. FDA and USDA have always worked together to coordinate food
safety education. The Food Safety Initiative has provided ample
opportunity to become even more closely coordinated. Working groups
have been formed and meetings occur on a regular basis to delineate
each agency's specific role and assess progress. The breakdown of
education programs among the agencies is dependent upon the
constituencies serviced and the products regulated. FDA is responsible
for education concerning food safety issues in processing and consumer
food handling of all foods except meat, poultry, and processed egg
products. FDA is also responsible for education involving food handling
in retail food service establishments specifically involving the retail
Food Code of 1997.
USDA does food safety education on the production, processing, and
consumer food handling of meat, poultry, and processed egg products.
The Department is also responsible for education at congregate meat
sites, gleaning and food recovery programs sites, school food service
facilities, and retail stores and restaurants that have on-site meat or
poultry processing. USDA and FDA are working together with industry to
develop and educational outreach program for the Good Agricultural
Practices/Good Manufacturing Practices guidance for fresh fruits and
vegetables. This program will be a well-organized program applicable to
the domestic and foreign product industry.
FDA is also pursuing cooperative programs related to veterinary
education programs which will focus on proper drug use with a specific
emphasis on proper use of antimicrobial drugs. These educational
initiatives will be implemented in conjunction with Surveillance
activities such as the practitioner prescribing surveys which will
serve as the foundation for this activity. These activities will be
accomplished in partnership with professional veterinary associations.
Additionally, the Agency is working to develop programs dealing with
food safety to be used in veterinary continuing education and
incorporation into veterinary school curricula. Producer education will
be done in partnership with producer associations as well as components
of the U.S. Department of Agriculture, such as the Animal Production
Food Safety Program, and Cooperative State Research Education and
Extension Service.
Question. What areas of food safety education will FDA be
responsible for? Please describe in detail the educational strategies
FDA will conduct, what information will be provided, how it will be
delivered, and who will be the target audience.
Answer. In terms of consumer education, FDA has joined CDC, USDA,
and the Department of Education, members of industry, and consumer
representatives to form a public-private Partnership for Food Safety
Education and launched a nationwide public education campaign in
October 1997. The campaign centers on four key food safety principles
along with a ``FIGHT BAC!'' logo. The Partnership distributed community
action kits and supermarket kits containing public education materials
to support the ``FIGHT BAC!'' campaign in early 1998. Currently FDA is
advising the Partnership on two school-based initiatives. The first is
development of a ``Presenter's Guide'' for introducing the ``FIGHT
BAC!'' message to children in kindergarten through third grade. The
presenters, our partners at the local level, cooperative extension
agents, health and consumer educators, have many opportunities to
present information in a classroom setting. This program will include
interactive activities to engage the children, as well as information
to take home to parents. The goal is to have this program in place for
September. The Partnership is also in the developmental stages of
creating a science-based food safety education program for children in
grades three through six. This longer-term project will meet the
educational needs of children as they are just beginning to learn food
preparation in the home.
Both of these projects are based on findings of a report,
``Evaluating the Placement of Food Safety Education in American
Schools,'' contracted for by FDA and USDA. Never before has an
educational survey been conducted to identify what subjects at what
grade levels, and to which school personnel food safety education
should be directed. This report, currently under review, will serve as
the foundation for developing relevant and effective education
programs.
FDA will support National Food Safety Education Month, already
designated by industry, by sending posters featuring ``FIGHT BAC!'' to
elementary school food service directors for display in the school
cafeteria. Work is also underway on a planning guide for use by
community health educators for promoting National Food Safety Education
Month that will be distributed this summer.
A video teleconference is scheduled for May that will reach state
and local health and education officials concerned with the prevention
of foodborne illness. Experts from government and private sector
organizations will, among other things, discuss how to use community
action materials from the ``FIGHT BAC!'' campaign along with plans for
National Food Safety Education Month.
In an attempt to examine the broad range of research data and its
implication on food safety education practice, a meeting of food safety
education researchers is planned for this year. The purpose of the
meeting will be to review the status of food safety education research,
identify gaps in existing research, and identify strategies for future
food safety education. One gap that has already been identified is the
need for further research on the best way to communicate the key food
safety principles in order to achieve behavior change. Research will
take place on the barriers to safe food handling.
FDA and USDA are developing a National Food Safety Information
Center. This center will build on the agencies' existing information
dissemination systems by, among other things, enhancing the data base
capabilities of the FDA/USDA Foodborne Illness Education Information
Center at the National Agriculture Library, establishing a new food
safety 800 number, developing the joint foodsafety.gov web page, and
enhancing publications distribution and electronic publications
dissemination systems.
In terms of retail education, FDA has worked with USDA to make the
HACCP manual for the school lunch program consistent with FDA's Food
Code. FDA has also joined with government, academic, consumer, and
industry representatives in establishing the ``Food Safety Training and
Education Alliance for Retail, Food Service, Vending, Institutions and
Regulators.'' This group, FSTEA, is working to promote training of
government and industry employees in retail food service. FSTEA has
thus far developed an evaluation form to be used by the professional
association members in evaluating training resources listed in the
National Agriculture Library's Foodborne Illness Education Center
database, and are developing recommended qualifications for persons who
teach retail food safety training to industry employees as well as
training curriculum for regulatory food inspectors.
FDA offers a considerable number of training courses for state and
local retail food regulatory staff through its State Training Branch. A
special four day Microbiology for Inspectors satellite course will be
offered in August. A follow up course, Investigation of Foodborne
Illness will be offered in September.
FDA has ``Voluntary Retail Food Regulatory Program Standards'' and
``Managing Food Safety: A HACCP Principles Guide for Operators of Food
Establishments at the Retail Level.'' We are conducting workshops
regarding these with State officials and once the documents have been
reviewed, the Agency will conduct pilot programs in the states of the
program standards and the HACCP guide beginning in the fall of 1998.
FDA is also conducting courses of epidemiology for State regulatory
officials, and has conducted an investigator course on tracebacks of
foodborne illness.
For producer education, FDA is working with USDA to develop an
educational outreach program for the GAP/GMP guidance for fresh fruits
and vegetables. An International Working Group consisting of
representatives from the Office of U.S. Trade Representatives, the U.S.
Department of State, FDA and USDA have been established to develop a
system of outreach for assistance to foreign countries to meet
guidelines required by the Produce Initiative. A conference will be
held this summer with individuals and representatives from
organizations involved in producer education to address outreach on the
domestic and international levels.
FDA is also responsible for the Veterinary Practitioner education.
Many initiatives already exist and more are being developed in
collaboration with veterinary profession associations, such as the
American Veterinary Medical Association and veterinary speciality
practitioner groups. The target audience for these programs is
practicing veterinarians and veterinary students. FDA is working with
the veterinary academic community to develop programs dealing with food
safety for use in continuing education programs and to encourage the
adoption of these programs into veterinary school curricula. Further,
practitioner education efforts will be conducted in conjunction with
producer associations such as National Pork Producers Council, and
National Cattlemen's Beef Association. The Agency will work with these
associations to enhance producer quality programs and develop new
quality assurance programs that will emphasize the relationship between
good husbandry practices and achieving a safe food supply. FDA plans to
work with producer associations, the Department of Agriculture, and the
states to enhance safe food production practices.
food safety research
Question. Can you be more specific as to what FDA plans to do with
the research money requested as part of the food safety initiative?
Please list specific research work/projects to be funded in each of
fiscal years 1998 and proposed for fiscal year 1999, the cost of each
project, and who will conduct the research.
Answer. An active research program is an integral component of
FDA's ability to develop and implement scientifically-sound regulations
and guidance designed to safeguard the U.S. food supply. The Food
Safety Initiative recognized that solving the new food safety problems
that will arise as we enter the next century requires a strong
investment in science, the source of new solutions. This is reflected
in the inclusion of two research components within the initiative,
bioresearch and risk assessment, that are devoted to providing the
needed food safety data, methods, and technologies.
The Food Safety Initiative, FSI, identified the following five
broad goals as the focus of the initiative's research programs:
Improved Detection Methods; Understanding Resistance to Traditional
Preservation Technologies; Understanding Antibiotic Drug Resistance;
Prevention Techniques: Pathogen Avoidance, Reduction, and Elimination;
and Food Handling, Distribution, and Storage. FSI also identified the
need for methods and scientific data that would enhance the ability of
federal agencies to assess microbial risk. This included two additional
broad priority research areas that are critical for addressing this
goal of the Food Safety Initiative: Develop and Validate Exposure
Assessment Models Based on Probabilistic Methodology; and Develop and
Validate Dose-Response Assessment Models for Use in Risk Assessment.
These seven research goals, with an emphasis on microbiological
problems associated with fresh or minimally processed produce, were
reaffirmed under the Produce and Imported Foods Safety Initiative.
These research priorities were used by FDA to develop a three year
research plan. The plan, which is in the final stages of development,
details the projects that FDA is undertaking to meet the goals of the
Food Safety Initiative and the regulatory mission of the Agency. I
would be happy to provide, for the record, a table showing research
projects, estimated FTE's associated with these projects, and whether
these projects are planned intramurally and extramurally.
[The information follows:]
FOOD SAFETY INITIATIVE RESEARCH
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
--------------------------------------------
Research project 1998 1999 FDA-run or external
estimated 1998 cost estimated 1999 cost
FTE level FTE level
----------------------------------------------------------------------------------------------------------------
Sampling for Pathogens on Produce.... 11.5 $874 14.5 $1,157 FDA.
Molecular Characterization of 1.0 76 4.0 319 FDA.
Maverick Strains of
Enterohemorrhagic E. Coli.
Effects of Environmental Conditions, 8.2 623 10.2 813 FDA.
Pytochemicals, Modified Atmosphere
Packaging and other Parameters for
the Growth and Survival of Foodborne
Pathogens on Produce, Particularly
Sprouted Seeds.
Molecular Mechanisms for Pathogen 5.5 418 6.5 518 FDA.
Emer- gence.
Identification and Characterization 3.0 228 4.0 319 FDA.
of Virulence Determinants for
Salmonella enteritidis and Vibrio
vulnificus.
Cyclospora Detection and Viability 2.5 190 4.5 359 FDA CDC USUHS Colleges.
Assessment.
Characterization of Pathogenic 13.7 1,041 14.2 1,133 FDA.
Aquatic Eucaryotes and their Toxins.
Control of Viral and Bacterial Human 5.5 418 6.5 518 FDA.
Pathogens in Seafood.
Assessment of Technologies for 9.7 737 10.7 853 FDA DOD.
Pathogen Reduction or Elimination.
Mycotoxins........................... 15.0 1,114 17.0 1,356 FDA.
Virulence Assessment and Molecular 3.5 266 4.5 359 FDA.
Pathogenisis of Salmonella
typhimurium DT 104 and Shigella.
Minimizing Biogenic Armine Formation 2.6 1,976 4.6 367 FDA.
in Seafood and Other Commodities.
Quantification of Effects of 1.5 114 2.0 159 FDA.
processing on Foodborne Pathogens
for minimally processed foods.
Survival of Food Pathogens during the .25 19 .5 39 FDA.
60-day Aging Period of Hard Cheeses
Made from Unpasteurized Milk.
Pathway Analysis: Assessment of the 1.0 76 1.5 119 FDA.
Pathogen Transmission Capabilities
of Disease-Carrying Insects.
Effect of a Variety of Stress Factors 0.7 53 1.5 119 FDA JIFSAN.
on the Immune Systems of Poultry and
Subsequent Infection of Shell Eggs
by Salmonella enteritidis.
Levels of Vibrio vulnificus and 1.75 133 2.5 199 FDA.
Vibrio parahaemolyticus in Retail
Seafood.
Development of gastroenteritis animal 6.0 456 6.0 478 FDA.
models and biomarkers for food-borne
pathogens to serve as surrogate
models for human disease.
Developing Alternative Modeling Tools 0.5 38 0.5 39 FDA.
for Assessing Dose Response and
Severity.
Risk Assessment Coordination Group... 3.5 266 3.5 279 FDA.
Intra- and Interagency Support of 0.8 61 0.8 63 FDA.
Risk Assessment.
Development of Risk Assessment 1.5 114 4.5 359 FDA.
Clearing- house.
Scientific Support Group............. 5.2 395 6.2 49 FDA.
Screen animal feeds for the presence ......... ......... ......... 28 FDA.
of microorganisms harboring the
resistance determinants.
Screen other environmental sources ......... ......... ......... 28 FDA.
for the presence of microorganisms
harboring the resistance
determinants.
Evaluate the effect of selection ......... ......... ......... 83 FDA.
pressure on the frequency of
resistance determinants found in
zoonotic and indigenous microbial
populations.
Monitoring quinolone resistance in ......... ......... ......... 78 FDA.
Campylobacter spp., as it relates to
increased use of fluoroquinolone in
animal husbandry.
Elucidation of mechanisms by which ......... ......... ......... 93 FDA.
competitive exclusion products
prevent colonization in chicken
intestine by Salmonella spp.
Evaluate Bacteriological Analysis ......... ......... ......... 33 FDA.
Manual procedures for detection of
pathogens in animal feeds and the
environment.
Bioremediation of veterinary drug ......... ......... ......... 15 FDA.
residues in environment as they
relate to antibiotic resistance.
Screening animal feeds using ......... ......... ......... 42 FDA.
molecular techniques for proteins
derived from mammalian tissue to
detect possible Bovine Spongiform
Encephalopathy (BSE).
Risk assessors on dose-response ......... ......... ......... 100 FDA.
modeling of pathogenic organisms.
Use of Human Flora-Associated Rodents ......... 130 ......... ......... Centre national D'Etudes
to Study the Effect of Low Doses of Veterinaires et
Anti- microbials. Alimentaires, Fougeres,
France.
----------------------------------------------------------------------------------------------------------------
Question. How much is requested for FDA food safety research for
fiscal year 1999?
Answer. The total amount for food safety research included in the
fiscal year 1999 budget request is $9.2 million and 43 FTE. Of this
total, $8.5 million is for the Foods program, $0.5 million for the
National Center for Toxicological Research, and $0.2 million for Other
Activities.
Question. How will the research at FDA be different from the
research that is being done and is planned by USDA?
Answer. A series of interagency meetings was conducted in the fall
of 1997 to assure that the resources provided by the Food Safety
Initiative for research would be utilized optimally. Similarly, one of
the major goals of the risk assessment activities called for by the
Food Safety Initiative was the establishment of an interagency risk
assessment consortium. One of the first activities of the consortium
has been to assist in the coordination microbial risk assessment
research.
For research related to our work in the area of veterinary
medicine, FDA is coordinating with the Department of Agriculture to
minimize the duplication of work. FDA's focus will be on those aspects
of foodborne pathogens related to products regulated by the Agency;
specifically the development of pathogens detection procedures for
animal feeds, feces, manure, and environmental samples, the
contribution of animal feeds to the pathogen load in food producing
animals, and the evolution of pathogens, including resistant pathogens,
in animals being fed antibiotics.
As a result of these interagency exchanges, the Agency has
identified eight research program areas that were consistent with its
regulatory mission and could be effectively addressed with the
expertise and facilities available at FDA. In addition, priority
research needs in support of specific public health issues currently
facing FDA were assessed. A total of ten issues associated with three
broad regulatory issues related to the control of foodborne disease
were identified as requiring research support. I would be happy to
provide a list of these activities for the record.
[The information follows:]
Research
Development of Sampling and Detection Methods for the
Identification of Pathogens that Occur Sporadically at Low Levels on
Produce
Salmonella Typhimurium DT104
Cyclospora cayetenensis
Development of New Strategies and Technologies for the Prevention
or Elimination of Pathogens from Foods, Particularly Fresh Produce
Molecular Mechanisms of Microbial Evolution that Lead to the
Emergence of New Foodborne Threats to Public Health
Risk Assessment
Improved Exposure Assessments Through the Development of Product/
Pathogen Pathway Analysis Models
Characterization of Dose-Response Relations for Selected Foodborne
Pathogens
Identification of Alternative Modeling Techniques for Enhanced
Microbial Risk Assessments
Control of Pathogens in Commodities that do not Receive a Terminal
Inactivating Treatment Prior to Consumption
1. Contamination of shell eggs with Salmonella.
2. Contamination of sprouted seeds with pathogenic microorganisms,
such as Escherichia coli O157, Salmonella spp., and Bacillus cereus.
3. Contamination of raw molluscan shellfish with pathogenic
microorganisms, including Salmonellaspp., Vibrio spp., and Norwalk
viruses.
4. Contamination of fresh or minimally processed produce with
pathogenic microorganisms, such as Escherichia coli O157:H7, Salmonella
spp., Listeria monocytogenes, and Cyclospora cayetenesis.
Adequacy of Food Processes and Implementation of HACCP
5. Validation that current guidelines for the aging of cheeses is
adequate to assure the elimination of pathogenic microorganisms.
6. Control of pathogenic microorganisms in fresh fruit and
vegetable juices, including Escherichia coli O157:H7, Salmonella spp.,
Listeria monocytogenes, and Cryptosporidium parvum.
7. Contamination of fresh seafood with marine toxins or parasites
such as Anasakis simplex that can infect humans.
Assessment of Public Health Impact
8. Pfiesteria piscicida--assessment of risk to human health through
consumption of contaminated seafood.
9. Contamination of grain-based products with mycotoxins, such as
fumonisins, deoxynivalenol, aflatoxins, and ochratoxins.
10. Determination of levels of pathogenic microorganisms in
specific commodities that would not pose a risk to specific high risk
populations.
Question. What criteria are you using for what research FDA should
do and what research should be conducted by USDA and other federal
agencies?
Answer. FDA uses the three criteria for determining what research
to conduct: (1) whether a particular issue or matter applies to FDA's
regulatory mission; (2) whether the interagency committees of the Food
Safety Initiative and the Produce Initiative assigned or placed
responsibilities on FDA; and (3) whether current or planned FDA
personnel have the expertise to conduct research applicable to either
of the two criteria stated above.
For veterinary medicine, FDA is coordinating with the Department of
Agriculture to eliminate duplication of work. FDA's focus will be on
those aspects of foodborne pathogens related to products regulated by
the Agency, namely the development of pathogens detection procedures
for animal feeds, feces, manure, and environmental samples, the
contribution of animal feeds to the pathogen load in food producing
animals, and the evolution of pathogens, including resistant pathogens,
in animals being fed antibiotics.
Question. What criteria are you using to determine what government-
funded research should be done?
Answer. The role of research within FDA is support of the Agency's
regulatory mission. This includes acquiring scientific knowledge and
principles needed to develop sound food safety policies and guidance,
developing tools for implementing and assessing the effectiveness of
its policies, and responding rapidly to newly emerging food safety
threats to public health. Other criteria focus in a generic sense on
the contributions of animal feeds and drugs to the development and
transfer of foodborne pathogens, including resistant pathogens, in
animal agriculture. An objective that is included is to minimize the
contributions of animal feeds and antibiotics to the problem,
recognizing the importance of both to the safety of food and health of
animals.
Question. Will the requested increase for food safety research
involve an increase in the scientific staff at the Center for Food
Safety and Nutrition (CFSAN)?
Answer. Yes. CFSAN's scientific staff will increase to fill the
deficiencies in expertise from a limited number of selected high-level
scientists. In addition, some increase will be needed in support and
temporary personnel to make research more cost efficient.
Question. How will the research be used once it is completed? Is
all the new research planned targeted at providing the science base for
better regulation and education for food safety?
Answer. The information acquired through Food Safety Initiative
research projects will indeed be used to support the Agency's
regulatory duties and responsibilities. These are: acquiring scientific
knowledge and principles needed to develop sound food safety policies
and guidance; developing tools for implementing and assessing the
effectiveness of its policies; and responding rapidly to newly emerging
food safety threats to public health.
The three-year research plan was developed in an incremental
fashion. An inventory and review of current and planned research
projects was conducted to fulfill the Fresh Produce Initiative
directive to identify, accelerate, and coordinate with other food
safety agencies research that will reduce microbial risks associated
with fresh produce, and to prepare FDA's research program for external
peer review. As this research focus developed, several additional
factors were considered during the review process. Core research
support functions, such as electron microscopy, mass spectrometry, flow
cytometry, pulse field gel electrophoresis, ribotyping, and animal care
and use, were identified. The needs to maintain and enhance specific
cross-cutting scientific capabilities and expertise, to support the
entire research program and the Agency's ability to respond to new food
safety concerns, were strongly considered. Moreover, a balanced
research program that addresses both the intermediate and long-term
needs of FDA is required. Therefore, the majority of the research
program is designed to address FDA's research needs during the next
three to five years, but a portion of the effort is reserved for
``exploratory research'' that addresses potential food safety concerns
that may occur during the next five to eight years.
Further, another objective of the research is to minimize the
contribution of animal feeds and drugs to the development of
pathogens--including antibiotic resistant--in food producing animals
and the transfer of these pathogens to animal derived food. This
research is expected to contribute to the reduction of pathogens in
animal feeds and also food producing animals. The research is also
expected to provide the basis for any changes in feed manufacturing,
transportation and storage. New, fast detection methods for detecting
pathogens in feeds, in animals and animal derived food are to be
developed, evaluated and accepted for monitoring purposes. This
research will provide the data to serve as the basis for the evaluation
and monitoring of any new animal antibiotics which affect the
development of foodborne pathogens in food producing animals. The
research will also provide the foundation for assessing the human risk
of using antibiotics in food producing animals. The ultimate goal is to
reduce the occurrence foodborne pathogens in animal derived food.
tobacco activities
Question. FDA proposes that funding for its tobacco activities
which received a $29 million increase for fiscal year 1998, be
increased by an additional $100 million for fiscal year 1999. What is
the justification for such a significant increase?
Answer. The proposed increase for tobacco will enable the Agency to
enter into enforcement contracts with all 50 states to conduct a
minimum of 500,000 inspections, fund an expanded outreach effort to
include state by state advertising directed to retailers, and enable
FDA to begin to implement regulatory controls for cigarettes and
smokeless tobacco.
Question. FDA funding for the tobacco initiative for fiscal year
1998 and requested for fiscal year 1999 is broken into the following
categories:
[In millions of dollars]
------------------------------------------------------------------------
Fiscal year--
-------------------------
1999
1998 request
------------------------------------------------------------------------
Compliance outreach........................... 10.0 35.0
Enforcement and evaluation.................... 24.0 75.0
Product regulation............................ ........... 24.0
-------------------------
Total................................... 34.0 134.0
------------------------------------------------------------------------
For both fiscal year 1998 and the fiscal year 1999 request, provide
a detailed listing of the specific activities being funded or proposed
to be funded under the above categories of the tobacco initiative,
including the funds and full-time equivalent staff allocated to each
activity.
Answer. We are happy to provide this information for the record.
[The information follows:]
fiscal year 1998
Staffing.--Twenty-five FTE are allocated to tobacco activity for
fiscal year 1998. Most of the people work on all aspects of the
program, however, 2 are dedicated exclusively to Outreach and 8 are
dedicated to Enforcement.
Outreach.--In fiscal year 1998, FDA is focusing most of its efforts
on retailer information, continuing its provision of brochures and
Question and Answer pamphlets for retailers as well as maintaining a
toll-free hotline telephone number for retailers to call to request
materials and a WEBsite with similar information. Further, as each new
state contracts with FDA to undertake compliance checks, the Agency
sends mailing to all retailers in the state to alert them that
compliance checks will soon begin in their state. The Agency has
developed and has begun distribution of in-store materials to all
retailers answering potential questions, and reminding them of their
responsibilities under the rule, and assisting them in compliance. In
addition, FDA has begun placing a modest level of advertising in a
major market within states in which contracted compliance checks are
being conducted.
Enforcement.--In fiscal year 1998, the Agency is attempting to
establish contractual relationships with each state and territory to
conduct compliance checks of retail outlets that sell tobacco products.
FDA is asking each state to attempt to conduct a minimum of 375
inspections per month. The contracting process requires hours of effort
by Agency staff reviewing proposals, providing technical assistance to
states, and finally negotiating the final contract. FDA then trains the
commissioned officials in each state and oversees the progress of the
contract.
fiscal year 1999
Staffing.--Twenty-five additional FTE are sought for fiscal year
1999. This includes four scientific reviewers for product regulation;
two attorneys, and six program analysts, primarily for enforcement; and
seven administrative staff, three consumer safety officers, and three
clerks to be involved in all the aspects of the program.
Outreach.--In fiscal year 1999, the Agency will design a multi-
media advertising campaign including radio, print, and billboard
advertisements and place these ads in major media markets in every
state with which FDA contracts to conduct compliance checks. It will
also develop a comprehensive retailer education program which includes
a retailer kit containing in-store signs, tent cards, fact sheets,
counter mats and other materials; a letter to retailers in each state
updating them on the status of compliance checks in their state; a
series of reminder postcards that can be posted in the store for
customers and clerks to see; trade advertisements in retailer
publications; and a toll-free hotline that retailers can call to
request additional materials and ask questions. It will continue to
have exhibits at major conferences representing state and local health
officials, public health organizations, and consumer and retailer
organizations educating these audiences about the new tobacco rule.
Enforcement.--The Agency plans to commission state officials in all
50 states to perform unannounced inspections of over 500,000 retail
establishments to determine if retailers are complying with the law. It
will send warning letters to first violators and seek civil money
penalties from those found violating the law multiple times. Finally,
it will develop an enforcement strategy for national chains.
Product regulation.--The Agency will begin to review applications
for new tobacco products that claim that they may or may not be less
hazardous. In doing so, it will assess the products to determine what
effects those products have on the health of current users, whether the
products will create more demand by young people to initiate use, and
whether the products will keep from quitting, those who might otherwise
have quit. Other activities may include: classification of the product
pursuant to Section 513 of the Act, establishment of quality system
requirements, and review and analysis of ingredients and constituents
of tobacco products.
Question. Provide a list, in priority order, of the tobacco
initiative activities proposed to be funded for fiscal year 1999.
Answer. We believe it is imperative that we expand our activities
in the tobacco program. All the activities we described earlier, when
taken together, form a program, which if viewed as a whole, instead of
as three separate parts, designed to move FDA towards its goal of
reducing youth tobacco use by half.
Question. Does the FDA have the capability to spend the increased
funds requested for its tobacco initiative during fiscal year 1999?
Answer. FDA does have the capability to spend the increased funds
requested for the tobacco initiative during fiscal year 1999. The
President's budget provides for a reasonable level of funding for each
of the three programmatic areas of FDA's tobacco program. Activities in
fiscal year 1997 and fiscal year 1998 have provided the institutional
basis for the effective carrying out of the responsibilities planned
for fiscal year 1999. A substantial amount of time, effort and planning
has occurred and the Agency is in a good position to undertake the
expansions envisioned for the program.
The majority of the funding for the tobacco program is dedicated to
be used for contracts with the states to commission state officials to
perform unannounced inspections of retail establishments.
Question. Will the $34 million for tobacco activities be obligated
by the end of fiscal year 1998? What portion of these funds have
already been obligated to date?
Answer. We will be happy to provide this information for the
record.
[The information follows:]
TOBACCO FUNDING FISCAL YEAR 1998
[In millions of dollars]
------------------------------------------------------------------------
Fiscal year 1998--
--------------------------------------
Anticipated obligations--
Current -------------------------
obligations Last half
of fiscal Total
year
------------------------------------------------------------------------
Salary & Benefits................ .8 1.1 1.9
Enforcement...................... .9 21.4 22.3
Outreach......................... 6.8 3.0 9.8
--------------------------------------
Total...................... 8.5 25.5 34.0
------------------------------------------------------------------------
The overwhelming majority of the money anticipated to be obligated
during the second half of fiscal year 1998 is for enforcement
contracts. Most of those contracts are in the process of being
negotiated, with the time consuming process of bidding and drafting
proposals having occurred during the first half of fiscal year 1998.
Question. What reduction in youth tobacco use will be achieved with
the increased funds provided for fiscal year 1998? What is your
projection if the $100 million increase requested in the fiscal year
1999 budget is provided?
Answer. The increased efforts in the arenas of outreach and
enforcement activities, the proposed product regulation campaign,
coordinated with the complimentary activities in the CDC, SAMHSA and
NIH, will dramatically enhance the nations's ability to meet its
objective of reducing young peoples use of tobacco by 50 percent over
seven years. It is the combined effect of all these efforts that
provides the greatest opportunity to reduce the death and disease
associated with tobacco use.
Question. Why doesn't the President's budget propose that the costs
of implementing and enforcing FDA's regulation of nicotine-containing
tobacco products be covered by a tobacco settlement rather than be
borne by the American taxpayer?
Answer. If Congress enacts comprehensive tobacco legislation, then
funds will be available for the FDA program that would be generated by
industry payments. The Administration is committed to working with the
Congress to ensure the enactment of this important legislation.
Question. FDA is currently proceeding with the age and photo ID
provisions of its final rule on tobacco since other provisions of its
rule were not upheld or suspended by the federal district court. If the
US Circuit Court of Appeals overturns the ruling and the FDA is able to
proceed to implement all provisions of its rule, will this alter FDA's
spending plans for fiscal year 1999? If so, how?
Answer. If FDA could proceed with enforcement of the entire tobacco
rule, it would require the Agency to renegotiate state contracts to
call for more and different enforcement tasks for state officials. In
addition, enhanced outreach efforts would have to be designed and
disseminated to explain the new provisions to affected industries. How
much reassignment of funds would be necessary to cover these new
activities is unclear, but FDA would expect to continue with its
current plans to begin product regulation, to the extent possible.
Question. How much of the $34 million provided for fiscal year 1998
is for FDA contracts with states to conduct enforcement inspections of
retail operations for compliance with FDA's regulations prohibiting the
sale of tobacco products to minors? How much is included in the fiscal
year 1999 request for contracts with states?
Answer. At least $20 million is allocated for FDA contracts with
states for fiscal year 1998. The bulk of the $75 million for
enforcement activities in fiscal year 1999 is intended for state
enforcement contracts.
Question. If states do not elect to enter into contacts with FDA,
what action, if any, will FDA take?
Answer. FDA is endeavoring to contract with every state and
territory. Significant amounts of time are being spent trying to
address each state's individual needs and requirements so that all
states can participate. However, if we should be unable to contract
with a state, FDA is prepared to perform compliance checks with FDA
field personnel in those states.
Question. If the $34 million provided for fiscal year 1998 was
intended to cover FDA contracts with all states and territories, why is
an increase in funding for these contracts required for fiscal year
1999?
Answer. There are over 500,000 retailers in the U.S. who sell
tobacco products (some estimate that it could be as high as 1,000,000).
The funding provided to date will enable FDA to contract with each
state to begin enforcement activities. But at current funding levels,
less than half of all retailers will be inspected. With the increase
funding for fiscal year 1999, FDA would anticipate being able to
contract for 500,000 compliance checks.
Question. Please describe what costs and activities are covered by
FDA's contracts with the states. What is the federal government paying
for specifically?
Answer. The contracts are designed to obtain state assistance in
the investigational coverage of retail establishments that sell tobacco
products. We will be happy to provide specific objectives of these
contracts, for the record.
[The information follows:]
specific objectives tobacco contracts
To enforce the Regulations, 21 CFR 897.14 (a) and (b).
To conduct a minimum of 375 unannounced investigations using
children ages 15-17 in retail establishments that sell tobacco to
determine compliance with the Regulations, 21 CFR 897.14 (a) and (b)
(minimum age of purchase 18 and requirement that retailers request a
photo identification for purchase).
To train one or more persons in the Contractor's state who in turn
trains the individual commissioned officers to conduct investigations.
To document unannounced investigations and coordinate with FDA as
necessary to achieve substantial compliance with the regulations, 21
CFR 897.14 (a) and (b).
The state is responsible for hiring the appropriate personnel,
training the minors who will assist in the investigations, planning and
conducting the investigations, filing reports with FDA of the outcome
of each investigation and conducting follow-up investigations as
warranted. FDA is responsible for sending out letters to each retailer
informing him/her of the results of the investigation (compliance or
violation). If a second or greater number of violations is reported, it
is FDA's responsibility to bring legal action, specifically, to seek to
impose civil money penalties.
Question. What is FDA's goal for the frequency of retailer
compliance checks through State contracts?
Answer. A key influence on a retailer's decision to comply with the
new legal requirement is the extent to which the individual perceives
he or she is likely to be found in violation. The Agency has developed
a general enforcement strategy aimed at conducting compliance checks in
a significant percentage of the approximately 500,000 retail outlets
that sell tobacco products. In fiscal year 1997, during the start up
phase of the program, ten pilot states were asked to conduct a minimum
of 300 compliance checks per month. Currently, all 50 states and
several territories are being asked to submit proposals to conduct a
minimum of 375 checks per month. In fiscal year 1999, FDA has committed
to conducting a minimum of 500,000 unannounced compliance checks of
retail establishments that sell tobacco. The goal of the program, when
full implementation occurs, will be to check every facility at least
once each year and to conduct follow up investigations on those found
to violate the rule.
Question. Please provide a summary, by state, of each contract,
including the total cost of the contract, its terms and length, etc.
Answer. All the contracts provide for the states to perform the
same functions. We are happy to provide a detailed summary of each
contract for the record. In addition to those contracts awarded for
fiscal year 1998, we are nearing final contract award with five other
states.
[The information follows:]
FISCAL YEAR 1997 TOBACCO COMPLIANCE CONTRACTS
----------------------------------------------------------------------------------------------------------------
Number of
State Contract compliance Total cost Start date End date
award date checks
----------------------------------------------------------------------------------------------------------------
Florida...................................... 06/11/97 2,664 $194,589 06/20/97 05/20/98
Washington................................... 06/24/97 2,640 167,517 07/01/97 03/01/98
Illinois..................................... 07/21/97 2,400 230,250 08/01/97 03/31/98
Texas........................................ 07/29/97 2,640 201,475 08/01/97 03/31/98
California................................... 08/12/97 2,160 277,889 09/01/97 04/30/98
Massachusetts................................ 08/13/97 2,640 124,662 09/15/97 05/14/98
Arkansas..................................... 09/25/97 2,400 204,364 09/30/97 05/31/98
Minnesota.................................... 09/15/97 1,600 171,522 09/15/97 05/14/98
Pennsylvania................................. 09/24/97 2,640 177,959 09/30/97 05/31/98
Colorado..................................... 09/22/97 2,352 111,138 09/30/97 05/31/98
------------------------------------------------------------------
Total.................................. ........... 24,136 1,861,365 ........... ...........
----------------------------------------------------------------------------------------------------------------
FISCAL YEAR 1998 TOBACCO COMPLIANCE CONTRACTS
----------------------------------------------------------------------------------------------------------------
Number of
State Contract compliance Total cost Start date End date
award date checks
----------------------------------------------------------------------------------------------------------------
Washington................................... 03/06/98 4,500 $283,978 03/09/98 03/01/99
Illinois..................................... 03/25/98 9,000 608,151 04/01/98 09/30/99
Texas........................................ 03/24/98 4,400 277,814 04/01/98 03/31/99
North Carolina............................... 02/18/98 9,000 603,674 02/23/98 08/22/99
Nevada....................................... 03/06/98 3,300 234,182 07/01/98 06/30/99
Florida...................................... 02/04/98 n/a 72,000 05/21/98 08/20/98
------------------------------------------------------------------
Total.................................. ........... 30,200 2,079,799 ........... ...........
----------------------------------------------------------------------------------------------------------------
Question. Please explain the differences between state contracts,
if any, and the reasons for those differences.
Answer. The main differences between FDA's contracts with the
states are the cost and proposed number of checks. There could be
several reasons for these and other differences. For example, some
states may choose to subcontract with county and local government to
conduct the unannounced investigations. The size of each state varies,
therefore travel costs and the number of investigators may differ. Some
states may have more experience conducting tobacco compliance checks.
Other reasons may include the variance in the number of retailers in
each state, and the difference in the lengths of the contracts.
Question. As I understand it, all the states had laws prohibiting
the sale of tobacco products to minors at the time FDA issued its final
regulation. To the extent that states were already implementing
enforcement and compliance activities with respect to those laws, do
the contracts include maintenance of effort requirements?
Answer. FDA's enforcement activities are not intended to supplant
state enforcement, but to supplement them. Efforts are made during
negotiations to ensure that state enforcement continues and that
federal funds be expended only on federal enforcement.
Question. First-time funding of $24 million is requested for fiscal
year 1999 for FDA tobacco production regulation. Please explain in
detail how this funding will be used and why it is required for fiscal
year 1999?
Answer. The product regulation activities anticipated for fiscal
year 1999 are all essential functions under the Food Drug and Cosmetics
Act and provide the industry with a framework in which to properly
conduct business.
The activities planned for fiscal year 1999 in this area include
the review of applications for new tobacco products that may claim to
be less hazardous than those currently on the market; the assessment of
these products to determine what effects they may have on the health of
current users; whether the products will create more demand by young
people to initiate their use and whether the products will keep those
who might otherwise have quit using tobacco products from doing so.
Other activities may include initiation of classification of the
product pursuant to Section 513 of the Act, establishment of quality
system requirements, and review and analysis of the ingredients and
constituents of tobacco products.
proposed user fees
Question. Please provide the Committee with a copy of the
Administration's legislative proposal to authorize the new user fees
proposed in the President's fiscal year 1999 budget.
Answer. I will provide for the record a copy of the March 31, 1998,
letter from Secretary Donna Shalala to Albert Gore, Jr., President of
the Senate, transmitting the Administration's draft bill, the ``Food
and Drug Administration User Fee Act of 1998.'' The same letter was
sent to Newt Gingrich, Speaker of the House of Representatives.
[The information follows:]
letter from donna e. shalala
The Secretary of Health and Human Services,
Washington, DC, March 13, 1998.
Hon. Albert Gore, Jr.,
President of the Senate,
Washington, DC.
Dear Mr. President: Enclosed for the consideration of the Congress
is the Administration's draft bill, the ``Food and Drug Administration
User Fee Act of 1998''.
The bill provides authority for the assessment of user fees for
regulatory activities of the Food and Drug Administration (FDA),
achieving savings indicated in the Presidents Budget for fiscal year
1999.
FDA has had great success in employing user fees to finance
important Agency activities, such as the review of new human drug
applications and the inspection of mammography facilities. The
Prescription Drug User Fee Act program, in particular, has been a model
for reinventing government and has benefited both consumers and
industry.
Industry derives a direct commercial benefit from consumers'
confidence in FDA's review process and product surveillance, which
provides a substantial guarantee of safety. Given the benefits to the
industry, and given that workloads are growing far faster than
government resources, FDA believes it is reasonable to share some of
the cost with the industry. In order to finance specific discretionary
activities in an era of fixed, disciplined resource allocation under
the balanced budget agreement, the FDA is proposing user fees to help
support the whole range of its activities.
Fees would be assessed for applications for marketing approval for
food additives, generic human drugs, animal drugs, and medical devices,
and for licensing of establishments manufacturing medicated animal
feed. Fees would also be assessed for import inspections of, and
issuance of export certificates for, human and animal drugs, medical
devices, and foods. Finally, fees would be assessed for monitoring and
inspections of establishments involved in interstate commerce in FDA-
related products, including foods, human and animal drugs, devices, and
cosmetics.
Fees charged under authorities added by this bill would not
duplicate fees under the Prescription Drug User Fee authority; they
could be waived in exceptional circumstances in the public interest.
Fees could be set at up to the full amount required to recover all
associated FDA costs. Fee revenues could be used only for the
regulatory activity for which collected, and would remain available
without fiscal year limitation (but subject to appropriation).
We recommend that the Congress give the draft bill its prompt and
favorable consideration and look forward to working with Congress to
secure enactment of this important proposal.
The Office of Management and Budget has advised that there is no
objection to the transmittal of this draft legislation to the Congress,
and that its enactment would be in accord with the program of the
President.
Sincerely,
Donna E. Shalala.
Enclosure.
A BILL
To provide for user fees for approval, importation, and postmarket
surveillance of products regulated under the Federal Food,
Drug, and Cosmetic Act.
Be it enacted by the Senate and the House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES IN ACT.
(a) Short Title.--This Act may be cited as the ``Food and Drug
Administration User Fee Act of 1998''.
(b) References in Act.--Except as otherwise specified, references
in this Act to ``the Act'' are to the Federal Food, Drug, and Cosmetic
Act, and amendments made by this Act to a section or other provision of
law are amendments to such section or other provision of that Act.
SEC. 2. CONTENTS.
This Act contains the following provisions:
Sec. 1. Short title; references in Act.
Sec. 2. Contents.
PART A--USER FEES
Sec. 11. Fees related to food additive petitions.
Sec. 12. Fees related to generic drugs.
Sec. 13. Fees related to animal drugs.
Sec. 14. Fees related to medical devices.
Sec. 15. Fees related to import inspections and export
certificates.
Sec. 16. Fees related to entities under FDA's oversight.
PART B--GENERAL PROVISIONS
Sec. 21. General provisions related to user fees.
Sec. 22. Agency plan and annual reporting requirements.
PART A--USER FEES
SEC. 11. FEES RELATED TO FOOD ADDITIVE PETITIONS.
(a) Types of Fees.--Beginning in fiscal year 1999, the Secretary
shall establish, in accordance with section 21, fees to cover
activities of the Food and Drug Administration in connection with:
(1) petitions for food additives submitted pursuant to
section 409(b) of the Act;
(2) notifications to the Secretary for food contact
substances submitted pursuant to section 409(h) of the Act;
(3) petitions for color additives submitted pursuant to
section 721 of the Act;
(4) petitions, submitted pursuant to sections 201(s) and
701(a) of the Act and regulations thereunder, for affirmation
that a substance that becomes, or may reasonably be expected to
become, a component of food is generally recognized as safe;
and
(5) notifications to the Secretary, submitted pursuant to
sections 201(s) and 701(a) of the Act and regulations
thereunder asserting that a substance that becomes, or may
reasonably be expected to become, a component of food is
generally recognized as safe.
The fees shall be payable at the time the petition or notification is
submitted to the Secretary.
(b) Fee Amounts and Availability.--Subject to section 21(a)(1)(A),
fees for the activities specified in subsection (a) shall be set for
each fiscal year at amounts that the Secretary reasonably estimates to
be sufficient to generate revenues totaling $10,335,000 for each of
fiscal years 1999 through 2003, and shall remain available until
expended, to the extent provided in appropriations acts, for the costs
of carrying out such activities.
SEC. 12. FEES RELATED TO GENERIC DRUGS.
(a) Types of Fees.--Beginning in fiscal year 1999, the Secretary
shall establish, in accordance with section 21, fees to cover
activities of the Food and Drug Administration in connection with
applications for approval for new drugs submitted pursuant to section
505(j) of the Act. The fees shall be payable at the time the
application for approval is submitted to the Secretary.
(b) Fee Amounts and Availability.--Subject to section 21(a)(1)(A),
fees for the activities specified in subsection (a) shall be set for
each fiscal year at amounts that the Secretary reasonably estimates to
be sufficient to generate revenues totaling $12,377,000 for each of
fiscal years 1999 through 2003, and shall remain available until
expended, to the extent provided in appropriations acts, for the costs
of carrying out such activities.
SEC. 13. FEES RELATED TO ANIMAL DRUGS.
(a) Types of Fees.--Beginning in fiscal year 1999, the Secretary
shall establish, in accordance with section 21, fees to cover
activities of the Food and Drug Administration in connection with:
(1) applications, including supplements, for new animal drugs
submitted pursuant to section 512(b)(1) of the Act, including
application and other submissions for import tolerances, as
described in section 512(a)(6) of the Act;
(2) abbreviated applications, including supplements, for new
animal drugs submitted pursuant to section 512(b)(2) of the
Act; and
(3) applications for licenses to manufacture animal feeds
bearing or containing new animal drugs, submitted pursuant to
section 512(m) of the Act.
The fees shall be payable at the time the application for approval is
submitted to the Secretary.
(b) Fee Amounts and Availability.--Subject to section 21(a)(1)(A),
fees for the activities specified in subsection (a) shall be set for
each fiscal year at amounts that the Secretary reasonably estimates to
be sufficient to generate revenues totaling $10,100,000 for each of
fiscal years 1999 through 2003, and shall remain available until
expended, to the extent provided in appropriations acts, for the costs
of carrying out such activities.
SEC. 14. FEES RELATED TO MEDICAL DEVICES.
(a) Types of Fees.--Beginning in fiscal year 1999, the Secretary
shall establish, in accordance with section 21, fees to cover
activities of the Food and Drug Administration in connection with
applications for--
(1) premarket approval of devices (including proposed product
development protocols) submitted under section 515 of the Act,
(2) supplements to approved premarket approval applications
for which clinical data are required,
(3) supplements to approved premarket approval applications
for which clinical data are not required, and
(4) device premarket notification submissions under section
510(k) of the Act.
The fees shall be payable at the time the application is submitted to
the Secretary.
(b) Fee Amounts.--The fees required under subsection (a) shall be
as follows:
(1) $175,000 for applications described in subsection (a)(1);
(2) $100,000 for supplements described in subsection (a)(2);
(3) $6,000 for supplements described in subsection (a)(3);
(4) $4,500 for submissions described in subsection (a)(4).
(c) Fee Amounts and Availability.--Subject to section 21(a)(1)(A),
fees for the activities specified in subsection (a) shall be set each
fiscal year in accordance with section 21 to amounts that the Secretary
reasonably estimates to be sufficient to generate revenues totaling
$25,000,000 for each of fiscal years 1999 through 2003, and shall
remain available until expended, to the extent provided in
appropriations acts, for the costs of carrying out such activities.
SEC. 15. FEES RELATED TO IMPORT INSPECTIONS AND EXPORT CERTIFICATES.
(a) Types of Fees.--Beginning in fiscal year 1999, the Secretary
shall establish, in accordance with section 21, fees to cover
activities of the Food and Drug Administration in connection with the
review of imported human and animal drugs, medical devices, and food
subject to regulation under the Act (including activities relating to
admission or detention of, refusal of entry to, and the issuance of
export certificates for such items). The fees shall be payable at the
time of each import entry or request for export certificates for
shipment of the item.
(b) Fee Amounts and Availability.--Subject to section 21(a)(1)(A),
fees for the activities specified in subsection (a) shall be set for
each fiscal year at amounts that the Secretary reasonably estimates to
be sufficient to generate revenues totaling $12,000,000 for each of
fiscal years 1999 through 2003, and shall remain available until
expended, to the extent provided in appropriations acts, for the costs
of carrying out such activities.
(c) Collections.--The fees authorized by this section shall be
collected on behalf of the Secretary by the United States Customs
Service.
SEC. 16. FEES RELATED TO ENTITIES UNDER FDA'S OVERSIGHT.
(a) Types of Fees.--Beginning in fiscal year 1999, the Secretary
shall establish, in accordance with section 21, fees to cover
activities of the Food and Drug Administration in connection with
regulatory activities with respect to regulated products approved for
marketing. The Secretary shall assess fees for monitoring
establishments that are subject to regulation (including inspections
conducted pursuant to section 704 of the Act, and other regulatory
activities), as follows:
(1) Food establishments.--An establishment subject to
inspection under section 704 of the Act because it
manufactures, processes, packs, or holds food for (or after)
shipment in interstate commerce, is subject to assessment of
annual fees under this section. The Secretary may impose an
annual registration requirement on such an establishment to
facilitate assessment and collection of the fees.
(2) Drug and device establishments.--An establishment subject
to the annual registration requirement under section 510 of the
Act (with respect to products other than those for which such
an establishment is subject to section 736 of the Act) is
subject to assessment of annual fees under this section at the
time of registration.
(3) Cosmetics establishments.--An establishment subject to
inspection under section 704 of the Act because it
manufactures, processes, packs, or holds cosmetics for (or
after) shipment in interstate commerce is subject to assessment
of annual fees under this section. The Secretary may impose an
annual registration requirement on such an establishment to
facilitate assessment and collection of the fees.
This section does not affect any other statutory or regulator'
requirements imposed on these entities.
(b) Fee Amounts and Availability.--Subject to section 21(a)(1)(A),
fees for the activities specified in subsection (a) shall be set for
each fiscal year at amounts that the Secretary reasonably estimates to
be sufficient to generate revenues totaling $57,905,000 for each of
fiscal years 1999 through 2003, and shall remain available until
expended, to the extent provided in appropriations acts, for the costs
of carrying out such activities.
PART B--GENERAL PROVISIONS
SEC. 21. GENERAL PROVISIONS RELATED TO USER FEES.
(a) Assessment of Fees.--
(1) Fee amounts.--
(A) Collections subject to appropriations.--The fees
authorized by this Act shall be collected in each
fiscal year as provided in appropriation acts for such
fiscal year.
(B) Relation to costs.--Fees assessed and collected
under part A shall not exceed amounts which the
Secretary estimates to be sufficient to cover costs of
the Food and Drug Administration associated with the
activities for which the fees are collected (including
costs of assessments and collection of the fees).
(C) Variation factors.--The amount of fees
established may vary to reflect the cost of those
activities with respect to different entities or groups
of entities, including the type and size of entity,
volume of business, and other factors the Secretary may
find appropriate.
(2) Fee determination and publication.--The Secretary shall
annually establish fee amounts under part A, and shall publish
schedules of such fees in the Federal Register as an interim
final rule. The establishment and publication of such fees
shall be solely in the discretion of the Secretary and shall
not be subject to the requirements of sections 553 and 801 of
title 5 of the United States Code and shall not be reviewable.
(3) Reduction or waiver of fees.--The Secretary may provide
for reduction or waiver of the fees under part A in exceptional
circumstances in the public interest.
(b) Crediting and Availability of Fees.--
(1) In general.--Fees collected pursuant to part A shall be
credited to a special fund in the Treasury for user fees
collected by the Food and Drug Administration. The fees shall
be available in the amounts specified in appropriations acts,
for salaries and expenses necessary to carry out the
responsibilities of the Food and Drug Administration in
connection with the activities for which such fees were
collected, including the conduct of scientific research;
development of methods of analysis; purchase of chemicals,
fixtures, furniture, and scientific equipment and apparatus;
development and acquisition of information technology and
information management systems; acquisition, maintenance, and
repair of real property; and expenses of advisory committees.
(2) Fees available only for the category of activity for
which assessed.--Fees collected for each category of activities
specified in part A shall be separately accounted for, and
shall be used only to finance the costs related to carrying out
responsibilities in connection with the same category of
activities for which the fees were collected.
(c) Collection of Unpaid Fees.--If the Secretary does not receive
payment of a fee assessed under subsection (a) within 30 days after it
is due, that fee shall be treated as a claim of the United States
Government subject to the provisions of subchapter II of chapter 37 of
title 31 of the United States Code.
SEC. 22. AGENCY PLAN AND ANNUAL REPORTING REQUIREMENTS.
The Agency plan for the Food and Drug Administration required under
section 903(f) of the Act shall include objectives with respect to the
assessment, collection, and use of the fees authorized under part A,
and the annual report required by section 903(g) of the Act shall
describe the performance of the Secretary with respect to such
objectives.
Question. The budget justification indicates that the FDA intends
to work with the Congress, industry, and other affected parties to
achieve the goal of collecting the total $280 million in existing and
new user fees assumed in the budget in fiscal year 1999. Has FDA
discussed the new user fees it proposes with the House and Senate
authorizing Committees of jurisdiction, and with affected industries
and other parties? Would you please summarize the status or outcome of
those discussions.
Answer. FDA, in concert with HHS and OMB, prepared user fee
legislation for the new fees proposed in the fiscal year 1999
President's Budget, which was submitted to the President of the Senate
and Speaker of the House on March 13, 1998. To date, there have been no
hearings with the authorizing committees or with affected industries on
this specific proposal. We do look forward to working with Congress to
authorize the fees. In order for FDA to maintain its current level of
consumers' health protection, it is important that the full program
level in the President's budget be appropriated.
Question. The fiscal year 1999 budget uses the collections from
unauthorized user fees to pay for FDA's regulation of foods, drugs,
biologics, animal drugs, and medical devices. If the proposed user fees
are not authorized, what impact would the lack of these resources have
on FDA's ability to carry out its responsibilities in each of these
areas?
Answer. The Administration is proposing new user fees of $127.7
million which would support 1,183 staff years. If the proposed user
fees are not authorized and the base resources replaced by these user
fees are not restored, the cuts will be felt across every program area
of FDA. The review times and backlogs of all FDA-regulated products
would increase substantially. FDA's ability to meet its statutory
deadlines and fulfill its mission of protecting and promoting the
health of the American public would be seriously undermined.
Question. What is meant by ``postmarket surveillance'' as part of
the user fee proposal?
Answer. Postmarket surveillance activities include not only
traditional domestic postmarketing activities, but also emerging
strategies, which include partnering with state, local, professional
and industry groups, and individuals to enhance the quality and safety
of products. By increasing information sharing and technical
assistance, establishments can operate with stronger quality assurance
systems. As a result, the Agency anticipates that less formal
regulatory intervention may be required. User fees would be collected
for traditional domestic postmarketing activities such as inspections,
investigations, sample analyses, regulatory analytical methods
development, field exams, and recall effectiveness checks.
Question. How many additives will fall under mandatory ``postmarket
surveillance''?
Answer. Food additive and color additive petitions are considered
as part of the Agency's premarket activities, and as such, none would
fall under mandatory postmarket surveillance.
Question. What mechanisms are proposed to ensure that user fees for
food additives will not be used for increased inspections?
Answer. In the draft bill the ``Food and Drug Administration User
Fee Act of 1998'' submitted to Congress by the Secretary on March 13,
the Department explicitly proposes that fees collected for each
category of activity be separately accounted for and be used only to
fund the costs related to carrying out responsibilities in connection
with that category of activities. Thus, fees related to food additive
petitions could not be used to fund activities, including inspections,
other than those specified in the bill.
Question. What reductions would you propose in FDA's fiscal year
1999 budget request if the $128 million in collections from proposed
new user fees are not available and the appropriations request is
approved?
Answer. If the $128 million in collections from proposed new user
fees are not available and the base level of appropriations is not
restored by this amount, the magnitude of the reduction would have a
very serious impact on our activities. It is difficult to say what the
specific reductions would be in each program area; however, I am
certain that there would be adverse consequences on all of our
activities, and our ability to act in a timely and complete manner
would be seriously compromised.
rental payments
Question. For fiscal year 1999, FDA is requesting $88.3 million for
rental payments to the General Services Administration, an increase of
$42 million from the fiscal year 1998 level. The budget justification
indicates that since 1995, there has been a widening gap between
payments paid and owed by the FDA for leased space and services
provided by GSA. This Committee has been appropriating the full amount
requested in the President's budget for FDA rental payments to the GSA.
Why hasn't the President's budget in past years reflected the full
amount FDA owed to the GSA?
Answer. Competition for increases in scarce Federal funding dollars
has provided higher priority to public health program improvements.
Again in fiscal year 1998, the President's budget request is for an
amount less than the actual GSA rent bill. If FDA's rent payments to
GSA had not been limited as they have been in recent years, FDA would
have had to divert further critical program resources to pay the rental
charges.
Question. I understand Dr. Friedman, that you were notified by GSA
last year of the arrearage in FDA's rent payments to the General
Services Administration for space and services received and the need to
remedy this situation. GSA indicated that it would not be able to
expand space and services to the FDA as it has been doing over the past
couple of years without proper reimbursement. Does the fiscal year 1999
request reflect the full rent due to GSA for all FDA occupied and
planned space provided by the GSA?
Answer. Yes, based on the information FDA has currently available
and that of GSA, FDA believes the fiscal year 1999 Congressional
Justification reflects the full rent due to GSA for all of FDA's
occupied and planned space.
Question. What will be the consequences of not appropriating the
full amount requested in the budget for fiscal year 1999 for rent
payments FDA owes to the GSA?
Answer. If FDA's rent payments to GSA are not fully appropriated or
if rent payments to GSA are not limited as they have been recent years,
FDA will have to divert further critical program resources to pay the
rental charges therefore reducing resources currently applied to
important public health initiatives.
Question. Of the $88.3 million requested for fiscal year 1999 to
fully finance FDA rental payments due to the GSA, the budget requests
that $5.428 million be financed from Prescription Drug User Fee Act
(PDUFA) collections. PDUFA user fee collections have not been drawn on
in the past to defray FDA leased space in support of the user fee
portion of the process for the review of human drug applications. Does
the FDA reform bill enacted into law at the end of last year authorize
the use of PDUFA collections for this purpose?
Answer. The original legislation, the Prescription Drug User Fee
Act of 1992, defined expenses associated with the process for the
review of human drug applications to include leasing, maintenance,
renovation, and repair of facilities. This section was left intact
under the provisions of the FDA reform bill enacted into law at the end
of last year. The FDA Modernization Act however, authorizes the
transfer of fees from an account without fiscal year limitation to the
appropriation account for salaries and expenses with such fiscal year
limitation. The Agency has also received clarification recently from
FDA attorneys that rent costs could be included in the costs financed
from PDUFA collections. FDA has requested specific changes in the
fiscal year 1999 appropriation language to allow the transfer of up to
$5,428,000 from fees to the Rental Payments to GSA appropriation.
Question. Please provide the provision of law which specifically
authorizes the use of PDUFA collections for rental of space payments to
the GSA. Please include the legal citation.
Answer. Section 735 (7)(C) of the Prescription Drug User Fee Act of
1992, Public Law 102-571 defines expenses associated with the process
for the review of human drug applications to include leasing,
maintenance, renovation, and repair of facilities, (See 21 USC 379g
(7)(C)). The Food and Drug Administration Modernization Act of 1997,
Public Law 105-115 amended Section 736 (g) of the FD&C Act to authorize
the transfer of fees to an annual appropriation account. (See 21 USC
379h (g)(1)). Additional appropriations language would be necessary to
transfer sums in excess of the 5 percent cap that appears on such
transfers for rental payments in the fiscal year 1998 appropriation.
Question. Please tell us how the $5.428 million was calculated as
the estimated amount of the payment for space representing the user fee
portion of the process for the review of human drug applications.
Please indicate how many square feet of GSA-provided space, out of the
total occupied by FDA, is devoted to the human drug applications'
review process, and how many occupiable square feet the user fee
portion of this space represents.
Answer. The calculation of $5.428 million is based on identifying
the percentage of fiscal year 1998 process FTE's times the FTE's
applicable to fees (41 percent).
In fiscal year 1998 an estimated 454,000 square fee of GSA space
was identified for the process and of this approximately 188,000 square
feet or 41 percent of the process space was estimated to be applicable
to the fee. The estimated GSA rent cost that could be chargeable to
fees in fiscal year 1998 was estimated to be $5.220 million.
The 1999 budget request of $5.428 million for GSA rent chargeable
to fees only includes an additional $208,000 above our fiscal year 1998
estimate. The increase is to cover the costs due to anticipated
inflation for our existing GSA space.
Question. How many total occupiable square feet of GSA-provided
space does FDA's fiscal year 1999 request for rental payments to the
GSA cover? Please provide a breakdown of this total by the following
categories: (1) the amount of occupiable square feet of currently
occupied, GSA-provided space; (2) the total occupiable square feet of
space being undertaken by GSA on FDA's behalf; and (3) the amount of
occupiable square feet of GSA-provided space projected for occupancy
during fiscal year 1999.
Answer. By the end of fiscal year 1998 FDA will occupy 4.05 million
occupiable square feet of space that is provided by GSA. This will
reflect an increase of approximately 51,000 occupiable square feet that
will have occurred during the course of 1998. The additional 51,000
occupiable square feet resulted from the occupancy of 318,761
occupiable square feet and the vacating of 268,129 occupiable square
feet. GSA is undertaking these additions and the vacating of space for
FDA at a number of sites. In fiscal year 1999 FDA is expecting to
vacate a total of 15,000 occupiable square feet which would reduce the
total FDA occupancy to 4.03 million occupiable square feet of space
provided by GSA.
Question. Are the FDA estimates provided in response to the above
question the same as the GSA estimates? If not, please give GSA
estimates and explain the differences between the FDA and GSA
estimates.
Answer. GSA has estimated that by the end of fiscal year 1998 FDA
will occupy 3.98 million occupiable square feet of space that is
provided to FDA by GSA. The difference between GSA's estimate and FDA's
estimate is approximately 70,000 occupiable square feet. This
difference can be attributed to minor discrepancies between GSA's
records and FDA's. When evaluated these individual discrepancies
typically affect less than 5,000 square feet of space each, but when
aggregated accumulate to 70,000 occupiable square feet. This, however,
represents less than two percent of FDA's total inventory of space
which is dispersed in over 225 buildings. FDA is working to reconcile
its records with GSA's.
This reflects an increase of approximately 53,000 occupiable square
feet that will occur over the course of 1997 and 1998. There is a 2,000
occupiable square foot variation in the amount of space projected by
GSA when compared to FDA's projection. This is primarily due to the
fact that GSA's estimates date back to 1997 and include actions that
may have already been reflected in FDA's 1998 projection.
In fiscal year 1999 GSA is expecting FDA to occupy a total of
100,000 occupiable square feet of space which would increase the GSA
estimated FDA occupancy to 4.08 million occupiable square feet of space
provided by GSA. GSA's estimate includes 50,000 occupiable square feet
of unspecified growth in FDA's inventory and 50,000 occupiable square
feet attributable to occupancy of space at the White Oak site in
Maryland. At this time there is no funding available to construct space
at White Oak Maryland. Therefore, FDA has not included this space in
its projected 1999 occupancy. If the GSA projection is reduced by
50,000 which was assigned to the White Oak site, FDA's and GSA's
projected occupancy for 1999 are identical at 4.03 million occupiable
square feet.
Question. How much is included in the fiscal year 1999 request for
rental payments to the GSA for operating costs associated with GSA-
provided space or for the refurbishment of space? Please indicate what
increases are projected for these costs for fiscal year 1999. Do the
FDA estimates differ with GSA's. If yes, please explain the differences
in detail.
Answer. Of the $88.294 million for GSA rent in fiscal year 1999,
$4.9 million is expected to be for FDA's building delegation
operations. This is $0.1 million more than the estimated fiscal year
1998 amount. FDA estimates its operating cost to be $13.4 million, a
total of $8.5 million greater that the amount proposed to be provided
by GSA. The funds provided to FDA, by GSA, are a building delegation
allowance for buildings that are primarily occupied for special use
laboratories. However, the funds are provided at a standard level based
on office operations, not the higher costs associated with the
operation of a special use laboratory.
Laboratory space is delegated to FDA because it requires an
increased level of operational expertise that GSA is not accustomed to
providing. While GSA charges almost 77 percent more for the occupancy
of laboratories than for offices they only provide an operating
allowance that is adequate for office space. Office space operating
costs are based on a general rule of 10 hours of operation for 5 days a
week. This results in substantially less operating time than
laboratories which must operate on a 24-hour basis 7 days a week due to
the scientific activities that must occur within controlled
environments.
Question. In addition to GSA-provided space and services, the FDA
is funding additional housing costs through its salaries and expenses
account. For fiscal year 1998, $25.855 million is being allocated for
these costs. For fiscal year 1999, $27.505 million is requested, an
increase of $1.650 million. Please provide specific explanation of the
expenses funded through the ``rent and related activities'' category of
the salaries and expenses account.
Answer. We are happy to provide the Committee with information on
our Rent and Rent Related Activities.
[The information follows:]
FOOD AND DRUG ADMINISTRATION--RENT AND RENT RELATED ACTIVITIES
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-------------------------------- Increase/
1998 current decrease
estimate 1999 request
----------------------------------------------------------------------------------------------------------------
Other rent and rent related activities.......................... $25,855,000 $27,505,000 +$1,650,000
----------------------------------------------------------------------------------------------------------------
Other Rent and Rent Related Activities:
explanation of expenses
FDA incurs rent and rent-related costs for facilities within the
Salaries and Expenses (S&E) appropriation that are not part of the
Rental Payments to GSA, which is a separate appropriation. These costs
are identified in three accounts: Commercial Rent & Related Services,
GSA Rent-Related Services and GSA Building Delegation Services. Below
is a description of each of the accounts within Other Rent and Rent-
related Activities:
The Commercial Rent and Related Services account consists of
recurring activities that FDA pays directly to non-Federal sources
under the delegation of direct lease and service authority. (Note: This
also includes recurring services for FDA-owned facilities.) Services
include rental of space, and all recurring services for building
operation; i.e., utilities; and services such as janitorial, guard,
grounds maintenance; and operation and maintenance of heating,
ventilation, and air-conditioning (HVAC) systems.
The GSA Rent-Related Services account includes recurring
reimbursable services provided by GSA that are over and above the
normal eight hours that GSA covers in its rent charges. Services
included are security systems, guard services, and HVAC beyond the
standard level funded by GSA.
The GSA Building Delegation account provides recurring services and
one-time repairs to operate and maintain buildings delegated to FDA by
GSA for management of day-to-day operations above GSA's standard level.
Services include utilities and all recurring services for building
operation, such as janitorial, guard, grounds maintenance, and
operation and maintenance of HVAC systems.
increases
Other rent and rent related costs--+$1.65 million
For fiscal year 1999, FDA is requesting an increase of $1.65
million for rent related costs. The fiscal year 1998 to fiscal year
1999 increase represents a full year of rent and utilities for new
space at the Christopher Columbus Center in Baltimore, MD. as well as
other increased costs for full year utilities and service contracts
including operation and maintenance, janitorial, guards service, and
grounds maintenance of FDA facilities.
Question. Please provide a detailed listing of the specific
expenses included in the $27.505 million requested for rent and related
activities for fiscal year 1999, by account (i.e., commercial rent and
related services, GSA rent-related services, and GSA building
delegation services), as compared to fiscal year 1998.
Answer. We are happy to provide the Committee with the information
detailing the specific expenses included in the $27.505 million for the
rent and related activities for fiscal year 1999 compared to fiscal
year 1998.
[The information follows:]
RENT AND RELATED SERVICES FISCAL YEARS 1998 and 1999 PLANS
[In thousands of dollars]
------------------------------------------------------------------------
Estimates
-------------------------
Account/type of service Fiscal year Fiscal year
1998 1999
------------------------------------------------------------------------
COMMERCIAL R&R
Commercial rent:
Chicago (IITRI)........................... 556 ...........
Dallas (Bryan Street)..................... 300 325
Los Angeles (Pico Blvd.).................. 930 950
Lenex, KS (OCI)........................... 126 140
San Diego (OCI)........................... 217 225
Jersey City NJ (OCI)...................... 350 370
Calverton MD (OCI)........................ 165 180
Bethesda (NLRC)........................... 2,245 2,327
Rockville (Wilkins Ave.).................. 416 ( \1\ )
Baltimore (Columbus Center)............... ........... 420
-------------------------
Subtotal, Commercial Rent............... 5,305 4,937
=========================
Subtotal, related services for above 1,188 1,933
buildings \2\..........................
=========================
FDA-owned facilities: \2\
MOD I..................................... 3,950 4,500
Beltsville Research Facility.............. 65 70
San Juan.................................. 425 600
WEAC...................................... 25 30
-------------------------
Subtotal, FDA-owned facilities.......... 4,465 5,200
=========================
Total, Commercial R&R................... 10,958 12,070
=========================
GSA RENT-RELATED \3\
Headquarters.................................. 5,424 5,586
Field......................................... 2,521 2,597
-------------------------
Total, GSA rent-related................. 7,945 8,183
=========================
GSA BUILDING DELEGATION \4\
Atlanta (Annexes I and II).................... \5\ 510 \6\ 562
FB-8.......................................... 3,880 4,051
12709 Twinbrook............................... 60 63
12720 Twinbrook............................... 85 90
12721 Twinbrook............................... 82 86
1901 Chapman.................................. 35 ( \7\ )
MOD II........................................ 2,300 2,400
-------------------------
Total, GSA building delegation.......... 6,952 7,252
=========================
Total, FDA rent and related services.... 25,855 27,505
------------------------------------------------------------------------
\1\ Space vacated during fiscal year 1997; fiscal year 1998 costs are
thru the decommissioning period.
\2\ Utilities and service contracts (i.e., O&M, grounds, guards,
janitorial services).
\3\ Overtime, utilities, guard and cleaning services not covered in GSA
lease.
\4\ Utilities and service contracts (i.e., O&M, grounds, guards, and
janitorial services above GSA-funded standard level).
\5\ Includes FDA funds for Atlanta Annex II for above-standard level for
three-fourths of fiscal year.
\6\ Includes FDA funds for Atlanta Annex II for above-standard level for
full fiscal year.
\7\ Space will be vacated in fiscal year 1998.
fiscal year 1998 operating plan reductions
Question. For fiscal year 1998, FDA is reducing funding for ``low
priority'' foods program work, including activities related to cosmetic
products, applied research on the full range of potentially hazardous
substances which may be found in foods, and compliance monitoring of
domestic food processors and imported food products. In addition, FDA
will not be able to devote additional staff to work on food and color
additive petitions. What impact will the reduction in resources devoted
to the chemical safety of foods have on food safety?
Answer. As stated in FDA's fiscal year 1998 Operating Plan
submitted to Congress, the Agency is reducing funding for lower
priority work. Within the Foods Program, the Chemical Safety of Foods
area absorbed part of the Agency's reduction in base resources. The
following three projects under Chemical Safety of Foods received those
resource reductions: (1) Chemotherapeutic Agents in Domestic and Import
Aquaculture Products; (2) Domestic and Import Pesticide Programs; and
(3) Food and Color Additive Petition Reviews.
Chemotherapeutic Agents in Domestic and Import Aquaculture Products
is a program aimed at detecting unapproved drug compounds in
aquaculture or farm-raised fish. In 1994, FDA detected several samples
with banned drugs but fortunately has failed to detect the drugs within
the past three years. While FDA's Center for Veterinary Medicine will
continue its research on new detection methods, for the Foods Program,
this activity will be reevaluated in fiscal year 1999 to determine any
negative impacts from the resource reduction. As for the Domestic and
Import Pesticide Program, FDA projects a 12 percent decrease in the
number of pesticide samples as a result of reduced resources. For Food
and Color Additive Petition Reviews, the reassignment of additional
staff to work on food and color additive petition review has
contributed significantly to gains made in fiscal years 1996 and 1997
to reduce the inventory of pending petitions. While the inability to
continue to devote additional staff to this effort will make it harder
to maintain this level of progress and it may take longer than
originally planned to entirely eliminate petition backlogs, we have
instituted procedures to increase efficiency and are still making
gains. We have attempted to make these reductions in such a way as to
minimize the impact on food safety.
Question. What will the reduction of additional staffing devoted to
work on food and color additive petitions have on the progress FDA has
made in reducing the backlog of work in this area? What impact will
this have on the time for reviews?
Answer. The reassignment of additional staff to work on food and
color additive petition review contributed significantly to the gains
made in fiscal years 1996 and 1997 in reducing the inventory of pending
petitions. For example, at the end of fiscal year 1997, the inventory
stood at 214 versus 242 at the end of fiscal year 1996 and 295 at mid-
fiscal year 1995). While the inability to continue to devote additional
staff to this effort will make it harder to maintain this progress and
it may take longer than originally planned to entirely eliminate
petition backlogs, we have instituted procedures to increase efficiency
and are still making gains. For example, in fiscal year 1999, FDA
intends to meet its goal of reviewing 30 percent of its food additive
petitions within one year.
Question. Slower device review times below the fiscal year 1997
baselines was one of the impacts cited by FDA to result from the
reductions made in its operating plan. What are the fiscal year 1997
baseline levels, and what reductions do you anticipate will result in
fiscal year 1998?
Answer. The improvements and changes resulting from the
implementation of the FDA Modernization Act and ongoing reengineering
efforts have significantly improved FDA's level of productivity in the
device review area in fiscal year 1997. During fiscal year 1998, FDA's
Device program is facing the challenge of implementing the requirements
of the FDA Modernization Act with reduced program resources. We hope to
maintain our productivity at the fiscal year 1997 level but we realize
that some decline in performance may occur during this transition
period. Our strategy is to concentrate resources on higher risk, higher
impact products or work areas where they are likely to have the
greatest effect on the public health. I will be happy to provide for
the record the fiscal year 1997 baseline levels for 510(k)
applications, PMA applications, and PMA supplements. The baseline
levels for PMA's and PMA supplements are estimates since insufficient
time has elapsed to calculate actual measurements.
[The information follows:]
Fiscal year 1997 baseline estimates for PMA's and PMA supplements:
Complete 50 percent of PMA first actions within 180 days; and complete
78 percent of PMA supplement first actions within 180 days.
Fiscal year 1997 baseline for 510(k) applications: Complete 98
percent of 510(k) first action within 90 days; and complete 64 percent
of 510(k) final action within 90 days.
buildings and facilities
Question. FDA recently reprogrammed $10.4 million of its buildings
and facilities funding from lower priority projects to complete
construction of Phase II of the Arkansas Regional Laboratory. The
fiscal year 1999 request does not include funds for Phase III of the
project. When will this funding be required and what is the projected
requirement for Phase III of the project?
Answer. $13.35 million would be needed in fiscal year 1999 to
construct Phase III and complete the Arkansas Regional Laboratory. Due
to competing issues with a higher priority to the FDA mission, within
both the Salaries and Expenses and the Buildings and Facilities
Appropriations, the request was not included in the President's Budget.
The $13.35 million is the firm figure based on the exercise of a fixed
price contract option to include Phase III in the current ARL
construction contract to the current construction contractor by
December 31, 1998. If this unfunded option is not exercised in fiscal
year 1999, Phase III may have to be repriced which may affect the cost
and may affect the schedule. It will likely escalate the price due to
the contractor having to re-mobilize the appropriate crafts, or a new
contractor having to mobilize altogether. If this unfunded option is
exercised in fiscal year 1999, there may be the opportunity to realize
some savings. In addition, Phase III could be completed on the original
schedule of December 1999, which is the same time as Phase II.
Question. What requirements of FDA's field laboratory consolidation
plan have been accomplished, and what future requirements remain?
Please give project, cost and year scheduled.
Answer. I would be happy to provide that information for the
record.
[The information follows:]
STATUS OF ORA FIELD LABORATORY CONSOLIDATION--MARCH 1998
----------------------------------------------------------------------------------------------------------------
Year Year
Location/action type Construction cost completed planned
----------------------------------------------------------------------------------------------------------------
Seattle, Expansion............................ N/A--GSA Lease........................ 1996 ...........
Buffalo, Lab closure.......................... N/A................................... 1996 ...........
Chicago, Lab closure.......................... N/A................................... 1996 ...........
Philadelphia, Expansion....................... N/A--GSA Owned........................ 1997 ...........
WEAC, Restructure............................. N/A................................... 1997 ...........
Cincinnati, Restructure....................... N/A................................... 1997 ...........
New Orleans, Lab closure...................... N/A................................... 1998 ...........
Atlanta, Expansion............................ N/A--GSA Lease........................ 1998 ...........
San Juan, Lab renovation...................... $1.6 M................................ ........... 1998
New York, New facility........................ N/A--GSA Lease........................ ........... 1999
Arkansas, New facility........................ $37.9 M \1\........................... ........... 1999
Los Angeles, New facility..................... $38.5 M............................... ........... 2000
Baltimore, Lab closure........................ N/A................................... ........... 1999
Detroit, Lab closure.......................... N/A................................... ........... 2000
Dallas, Lab closure........................... N/A................................... ........... 2000
Minneapolis, Lab closure...................... N/A................................... ........... 2000
Denver, Lab closure........................... N/A................................... ........... 2010
Kansas City, Lab closure...................... N/A................................... ........... 2014
San Francisco, Lab closure.................... N/A................................... ........... 2014
----------------------------------------------------------------------------------------------------------------
Note.--Facilities provided by GSA are funded through Agency annual rent payments to GSA. The costs identified
above only reflect construction expenses funded under the FDA Buildings and Facilities appropriation, and not
related cost (i.e. employee and equipment transfers) which are funded via FDA's Salaries and Expenses
appropriation.
\1\ Phase III of the project is unfunded, estimated cost is $13.4 M.
the fda modernization act of 1997
Question. Are any additional resources included in the fiscal year
1999 budget request, aside from increased PDUFA collections, to fulfill
requirements the FDA Modernization Act enacted into law at the end of
last year?
Answer. No additional resources have been requested in the fiscal
year 1999 budget request. Currently FDA is developing more than 40
regulations and guidance documents specified in the FDA Modernization
Act within our current resources. After the issuance of these
documents, additional resources to implement and fulfill requirements
of the FDA Modernization Act will be addressed in future budget
requests.
Question. Please list the activities, and resources, both in
dollars and staff years, required by FDA to carry out its new
responsibilities under the FDA Modernization Act of 1997. In addition,
indicate the fiscal year the Committee can expect these additional
resources to be requested.
Answer. The Agency is currently preparing over 40 regulations,
federal register and guidance documents which are included in the FDA
Modernization Act. This effort is being undertaken within current
resources and is expected to cost more than $10 million. Several
additional provisions of the FDA Modernization Act require FDA to
submit reports to Congress which evaluate the costs of certain
provisions. After completing the implementing regulations and federal
register documents, FDA will prepare the reports and cost estimates as
specified in the Act. We hope that the fiscal year 2000 budget will
address any additional resources the Agency will need to undertake new
responsibilities under the FDA Modernization Act.
Question. The Pre-Market Notification provisions of the FDA
Modernization Act of 1997 will expedite introduction of advanced food
packaging materials while assuring protection of public health. The Act
conditions this new pre-market notification system on an appropriation
of $1.5 million for the six months the system will operate in fiscal
year 1999 and at least $3 million annually thereafter. Is the $1.5
million for this system to operate included in FDA's fiscal year 1999
request? If not, why?
Answer. No increase was included in the fiscal year 1999 request,
as we were still reviewing the impact of this program. We are in the
process of completing our report, as required by the FDA Modernization
Act, which will provide our estimate as to the costs of this program.
Question. What is the fiscal year 1998 base level of resources in
dollars and staff years in each of the Human Drugs and Biologics
programs required to sustain the base level of resources required for
FDA to utilize PDUFA fees? What are these levels for fiscal years 1999,
2000, and 2001?
Answer. The Agency devoted resources of $232,249,000 in fiscal year
1997 to the Process for the Review of Human Drug Applications, of
which, $84,289,000 came from fees and $147,960,000 from appropriated
dollars. The FDA Modernization Act mandates that the amount that came
from appropriations in fiscal year 1997 be the base level that must
come from FDA appropriations in each of the subsequent years. It does
not specify how much must be spent in either the Human Drugs or
Biologics programs.
The amount of base resources for the subsequent years are adjusted
for inflation based on the lower of either the Consumer Price Index or
the total of discretionary budget provided for programs in the domestic
category. Therefore, the amounts for fiscal years' 1999, 2000, and 2001
cannot be projected at this time.
animal drug approvals
Question. Dr. Friedman, you indicate the prepared statement you
submitted to the Committee that the Center for Veterinary Medicine is
``reengineering the drug approval process.'' Would you please explain
how the process is being revised or changed.
Answer. FDA is in the process of implementing the Animal Drug
Availability Act of 1996--ADAA--and policies that will enable faster
approval of new animal drugs. The Center for Veterinary Medicine at FDA
has been working closely with animal drug manufacturers, producers and
veterinarians to design a new and more flexible animal drug approval
process that reduces the time and cost necessary for meeting the
requirements. Congress enacted the ADAA on October 9, 1996. The purpose
of the ADAA is to facilitate the approval and marketing of new animal
drugs and medicated feeds. In furtherance of this purpose, the ADAA
redefined substantial evidence, i.e., the standard by which a new
animal drug is determined to be effective. FDA was directed to, and
has, proposed a further definition of substantial evidence (62 FR
59830). The proposed changes would give FDA greater flexibility to make
case-specific determinations regarding the number and types of studies
that will provide, in an efficient manner, substantial evidence that a
new animal drug is effective. Additionally, in response to the
President's reinventing government initiatives announced in the
President's National Performance Review, ``Reinventing the Regulation
of Animal Drugs,'' May 1996, FDA announced its intent to implement
policies that will enable the faster approval of new animal drugs. FDA
has found that direct review of new animal drug submissions by
reviewers with specialized technical expertise and phased review of
technical sections of new animal drug applications enable faster
approval of new animal drugs because technical sections are submitted
and reviewed as they are completed rather then the sponsor waiting
until all sections are completed and submitting them together. FDA has
implemented policies to allow for the direct and phased review of
applications and intends to modify the regulations governing
investigational use new animal drugs and new animal drugs to describe
direct and phased review. FDA also intends to issue a proposed
regulation to describe how new animal drug applicants may request a
presubmission conference to discuss investigational or new animal drug
application requirements. While the ADAA added a statutory entitlement
to a presubmission conference, FDA's Center for Veterinary Medicine had
already been encouraging sponsors of NADA's to participate in
conferences with FDA to discuss in detail what studies are necessary to
demonstrate the safety and effectiveness of a new animal drug. In its
experience with these informal conferences, FDA and industry found
that, as a result of direct communication during the development and
review of new animal drugs, industry conducted fewer unnecessary
studies and there were fewer delays in the review process.
office of generic drugs
Question. In response to language included in the Statement of the
Managers accompanying the Conference Report on H.R. 2160, the fiscal
year 1998 Agriculture, Rural Development, and Related Agencies
Appropriations Act, the FDA operating plan includes an increase from
the fiscal year 1998 level for the Office of Generic Drugs. Funding for
the Office of Generic Drugs for fiscal year 1998 will be $9,693,000, as
compared to the fiscal year 1997 level of $8,991,000, an increase of
$702,0000. Is this correct?
Answer. Yes, the Office of Generic Drugs was given an increase of
$702,000 for fiscal year 1998, over the fiscal year 1997 level, as
reflected in FDA's fiscal year 1998 Operating Plan.
Question. How is FDA allocating the additional funds provided for
the Office of Generic Drugs for fiscal year 1998?
Answer. The Office of Generic Drugs will spend most of the fiscal
year 1998 funding increase on payroll expenses for additional review
activities. The remaining funds will be expended on operating expenses.
These expenses include spending for things such as laboratory and
computer equipment, travel, training, and day-to-day operating costs.
Question. What was the staffing level (FTE's) for the Office of
Generic Drugs for fiscal year 1997? What will the staffing (FTE) level
for the Office be for fiscal year 1998? What is the fiscal year 1999
budget request level?
Answer. The ceiling for the Office of Generic Drugs was 127 FTE's
in fiscal year 1997 and is at 132 FTE's for fiscal year 1998. No
decision has been made to date on the staffing level for fiscal year
1999, but the current estimate for fiscal year 1999 is the same as
fiscal year 1998.
Question. How many full-time equivalent (FTE) positions would have
to be added to the Office of Generic Drugs fiscal year 1998 staffing
level to enable the Office to meet FDA's statutory requirement to take
final action on Abbreviated New Drug Applications (ANDA's) within six
months?
Answer. The Office of Generic Drugs estimates that it would need
approximately 75 additional FTE to review the majority of applications
within 180 days. There will always be a few applications that cannot be
reviewed within 180 days due to complicated scientific issues or other
barriers outside the direct control of the Office of Generic Drugs. In
addition, other parts of the Food and Drug Administration that support
the generic drug review program will need additional FTE, such as the
Office of Regulatory Affairs and Office of Compliance. Furthermore, the
Office of Generic Drugs' and possibly other supporting FDA components'
budgets would need to be proportionately increased to support the extra
FTE, with increases to cover costs associated with support costs such
as computers and training. The projection of approximately 75
additional FTE is based on a November 1996 report entitled: ``Generic
Drug User Fee Proposal Questions & Answers,'' but updated to reflect
the increase in submissions of ANDA's.
Question. What was the backlog of generic drug applications as of
the end of fiscal year 1997 and as of January 1, 1998? Please provide
the total number of ANDA's pending before the FDA as well as the number
pending for more than six months?
Answer. At the end of fiscal year 1997, there were 515 pending
ANDA's, including 106 pending for more than six months. On December 31,
1997, there were 588 pending ANDA's, including 100 pending for more
than six months.
Question. What were the mean and median review times for new drug
applications (NDA's), ANDA's and ANDA supplements in fiscal year 1997?
What have they been in fiscal year 1998 to date?
Answer. It is important to note that review time is different from
approval time. Review time is the time that the agency takes to review,
that is, to take a final action on, an application. The time for
approval is the sum of the time for FDA review plus the time for the
sponsor to respond to any deficiencies noted in the review if the
application is not approved the first time it is submitted.
Either an approval or disapproval of an ANDA is considered by FDA
to be a final action. The Agency makes every attempt to meet the
requirement to approve or disapprove an application within 180 days;
however, for a number of reasons it is not always possible to do so.
After receiving a disapproval action, manufacturers frequently resubmit
applications that address the deficiencies indicated in the disapproval
action.
As we mentioned earlier, approval times reflect both time with the
agency reviewing applications as well as time with the sponsor or
applicant responding to deficiencies noted by FDA reviewers. The time
spent in FDA on an ANDA is measured by ``review cycles''. A cycle
starts when an application is filed by FDA and ends when the agency
issues an ``action letter''. Generally these letters communicate to the
sponsor that their application is approved or not. If not approved, the
sponsor is provided with the reasons why and has an opportunity to
submit information needed to address these deficiencies. When this
information is received a new cycle begins.
The Office of Generic Drugs does not calculate yearly review cycle
times, but can provide monthly calculations. Traditionally, the month
of September has been used to report review times. Regarding the NDA
information we will provide, the data reported include all approvals
during the fiscal year 1997 and 1998, pre-PDUFA as well as any
applications submitted in a PDUFA cohort.
[The information follows:]
FISCAL YEAR 1997 REVIEW TIMES (SEPTEMBER 1997)
[Time in months]
------------------------------------------------------------------------
Mean Median
------------------------------------------------------------------------
ANDA's........................................ 5.9 5.4
ANDA supplements \1\.......................... n/a 5.2
NDA's (124 drugs)............................. 16.0 15.0
Fiscal Year 1998 Year to Date Review times (February 1998)
ANDA's........................................ 6.2 6.1
ANDA supplements \1\.......................... n/a 4.4
NDA's (55 drugs, through 2/28/98)............. 14.3 12.0
------------------------------------------------------------------------
\1\ Original and major amendments to supplements.
blood safety
Question. How does FDA collaborate with the Centers for Disease
Control (CDC) in investigating CDC-reported incidents of possible
transmission of an infectious disease in its efforts to identify
problems with blood products?
Answer. The FDA has extensive interactions with its sister agencies
of the Public Health Service or PHS, the CDC and NIH, on blood safety
issues at all levels of the agencies. The FDA collaborates with the CDC
to ensure a rapid response to any possible transmission of infectious
disease. The CDC participates in product investigations by conducting
epidemiologic studies or assisting with scientific analysis.
Recent examples include Centeon Albuminar in which CDC provided
epidemiologic assistance in determining cases of individuals affected
by bacterially contaminated product. Another example concerned Alpha
Factor VIII and Factor IX in which the CDC provided epidemiologic and
laboratory assistance in investigating the transmission of Hepatitis A
virus from these clotting factors. CDC is currently assisting the FDA
in an investigation of allergic reactions associated with specially
filtered (leukoreduced) blood products.
The NIH and CDC routinely share information from large scale
surveillance studies on blood safety issues such as the Retroviruses
Epidemiology in Donors Study (REDS), the Transfusion Safety Study
(TSS), and the Transfusion Transmitted Viruses Study (TTV).
The Department has raised blood safety to the highest level. As you
are aware, Dr. Satcher has been appointed as the Assistant Secretary
for Health, as well as serving as the Surgeon General, and also serves
as the Blood Safety Director. Coordination of the response of the PHS
agencies occurs at the level of the Blood Safety Committee chaired by
the Blood Safety Director and consisting of the Director of the NIH,
the CDC, and the Commissioner of Food and Drugs.
The NIH, CDC and FDA also serve as ex-officio members of the
Advisory Committee on Blood Safety and Availability. The Advisory
Committee has considered Hepatitis C virus (HCV) lookback notification
and policy related to risk of Creutzfeldt-Jakob Disease (CJD), since
its first meeting in April 1997. In August 1997, the Committee issued
recommendations for the implementation of HCV lookback notification.
The Secretary accepted these recommendations in January 1998, and the
Department is in the process of implementing HCV lookback measures.
CDC and NIH representatives now serve as voting members of the
Blood Products Advisory Committee which provides scientific advise to
the FDA on a variety of issues including product approvals. NIH and CDC
employees also serve on the Transmissible Spongiform Encephalopathies--
TSE--Advisory Committee which advises FDA on TSE issues including their
possible impact on blood and blood products. NIH and CDC
representatives participate in the Interagency Working Group on Blood
Safety and Availability which hold monthly teleconferences to discuss
issues affecting blood safety.
The CDC has also created a position of Assistant Director for Blood
Safety to facilitate interactions on these issues. Together, these
efforts ensure that CDC and NIH have input at the highest levels of the
FDA and the Department.
Question. Does the investigation process differ if an adverse event
is discovered by FDA or by CDC? Are FDA's decision steps related to
product withdrawal or recall the same?
Answer. The FDA and CDC may become aware of adverse events by many
different mechanisms because the FDA focuses on regulated products
while CDC focuses on surveillance and epidemiological investigations.
Adverse events may be reported through either the FDA's Medwatch
system, the CDC surveillance systems or as reports from consumers. Once
an adverse event is discovered, the FDA and CDC work together to
safeguard the public by rapidly investigating the cause of the adverse
event, alerting the manufacturer and the public. FDA and CDC have
reciprocal arrangements regarding emergency contacts and utilize
standing cooperative procedures for sharing information and managing
investigations.
The FDA may initiate an investigation at both the administering
facility and the manufacturer of the product. CDC may be called upon to
assist the FDA in epidemiologic and scientific investigations.
FDA's decision steps related to product withdrawal or recall are
the same regardless of whether the event is discovered by the FDA or by
the CDC. FDA's decision steps in the classification of these types of
situations is similar. The end points may, however, be different. For
example, a manufacturer may voluntarily withdraw product from the
market at any time. If the presence of the product in the market place
represents a violation of the Federal Food, Drug, and Cosmetic Act or
the Public Health Service Act and the FDA would pursue legal action
(e.g. seizure), the withdrawal may be formally classified by the FDA as
a ``recall''. If the FDA does not believe that the underlying
violations or deficiencies relating to the product are actionable
violations, the withdrawal action may be formally classified by the FDA
as a ``Market withdrawal''. For recall classifications, a health hazard
evaluation is performed and the recall is classified as Class I, II, or
III based on the potential risks and hazards, if any, associated with
use or exposure to the product.
Investigation processes for FDA and CDC differ in that FDA has a
focus on regulated products and the public health associated with the
use of those products while CDC is principally concerned with
epidemiological investigations and surveillance relating to
transmission or suspected transmission of diseases which also
contribute to public health decisions. FDA and CDC work closely
together when investigations focus on broad public health issues
involving the potential spread of infectious agents.
Investigational processes and directions may differ based upon the
source of the information concerning an adverse event. For example, if
a regulated product is suspected as having caused an unexpected or
serious adverse event, FDA may initiate an inspection at both the
administering facility and the manufacturer of the product in question.
Since CDC has extensive epidemiological investigational experience, FDA
would conduct a joint review in situations where the facts surrounding
a disease transmission do not clearly implicate a specific product and
require an extensive epidemiological investigation.
Question. Last year, the Committee directed FDA to move forward in
convening a working group to develop a system to notify patients of
adverse events. As a result of this action, I understand that a
voluntary patient notification system has been proposed by blood
product manufacturers. What progress has been made in implementing this
voluntary notification system?
Answer. The voluntary notification system came about following a
PHS-sponsored meeting on notification of withdrawals and recalls that
occurred in November 1996. Since that time, the FDA has met with
consumer groups and industry representatives on numerous occasions to
help formulate the elements of this voluntary system.
The International Plasma Products Industry Association, IPPIA, has
formulated a proposal to implement a voluntary notification system,
that will employ a single third-party to act as the repository and
distributor of information. The IPPIA projects that the notification
system will be operational in June 1998.
Question. What steps does FDA intend to take to ensure this system
is appropriately implemented?
Answer. FDA is considering drafting a regulation that will require
adequate record keeping and an effective mechanism to identify and
notify product custodians in the event there is a potential for the
exposure to a communicable disease. Delivery system participants will
be required to establish and maintain mechanisms for notification of
the product custodian, which in some cases, may include the patient or
the patient's legal guardian.
FDA continues to support better notification of consumers about
withdrawals and recalls through a number of means, including improved
labeling of products. Proposed improvements include the use of lot-
number tear-offs to make it easier to track lot numbers, and the
printing of the third-party telephone number on the product to permit
easy access to enrollment in the notification system. The FDA continues
to meet with consumer groups and industry to discuss these issues.
Question. Once established, is there a mechanism for FDA oversight
of the patient notification system?
Answer. FDA regards the notification system as a component of the
recall plan of a manufacturer, and thus, the system would fall under
FDA's regulatory purview. Any information a firm disseminates through
the national notification system will be part of its recall procedures,
and will be reviewed by the FDA on that basis. Importantly, while FDA
does have a policy of reviewing the recall strategy of manufacturers,
recalls are reviewed at different levels depending on several factors.
The depth of review has resource implications, especially if multiple
systems are in place. FDA prioritizes its resources by the level of
health risk. Any auditing for effectiveness during a recall would be
governed by FDA's existing procedures for effectiveness checks.
Question. How will manufacturers be held accountable for notifying
patients of possible contamination of blood products?
Answer. FDA agrees that the voluntary national notification
proposal by a third party is a good idea, but not in lieu of patient
notification by the product consignees. During a recall, the FDA is
also concerned with product retrieval, which is not a primary objective
of the voluntary plan. The proposal addresses patient notification but
not product withdrawal or retrieval. A manufacturer's participation in
the voluntary patient notification system will not fulfill all of a
manufacturer's responsibility regarding product recall. FDA is
considering a regulation requiring a notification mechanism of a
manufacturer's failure to follow the regulation which could result in
regulatory action. FDA would conduct inspections to oversee the
implementation of the regulation.
Question. What FDA resource commitments has FDA made to this
voluntary notification system?
Answer. The voluntary notification system came about following a
PHS-sponsored meeting on notification of withdrawals and recalls that
occurred in November 1996. Since that time, the FDA has met with
consumer groups and industry representatives on numerous occasions to
help formulate the elements of this voluntary system. The FDA continues
to meet with consumer groups and industry to discuss these issues. FDA
continues to support better consumer notification about withdrawals and
recalls through a number of means. CBER posts notices of plasma-
derivative product recalls and withdrawals on its WebPage. FDA is
considering publication of a proposed regulation which would require
adequate record keeping and an effective mechanism to identify and
notify product custodians in the event there is a potential for the
exposure to a communicable disease. This proposed regulation would be
disseminated for notice and comment before becoming final. Resources
for these activities have been identified within a larger plan to
address current concerns related to blood safety.
The International Plasma Products Industry Association (IPPIA) has
formulated a proposal to implement a voluntary notification system,
that will employ a single third-party to act as the repository and
distributor of information. The IPPIA projects that the notification
system will be operational in June 1998.
medical glove protein and/or powder
Question. FDA reportedly has under consideration a rule setting a
protein limit of 1200 micrograms per medical glove, and a powder limit
of 120 milligrams per glove. Is there a scientific basis upon which to
determine these standards? If so, what is that basis? Or, are these
standards simply based on FDA's evaluation that medical glove
manufacturers will be able to achieve them?
Answer. These limits are based on the scientific principle of dose-
response, i.e., less protein and less powder will reduce adverse
effects, and they are also based on FDA evaluation that medical glove
manufacturers will be able to achieve these limits.
Question. The implementation of any standard for glove protein and/
or powder would seem to depend heavily on the methods used to measure
protein or powder. What methods are available to measure these things,
and what if anything needs to be done to improve, refine, or
standardize these methods? Has the FDA worked with ASTM or other
voluntary standards organization to arrive at reliable measurement
techniques?
Answer. The method recommended for measuring protein levels is the
American Society for Testing and Materials (ASTM) D 5712 Standard.
FDA's Center for Devices and Radiological Health is currently
evaluating the use of the ASTM D 6124 Standard for measuring glove
powder levels.
Question. In setting protein and/or powder limits for medical
gloves, what measures has FDA taken, or does it intend to take, to
ensure that its regulations do not cause shortages of medical gloves?
Answer. FDA has requested ASTM to develop a standard for the
maximum level of water-soluble protein on natural rubber latex medical
gloves, and the maximum allowable level of glove powder on medical
gloves. This effort is ongoing and FDA is actively participating. This
effort in cooperation with the manufacturer members of ASTM was
undertaken to ensure that the proposed regulation will not cause
shortages of medical gloves.
fda study of the third national health and nutrition examination survey
(nhanes) samples
Question. In its September 1997 Medical Glove Powder report, FDA
indicated that its CDRH Epidemiology Team was conducting a study of the
seroprevalence of natural latex-specific IgE antibodies among
participants in the Third National Health & Nutrition Examination
Survey (NHANES III). What is the status of FDA's study? Over what time
period were blood samples in this study collected?
Answer. FDA's CDRH, in conjunction with FDA's Center for Biologics
Evaluation and Research, CBER, sponsored testing of blood samples from
the Phase II , 1991-1994, of the National Health and Nutrition
Examination Survey III for seroprevalence of natural latex-specific IgE
antibodies. The CDRH Epidemiology Branch is awaiting the results of
this testing, which is still in progress. Upon receipt of the complete
testing results, the CDRH Epidemiology Branch will analyze the data,
using the demographic information and population weights supplied by
the National Center for Health Statistics, the agency conducting NHANES
III.
Question. In studying IgE seroprevalence among NHANES III
participants, what assay(s) did the CDRH Epidemiology team use? Also,
what method or cutoff level(s) did the Epidemiology Team use to
classify individual results as reflecting or not reflecting latex
sensitivity? (For example, did the Epidemiology Team use a result of
0.35 International Units per milliliter (0.35 IU/ml) on the AlaSTAT
Latex-Specific IgE Allergen assay as a cutoff point for latex
sensitivity?) And what was the reason for using this cutoff?
Answer. The AlaSTAT Assay is being used to test the NHANES III
Phase II blood samples. The Epidemiology Team will receive the results
expressed in International Units per milliliter (IU/ml), rather than as
``positive'' or ``negative.'' Therefore, the CDRH Epidemiology Branch
will be able to examine the data using a variety of cut points, and
determine which, if any, correlate with other variables available in
the NHANES III data set.
government performance and results act
Question. How are the agency's annual performance goals linked to
the agency's mission, strategic goals, and program activities in its
budget request?
Answer. The Agency's annual performance goals are aligned with FDA-
wide strategic goals and strategies, which in turn, support the
Agency's mission. The basic elements of FDA's mission are to promote
the public health by timely review of regulated products prior to
marketing; protecting the public health by ensuring the safety and
effectiveness of products on the market; and coordinating agency
efforts with external partners and stakeholders. FDA's strategic goals
and strategies directly support each element of the mission statement.
Each performance goal in the Performance Plan, in turn, is tied to an
Agency strategy. Those connections are identified in the descriptive
material supporting the performance goal statements.
The performance goals in the plan are also organized by FDA's major
program activities in the budget, for example foods, drugs, biologics,
or one of the other major program areas. Within each program activity,
performance goals are grouped into clusters, with program resources
broken out for each cluster.
Question. Could you describe the process used to link your
performance goals to your budget activities? What difficulties, if any,
did you encounter, and what lessons did you learn?
Answer. The process used to link performance goals to budget
activities involved program managers, planners and budget
representatives from each Agency center, their field counterparts, and
non-center headquarters analysts. The process contained several steps.
First, program managers and planners in each center identified clusters
of performance goals that supported each major strategic direction for
the center. FDA identified resource totals for each budget activity. We
are defining a budget activity as a program identified in the budget,
for example human drugs, foods, and so forth. Resources associated with
a program consist of the resources allocated to a product center, such
as human drugs, plus the resources assigned to regulate that product
area in FDA's field organization. Center officials then apportioned the
resource total for each budget activity, or program, to each cluster of
performance goals within the program, based on an estimate of
expenditures necessary to achieve the performance goals. We then
reconciled program resources identified in the budget with those
identified in the performance plan.
The challenge associated with this new way of organizing resources,
by strategic direction, was that it was different from the traditional
``project'' classification. FDA's current accounting system keeps track
of resources below the program level by these projects. Thus, resources
were crosswalked from an input-oriented project and accounting system
to a results-oriented performance system. These crosswalks were
accomplished by developing reasonable estimates rather than through
empirical record-keeping.
The major lesson learned was that performance goals could still be
linked to the existing budget structure while being arrayed differently
for strategic and performance purposes. We are still in the process of
determining the extent to which budget and performance systems should
be integrated. The degree of integration depends, at least in part, on
the preferences expressed by HHS, OMB, and Congress.
Question. Does the agency's Performance Plan link performance
measures to its budget? Does each account have performance measures?
Answer. Yes, the performance goals in the performance plan are
directly linked to the budget. There are goals for each program area in
the budget and the clusters of goals within program areas are tied to
the resources requested for that program. The budget justification uses
performance goals in justifying the budget request. With respect to the
second part of your question, if by ``account'' you mean the FDA
appropriation, the answer is yes. The appropriation is a more aggregate
category than the program, or budget activity. Thus, performance
measures for the FDA account, or appropriation, would be the sum of
performance measures for all of FDA's programs.
Question. To what extent does your performance planning structure
differ from the account and activity structure in your budget
justification?
Answer. The performance planning structure uses the same programs
as the budget, for example Foods, Human Drugs, Biologics, Animal Drugs
and Feeds, Devices, National Center for Toxicological Research, and
Tobacco. Earlier we discussed how the performance planning and budget
structure differ below the program level.
Question. Do you plan to propose any changes to your account
structure for fiscal year 2000?
Answer. We are currently in the process of evaluating whether to
change portions of our account structure, to provide the most helpful
information to the Committee. We would be happy to keep the Committee
apprised of any proposed changes as they are developed.
Question. How were performance measures chosen?
Answer. First, we would like to clarify how FDA uses the term
performance measure. FDA identifies a performance measure as one
element of a performance goal. The performance measure is the yardstick
that is used to identify levels of desired and actual performance. The
performance goal is a statement that includes the performance measure
plus the target level and time frame that the manager selects as an
intended result, and by which he/she manages. To illustrate,
``percentage of priority drugs reviewed within one year of receipt''
would be a performance measure. The total performance goal would read:
``Complete review on 90 percent of all high priority drugs received in
fiscal year 1999, within one year of receipt.''
FDA used a process to choose performance goals, which includes the
selection of both measure, target level and time frame.
FDA initiated this process by issuing guidance on the development
of performance goals and supporting documentation. This guidance was
based on directives issued by OMB and the Department of Health and
Human Services. Each line component of the Agency submitted performance
goal candidates. Over 250 performance goals were submitted by the
Centers. The goals were screened based on specific criteria, condensing
the initial list of goals to the 64 performance goals contained in the
Agency Performance Plan. We are happy to provide this criteria for the
record.
[The information follows:]
fda performance goal criteria
Did the goal address a high public health priority?
Was there substantial stakeholder concern and interest--for
example, the Administration, Congress, consumers, industry?
Did the goal address a specific legislative mandate--for example,
the Prescription Drug User Fee Act?
Was the goal either outcome-oriented or would it position the
agency to measure and produce outcomes in the future?
Was the goal associated with a program area in which substantial
budget increases were being requested?
Question. How did the agency balance the cost of data collection
and verification with the need for reliable and valid performance data?
Answer. FDA used the primary criterion of significant potential
public health risk to determine in which areas it was justifiable to
expend and request resources for collection and validation of important
data. Two notable illustrations are in the area of food safety and
imports. Both areas are of major concern to the public. The Agency has
devoted considerable resources in the import area to establish an
import monitoring system, in cooperation with the U.S. Customs Service.
As a result of this effort, the Agency now has in place an automated
screening system which permits the rapid approval of imports from
sources that historically have ``clean bills of health.'' This system
also allows the Agency to quickly target suspected shipments for closer
laboratory examination. FDA's performance plan contains a goal that
will ensure that at least 55 percent of safe import entries are
released for entry within 15 minutes.
Food safety is a second illustration of a high public health
priority for which large expenditures for establishing of effective
data collection systems is warranted. FDA performance goals for fiscal
year 1999 address the need to work cooperatively with other federal
agencies in developing baseline surveillance data on food borne
illnesses; and on adverse events associated with dietary supplements,
infant formulas, and medical foods.
In other instances, the establishment of valid and reliable data
systems in the premarket review areas has been supported by
stakeholders, such as the regulated drugs and biologics industry in the
form of user fees. Industry is willing to contribute funding for these
systems because they are dependent upon accurate data to gauge FDA's
progress in prompt review decisions.
Question. Does your plan include performance measures for which
reliable data are not likely to be available in time for your first
performance report in March 2000?
Answer. Our goal is to have reliable data available for all
performance goals, performance measures, target levels and time frames,
by March 2000. The performance goals that are at greatest risk for not
having reliable data are those areas in which the Agency is partnering
with other agencies and are taking new approaches to protecting the
public health. For areas such as seafood HACCP, where the industry is
still in the process of adapting this new hazard control approach, some
time may be needed to develop baselines that are sufficiently stable to
use as a basis for predicting future performance. Also, some programs
will need to focus on process improvement goals. These are goals that
lay the foundation for systems to collect data and/or develop
appropriate measures. Once these systems are operating, then the
program will have data and the appropriate metrics to measure
performance that is more closely related to outcomes.
Question. What are the key performance goals from your fiscal year
1999 Annual Performance Plan that you recommend this subcommittee use
to track program results?
Answer. All of the goals in FDA's fiscal year 1999 Performance Plan
represent Agency commitments that FDA will strive for. The Committee
may be particularly interested in tracking specifically identified
goals that lend themselves to quantification, and are associated with
program areas of particular current Congressional interest. We will be
happy to provide a listing of these goals for the record.
[The information follows:]
selected fda performance goals fiscal year 1999
PDUFA (Prescription Drug User Fee Act)
Review and act on 90 percent of standard new drug applications
(NDA's) filed within 12 months after receipt (30 percent within 10
months of receipt); and priority applications within six months.
Review and act on 90 percent of complete NDA applications
resubmitted following receipt of a non-approval letter, within six
months after resubmission date.
Review and act upon 60 percent of fileable original generic drug
applications within six months after submission date.
Review and act upon 90 percent of standard efficacy supplements
within 12 months (30 percent within 10 months of receipt) and priority
efficacy supplements filed within six months of receipt.
Review and act upon 90 percent of manufacturing supplements within
six months and act on 30 percent of manufacturing supplements requiring
prior approval within four months.
Food safety
By 12/30/99, 50 percent of the seafood industry will be operating
preventive controls for safety as evidenced by functioning, appropriate
HACCP systems.
By the end of fiscal year 1999, enhance the safety of the nation's
food supply by achieving adoption of the Food Code by 25 percent of the
states.
Tobacco
Enter into contracts with all 50 states (depending on their
willingness) to conduct an average of 42,000 unannounced compliance
checks each month of retail establishments that sell tobacco products.
Imports
Increase the percentage of safe imports screened within 15 minutes
to 55 percent.
Mammography
Have at least 97 percent of mammography centers meet key inspection
standards, with less than 3 percent of facilities with Level 1
(serious) inspection problems.
Important new medical devices
Complete 50 percent of Premarket Approval applications (PMA's)
within 180 days.
Question. In developing your Annual Performance Plan, what efforts
did your agency undertake to ensure that the goals in the plan include
a significant number of outcome measures?
Answer. FDA used several approaches to focus on outcome-oriented
performance goals. In anticipation of preparing the fiscal year 1999
Annual Performance Plan, we trained over 600 of our managers, planners
and field staff in GPRA and performance management principles. FDA's
GPRA training and the fiscal year 1999 Performance Plan guidance
described the differences between input goals, activity goals, output
goals and outcome goals. We are also encouraging the use of `process
improvement' performance goals, such as establishing important data
systems, or developing appropriate partnering arrangements. These goals
are important as transition mechanisms which position our agency to be
more effective in both measuring and producing outcomes in cooperation
with external partners. FDA is also encouraging system analyses of
agency programs and their relationships with their environment to
explain and predict outcomes more effectively. These analyses help to
explain the relationships among components of the system. To
illustrate, in the food safety area, we are examining linkages among
research, surveillance efforts, educational interventions and
enforcement actions. These relationships are first understood in
conceptual terms. As systems understanding develops further, hopefully
empirical relationships can be established among these components to
aid in predicting and then committing to outcomes.
During the development of the Annual Performance Plan, FDA used its
network of program liaisons to provide technical assistance and support
to organizational components in developing outcome-oriented performance
goals. This assistance ranged from reinforcing performance planning
principles; discussing performance measurement issues; establishing
rational linkages between process improvement goals, output goals and
desired outcomes; and providing feedback on performance information
developed. Through an iterative process, the Agency program managers
and planners selected the most important and most outcome-oriented
performance goals for inclusion in the Annual Performance Plan.
Question. Do you believe your program managers understand the
difference between goals that measure workload (output) and goals that
measure effectiveness (outcome)?
Answer. Yes. As a result of extensive GPRA training and application
of performance management principles, FDA's program managers are
shifting their emphasis away from managing activities and toward
managing results. For example, the primary objective of the President's
Food Safety Initiative is to reduce foodborne illness. FDA managers are
collaborating with USDA, CDC and EPA and state and local health and
agricultural agencies in this effort.
The use of the Compliance Achievement Reward System (CARS) provides
another example of how the development of a performance-based personal
reward system has been used to foster change toward an outcome-oriented
culture in the Agency's compliance program. This results-oriented
computer data system captures efficient and effective compliance
achievements that focus on impacts and outcomes. This reporting system
is helping to create a change in FDA's mind set from only ``policing''
the industry to a willingness to openly communicate and work with those
industries willing to work with FDA. Credit is given to employees who
achieve compliance efficiently with regulated industry. Employees used
to be rewarded for the number of enforcement and administrative actions
taken. Now they are interacting with industry more through individual
meetings, training, workshops, and grassroots meetings to listen to
concerns.
Nevertheless, we continue to face several challenges that limit our
ability to establish measurable outcome oriented performance goals.
First, a major barrier to establishing outcome-oriented performance
goals is that most desirable health outcomes of FDA action, reduced
morbidity and mortality, results from the efforts of multiple actors,
including the regulated industry, other federal agencies, health
professionals and consumers. As we approach ultimate outcomes, FDA's
singular influence increasingly wanes and it becomes increasingly
difficult to establish a clear connection between FDA's action and some
ultimate health outcomes. Moreover, we are necessarily dependent on
purchasing or obtaining data from external partners who are responsible
for collecting and guaranteeing the quality of health outcomes data. In
many cases, outcome data are not only expensive, they are simply not
available.
Second, many of our existing data systems were designed to measure
activities but provide neither relevant baselines required to develop
results-oriented performance goals that are within our control nor to
track the progress made toward achieving such performance goals. Third,
although we have addressed this issue by including process improvement
goals aimed at developing the appropriate measurement systems, their
development often requires a substantial investment of resources and,
in some cases, performance data will not be immediately available.
Question. What are some examples of customer satisfaction measures
that you intend to use? Please include examples of both internal and
external customers.
Answer. FDA is concerned about customer satisfaction for all of our
varied customer groups. We recently completed a survey of customers
including consumers, health professionals, state governments and
industry. Survey results were analyzed and incorporated into goal
setting for FDA programs. Since the Performance Plan is concise and
focused externally, only a fraction of the customer service goals FDA
has adopted were included in the fiscal year 1999 Performance Plan. FDA
is working to incorporate more input from customers in its program
management and the Agency has worked with OMB to develop a ``generic''
customer service survey initiative that will expedite FDA's conduct of
customer surveys in the future. We are happy to provide some examples
of customer-focused goals for the record.
[The information follows:]
selected examples of fda customer-focused goals
By the end of fiscal year 1999, complete reviews of 30 percent of
food and color additive petitions within 30 days.
By the end of fiscal year 1999, increase to at least 77 percent the
proportion of people aged 18 and over who use food labels to make
nutritious food selections.
Review and act on 90 percent of standard new drug applications and
Product License Applications/Biologics License Applications filed
within 12 months after receipt--30 percent within 10 months of
receipt--and priority applications within six months.
FDA will continue to improve the legibility and clarity of over the
counter (OTC) drug labels, and improve the consumer's ability to read
and understand important warnings and usage directions.
At least 97 percent of mammography centers meet key inspection
standards, with less than 3 percent of facilities with Level I serious
inspection problems.
Question. How were the measurable goals of your fiscal year 1999
Annual Performance Plan used to develop your fiscal year 1999 budget?
Answer. The Agency's measurable goals, performance goals, provided
a basis for estimating resources required to fulfill the Agency's
performance obligations. For example, in the area of prescription
drugs, FDA negotiated performance goals with industry stakeholders. The
budget was derived from the specific performance commitments
negotiated. Similarly, for Seafood HACCP, a goal was set to bring the
seafood industry into compliance. FDA determined the number of
inspections and the technical assistance required to achieve the
desired level of compliance, and these estimates served as a basis for
requesting additional funds to hire new staff for the seafood
inspection program.
In other instances, such as the President's Food Safety Initiative
and the Tobacco Initiative, the public health rationale and pressing
need for a change in strategic emphasis was sufficiently strong to
result in the development of a new initiative and the appropriation of
additional resources. The strategic intent of these important
initiatives set the directional context that guided the development of
annual performance goals.
Question. If a proposed budget number is changed, up or down, by
this committee, will you be able to indicate to us the likely impact
the change would have on the level of program performance and the
achievement of various goals?
Answer. Yes, as we gain experience in implementing GPRA, we
continue to improve our ability to evaluate the impact of changes in
funding level on our programs and our ability to achieve the
performance commitments outlined in the Annual Performance Plan. In
some instances, changes in funding level may require an increase or
decrease in program efforts and target level of performance or the
development of new performance goals to fulfill new performance
expectations. In other instances, reductions in funding level and
performance expectations may require us to re-evaluate our priorities
and program expectations.
Over the past few years, FDA has practiced several strategies for
operating with reduced resources in spite of an increasing workload.
These strategies, which have sometimes been used in combination, have
included reducing program efforts without significantly changing the
program approach, refocusing program efforts to target the highest
priority health risks and to implement interventions that yield the
greatest potential health benefits, and maximizing our limited
resources by re-examining and redefining the role we play in protecting
public health vis a vis other federal, state and local and
international government agencies, third parties, industry, and other
nongovernmental institutions. Some of those strategic changes have led
us to modify some of our activity measures. However, changes in
approach will not change the agency's desire to improve health
outcomes.
Question. Do you have the technological capability of measuring and
reporting program performance throughout the year on a regular basis,
so that the agency can be properly managed to achieve the desired
results?
Answer. Yes, the agency has a variety of data systems which can
provide information on program performance needed by management. The
agency plans to monitor performance on the fiscal year 1999 performance
goals on a regular basis. As part of the required GPRA verification and
validation process, the agency has initiated a system to ensure that
performance data provided by its programs are accurate. This program
has three basic components, (1) training workshops for program managers
to learn the essential aspects of performance measurement; (2) a
comprehensive checklist for verifying and validating performance
information used to establish and monitor progress toward each goal;
and (3) assistance in applying performance data as an effective
management reporting tool. This process will ensure that the necessary
data is both available and reliable to report on each fiscal year 1999
performance goal and will progressively enhance the Agency's ability to
achieve and measure meaningful results.
Question. The Government Performance and Results Act requires that
your agency's Annual Performance Plan establish performance goals to
define the level of performance to be achieved by each program activity
set forth in your budget. Many agencies have indicated that their
present budget account structure makes it difficult to link dollars to
results in a clear and meaningful way. Have you faced such difficulty?
Answer. The present budget account structure has not made it
difficult to link dollars to results. In the performance plan, we
linked dollars to our major program categories and more specifically,
to groups of related performance goals, which we call performance goal
clusters. The program dollars required to carry out the strategic
intent of our programs were linked to the goal clusters.
Question. Would the linkages be clearer if your budget account
structure were modified?
Answer. We do not know the answer to your question at this time,
but we are studying the situation. Specifically, we are examining ways
of improving alignment of the traditional budget account structure to
which Congressional Appropriations Committees are accustomed and a
structure required by the Government Performance and Results Act (GPRA)
that links resources with results-oriented performance goals. The first
step in this process is to develop a crosswalk between our budget
account structure and the results-oriented performance goal clusters.
Once we better understand the linkages between these two structures, we
will be in a better position to evaluate the budget account structure
to determine if it should be changed to better reflect performance as
required by GPRA. Whether Congress and our other stakeholders want us
to eliminate the existing budget structure which is recognizable
remains unclear. We will continue to keep the Committee informed of any
changes.
Question. If so, how would you propose to modify it and why do you
believe such modification would be more useful both to your agency and
to this committee than the present structure?
Answer. We are currently exploring possible changes in our account
structure, but are not far enough along to have a meaningful dialogue
with the Committee. We fully intend to work with the Committee as we
move forward in developing any proposed changes.
Question. How would such modification strengthen accountability for
program performance in the use of budgeted dollars?
Answer. We are not yet sure that modification of the budget
structure is the most appropriate answer to strengthening
accountability for program performance. However, any mechanism which
establishes a stronger link between budgeted dollars and planned
performance will allow program managers and resource allocators to gain
a better understanding of their return on investments. It is entirely
possible that such mechanisms could be informative crosswalks between
budget and performance structures. It should be noted that budget
structures, performance structures, and integrating mechanisms are only
as effective as the validity and reliability of the information
contained in those structures. It does little good to show which
dollars are `chasing' which performance goals if a solid relationship
between resources and performance hasn't yet been established.
Question. Does your fiscal year 1999 performance plan--briefly or
by reference to your strategic plan--identify any external factors that
could influence goal achievement?
Answer. Our Performance Plan does briefly address some of the
external factors that effect both goal achievement and the choice of
strategies necessary to respond to the external factors. Prior to
developing performance goals for fiscal year 1999, each program
identified key environmental factors that affect their ability to carry
out the strategic intent of their program. Because each of our programs
are so diverse, each had to address the individual factors affecting
their particular programs as they developed performance goals.
Question. If so, what steps have you identified to prepare,
anticipate and plan for such influences?
Answer. The Foods program, for example, has identified changes in
physiological microorganisms, changes in the food supply and
distribution, hazardous dietary supplements as some of the external
factors to which they must respond. They respond by developing
appropriate strategies and leveraging resources to address these
factors. One of the external factors that is common to several of FDA
programs is an increased workload. This factor has lead to the
increased participation in Federal, state, international, and industry
partnerships to develop the most efficient and effective ways to
protect the public health. Partnerships in themselves are an external
factor because without full and continued participation in agreements,
the desired outcome of the partnership is compromised.
Question. What impact might external factors have on your resource
estimates?
Answer. Unexpected shifts or developments of new factors could
ultimately affect resource estimates. For example, response to
emergency situations; changes in consumer consumption; and incomplete
partnerships agreements would require FDA to reprogram resources to
respond to meet the need.
Question. Through the development of the Performance Plan, has the
agency identified overlapping functions or program duplication? If so,
does the Performance Plan identify the overlap or duplication?
Answer. Through the development of the performance plan FDA has
taken steps toward identifying areas of overlap and coordination with
other federal agencies and nongovernmental institutions. This in turn,
has led to significant coordination to avoid duplication of effort.
The Food Safety Initiatives provides a good illustration of how a
total network can create synergies to produce system outcomes. We have
included in the performance plans descriptions of how each of these
initiatives is being implemented through partnerships and close
coordination among multiple federal agencies, international, state and
local governments, industry and consumer groups. FDA is working closely
and cooperatively with its partners to reduce the incidence of food
borne illnesses.
In developing the President's Food Safety Initiative, the functions
of all the participating agencies were examined and great care was
taken to avoid duplication, both among and within the participating
federal agencies, and to ensure that the activities of the
participating agencies were coordinated. FDA is closely coordinating
with other agencies in the area of Food Safety education, research and
risk assessment. For example, FDA and USDA's Agricultural Research
Service have coordinated their research efforts and have jointly
developed research strategies. A risk assessment consortium has been
formed at the Joint Institute for Food Safety and Nutrition (JIFSAN)
which allows members to learn from the work of other agencies and build
on each others efforts. Coordination of agency efforts in the area of
food safety education is expected to encourage the communication of
common messages and thus improve the ability of all cooperating
agencies to achieve the shared goal of reduce the risk of microbial
contamination in food and reducing the occurrence of food borne
illnesses.
During the development of the fiscal year 1999 Performance Plan, we
used a combination of data from FDA's Field Data System and data from
USDA's National Agricultural Statistics surveys to develop a
performance goal of increasing the percentage of fruit and vegetables
produced using good agricultural practices guidance for reducing
microbial contamination. FDA and USDA are currently collaborating in
the development of follow up surveys that will allow both FDA and USDA
to measure the effect of their joint efforts. FDA is engaged in similar
data sharing partnerships with other agencies involved in the Food
Safety Initiative, including the CDC and Food Safety Inspection Service
(FSIS), and other USDA agencies.
FDA will continue to examine the relationships between its own
efforts and those of cooperating organizations. The interactions among
institutions is essential in order to address complex health challenges
in areas such as tobacco, imported products and mammography. The
current climate of outcome-oriented performance management reinforces
the need to identify synergies as well as areas of overlap so that we
can launch cost-effective consumer protection initiatives.
Question. Future funding decisions will take into consideration
actual performance compared to expected or target performance. Given
that: To what extent are your performance measures sufficiently mature
to allow for these kinds of uses?
Answer. In some cases, our performance measures are sufficiently
mature for use as a basis for funding decisions. An example of a
``mature'' indicator is provided by the PDUFA goals that measure the
timeliness of FDA application review, such as ``review and act on 90
percent of standard new drug applications within 12 months of
receipt.'' However, the fiscal year 1999 planning process revealed a
need for certain new performance measures. In some of those cases, FDA
is developing or refining data systems, such as the adverse event
reporting system, to collect the necessary information. A goal for
fiscal year 1999 is to implement the Adverse Event Reporting System for
the electronic receipt and review of adverse drug event reports. FDA
has a similar goal in the device adverse event reporting area. In other
cases, FDA has decided to partner with other state or Federal agencies
to share data. FDA is sharing data for goals such as to increase the
percentage of domestic produce produced consistent with Good
Agricultural Practices to reduce microbial contamination. We will be
determining the baseline and using data from USDA's compliance data
systems and their Fruit and Vegetable Chemical Use Surveys. In other
areas, including seafood HACCP compliance, FDA coordinates its
inspection efforts with states, so we must also integrate compliance
data between FDA and all contracted states. FDA continues to explore
potential partnerships with other institutions and creative solutions
to address the issue of data compatibility.
FDA is firmly committed to developing credible data for our
performance measures, not only for Congressional use, but for our own
priority setting, internal management, and budgeting decisions. We are
emphasizing verification and validation of performance data in our
planning and budgeting activities, and managers are enforcing this
focus by using performance measure data in analysis and decision
making.
Question. Are there any factors, such as inexperience in making
estimates for certain activities or lack of data, that might affect the
accuracy of resource estimates?
Answer. Several factors affect accuracy of resource estimates.
First, would be lack of empirical data in areas where new strategies
have been formulated. If the approach is new, no baseline exists to
determine the relationship between resource expenditures and either
activities or results. Another major factor is the great expense in
collecting data in areas where we are trying to estimate resources
necessary to achieve outcome-oriented performance goals. In many cases,
outcome data bases simply don't yet exist. A third factor is the
expense associated with conducting studies that will allow us to
establish a valid and reliable relationship between resources and
results. The Agency would have to overcome each of these barriers in
order to accurately estimate resources necessary to achieve specific
outcome-oriented performance goals.
Question. Based on your fiscal year 1999 performance plan, do you
see any need for any substantive revisions in your strategic plan
issued on September 30, 1997?
Answer. The Department submitted a department-wide strategic plan
in lieu of having each operational division do so in order to meet the
requirements of GPRA.
______
Questions Submitted by Senator Specter
Question. I understand that FDA officials recently toured mushroom
growing and processing facilities in the People's Republic of China. I
would appreciate a full report of the findings of this trip. Does FDA
have any plans to change the automatic detention and lot-by-lot release
program currently operating for mushroom products imported from China?
Answer. FDA recently completed a series of evaluation trips to the
People's Republic of China (PRC). The purpose of the trips was to
evaluate the progress made by the PRC mushroom industry, in conjunction
with their government authorities and private consultants, in
addressing the problem of Staph enterotoxin in canned mushrooms. The
evaluation trips were designed to look at mushroom processing from the
grower through post-processing handling.
FDA is currently in the process of reviewing the trip reports and
will prepare an evaluation of the findings. FDA intends to use the
findings from our recent evaluation trips to determine if the current
lot-by-lot release program for canned mushrooms should be maintained as
it is currently, amended or discontinued. No decision on this question
has yet been made and will not be until the evaluation of the trips is
completed. We will share our evaluation with your office when it is
available.
Question. Please provide my office with any monthly statistics the
FDA has for the past year regarding the number of lots of processed
mushrooms and kilograms represented by those lots from the People's
Republic of China that have requested clearance and/or been cleared for
import into the United States under the lot by lot program.
Answer. The results of our record review regarding imported canned
mushrooms from the People's Republic of China under the Lot-By-Lot
Release Program for the past year as of March 31, 1998, are 3,527 lots
and 38,837,561 kilograms. FDA did not make any seizures of mushrooms
from the Chinese factories due to contamination by Staphylococcus
aureus enterotoxin. Monthly statistics are not currently available, but
we would be glad to work with you on obtaining that information.
pharmaceutical benefit management companies
Question. Pharmaceutical Benefit Companies are engaged by health
plans to interact with pharmaceutical manufacturers and health care
providers in order to find safe and effective therapies, ensure
consumer safety, and coordinate information services.
What prompted the FDA to issue the January 5 draft guideline on
``Medical Product Promotion by Healthcare Organizations or Pharmacy
Benefit Management Companies''? What agency analyses were undertaken to
prompt formal action on the issues addressed by the guidance? What were
the methodologies used in those analyses?
Answer. FDA has been considering issues related to the promotion of
medical products in a managed care environment since 1994. In 1994, the
Agency met individually with four medical product sponsors to discuss
regulatory issues in light of their newly established relationships
with Pharmacy Benefit Management Companies, PBM's. Since that time, the
Agency has continued its information gathering efforts. These efforts
have included our participation in programs, meetings and workshops.
These activities permitted FDA to work with many managed care experts
to review several studies and to comment on reports from other
government agencies. In addition, we have participated in meetings with
many of our stakeholders, including members of the pharmaceutical
industry, health professional groups and consumer organizations.
On October 19 and 20, 1995, FDA held a public hearing on
``Pharmaceutical Marketing and Information Exchange in Managed Care
Environments.'' The purpose of the hearing was to solicit information
and views concerning the potential impact of changing organizational
structures and information dissemination channels in the managed care
setting on the Agency's responsibilities to regulate drug marketing and
promotion. FDA heard testimony from 26 individuals and received an
additional 38 comments to the hearing docket.
Since the hearing, the agency has continued its dialogue with
representatives from the public and private sectors, including
representatives from the pharmaceutical industry. The pharmaceutical
industry representatives have asked that FDA maintain ``a level playing
field'' for all medical product sponsors with respect to the regulation
of their promotional activities. Since one concern that has been raised
about this issue is drug switching, FDA has, in addition, sent a letter
to its ``MedWatch partners'' asking that they disseminate a letter
describing FDA's concerns about possible risks that may be associated
with the switching of a patient from one product to another, usually
within the same therapeutic class and asking that reports of any
adverse events be submitted to FDA. The Agency has evaluated these
reports and has placed its findings in the docket for the January 5,
1998 draft guidance. In light of FDA's concern about promotional
activities that may create a public health risk, and consistent with
the information that had been gathered over the years, the Agency
determined that the issuance of a draft guidance would be the
appropriate next step.
Question. What is the role and jurisdiction of the FDA in
connection with health care actors outside the realm of the drug
companies it currently regulates? What is the specific jurisdiction of
the FDA in issuing this guidance?
Answer. Under the Food, Drug and Cosmetic Act, FDA has
responsibility for regulating the labeling and, in many cases, the
advertising of medical products. FDA's determination that medical
product sponsors are responsible, under certain circumstances, for
promotional activities performed by health care organizations/PBM's on
their behalf is consistent with long standing agency policy and finds
support in the Act, regulations and legal precedent. The introductory
phrase of section 301 of the Act provides that the ``causing'' of a
prohibited act, as well as the act itself, is prohibited. In addition,
21 C.F.R. Sec. 1.1(a) provides that the provisions of regulations
promulgated under the Act, ``with respect to the doing of any act shall
be applicable also to the causing of such act to be done.'' FDA is
simply saying that medical product sponsors, that is, the holders of
new drug applications, must be accountable for their promotional
activities whether these activities are undertaken as direct marketing
or indirectly through a PBM.
This broad theory of liability, which is based on FDA's
responsibility to protect the public health, has been upheld in several
FDA enforcement actions. Additional support is found in the law of
agency, doctrine of respondent superior.
Question. Why did the FDA proceed on this issue through a guidance
as opposed to a rulemaking?
Answer. FDA determined that a guidance was appropriate because the
agency was not creating new requirements, but was, instead, providing
an interpretation of existing statutes and regulations. Consistent with
the Agency's Good Guidance Practices, this Level One guidance document
was issued in draft with a request for public input.
office of generic drugs
Question. Last year, the Senate Appropriations Committee inserted
report language making it clear that the FDA has a statutory obligation
to take final agency action within 6 months in regard to generic drug
approvals. In the fiscal year 1999 Budget Justification submitted to
Congress in February, the FDA states ``an action letter is issued for
approximately 50 percent of the applications within the 180-day
statutory period.'' Does the FDA consider an action letter final agency
action?
Answer. Yes, unless the applicant requests an opportunity for a
hearing on the question of whether there are grounds for denying
approval of the ANDA. Generally, an action letter communicates to a
sponsor that its abbreviated new drug application, ANDA, is approved or
not approved. If not approved, the sponsor is provided with the
reasons/deficiencies. However, the sponsor can pursue approval by
responding to the deficiencies by providing the necessary information.
This response is called an amendment and restarts the statutory
obligation for an agency action within 180 days. The 180 day median
value is calculated for original submissions and major amendments only.
For ``minor'' deficiencies, the median review time is approximately 60
days. Many of our letters are for minor deficiencies.
Question. As you may know, last year I expressed support for
increased funding for the Office of Generic Drugs. In preparation for
the conference to reconcile the Senate and House fiscal year 1998
Agriculture Appropriations Bill, I wrote Senator Cochran in support of
the additional $1 million contained in the House Bill. The Conference
Report (Public Law 105-86) included a fiscal year 1998 Operating Plan
to Congress. The Operating Plan submitted to Congress at the start of
the year provided the Office of Generic Drugs with a funding increase
of at least $400,000. Please explain why the FDA decided against
allocating the Office of Generic Drugs the additional $1 million and
how the $400,000 figure was determined.
Answer. In developing an fiscal year 1998 operating plan for the
Agency, FDA took into account the direction in the Conference Report on
FDA's fiscal year 1998 Appropriation, which stated ``The conference
agreement includes an increase for the Office of Generic Drugs''. Using
fiscal year 1997 operating and payroll obligations of $8.9 million in
the Office of Generic Drugs as a starting point, the full cost of the
fiscal year 1998 pay raise was added along with an increase to the
operating budget, for an increase of $702,000 for the Office. The
increase in funding will assist the Office of Generic Drugs' efforts
towards accelerated approval times.
The Office of Generic Drugs is an integral part of the generic drug
review process and represents a portion of the total resources for the
generic drug program. The total obligations for the generic drug review
process are shown in the Congressional Budgets on the ``Distribution of
Resources'' table, in the Human Drugs program line ``Generic Drug
Evaluation,'' page 122 of the fiscal year 1999 Justification of
Estimates for Appropriations Committees.
We will be happy to provide funding information for the total
generic drug program.
[The information follows:]
GENERIC DRUG PROGRAM FUNDING LEVELS
----------------------------------------------------------------------------------------------------------------
Fiscal year 1997 actual Fiscal year 1998 estimate Fiscal year 1999 estimate
--------------------------------------------------------------------------------
Amount FTE Amount FTE Amount FTE
----------------------------------------------------------------------------------------------------------------
Generic drug evaluation........ $34,183,000 351 $34,883,000 351 $34,883,000 351
----------------------------------------------------------------------------------------------------------------
Question. I have been contacted by a constituent who has Hereditary
Angioedema, a rare blood disease. I understand that the medication C1-
Inhibitor has shown promise in stopping acute attacks of this disease.
What is the testing status of this drug and when is it expected to be
approved for use?
Answer. The FDA may neither confirm nor deny the receipt of
applications for unapproved products.
The following information is taken from a National Institute on
Allergy and Infectious Diseases, NIAID, release dated September 1996.
Hereditary angioedema, HAE, is caused by a defect in the gene that
encodes the C1 inhibitor protein, an important regulator of a group of
immune system enzymes known collectively as complement. Affected
individuals produce either insufficient or dysfunctional C1 inhibitor.
The resulting deregulation of complement in these individuals leads to
episodes of swelling, typically in the extremities, face, larynx, and
abdomen.
Many people with HAE currently use androgens, compounds derived
from male sex hormones, to reduce the frequency and severity of
swelling attacks. These drugs, however, are ineffective in some
patients, and unsafe for children and pregnant women. More than a
decade ago, researchers led by Michael M. Frank, M.D., then chief of
the NIAID's Laboratory of Clinical Investigation, LCI, showed that C1
inhibitor protein extracted from donated human blood could ease
patient's swelling during acute episodes of HAE. This experimental
treatment, however, was associated with a risk for transmission of
viral blood contaminants such as HIV and hepatitis. Other researchers
subsequently showed that prolonged exposure to heat and high pressure
could inactivate blood-borne viruses. In a current study, Dr. Frank and
his colleagues in the LCI and at Children's Hospital in Boston used C1
inhibitor that had been sterilized through these procedures.
In the treatment study, the researchers gave either C1 inhibitor or
placebo to HAE patients after episodes of swelling had begun. On
average, patients receiving C1 inhibitor felt relief of their symptoms
55 minutes after infusion, more than 10 times sooner than patients in
the placebo group. The treatment was particularly effective for
reducing swelling of the larynx and abdomen. The researchers reported
that C1 inhibitor caused no immediate or short-term harmful side
effects. In addition, after four years of follow-up, no evidence of HIV
or hepatitis infection was found in any of the study participants.
______
Questions Submitted by Senator Bond
st. louis fda drug analysis lab
Question. The fiscal year 1998 Agriculture appropriations bill
specifically stated that ``none of the funds made available to the Food
and Drug Administration by this Act shall be used to close or relocate
the Food and Drug Administration Division of Drug Analysis in St.
Louis, Missouri.''
Is the FDA following the intent of this law? How do you explain the
fact that since Dr. Janet Woodcock became Director of the Center for
Drug Evaluation and Research (CDER), the St. Louis lab has not been
allowed to hire replacements for individuals who leave, and that if any
new person is hired, he or she would be hired for the Laurel, MD
laboratory?
Is the FDA circumventing the intent of the law?
Answer. Per the appropriations bill language, no fiscal year 1998
funds are being used by FDA to close or relocate the Division of
Testing and Applied Analytical Development. FDA will maintain its
analytical operations at the DTAAD laboratory in St. Louis.
In order to meet the challenges of budget reductions and to direct
limited resources to priority objectives and goals, the FDA has
reviewed its various programs to determine where streamlining is
feasible. The entire Office of Testing and Research, OTR, of which the
Division of Testing and Applied Analytical Development is a part, has
absorbed resource reductions, both in dollars and numbers of employees,
FTE, over the last several years. The reductions in FTE have limited
the entire OTR's ability to replace employees, and limited dollars have
dictated the need to evaluate programs further.
In addition, work demands have changed significantly with regard to
testing requirements. Many requirements for testing drugs have been
reduced or eliminated in the last few years. Under the Food and Drug
Administration Modernization Act of 1997, FDA has reduced testing
requirements for antibiotics and eliminated testing requirements for
insulin. FDA is currently evaluating duplicative testing requirements
in other areas. All of these resource-saving initiatives are being done
in an effort to meet streamlining needs and direct FDA resources to the
highest priority needs.
Question. The St. Louis FDA lab has been in St. Louis since 1909
and is the premier laboratory in CDER and is recognized world-wide for
its outstanding capabilities and collaborative efforts. If the FDA
continues in weakening the St. Louis lab by refusing to allow it to
maintain its ability to function as a viable laboratory, isn't the FDA
defiantly contradicting the fiscal year 1998 appropriations language?
Answer. It is our intent to comply not only with the letter of your
direction, but with the intent. We will not use any fiscal year 1998
funds to close or relocate the Division of Testing and Applied
Analytical Development. FDA will continue to maintain its analytical
operations at the DTAAD laboratory in St. Louis.
Laboratory testing requirements have changed significantly in the
last few years. The Food and Drug Administration Modernization Act of
1997 eliminated the requirement to test insulin and reduced antibiotic
testing requirements. These changes, coupled with streamlining
initiatives agency-wide, have required a redirection of our research
and testing programs, wherever the location. All the resource saving
initiatives are being done to support the need to streamline the
Agency, while maintaining our core scientific capability.
fda regulation of health care organizations
Question. What was the impetus for the FDA in developing a draft
guidance on ``Medical Product Promotion by Healthcare Organizations or
Pharmacy Benefit Management Companies'' which was published earlier
this year?
Answer. As the health care environment has changed in recent years,
there have also been changes in the marketing and promotion of drug
products. On January 5, 1998, the FDA published a Federal Register
notice announcing the availability of a draft guidance concerning
promotional practices by pharmacy benefits management companies (PBM)
and similar enterprises that are owned or influenced by the sponsors of
medical products. Concerns about drug switching and other potentially
harmful promotional practices have come to light as a result of several
in-depth analyses of PBM involvement in medical decision making
conducted by the FDA, the Health Care Finance Administration, and the
Department of Health and Human Service's Office of Inspector General.
Question. Why did the agency opt to undertake this initiative as a
guidance, which has no public comment period, instead of the rule
making process?
Answer. FDA published a document entitled ``Good Guidance
Practices,'' which was announced in the Federal Register on February
27, 1997, in a notice entitled ``The Food and Drug Administration's
Development, Issuance, and Use of Guidance Documents.'' This document
explains that the purposes of guidance documents are to first provide
assistance to the regulated industry by clarifying requirements that
have been imposed by Congress or issued in regulations by FDA and by
explaining how industry may comply with those statutory and regulatory
requirements. The second purpose of guidance documents is to provide
specific review and enforcement approaches to help ensure that FDA's
employees implement the agency's mandate in an effective, fair, and
consistent manner. The document entitled ``Guidance for Industry:
Promoting Medical Products in a Changing Healthcare Environment; I.
Medical Product Promotion by Healthcare Organizations or Pharmacy
Benefits Management Companies, PBM's,'' draft was posted on the FDA
website on January 5, 1998. There was a 90-day comment period on the
draft guidance, which ended on April 6, 1998. We received approximately
200 comments. We are reviewing and considering these comments carefully
as we prepare to write final guidance.
______
Questions Submitted by Senator Gorton
Question. Could you expand on FDA's plan to inspect growing
conditions (farms) overseas in order to further the President's Food
Safety Initiative? Does the FDA expect that foreign countries would
like to establish a similar program to inspect U.S. farms?
Answer. We do not anticipate regular inspections. FDA will become
involved in visiting growers only when there is an identified outbreak
of foodborne illness that is traced back to a specific farm.
Foreign governments, regulatory agencies, and industry currently
send inspectors to the U.S. to inspect a variety of manufacturers,
including many drug, device, and food processing facilities, for a
variety of regulatory and trade reasons. Many other countries currently
send inspectors to the U.S. to confirm compliance with fresh fruit and
produce requirement involving grades, size, chemical usage, among
others. With or without a U.S. program of inspection of farms in
foreign countries, we expect that our trading partners may wish to, and
will, visit U.S. farms and food production facilities.
Question. What does FDA intend to do with the additional $100
million requested for the youth and tobacco project?
Answer. The $100 million increase will be apportioned as follows--
$51 million for increased enforcement activities; $25 million for
increased outreach activities; and $24 million for new product
regulation activities.
______
Questions Submitted by Senator McConnell
tobacco
Question. The FDA has requested $134 million for tobacco in fiscal
year 1999. The money for this increased funding would come from the
proposed tobacco settlement, which may not pass Congress this year. If
it is not passed, where will FDA get money for tobacco? What programs
within the agency will be cut to provide money for the tobacco
initiative?
Answer. Reducing the availability and appeal of tobacco products to
children and teenagers is an enormous undertaking with the potential
for immense public health benefits. As a result, the Agency's
activities in this regard are a high priority for FDA and are a central
component of the Administration's Youth Tobacco Prevention Initiative.
If the funds are not fully appropriated for the tobacco initiative, the
Agency will have to make some difficult choices with respect to this
and other important programs it administers. Funding reductions in
other programs would seriously impair FDA's ability to carry out all of
its significant functions.
Question. How much money do you propose be spent in FDA on tobacco-
education activities? How much money will be spent in all of HHS on
tobacco education activities? What will the education entail?
Answer. The overall budget for FDA's tobacco education activities
for fiscal year 1999 is $35 million. However, HHS does not separately
track tobacco education activities for each of the agencies. In fiscal
year 1999, the Agency will design a multi-media advertising campaign
including radio, print, and billboard advertisements and place these
ads in major media markets in every state with which FDA contracts to
conduct compliance checks. We will also develop a comprehensive
retailer education program which includes a retailer kit containing in-
store signs, tent cards, fact sheets, counter mats and other materials;
a letter to retailers in each state updating them on the status of
compliance checks in their state; a series of reminder postcards that
can be posted in the store for customers and clerks to see; trade
advertisements in retailer publications; and a toll-free hotline that
retailers can call to request additional materials and ask questions.
FDA will continue to have exhibits at major conferences representing
state and local health officials, public health organizations, and
consumer and retailer organizations educating these audiences about the
new tobacco rule.
Question. How much money is spent in both FDA and HHS on education
activities for encouraging breast examinations and yearly pap smears?
Answer. Because FDA has responsibility for implementation of the
Mammography Quality Standards Act (MQSA), our educational efforts for
breast health have been mainly in promoting the use of mammography.
While many of the agency outreach efforts involve educating health
professionals about MQSA, FDA has conducted some activities to
encourage breast health among consumers. The agency's accomplishments
are listed below.
[The information follows:]
Entered into an Interagency Agreement for $25,000 with the Agency
for Health Care Policy and Research to produce the consumer brochure
``Things to Know about Quality Mammograms'';
--Spent $5,000 for buttons stating ``Quality Mammography Saves
Lives!'';
--Spent $129,000 to initiate and implement a hotline so that any
woman in the country could find an FDA-certified mammography
facility. The hotline was promoted through the media and a
campaign by the First Lady to promote mammography;
--Spent $11,000 to develop speakers kits on MQSA;
--Developed a Breast Implant Update packet for consumers; and
--Sent a letter to Ann Landers about the importance of mammography in
early detection of breast cancer.
In addition to these accomplishments, FDA routinely conducts the
following activities which require little funding:
--exhibit and present at meetings for consumers;
--share the database of certified facilities with the National Cancer
Institute;
--conduct voluntary patient notification activities when facilities
practice poor quality mammography. This involves focus testing
notification letters to patients and physicians, developing
patient notification packages to help facilities develop the
letters, and a follow-up study to evaluate the effectiveness of
the notification;
--distribute the ``Mammography Matters'' publication to consumers as
well as health professionals;
--distribute letters to approximately 500 breast cancer advocacy and
national health organizations on issues such as the consumer
aspects of the final MQSA regulations; and
--develop a reprint on mammography and the final regulations which
will be distributed throughout FDA and by the Consumer
Information Center in Pueblo, CO.
Question. How much money is spent in both FDA and HHS on education
activities for encouraging the consumption of folic acid for women in
their child-bearing years?
Answer. Over the past several years, FDA has been instrumental in
providing education about the association between folic acid and
reduced risk of neural tube defect-affected births to the audiences
most in need of up-to-date, accurate information: consumers, healthcare
professionals, and industry. This is accomplished through contacts with
these groups, providing educational materials, and working with
professional organizations to assure that the latest science is
translated into information easily used by consumers. The Agency has
ongoing, direct contact with individuals from these groups to answer
their questions. It routinely provides them materials such as press
releases, the Backgrounder, an issue of FDA Consumer magazine featuring
folic acid articles, copies of regulations, and the FDA Folate Poster.
The Agency also participates in cooperative work to communicate the
health message. The Agency uses an internet outreach and education
program to make information more easily accessible. Other folic acid
outreach and education activities are conducted through the FDA
Consumer Education Staff, Public Affairs Specialists located in
District Offices around the country, and both the FDA and HHS Offices
of Women's Health. Those activities include presentations to consumer
groups including adolescents and adults, and to health professionals
and nutrition education and food safety groups. FDA, in collaboration
with CDC and the March of Dimes Birth Defects Foundation held a public
meeting on August 6, 1997, focused on partnering with outside groups in
an effort to disseminate the folic acid health message as widely as
possible. I would be happy to provide, for the record, a list of the
specific activities the Agency has produced and disseminated. Because
these activities have occurred over a number of years and are a part of
larger day-to-day program activities, such as consumer information, or
dietary supplement work, it is not possible to identify specific
funding devoted to each of these education efforts.
[The information follows:]
fda materials related to folic acid education
--FDA Consumer magazine featuring folic acid:
Inside back cover, ``Think Folate Now''
Folic acid article ``How Folate can Help Prevent Birth Defects''
Birth defects article
--Article for FDA Medical Bulletin
--Article on folic acid for North American Precis--wire service to
10,000 newspapers nationwide
--Consumer group contacts: ``Dear Consumer'' letters and packets
--``Dear Editor'' letters
--``Dear Health Professional'' letters and contacts with professional
associations.
Question. How much money is spent in both FDA and HHS on education
activities for identifying the signs of diabetes and treating the
disease?
Answer. FDA currently has no ongoing educational activities
regarding diabetes.
I support focusing food regulatory activities on matters of food
safety. This focus, however, has the effect of placing economic and
quality regulatory issues as relatively lower priorities. Nevertheless,
I am concerned that if there are regulatory requirements that FDA will
not enforce, then those requirements should be repealed. Otherwise,
unscrupulous operators can violate those requirements with impunity to
the competitive disadvantage of law abiding businesses.
I understand that there are industry self policing efforts with
attempt to address these economic and quality regulatory issues in an
informal manner. For example, the olive oil association has a program
that identifies economic adulteration of olive oil, such as
substituting other edible oils or misrepresenting the quality of the
olive oil.
Question. Does FDA policy support active cooperation with industry
self policing programs? Using the olive oil program, as well as other
examples that you feel are appropriate, please report on apparent
violations referred to you agency and what action was taken by FDA.
Answer. FDA has long encouraged industry self compliance activities
that promote adherence to legal requirements. Activities such as the
American Institute of Baking food labeling seminars; the container
integrity program of the National Food Processors Association and the
defects in spice program of the American Spice Trade Association are
important programs that promote industry awareness and compliance with
food safety and other requirements. FDA also has partnership agreements
with industry and trade associations such as the California Dried Fruit
Association.
In 1995, as part of the Administration's ``Reinventing Government''
initiative, FDA conducted a page-by-page review of agency regulations.
As a result, a number of regulations were revoked and proposals were
made to revoke others. On August 12, 1997, a final rule was published
to revoke certain regulations relating to food and cosmetic labeling.
The activities of concerned consumers, industry and associations
have long been an important part of our surveillance activities.
However, some of the information we received from these sources is not
current and may not be suitable for regulatory consideration, i.e.,
analytical data may not reflect adequate sample sizes, utilize official
analytical methods or the chain of custody is inadequate. Nevertheless,
these reports are evaluated with appropriate follow-up assigned based
on timing, strength of the evidence, available resources and competing
priorities. During the past year, we have not taken regulatory action
based on these sources of information. However, during the past few
years we have successfully taken action against adulterated orange
juice, honey and syrup products based on part on information from
industry, consumer or state officials.
______
Question Submitted by Senator Burns
medical product promotion
Question. The Food and Drug Administration recently published a
``Draft Guidance for Industry: Medical Product Promotion by Healthcare
Organizations of Pharmacy Benefits Management Companies (PBM's).'' As I
understand the draft guidance, it seeks to clarify the FDA's position
on promotional activities of pharmaceuticals by PBM's which are
subsidiaries of product sponsors or promote products on behalf of the
sponsors. I certainly support the FDA's goal of ensuring that
promotional activities follow applicable laws and regulations. It has
been brought to my attention, however, that the guidance could
inadvertently restrict the dissemination of comparative information
about pharmaceuticals to consumers in Montana. I look forward to a
written response from FDA addressing this concern. I note that it is
not addressed in the draft guidance notice published in the Federal
Register on January 5, 1998.
Answer. Because the document is a draft and comments are still
being reviewed, I cannot say what will be in the finalized guidance,
but we do appreciate your concern. The final guidance will be developed
after careful consideration of these comments, including the concerns
regarding comparative information about pharmaceuticals that were
mentioned by your constituents in Montana.
______
Questions Submitted by Senator Bumpers
food safety initiative--haccp/sound science
Question. In late 1997, FDA began implementation of HACCP for
seafood and you have now stated your intention to develop HACCP rules
for fresh fruit and vegetable juices. In January of this year, FSIS
began implementing HACCP for meat and poultry operations and already,
the industry is finding parts of the HACCP rules problematic. For
example, I have been recently told that an FSIS HACCP rule is going to
require an additional use of two gallons of water per bird for poultry
processing which will result in tremendously burdensome challenges for
many rural community water discharge facilities. Since implementation
of HACCP for seafood, have you encountered any special problems in
working with industry? If so, what?
Answer. HACCP is a system of preventive controls for safety that
involve, for each processor, developing an understanding of both the
food safety hazards that are reasonably likely to occur for the
products being processed and the controls that are available to the
processor to minimize or eliminate the hazards. On a day-to-day basis,
a processor's core HACCP activities are monitoring key processing
points to ensure that they are operating in a manner that produces a
safe product and recording the results of that monitoring.
To help processors understand these concepts and activities, FDA
participated in the development of low-cost training for industry in
HACCP principles and their application to seafood. This course has been
attended by several thousand individuals nationwide. The Agency also
developed guidance for processors, the ``Fish and Fishery Products
Hazards and Controls Guide,'' which provides advice on hazards that are
reasonably likely to occur in various situations and on controls that
are known to exist for those hazards. This Guide also includes a
simple, fill-in-the-blank HACCP plan and instructions on how to
complete it.
Even with the training and the guidelines, the Agency has long
recognized that the development of HACCP systems in many processing
plants will involve trial and error. Thus, it has always been the
agency's expectation that the first round of inspections after the
December, 1998, effective date of the HACCP program would uncover
numerous systems in need of improvement. This is turning out to be the
case, but is not regarded as a special problem at this stage of
implementation. As planned, FDA's inspections are focusing on
evaluating HACCP systems and providing feedback to the firms on aspects
of their systems that need improvement. During the first round,
regulatory action is only to be initiated when, in addition to HACCP
system deficiencies, the products themselves contain contaminants or
are in imminent danger of becoming contaminated. If the feedback from
the first inspections does not result in significant, industry-wide
improvements during the second round of inspections, FDA would likely
regard such a situation as a special problem.
Question. Do you have current authority to expand HACCP to fruit
and vegetable juice processing?
Answer. Yes. The legal basis for mandating HACCP systems for juice
processing is the same as that for seafood. Thus, the Food and Drug
Administration proposed to issue HACCP regulations for fruit and
vegetable juice processing under various sections of the Federal Food,
Drug and Cosmetic Act, including, most significantly, sections
402(a)(1) and (a)(4) and 701(a) of the act (21 U.S.C. 342(a)(1) and
(a)(4) and 371(a)). Section 402(a)(1) of the act states that a food is
adulterated if it bears or contains any poisonous or deleterious
substance that may render the food injurious to health. Section
402(a)(4) states that a food is adulterated if it has been prepared,
packed, or held under insanitary conditions whereby it may have been
contaminated with filth, or whereby it may have been rendered injurious
to health. Section 701(a) of the act authorizes the agency to adopt
regulations for the efficient enforcement of the act.
As noted in the final rule mandating HACCP for fish and fishery
products (60 Federal Register 65096), the Act provides a broad
statutory framework for Federal regulation to ensure human food will
not be injurious to health and to prevent commerce in adulterated
foods. Recent outbreaks of foodborne illness as a result of consumption
of contaminated juice have raised concerns about the safety of juice.
Given these concerns and its responsibility under the act, FDA has
determined that it is appropriate to propose to require that processors
incorporate certain basic food safety control measures into juice
production.
Question. Please explain in detail the manner in which FDA
incorporates the best science available in developing HACCP rules?
Answer. In developing HACCP regulations, FDA relies on advice from
the National Advisory Committee on Microbiological Criteria for Foods--
NACMCF--as well as data and information from the food industry, FDA
scientists, and scientists in other fields from academia, government
and trade associations. Because HACCP rules are established through
notice/comment rulemaking, all interested persons have the opportunity
to submit relevant information, including high quality scientific
information, to the agency in comments on the proposed rule. FDA also
reviews the most up-to-date scientific documents from the peer-reviewed
literature in identifying hazards, control measures, and critical
limits, and uses advice from the NACMCF as the basis for developing
HACCP rules.
The NACMCF, an advisory committee of peer-acknowledged leading
scientists to advise on specific health-related science-based issues,
has published three documents on HACCP. The latest revision provides
better clarity, science, and harmonization with international HACCP
guidance, and was released in August, 1997. The USDA and FDA HACCP
rules are based on the seven principles of HACCP, as defined by the
NACMCF, and are fundamentally the same. The proposed HACCP juice rule
is also consistent with these existing HACCP regulations and the
underlying science upon which HACCP is based.
In developing the proposed rule for juice, FDA held public
scientific meetings to address science and health related issues
relevant to the production, processing and consumption of juice. Top
scientists from academia, government, the food industry and trade
organizations; public health officials from the Centers for Disease
Control and Prevention and states; and interested members of the public
attended, providing the latest evidence, concerns, and solutions, both
at the meeting and in written comments. FDA scientists used these
comments, as well as comments on the HACCP ANPR from August 1994, FDA
research and surveillance data, pilot program experience, and
information from the peer-reviewed scientific literature, in developing
the proposed rule.
Question. How does FDA resolve disagreements within the scientific
community regarding the development of what is proper under HACCP?
Answer. Hazard Analysis Critical Control Point--HACCP--is a
preventative system for producing safe food. FDA's HACCP regulations
are not proscriptive in that they do not identify specific hazards, or
require specific control measures or critical limits that industry must
apply. Rather, HACCP places responsibility on industry to determine the
specific hazards that apply to their products and processes, and
measures to control these hazards. It is the industry's responsibility
to provide scientific data and principles to substantiate a HACCP plan.
During the developmental stages of HACCP rules, the Agency works
with the scientific community and the industry to jointly determine
what to include in a HACCP rule, such as through the voluntary HACCP
Pilot Program, and through public scientific meetings. Through the
HACCP Pilot Program, for example, FDA is working cooperatively with
processors, trade associations, and state regulatory agencies. Where
there are disagreements, such as in the results of hazard analysis or
the determination of critical control points, scientific data are
presented to resolve the problem.
FDA also comments on its HACCP proposals from the scientific
community and others, through the rule-making process. FDA used the
comments received on the ANPR, and those received on the proposed rule
for seafood to develop the final seafood HACCP rule. The same process
is planned for HACCP for juice. The proposed seafood HACCP rule was
available for public and scientific comment during ``Town Meetings.''
FDA held a public forum on juice in December of 1996, that was used in
developing a proposed rule.
Question. What mechanisms are in place for industry to challenge a
science-based rule relating to the implementation of HACCP for seafood
or any similar regulation under your jurisdiction?
Answer. FDA recognizes, and has long advised the industry, that no
two HACCP systems need be identical. HACCP systems can be unique to
each processing operation. FDA does not dictate in advance what a HACCP
system must look like for any given processor. Individual flexibility
is one of the key aspects of HACCP and is essential to the success of
the overall program. That is one reason why the seafood HACCP
regulations are short and relatively general. The regulations
essentially require that processors establish HACCP systems that honor
seven internationally recognized principles of HACCP, such as hazard
analysis, developing ``critical control points,'' and monitoring those
critical control points to make sure that they are operating as they
should, but leave the details to processors.
To help processors determine how to apply those principles to their
situations, FDA has issued guidelines, the ``Fish and Fishery Products
Hazards and Controls Guide,'' that provide advice on hazards and
controls for those hazards. Processors are advised not to follow FDA's
advice blindly, however, but to determine whether that advice is
appropriate for them. While FDA's inspectors will initially compare
each processor's HACCP system to the advice in the guidelines,
processors are free to choose alternative approaches so long as their
HACCP systems provide a level of safety that is equivalent to that
provided in the guidelines' approach. Moreover, processors are free to
challenge the scientific validity of the approach taken in the
guidelines. The appeals process for guidance is set forth in the agency
Good Guidance Practices at 62 Federal Register 89 69-70, February 27,
1997. FDA is always interested in learning about better ways to ensure
safety and in making improvements in its own guidelines. In developing
alternatives to the guidelines or challenging their validity,
processors should be able to establish the scientific validity of their
systems for the agency to evaluate.
premarket notification program
Question. The Food and Drug Modernization Act of 1997 created a new
Pre-Market Notification Program which would accelerate the approval
time of certain materials such as new food-contact packaging materials
that are important to firms in my state. This program is supposed to
take effect April 1, 1999, and I understand it is estimated to cost
$1.5 million in fiscal year 1999 and $3 million in subsequent years. I
also understand FDA is required by the Act to report to Congress by
April 1, 1998 (tomorrow) on updated estimates for this program. When
can we expect to receive the report that is due tomorrow?
Answer. We have a draft document that is now being circulated
within the Agency for clearance. We plan to submit this report to the
Department for their review shortly. With support from the Department,
we are trying to expedite the process as much as possible. However,
assembling this initial report and ensuring the soundness of the
estimate did take longer than anticipated. We expect that the report
will be submitted shortly.
Question. Can you provide information regarding the currently
estimated costs of this program?
Answer. At this time, the report is still under development. Once
the report is finalized we will be able to provide our estimate of the
costs of the program.
Question. Do you believe it will be operational by April 1, 1999?
Answer. The section of the Food and Drug Modernization Act that
established the premarket notification program for food contact
substances provides that this program will operate only if, in a given
year, certain conditions are met. That is, that an appropriation equal
to or exceeding a defined amount is made for carrying out the premarket
notification program, and that the Secretary certifies, in essence that
the amount appropriated for the Center for Food Safety and Applied
Nutrition is not less than that appropriated for fiscal year 1997,
exclusive of new programs.
At this time, we cannot say whether the conditions specified in the
statute for operation of the premarket notification program will be
met. However, only if the statutory conditions are met, would the
program be operational on April 1, 1999.
Question. Have you heard from the regulated industry regarding this
program and if so, what is their response to it?
Answer. Prior to enactment of the FDA Modernization Act, agency
personnel discussed the premarket notification system with industry
representatives who strongly favored the establishment of such a system
and even supported industry-funded user fees to ensure that the program
would be adequately supported. It is our understanding that the
regulated industry continues to favor an adequately supported premarket
notification program for food contact substances.
irradiation
Question. Last December, FDA approved irradiation of meat products
including fresh and frozen beef, lamb, and pork. FDA had similarly
approved irradiation for poultry products in 1992. What is your view on
consumer confidence relating to irradiated foods?
Answer. A survey conducted for FDA in the 1980's showed a small
proportion of the population very interested in obtaining irradiated
foods, a similar proportion opposed, and the majority being willing to
consider such products and deciding on the merits. The only real test,
however, is to see whether consumers buy such products when available.
At this time, very little product has been available to consumers but,
where consumers had the opportunity to purchase such foods and had
received educational materials allowing an informed decision, they have
been receptive. With greater awareness of the risks from foodborne
organisms, we believe many consumers would be interested in irradiated
foods depending on the price, taste, and perceived benefits.
Question. What percentage of poultry products have been subjected
to irradiation since 1992?
Answer. As far as we are aware, only a very small percentage.
USDA's Food Safety and Inspection Service would have better information
of amount based on their management of the poultry inspection program.
Question. What indications are there that the meat industries will
be using irradiation as a food safety procedure in the near-term?
Answer. While we know of interest, we have no information on who,
if anyone, will actually use the process. Also, at this time, there is
still a need for the Food Safety and Inspection Service to amend its
regulations regarding meat processing before meat may be irradiated
legally. As with poultry, FSIS may be in a better position to gauge
industry interest because, in such cases, a meat irradiation facility
would become a meat processing facility subject to FSIS regulation.
Question. Outside the United States, how is irradiation viewed by
consumers?
Answer. We have no information on that question. We know that the
amount of food irradiated outside the U.S. is generally small but have
no information about consumer preferences.
Question. How much, if any, irradiated food product is imported
into the United States?
Answer. Essentially none. There is very little irradiated food in
commerce, in the U.S. or abroad.
protections for industry
Question. No one questions the need to move forward with reliable
food safety requirements. Industry and consumers alike know that the
highest levels of food safety are in the interests of them both.
However, sometimes in an effort to react quickly, government overreacts
in ways later found more harmful than necessary. The effect of the Alar
scare several years ago to the apple industry in the Pacific Northwest
and the more recent forced sale of Hudson Foods are cases in point.
What steps is FDA taking to ensure that while doing everything possible
to protect consumers from unsafe food, governmental overreaching does
not occur in ways overly harmful to industries or individual companies?
Answer. In these days of mass media coverage of news events, there
may be little FDA can do to protect industry from adverse publicity.
However, FDA has issued a complete guideline for industry to follow to
be prepared for emergencies such as product recall. This guideline is
published at 21 CFR Part 7. Basically this guideline explains how the
industry can be prudent in making such emergencies as recalls as lest
disruptive to the firms operations as possible. These are: (1) prepare
and maintain a contingency plan for emergencies; (2) use sufficient
coding of products to make possible lot identification and to
facilitate effective recall of violative lots; and (3) maintain product
distribution records necessary to facilitate location of the product
being recalled.
Utilizing this system, the expeditious handling of a recall or
other emergency can and does show to consumers that the firm takes its
responsibilities to consumers seriously. This approach also allows the
recall to be completed quickly and reduces media exposure.
international food safety
Question. Food markets have become global and various new strains
of bacteria move more quickly from one region to another than ever
before. In addition, the modernization of food processing itself poses
special problems for food safety. Explain the role of FDA in
investigating the rise in harmful bacteria, especially as it relates to
food products.
Answer. FDA regulates food products except for meat, processed egg
products, and poultry. FDA for many years has had a robust research and
testing program geared to microbial contamination of food products,
especially canned foods and seafoods. With the recent increase in
reported outbreaks associated with fresh produce and other foods, FDA
and USDA contacted CDC to initiate a nationwide active surveillance
program, now called FoodNet, to actively collect foodborne outbreak
information from physicians and hospital surveys. These FoodNet
sentinel sites, which will number eight in 1998, cover nearly the
entire USA and provide statistical foodborne illness information for
FDA and USDA to monitor and institute intervention strategies to limit
the scope of an outbreak. Likewise, FDA or USDA would then conduct
traceback investigations to determine the exact food source or
microorganism. FDA and USDA have recently linked with CDC's DNA
fingerprint network in order to specifically link/de-link
geographically diverse outbreaks.
FDA, in cooperation with other federal and academic institutions,
conducts microbial and risk assessment research on the microbial
ecology, intervention strategies, method development, risk assessment
models, and sampling strategies, to provide the scientific data and
information necessary to successfully prevent, minimize or intervene
microbial contamination. This scientific research is critically
important to develop food safety systems and guidance for emerging and
evolving microbial pathogens.
FDA is a leader in the scientific investigation of foodborne
pathogens and this expertise proves essential in crafting sound public
policy to ensuring the safety of the food supply. With ever-increasing
and global food supply, we must devote greater attention and efforts,
however, to new strains and new pathogen commodity combinations.
Likewise, pathogens are evolving so that traditional prevention
techniques are less effective, such as acid environment, hence we must
understand those mechanisms so that new intervention strategies may be
developed, such as ozone and irradiation.
Question. Explain your view on the influence of modernization of
the food system as a contributor of food-borne illness.
Answer. The modernization of the food system influences both the
development and spread of foodborne illness. Only a few years ago most
food available to consumers was produced and sold locally. Today, the
food industry has evolved from many, small local producers and
manufacturers into a few large producers that ship products across the
country and around the world. This means that a single contaminated
product has the potential to be distributed thousands of miles and to
cause contamination. Moreover, food products may become contaminated at
any point in the lengthy journey between producer and grocery.
Consumers are demanding products with convenience and that have
organoleptic properties closer to ``fresh.'' This requires the use of
minimal processing and packaging technologies and more complex
processes to assure the same level of protection that traditional
thermal methods, such as canning and pasteurization, deliver. Further,
there are several other causes. Among these are consumer preferences
for undercooked products and convenience foods, increased dining out,
and more on-site food processing. Also the population particularly
vulnerable to foodborne disease has been growing in size; today more
than 30 million people are at high risk from foodborne infection. These
include the elderly, the very young, pregnant women, and the
immunocompromised by diseases such as HIV/AIDS or by drugs such as
those used by organ transplant recipients and cancer patients.
The modernization of the food supply also applies to animal
production practices. The use of antimicrobial agents in animal
production has facilitated confinement housing and allowed higher
densities of animals to be maintained. Unless properly managed, food
animals being reared in crowded conditions have ample opportunities to
transmit infections. The resulting poor performance or disease
increases the use of therapeutic, prophylactic and growth-promotant
antimicrobial agents. Even if well managed, the increased density of
livestock or poultry with similar risk profiles in intensive rearing
operations requires an aggressive approach to disease control, which
can lead to heavy prophylactic and therapeutic antimicrobial use. If
such operations are not well managed, heavy antimicrobial use may
become a management crutch.
For these reasons, the use of preventive systems, such as Hazard
Analysis and Critical Control Point procedures, during food production
and distribution becomes imperative in reducing the risk of
contaminated products reaching consumers.
Question. Describe the manner in which FDA is working with foreign
countries to help ensure food safety for all consumers.
Answer. FDA has a long history of international leadership and
cooperation on food safety through direct contacts with foreign
governments and industry as well as through international organizations
such as the World Health Organization, Panamerican Health Organization,
and the Codex Alimentarius Commission, which establishes international
standards.
Through these numerous avenues, FDA has promoted or established
standards which are consistent with the U.S. level of protection. With
the President's Food Safety Initiative we have convened an
international working group comprised of the State Department, U.S.
Trade Representative and USDA/Foreign Agriculture Service to map out a
technical assistance program to reach foreign countries and producers.
Furthermore, we have made numerous speeches and presentations at
scientific, intergovernmental meetings to discuss FSI and, more
specifically, the Fresh Produce Initiative goals and objectives. We
established a website to further disseminate information, regulations
such as HACCP, and guidelines generated to ensure improved food safety.
Currently, we have proposed, ``Draft Guidelines to Minimize Microbial
Contaminations for Fresh Fruits and Vegetables,'' and proposed Juice
HACCP regulations. The internet is a powerful tool in sharing
information and informing foreign countries and enterprises.
With the funding included in the President's fiscal year 1999
Budget request, we plan to hire additional staff to conduct foreign
country visits to provide scientific and technical assistance in
cooperation with our USDA/FAS and APHIS colleagues to actively promote
good agricultural practices and food safety regulations.
tobacco
Question. In 1997, FDA's regulation on youth tobacco became
effective and ten states, including Arkansas, were chosen for a pilot
project to determine the level of enforcement of rules prohibiting the
sale of tobacco products to anyone younger that 18 years of age.
Additional funds for this purpose were included in the fiscal year 1998
appropriations bill to extend this activity to any state wishing to
participate. How many states have chosen to participate?
Answer. Thus far, 28 states have submitted proposals for funding in
fiscal year 1998. Of these, 4 are for extensions of the original 10
contracts signed last year. There are 7 contracts with new states that
have been signed or will shortly be signed. Seventeen additional
proposals are currently being negotiated.
Question. If any states declined, what were the reasons?
Answer. No states have formally declined to submit a proposal. The
agency expects the remaining proposals to be submitted over the next
two to three months.
Question. In what ways were these federal funds not simply
replacement of state funds that would have been otherwise available for
enforcement?
Answer. Funds available to the states to enforce the FDA rule
cannot be used to enforce state laws. They can only be used to enforce
the FDA regulation. Thus, the federal funds cannot be used to replace
any existing state funds that would have otherwise been available for
enforcement.
Question. The fiscal year 1999 budget request includes an increase
of $100 million for tobacco-related activities. What steps is the
Administration taking to ensure that of any revenues available through
a ``tobacco settlement'', enough will be made available to this
subcommittee to fund the FDA activities related to tobacco?
Answer. The Administration will work closely with Congress to
ensure the appropriate distribution of any funds that are generated
from the passage of comprehensive tobacco legislation.
Question. Please provide an outline of the extent to which specific
activities will be included in the $100 million increase.
Answer. Of the requested $100 million increase, $51 million will be
used to increase enforcement activities; $25 million will be used to
increase outreach activities; and $24 million will be used for new
product regulation activities.
Question. Since the fiscal year 1999 budget contains several
proposed user fees, why were user fees not proposed to fund the FDA
tobacco activities?
Answer. The Administration's budget request for fiscal year 1999
includes funding for FDA's tobacco program, and other domestic policy
priorities, that would be generated from the passage of comprehensive
tobacco legislation. A key element of this legislation is raising the
cost of cigarettes. The revenues raised are essentially indirect user
fees.
Question. A large part of the $100 million increase is for
education, media, directed mailings, and other activities designed to
dissuade young Americans from using tobacco products. What levels of
funding are currently being used for this purpose by other governmental
entities (including state and local governments) and various non-
profits such as the American Cancer Society?
Answer. The overall objective of FDA's tobacco program is to reduce
the number of young people who use tobacco. Nevertheless, that is not
the primary objective of the outreach activities the Agency will
conduct with increased funding in fiscal year 1999. The goal of FDA's
outreach efforts is to increase retailer compliance with the
regulations that went into effect in February 1997 that prohibit the
sale of cigarettes and smokeless tobacco products to minors. The Agency
is unaware of the precise level of funding currently being used by
private and public organizations to dissuade young people from using
tobacco products and whether any of that funding is directed to
retailer compliance.
Question. What tangible evidence exists to document the effect of
educational and communication efforts in reducing teen smoking?
Answer. The following evidence exists on the effect of educational
and communication efforts to help reduce teen smoking.
[The information follows:]
DHHS, ``Preventing Tobacco Use Among Young People: A Report of the
Surgeon General,'' 1994, stated, based upon a review of the evidence,
that ``a nationwide well-funded antismoking campaign could effectively
counter the effects of cigarette advertising in its currently permitted
media forms.'' (see also, for a similar recommendation, Institute of
Medicine, ``Growing Up Tobacco Free: Preventing Nicotine Addiction in
Children and Youths,'' 1994.)
From July 1, 1967 to December 31, 1970, the Federal Communications
Commission, as part of the ``Fairness Doctrine,'' required antismoking
messages on television and radio to counter industry advertising.
During that time, per capita cigarette consumption declined 7 percent,
from 4,280 in 1967 to 3,985 in 1970 (6.2 percent was attributable to
the messages). A study of adolescents found that their smoking rates
declined during that period.
In an effort to reduce cigarette consumption, the Greek government
launched an antismoking campaign including television and radio
counter-advertising as well as a community-based print education
campaign that lasted for two years of the government's effort. During
this two year period, the annual increase in smoking rates dropped to
zero. When the campaign ended, the annual increase rose to 6 percent.
Researchers, in Vermont, tested the effect of mass-media and school
health education programs. Students exposed to both school and media
interventions were 35 percent less likely to have smoked in the past
week than students exposed only to the school program, and this
preventive effect persisted for at least 2 years following the
completion of the intervention program. The decrease occurred even in
students who were considered to be at slightly higher risk of becoming
smokers because of demographic considerations.
In California, the Department of Health Services conducted a $26
million multi-year media anti-smoking campaign. One evaluation found
that the campaign directly influenced 7 percent (33,000) of
Californians to quit smoking in 1990-1991, and contributed to the
quitting of another 173,000. The program also resulted in high levels
of awareness among young people and may have contributed to stopping
the rise in teen smoking that had been occurring in California before
the campaign.
medguide
Question. Last year, FDA launched the MedGuide program as a way to
give consumers better information about possible side effects of
medications and other possible dangers from the misuse of medicine. Can
you document any results of this program?
Answer. In 1995, the FDA proposed a regulation that was intended to
encourage the development and distribution of patient-directed
medication information that would be easily understood, comprehensive,
specific, non-promotional in tone and content, and scientifically
accurate. Following publication of this proposal, Congress directed the
Secretary of DHHS to convene a committee of diverse private-sector
interest groups to develop a voluntary, long-range, comprehensive
action plan to fulfill the goals specified in the Congressional
mandate. These goals are to ensure that useful written prescription
medication information would be distributed to 75 percent of patients
receiving new prescriptions by the year 2000, and 95 percent by the
year 2006. The plan aimed to improve patients' understanding of the
prescription drugs they take and reduce the misuse of such medications
which FDA has estimated costs the public in excess of $20 billion
annually. Assisted by The Keystone Center, a nationally recognized,
non-profit public policy mediating organization, a 34-member steering
committee representing the pharmaceutical industry, pharmacists,
physicians, consumer and patient advocacy groups, patient drug
information data base companies and other interested groups
participated in developing the plan. On January 14, 1997, DHHS
Secretary Donna E. Shalala accepted the action plan developed by the
collaborative steering committee.
Public Law 104-180 called for an evaluation of the private sector's
achievement of the goals of the plan in the year 2000. In addition, the
action plan itself called for the development of mechanisms for
periodic evaluation of the voluntary program. We are aware of at least
one segment of the private sector that is conducting small-scale
evaluations of patient medication information distributed by various
information vendors for certain drug classes, and one specific
information vendor's evaluation of certain of its leaflets. There may
be other evaluations ongoing of which we are unaware.
In 2000, FDA plans to conduct an evaluation of both the
distribution and quality, that is, ``usefulness,'' of a sample of
medication information sheets given to patients with their new
prescriptions. In addition, FDA intends to conduct an interim
assessment of the private sector's progress toward meeting the goals to
allow for any necessary adjustments in time for the critical year 2000
evaluation. FDA has obtained funding, and is in the process of
obtaining OMB clearance, for one component of this evaluation: the
general distribution of patient medication information. However, this
study cannot evaluate the quality or usefulness of the information as
defined by the action plan. FDA is seeking funding to conduct this
critical component of a full interim evaluation. FDA has not yet
collected any documented results because the action plan is only in its
first year of implementation.
We believe we can best aid the ongoing private sector efforts to
reach the congressionally-mandated goals by providing well-documented,
objective, non-partisan evaluations of progress.
FDA is in the process of finalizing a rule to require FDA-approved
labeling for patients, or ``Medication Guides,'' only for a few rare
products each year that are determined to pose a serious and
significant public health concern requiring immediate distribution of
FDA-approved patient labeling.
Question. Has there been a reduction in hospitalizations due to
accidental misuse of medications?
Answer. As we discussed earlier, Public Law 104-180 called for an
evaluation of the private sector's achievement of the goals of the plan
in the year 2000. The action plan also called for the development of
mechanisms for periodic evaluation of the voluntary program. FDA has
not yet collected any documented results because the action plan is
only in its first year of implementation.
Question. To what extent is MedGuide used in the marketing of
medications?
Answer. FDA has not conducted a rigorous evaluation of the use of
patient medication information in the marketing of medications.
However, we have observed, again in a non-rigorous manner, an increase
in the number of manufacturers who are submitting draft patient
labeling for various new drug approvals. We believe that there are
concerns on the part of the manufacturers about liability brought on by
increased consumer-directed advertising. It appears there is a desire
from industry to make more extensive use of information that is more
easily understood by patients or consumers to fulfill the requirement
that advertisements contain information ``in brief summary'' concerning
the risks associated with the advertised product.
Question. Is there any way to document the extent to which
consumers actually read and use the information available through
MedGuide?
Answer. Protocols could perhaps be designed to assess the actual
use by patients of patient-directed medication information, but these
would be expensive to conduct.
user fees
Question. Again this year, FDA is proposing unauthorized user fees
($128 million) as part of the budget submission. As always, this puts
extreme budgetary pressure on this subcommittee since authorization of
user fees is not within our proper jurisdiction and can, in fact, be
challenged by the House Ways and Means Committee. With limited, and
often reduced, allocations to our subcommittee, the assumption of user
fees serves only to place all programs under our jurisdiction at risk.
What steps has FDA or the Administration taken to work with the
authorizing committees to enact these user fees?
Answer. FDA, in concert with HHS and OMB, prepared user fee
legislation for the new fees proposed in the fiscal year 1999
President's Budget, which was submitted to the President of the Senate
and Speaker of the House on March 13, 1998. To date, there have been no
hearings with the authorizing committees or with affected industries on
this specific proposal. We do look forward to working with Congress to
authorize the fees. In order for FDA to maintain its current level of
consumers' health protection, it is important that the full program
level in the President's budget be appropriated.
Question. How soon could they be collected if enacted?
Answer. As the proposed legislation moves through Congress, the
Administration will make every effort to expedite collections once
enactment occur. This would include extensive negotiations with
industry to ensure a palatable fee structure similar to that which
occurred with PDUFA. At this time, it would be difficult to provide an
exact timetable of events.
Question. If this subcommittee chose to make certain FDA activities
conditioned on the authorization and collection of up to $128 million
in new user fees, which FDA activities would you suggest we postpone
until these fees are collected?
Answer. The authorization and collection of the new proposed user
fees is intended to support FDA's traditional activities of premarket
review and postmarket assurance for foods, drugs, biologics, animal
drugs, and medical devices. Delays in collecting these user fees would
prolong the review process, extend approval times, and seriously impede
our ability to meet statutory deadlines in these program areas. Under
the Administration's plan, user fees would be in place at the start of
the fiscal year so that no disruption of activities would occur.
fda lab consolidation/nctr
Question. In fiscal year 1998, funds were provided to complete
Phase II of the Arkansas Regional Lab (ARL) at Jefferson, Arkansas on
the campus of NCTR. The ARL is an important component of FDA's overall
lab consolidation. In fact, consolidation should now be underway with
certain FDA lab function being transferred to the ARL in the near
future. I note that the fiscal year 1999 budget request does not
include funding for Phase III of the ARL. Phase III is the final phase
of construction for the ARL and I understand it is critical for the
efficient execution of FDA's lab consolidation plan. Can you explain
why Phase III was not included in the budget request?
Answer. Due to competing issues with a higher priority to the FDA
mission, within both the Salaries and Expenses and the Buildings and
Facilities Appropriations, the request was not included in the
President's Budget.
Question. Was Phase III included in the fiscal year 1999 budget
recommendations of FDA to HHS or to OMB?
Answer. FDA requested funding for the construction of Phase III of
the Arkansas Regional Lab (ARL) in the Preliminary Budget Submission to
DHHS but this request was not included in the Justification of Budget
Estimates to OMB.
Question. Please provide an update on all FDA lab consolidation
activities with special detail given to the consolidation of activities
at ARL.
Answer. For the record, I would be happy to provide a listing of
impacted field locations, with a description of the impact on that
location under the FDA field laboratory consolidation. Laboratory
personnel in each closing laboratory either have been or will be
offered relocation expenses to move to the new site along with their
work. Under the plan, other district office functions and staff would
remain in place. This includes a complement of inspectors, consumer
safety officers, consumer affairs officers, and administrative staff at
each location where laboratories were to be phased out. Only the
laboratory staffs would be affected by the plan.
[The information follows:]
status of fda field laboratory consolidations--march 1998
Arkansas Regional Laboratory (ARL) (NCTR at Jefferson, AR)--Planned
as a multi-purpose laboratory. ARL assumed many of the laboratory/
analytical functions performed by the Chicago District laboratory,
which closed on July 1, 1997. ORA will occupy renovated, temporary
space until completion of the ARL facility in 1999. The ARL will also
assume the analytical and laboratory functions and personnel from the
Dallas, Minneapolis, and Detroit laboratories when these facilities
close in 2000, except for Detroit's human drug functions and the
Medical Devices program work from Minneapolis.
Baltimore--The laboratory closes in 1999. The Human Drug functions
will go to Philadelphia and Medical Devices program in-vitro
diagnostics will go to WEAC. All other programs move to the Southeast
Regional Laboratory (SRL) in Atlanta, except for the present DOD shelf
life work which will move to Philadelphia and San Juan.
Buffalo--The laboratory closed in October 1996. All analytical
laboratory functions were transferred to the Northeast Regional
Laboratory (NERL), Brooklyn, New York.
Chicago--The laboratory closed on July 1, 1997. Most analytical/
laboratory work was transferred to the ARL at NCTR. The remaining work
moved to Minneapolis and the Kansas City laboratory.
Cincinnati--The analytical functions were terminated on June 30,
1997. The human drug functions were assigned to Philadelphia; all other
work went to the SRL in Atlanta. The National Forensic Chemistry Center
(NFCC) will remain in Cincinnati and the new facility is scheduled for
completion and occupancy in the summer 1998.
Dallas--The laboratory will close in 2000. All analytical /
laboratory functions will be transferred to the ARL.
Denver--The laboratory is scheduled to close in 2010. Analytical
resource distribution will be reassessed annually. Functions will be
transferred to the ARL.
Detroit--The laboratory will close in 2000. Human drug work will
move to Philadelphia; DOD shelf life functions will be split between
Philadelphia and San Juan laboratories. The remaining analytical and
laboratory programs will be reassigned to the ARL.
Kansas City--Planned for closure in 2014. Analytical resource
distribution will be reassessed yearly. Functions will be reassigned to
the ARL.
Los Angeles--Planned as a multi-purpose facility. FDA has acquired
10 acres of land on the campus of the University of California at
Irvine. Architectural and engineering design efforts are underway and
receipt of the final design is scheduled for July 1998. Funding for
construction has not been secured and the lease for the existing lab
expires in March 2000. The new facility project is comprised of three
construction phases. Phase I is the core and shell at an estimated cost
of $16.5 M; the second phase is the fit-out of the laboratory at an
estimated $16.5 M and phase III consists of the fit-out of the office
space which is estimated at $5.5 M. The construction cost estimate is
based on an fiscal year 1999 contract award. When the new lab is
completed, Seattle's current drug functions are scheduled to move to
Los Angeles and seafood functions would transfer to Seattle.
Minneapolis--The laboratory will close in 2000. All analytical
functions will transfer to the ARL except for Medical Devices related
work which will be transferred to WEAC.
New Orleans--The laboratory closed on February 28, 1998. The human
drug program moved to the San Juan laboratory; all other analytical/
laboratory programs were transferred to the SRL in Atlanta.
Northeast Regional Laboratory (NERL) (New York)--Planned as a
multi-purpose laboratory. A site for replacement space for the present
Northeast Region, District and Regional Laboratory has been negotiated
and secured at the York College in Jamaica, Queens. A lease has been
signed by GSA for FDA and construction is underway. FDA occupancy is
scheduled between December 1999 and Spring 2000.
Philadelphia--Planned as a drug specialty laboratory. The current
laboratory facility was renovated and expanded by 8,000 square feet to
accommodate the additional drug functions inherited from other
laboratories. The additional laboratory space was completed and
occupied in September 1997.
San Francisco--The laboratory will close upon lease expiration in
2014. Analytical functions will be reassessed yearly.
San Juan--Planned as a drug specialty laboratory. All other
analytical work has been reassigned to the SRL in Atlanta. Renovations
are underway to convert the laboratory to specialty drug analysis space
and are scheduled for completion by August 1998.
Seattle--One of five planned multi-purpose laboratories. FDA
expanded the laboratory by 5,000 square feet in 1996. Analytical
programs, including an animal facility, are now operational and Seattle
will receive seafood analytical program work from Los Angeles and
transfer their human drug programs when the new Los Angeles laboratory
is completed.
Southeast Regional Laboratory (SRL) (Atlanta, GA)--Planned as a
multi-purpose laboratory. A 42,000 net square feet laboratory expansion
project was completed in December 1997 and the new space is occupied
and in use.
Winchester Engineering & Analytical Center (WEAC) (Winchester,
MA)--Planned as a specialty laboratory for radio nuclides/radio
pharmaceuticals and engineering functions for medical devices. Human
drug analytical and validation work was transferred to Philadelphia
during 1997 and all other analytical functions were moved to the
Northeast Regional Laboratory as of June 1997.
Question. What effect on FDA lab consolidation will the failure or
delay in constructing Phase III have?
Answer. Phases I and II provide only laboratory space and offices
for the analysts and management of the lab. There is no space for
support personnel or functions in the first two phases. Phase III is an
integral part of the Arkansas Regional Lab project. Phase III
construction is comprised of finishing ARL exterior areas which will
allow for a more complete integration of the ARL functions with the
National Center for Toxicological Research or NCTR. The functions to be
expanded and shared include such support as Financial Management,
Procurement, General Administration, Computer Operations and related
activities. All of the planned space for these functions is included in
Phase III of the ARL project. Phase III calls for renovation of
available space at NCTR to provide the administrative space necessary
to support the ARL and NCTR science functions which is crucial for the
maximum efficiency of the programs. If funding for Phase III is not
available, makeshift space will have to be provided to accommodate the
expanded service and support functions. Using makeshift space will
reduce the effectiveness of the entire concept of field lab
streamlining and severely hinder FDA's ability to provide adequate
space to house the common support elements.
Question. What are the current cost and time estimates for
completing Phase III?
Answer. The current estimated construction cost of the Phase III
portion of the project is $13.35 million. The estimated cost is based
on the exercise of a fixed price contract option to include Phase III
in the current ARL construction contract to the current construction
contractor by December 31, 1998. Based upon this option date, Phase III
would be completed, along with Phases I & II, in December 1999. If
Phase III is not awarded by December 31, 1998, Phase III will have to
be repriced which will affect the cost and may affect the schedule.
______
Questions Submitted by Senator Harkin
biologics evaluation and research
Question. The Administration's fiscal year 1999 budget for the Food
and Drug Administration includes several new and expanded initiatives.
However, it is my understanding that some of the basic FDA programs,
such as the Center for Biologics Evaluation and Research (CBER) have
recently experienced substantial program reductions--I am told 40-50
percent. Is this correct? Does the fiscal year 1999 budget address this
shortfall, and how does it do so?
Answer. The Prescription Drug User Fee Act provides that fees are
to be used to finance a portion of the costs associated with the
premarket review of drug applications. Fees can only be collected and
made available to cover increases in the costs for the process to
review human drug applications. PDUFA is designed to assure that user
fees collected under the Act are indeed additional resources for FDA to
expedite the review of new drug applications.
Under the Prescription Drug User Fee Act of 1992, certain
regulatory research activities were supported by user-fee funding. The
Agency and the industry negotiated that user-fee funding will no longer
support any regulatory research activities under the Prescription Drug
User Fee reauthorization. The intent is to devote user-fee resources to
application review and information systems. The CBER will phase out its
user-fee research FTE by the year 2000. Although user fees will no
longer be available to fund research, CBER will maintain a reduced,
high quality research program.
The one-third reduction is to the CBER research staff, not total
Center staff. The reduction will be phased over three years. At the end
of this phase out, CBER will have 79 fewer FTE devoted to research, and
no research FTE will be supported by user fees. About half of those 79
FTE will be redirected to application review.
FDA's budget request to Congress for fiscal year 1998 included $820
million for salaries and expenses for the agency's base level of
activities in fiscal year 1997, as well as selected program increases.
In final action on FDA's appropriations for fiscal year 1998, Congress
included an allocation of $24 million for FDA's role in the President's
Food Safety Initiative and an increase of $29 million for the Agency's
initiative to reduce underage use of tobacco products. Since the final
appropriation of $857 million for FDA's salaries and expenses
represented additional funding of only $37 million for $53 million in
new program activities, it required the Agency to absorb a $16 million
reduction to base activities. FDA was required, therefore, to
reevaluate the funding needs of its base programs.
FDA has conducted a thorough review of its major program areas to
determine where and how reductions could be taken in the current fiscal
year to fund new initiatives and pay increased salary and other
increased costs. The Agency is determined to fully fund the Food Safety
Initiative and the Tobacco Initiative at the program levels requested
and appropriated. FDA's plans are described in the operating plan
submitted to the Committee in January.
As shown in the operating plan, CBER's salaries and expenses
resources for fiscal year 1998 are $96,279,000 and 875 FTE, compared to
fiscal year 1997 actuals of $96,256,000 and 861 FTE. The CBER programs
are not incurring a disproportionate share of the Agency's reductions.
The impact of these reductions on CBER programs will primarily be in
the following areas: FDA's work on two action steps of an adult
vaccination plan focusing on the recommendations of a 1994 National
Vaccine Advisory Committee Report on adult immunization and adult
immunization goals and performance measures will be delayed; funding
for information systems to track the progress of applications,
specifically, the blood logging and tracking system will be reduced;
and the review times for non-user-fee applications such as blood and
source plasma applications may increase.
The fiscal year 1999 request will fund CBER activities at
approximately the same level as in fiscal year 1998. It should also be
noted that the fiscal year 1998 operating level reflects an increase of
10 FTE in the field biologics program for increased efforts aimed at
ensuring the safety of the blood supply.
Question. Dr. Friedman, it is my understanding that some of the
most exciting innovations in medical research and drug development will
occur in the coming decade as we travel further into the age of
molecular medicine we have now entered. I am informed that these
innovative products are likely to need to be reviewed by the Center for
Biologics Evaluation and Research. What are the consequences for the
future if we do not provide adequate resources to stabilize the Center
for Biologics Evaluation and Research today?
Answer. In the area of biologics, examples of the vast new product
types for which there is not prior history or base of knowledge to draw
upon include the following: DNA vaccines, gene therapy vectors,
manipulated tissues, xenotransplants, and non-red blood cell oxygen
carriers. Meeting the tighter review time frames and performance
benchmarks required under the Prescription Drug User Fee Act, or PDUFA,
requires scientists at the cutting edge of their fields. This
requirement is best achieved by having the researcher, who is currently
practicing his or her specialty, directly involved in the review of
product applications. Thus, there must be an environment which will
attract and retain highly qualified researchers who are willing to
commit some portion of their time to the regulatory process.
The ability to recognize and anticipate problems before they
happen, as well as to respond quickly to crises, requires a cohort of
scientists who have active laboratory programs and hands-on regulatory
experience. Even with the reductions that have been necessary in fiscal
year 1998 in CBER programs, we believe CBER retains a wide range of
excellent scientists who can bring laboratory experience to bear on
regulatory decisions.
fda youth tobacco initiative questions
Question. I just want to make it clear for the record that the FDA
tobacco initiative that is in the budget, the $134 million, is separate
from the tobacco settlement and from comprehensive tobacco legislation.
In other words, FDA intends to carry out this initiative and can do so
even if Congress does not pass an omnibus tobacco bill--provided you
have the funding. Is that correct?
Answer. The budget request for FDA's tobacco program for fiscal
year 1999 is based upon $134 million being made available to FDA for
these activities. These resources are needed to fully enforce the
Agency's tobacco rule.
Question. There is a compelling need for a comprehensive approach
to reduce teen smoking along the lines of the comprehensive regulation
issued by FDA in August of 1996--to reduce both access to and demand
for tobacco among youths. We do not yet have fully in place a
comprehensive program: it is my understanding that FDA's advertising
restrictions have not yet gone into effect. However, a crucial part of
the FDA initiative is in effect--setting a national minimum age for
sales of tobacco and requiring photo I.D. checks. What is the
contribution to public health of expanded funding just for carrying out
FDA's youth access restrictions, particularly the minimum age and photo
I.D. rules?
Answer. The two access restrictions that are in place today,
dealing with age and photo ID, are just one part of a comprehensive set
of access and advertising provisions in FDA's final rule. It is the
Administration's stated goal that a 50 percent reduction in youth
smoking can be achieved when the Agency's final rule has been fully in
effect for seven years. It is critical to expand the funding for
enforcement of the age and photo ID provisions. In fiscal year 1998,
compliance checks will be performed in less than half of the retail
outlets that sell cigarettes and smokeless tobacco products in the
United States. Expanded funding for these enforcement activities in
fiscal year 1999 will help ensure that retailers do not sell tobacco
products to minors. This is a vital first step towards accomplishing
the objectives of the comprehensive program envisioned under FDA's
final rule.
fda's arrangements with the states
Question. Why is FDA entering contracts with the states instead of
using its own personnel for the enforcement activities?
Answer. There are at least 500,000 tobacco retailers in the United
States. FDA's limited field inspectional resources simply do not allow
the Agency to enforce the tobacco rule by itself. Joint enforcement
efforts with the states, using a training, commissioning, and
contracting process similar to the tobacco program, have worked quite
successfully for mammography, retail food, and dairy farm inspections.
Question. What type of arrangements does FDA have with the states
and how is FDA working with the states?
Answer. FDA has established a close and collaborative working
relationship with the states to jointly enforce the tobacco rule. For
fiscal year 1998, states submit proposals to FDA to conduct compliance
checks under contract to the Agency. Proposals are based upon a
Statement of Work drafted by FDA and sent to each state last November.
State and local officials are trained and commissioned to conduct the
compliance checks after each contract is negotiated and awarded.
Throughout the entire process the FDA tobacco team works very closely
with the Agency's state partners.
Question. What support does FDA provide to the states? Does
enforcement of the FDA minimum age and photo I.D. check rules impose
new burdens on the states?
Answer. FDA provides extensive support to its state partners. In
addition to the training and commissioning that each state receives,
any issue or question that arises is addressed by the tobacco team
working in close contact with the state making the inquiry. There are
no new burdens imposed on the states by virtue of their participation
in the FDA tobacco effort because FDA reimburses the states for their
expenses under the negotiated terms of the contract each state signs
with the Agency.
Question. Please tell the Committee a little more about what FDA
will be able to achieve with the additional funding requested for the
tobacco initiative for fiscal year 1999. I assume the additional
funding will allow additional compliance checks, but also more
education of retailers and of the public. How many retail
establishments are you expecting to reach? How many visits a year do
you expect to conduct for an establishment? And what will the budget
request fund in the way of education and outreach?
Answer. In fiscal year 1998, FDA is focusing most of its outreach
efforts on retailer information, continuing its provision of brochures
and Question and Answer pamphlets for retailers as well as maintaining
a toll-free hotline telephone number for retailers to call to request
materials and a WEBsite with similar information. Further, as each new
state contracts with FDA to undertake compliance checks, the Agency
sends mailing to all retailers in the state to alert them that
compliance checks will soon begin in their state. In addition, the
Agency has developed and has begun distribution of in-store materials
to all retailers answering potential questions, and reminding them of
their responsibilities under the rule, and assisting them in
compliance; and has begun placing a modest level of advertising in a
major market within states in which contracted compliance checks are
being conducted.
In fiscal year 1999, the Agency will design a multi-media
advertising campaign including radio, print, and billboard
advertisements and place these ads in major media markets in every
state with which FDA contracts to conduct compliance checks. It will
also develop a comprehensive retailer education program which includes
a retailer kit containing in-store signs, tent cards, fact sheets,
counter mats and other materials; a letter to retailers in each state
updating them on the status of compliance checks in their state; a
series of reminder postcards that can be posted in the store for
customers and clerks to see; trade advertisements in retailer
publications; and a toll-free hotline that retailers can call to
request additional materials and ask questions. It will continue to
have exhibits at major conferences representing state and local health
officials, public health organizations, and consumer and retailer
organizations educating these audiences about the new tobacco rule.
On the enforcement side, in fiscal year 1998, the Agency is
attempting to establish contractual relationships with each state and
territory to conduct compliance checks of retail outlets that sell
tobacco products. FDA is asking each state to attempt to conduct a
minimum of 375 inspections per month. In fiscal year 1999, the Agency
plans to commission state officials in all 50 states to perform
unannounced inspections of over 500,000 retail establishments to
determine if retailers are complying with the law. It will send warning
letters to first violators and seek civil money penalties from those
found violating the law multiple times. Finally, it will develop an
enforcement strategy for national chains.
Question. I want to examine more closely questions about the
impacts on retailers of enforcing the minimum age and photo I.D. rules.
What are you doing to help retailers comply with the requirements so
they do not get sanctioned by FDA?
Answer. The Agency has created an extensive program of outreach to
tobacco retailers to ensure that they comply with the new tobacco rule.
We fully described the details of this effort earlier. We will provide
a full set of all the materials the Agency sends to retailers under
separate cover.
Question. Can you walk us through the enforcement process? What
happens for successive violations? What are the levels of penalties?
Answer. A retailer that sells a tobacco product to a minor during
an FDA compliance check receives a written warning from FDA for a first
violation. Escalating monetary penalties are imposed starting with a
second violation. The fine for a second violation is $250; $1,500 for a
third violation; $5,000 for a fourth violation; and $10,000 for a fifth
violation. Retailers are provided an opportunity to contest the
penalties FDA seeks to impose, including the right to request a hearing
before an administrative law judge.
Question. How much time between compliance checks? Could a retailer
be subjected to multiple penalties without having time to correct the
problem in the store, for example, through multiple compliance checks
and penalties in one day?
Answer. There is no fixed period of time between compliance checks.
Typically, a follow-up compliance check in an outlet that previously
sold to a minor will occur within three months of the prior inspection.
Multiple FDA compliance checks in the same store on the same day will
not occur.
Question. Can you describe for the Committee the difference between
this FDA initiative and the Synar Amendment rules relating to the
Substance Abuse and Mental Health Administration block grants? How are
the programs different and why is FDA's initiative needed in addition
to the Synar regulations?
Answer. The FDA and Synar programs complement each other. SAMHSA
administers the Synar program, which conditions the receipt of
substance abuse and mental health block grants on demonstrated tobacco
control activities at the state level. The Synar program requires the
states to monitor retailer sales to minors. By contrast, FDA has begun
to enforce a mandatory federal regulation that prohibits the sale of
cigarettes and smokeless tobacco products to minors.
The FDA access restrictions are just one part of a comprehensive
agency regulation which, when fully in effect, will restrict the
availability and the appeal of tobacco products to minors. The key
difference is that SAMHSA measures compliance with tobacco control, and
FDA enforces a comprehensive regulation.
______
Questions Submitted by Senator Byrd
safety of imported food act
Question. Chairman Cochran, Senator Bumpers, members of the
Subcommittee, and Lead Deputy Commissioner, Dr. Michael A. Friedman, I
am pleased to be here today to review the Food and Drug
Administration's (FDA) programs. The FDA is the responsible federal
agency for carrying out policy that protects the health of the nation
against impure and unsafe foods, drugs, and cosmetics, as well as other
potential hazards. While the FDA's mission is broad in scope, I will
limit my questions to the safety of imported food, the Office of
Generic Drugs, and the Food Packaging Pre-Market Notification System.
One of the rewards that this nation enjoys as a result of its
prosperity is the virtual smorgasbord of foods available to every
consumer. However, this smorgasbord has the potential to become the
literal poison pill, with outbreaks of foodborne illnesses raising
alarming questions about the safety of the U.S. food supply. Not only
are Americans getting sick from eating contaminated food, but an
estimated 9,000 deaths occur annually in this country as a result of
foodborne illnesses.
To ensure the safety of imported fruits and vegetables, and other
imported food, I cosponsored S. 1707, the Safety of Imported Food Act.
S. 1707 would provide the FDA with new authority that would allow the
agency to prevent the importation of foreign goods grown and processed
under conditions that do not meet U.S. food safety standards. These
conditions include everyday production and processing practices, where
microbial contamination can occur--and where it often begins. In brief,
S. 1707 would greatly enhance the FDA's ability to identify potential
food safety hazards before people get sick.
Would you please provide answers to the following questions: since
the FDA already has the authority to detain products offered for
import, why does the FDA need the authority provided under S. 1707?
Answer. Current law provides FDA with authority to refuse entry if,
after inspection or testing of imported products at the border, or as a
result of other information, the Agency finds that the food appears to
be unsafe or otherwise violates U.S. law. Experience has shown,
however, that inspection and testing of products at the border may not
be sufficient in all cases to ensure the safety of food products. In
addition, it may be necessary to identify and inspect the source of
potential contamination to ensure that products offered for sale in the
United States meet domestic food safety requirements or otherwise
achieve the level of protection required. FDA currently has such
authority but only with respect to domestic production.
This new provision adds to the Federal Food, Drug, and Cosmetic
Act, FD&C Act, a principle that has been reaffirmed in the World Trade
Organization, WTO, agreements on food safety. This agreement recognizes
the right of signatory countries to set the level of protection each
country deems appropriate for the health and safety of its citizens,
and to exclude imported foods that do not meet their domestic food
safety requirements or otherwise achieve the appropriate level of
protection. The FD&C Act currently does not explicitly include this
concept.
Question. What would be the effect of S. 1707 on FDA's existing
authority over imported food?
Answer. Current law provides FDA with authority to refuse entry if,
after inspection or testing of imported products at the border or as a
result of other information, the Agency finds that the food appears to
be unsafe or otherwise violates U.S. law. S. 1707 would give FDA the
authority to evaluate the food safety systems, conditions, or measures
in which an imported food was prepared, packed or held; if such
conditions, systems, or measures do not meet U.S. requirements or
otherwise achieve the U.S. level of protection, a food may be deemed
adulterated and denied entry.
This new provision adds to the Federal Food, Drug, and Cosmetic Act
(FD&C Act) a principle that has been reaffirmed in the World Trade
Organization, WTO, agreements on food safety. This agreement recognizes
the right of signatory countries to set the level of protection each
country deems appropriate for the health and safety of its citizens,
and to exclude imported foods that do not meet their domestic food
safety requirements or otherwise achieve the appropriate level of
protection. The FD&C Act currently does not explicitly include this
concept. The effect of S. 1707 would be to provide the authority needed
to ensure that all imported food products meet the U.S. level of
protection and also is consistent with rights and obligations under
international trade agreements, and would provide FDA with another
effective enforcement tool.
Question. Does this legislation conflict with U.S. obligations as a
member of the World Trade Organization (WTO)?
Answer. S. 1707 is consistent and will not conflict in any way with
U.S. obligations as a member of the World Trade Organization, WTO.
Rather, S. 1707 is consistent with the right recognized in one of the
WTO agreements, the Agreement on Sanitary and Phytoganitary Measures,
that each member nation has the right to maintain its appropriate level
of protection. The purpose of S. 1707 is not to restrict trade but to
assure that U.S. consumers are as protected from harmful imports as
they are from harmful domestic products. Current law provides FDA with
authority to refuse entry if, after inspection or testing of imported
products at the border or as a result of other information, the Agency
finds that the food appears to be unsafe or otherwise violates U.S.
law. Experience has shown, however, that inspection and testing of
products at the border may not be sufficient in all cases to ensure the
safety of food products.
Question. I note that the President's budget proposes the inclusion
of approximately $25 million in the FDA's fiscal year 1999 budget to
provide the necessary resources to implement the goals of S. 1707. If
these funds are provided in the fiscal year 1999 Agriculture
Appropriations Bill, what progress will the agency be able to make in
implementing the authority provided under S. 1707 in fiscal year 1999?
Answer. The funding included in the fiscal year 1999 budget request
would provide, among other things, better assurances that domestic and
imported fresh fruits and vegetables are safe. However, this funding is
not dependent upon passage of the legislation. The funding and the
legislation are inter-related but not interdependent. Passage of the
legislation would provide FDA with a powerful tool toward improving the
safety of imports, but the activities planned with the proposed funding
can move forward even without enactment, as the legislation is budget
neutral.
office of generic drugs
Question. Mr. Chairman, I am also interested in the FDA's Office of
Generic Drugs (OGD). The generic drug industry, including Mylan
Laboratories, Inc., headquartered in West Virginia, has alerted me that
consumers and all purchasers of pharmaceutical products, including the
federal government, could realize substantial savings if the FDA
adhered to its statutory deadline for the OGD to review generic drug
applications, known as Abbreviated New Drug Applications (ANDA), within
180 days.
I understand that a backlog of pending generic drug applications
continues in the OGD. Why is the FDA exceeding the statutory
requirement that ANDA's receive final agency action in six months?
Answer. The agency makes every attempt to meet the 180 day generic
drug application review requirement; however, for a number of reasons
it is not always possible to do so.
FDA considers either an approval or disapproval be a final action
on any Abbreviated New Drug Application (ANDA). After receiving a
disapproval action, manufacturers frequently resubmit applications that
address the deficiencies indicated in the disapproval action.
Approval times reflect both time with the agency reviewing
applications as well as time with the sponsor or applicant responding
to deficiencies noted by FDA reviewers. The time spent in FDA is
measured by ``review cycles''. A cycle starts when an application is
filed by FDA and ends when the agency issues an ``action letter.''
Generally these letters communicate to the sponsor that their
application is approved or not. If not approved, the sponsor is
provided with the reasons why and has an opportunity to submit
information needed to address these deficiencies. When this information
is received a new cycle begins.
Generally, approval time is comprised of multiple ``review
cycles,'' as well as time between cycles when the applicant is
responding to FDA's comments. However, there have been applications
approved after the first ``review cycle.'' However, we believe there
are some primary factors that impact our ability to review ANDA's
within 180 days.
First of all, the number of employees assigned to the Office of
Generic Drugs has remained fairly constant while the number of original
ANDA submissions has increased over 40 percent since 1994.
Secondly, the activities of the Office of Generic Drugs (OGD) are
entirely funded through appropriated funds. This means that OGD
receives no additional funding from industry under the Prescription
Drug User Fee Act (PDUFA) to support the hiring of additional staff.
Therefore, resources are based on traditional appropriations and cannot
rely upon additional resources made available through PDUFA.
Lastly, included on the review clock are times that the Food and
Drug Administration need to determine if the manufacturing site(s) are
in compliance with current good manufacturing practices (cGMP's) and
time for statistical and clinical consult.
Question. Please provide a list of ANDA's that are currently being
delayed because of an outstanding scientific or regulatory
bioequivalence issue.
Answer. The types of drug products that may take longer to review
are nonsystemically absorbed drug products that require more extensive
bioequivalence testing methodology and others that raise especially
complex scientific issues. Information regarding whether an ANDA is
undergoing review by the agency is proprietary information, and is
generally not disclosable. FDA can only disclose this information to
Congress in response to an authorized request from the Committee
Chairman.
Question. Please provide the names, or the types of products, as
well as the mean time of the applications pending before FDA.
Answer. As mentioned earlier, we may not disclose the specifics of
the pending ANDA's without an authorized request from the Committee
Chair. However, the types of drug products that may take longer to
review are nonsystemically absorbed drug products that require more
extensive bioequivalence testing methodology and others that raise
especially complex scientific issues.
The Office of Generic Drugs does not routinely monitor the mean
time of pending applications. However, at the end of fiscal year 1997,
there were 515 pending ANDA's, including 106 pending for more than six
months. Overdue applications are ANDA's that have been pending more
than 180 days.
Question. How many of the outstanding issues on scientific or
regulatory bioequivalence were raised by citizen petitions?
Answer. The Agency receives numerous Citizen Petitions and other
challenges each year regarding scientific or regulatory bioequivalence
issues. There are approximately a dozen of these Petitions and other
challenges currently being evaluated by the Office of Generic Drugs
(OGD). Each Petition and challenge is carefully reviewed and responded
to, and any related ANDA's are carefully evaluated based on the issues
raised in the Petition. However, as we discussed earlier, the Office of
Generic Drugs (OGD) is not allowed to specifically discuss ANDA's
pending before the Agency.
Question. The FDA reported to industry last year that a program was
initiated in fiscal year 1996 to release bioequivalence protocols and
protocol reviews to the public. Has this program reduced OGD's protocol
workload and resulted in more time for work on reviews?
Answer. The inception of the initiative to publicly release
bioequivalence protocol reviews resulted in OGD's issuance of 40
protocols to date, 34 of which were issued in fiscal year 1997. This
initiative has reduced the total number of protocols received by the
Office from 153 in fiscal year 1995 to 60 in fiscal year 1997.
Consequently, OGD's bioequivalence reviewers and support staff now have
more time to devote to the review of ANDA's.
premarket notification system
Question. With regard to the Premarket Notification (PMN) System,
the PMN provisions of the FDA Modernization Act of 1997 are intended to
expedite introduction of advance food packaging materials while
assuring the protection of public health. PMN has a significant impact
on the Kanawha Valley Union Carbide plant in West Virginia, and I have
the following questions. The FDA reform legislation that Congress
enacted last year included a streamlined regulatory process for
approving food contact materials. It appears that this agreement was a
substantial factor in securing passage of section 309 of the new law.
Am I correct that industry and the FDA were in agreement on the basic
concept of this pre-market notification plan for food contact
substances?
Answer. Yes, prior to enactment of the FDA Modernization Act,
agency personnel discussed the elements of a premarket notification
system for food contact substances with industry representatives, and
it is correct that the Agency is in agreement with the basic concept.
However, FDA's agreement to the program was explicitly conditioned on
its receiving adequate funding through user fees; however, that portion
of the program was not enacted.
Question. The language of the new statute requires that the FDA
report to Congress by April 1, 1998, on the estimated cost for carrying
out the food contact substance notification program. How far along is
the Agency in preparing this report?
Answer. We have a draft document that is now being circulated
within the Agency for clearance. We plan to submit this report to the
Department for their review shortly. With support from the Department,
we are trying to expedite the process as much as possible. However,
assembling this initial report and ensuring the soundness of the
estimate took longer than anticipated.
Question. On the basis of this evaluation, do you believe the
Agency will indeed need additional funding to implement the food-
contact substances notification program as originally expected by the
House and Senate Conference Committee Members for the FDA reform
legislation?
Answer. No increase was included in the fiscal year 1999 request,
as we were still reviewing the impact of this program. We are in the
process of completing our report, as required by the FDA Modernization
Act, which will provide our estimate as to the costs of this program.
This concludes my questions, Mr. Chairman, and I look forward to
working with you, the Ranking Member, and other Subcommittee members in
conjunction with the Lead Deputy Commissioner, on these important
issues confronting the FDA.
______
Questions Submitted by Senator Leahy
generic drugs
Question. The Administration's fiscal year 1999 budget
justification document indicates that $34,883,000 and 351 Full Time
Equivalents (FTE's) were devoted to FDA's generic drug program in
fiscal year 1998. I understand that approximately $8,500,000 and 127
FTE's were allocated specifically to the Office of Generic Drugs (OGD)
for fiscal year 1998. Where do the other 224 FTE's work and how does
the FDA spend the remaining $26,383,000? Please provide the specific
FDA offices outside the OGD that will receive fiscal year 1998 generic
drug program monies, detailing the dollar amount and FTE number for
each recipient office.
Answer. Of the 351 FTE providing support to the Generic Drugs
program, 127 are located within the Office of Generic Drugs; 105 are
elsewhere within the Center for Drug Evaluation; and 119 are located in
the Office of Regulatory Affairs. The cost of the support provided by
these offices are spent on salaries and operating expenses. We are
happy to provide the breakout of support for the Generic Drugs program
within the Center for Drug Evaluation for the record.
[The information follows:]
------------------------------------------------------------------------
Estimated
Office FTE costs
------------------------------------------------------------------------
Office of Center Director.................... 7 $824,000
Office of Management......................... 7 925,000
Office of Information Technology............. 8 942,000
Office of Training & Comm.................... 8 942,000
Office of Compliance......................... 26 3,062,000
Office of Review Management.................. 26 3,062,000
Office of Pharm. Science \1\................. 23 2,710,000
--------------------------
Total.................................. 105 12,367,000
------------------------------------------------------------------------
\1\ Excludes Office of Generic Drugs.
Dollars are rounded.
Since publication of the 1999 budget justification document, the
Office of Generic Drugs staff has increased from 127 to 133 for fiscal
year 1998. The FDA Operating Plan also estimates the funding level for
the Office at $9,693,000.
Question. I am concerned about the backlog of pending applications
for Abbreviated New Drug Approvals. According to the generic drug
industry, about half of all drug prescriptions are filled with generic
versions of the prescribed drug, and a generic typically enters the
market 30 percent below the brand price. Within a couple of years, the
generic industry predicts that the generic drug price may decline to 60
to 70 percent of the brand price. Long delays in an Abbreviated New
Drug Application costs consumers and the government millions of
dollars. I know that FDA has been trying to reduce the backlog of
Abbreviated New Drug Applications. I would like to know what steps FDA
is taking to continue making progress against the backlog.
Answer. The Office of Generic Drugs (OGD) defines backlog as being
all applications pending review. This includes applications that are
pending less than 180 days, and application pending greater than 180
days or called ``overdue'' applications. At the end of fiscal year
1997, there were 515 pending ANDA's, including 106 pending for more
than six months. Either approval or disapproval of an ANDA is
considered by FDA to be a final action. We make every attempt to meet
this requirement; however, for a number of reasons it is not always
possible to do so. After receiving a disapproval action, manufacturers
frequently resubmit applications that address the deficiencies
indicated in the disapproval action.
Of the 515 applications pending at the end of fiscal year 1997, 106
were overdue.
FDA has specific initiatives with the goal to reduce the backlog
and decrease overall time to approval.
OGD has begun sending the review comments and/or deficiencies to
applicants via facsimile. Prior to communicating via facsimile, all
deficiencies were sent through the U.S. mail. Communicating
deficiencies by facsimile can save several days in each review cycle.
Additionally, for most minor issues, applicants are able to submit
their responses via facsimile. If a fax response is received from an
applicant within 30 days, the reviewer will then complete review of
that application. Previously, responses to minor amendments were placed
in a queue and reviewed within 60 days. Based on the reason for the
deficiency, a small number of minor amendments continue to be placed in
a queue for review. The Office believes that this new procedure has
improved communications with applicants and has helped to reduce
overall time to approval.
The Office has been working with firms to facilitate the electronic
submission of data (ESD) used to support bioequivalence studies. This
is also referred to as the bioequivalence/bioavailability database. The
ESD format contains the core information from a bioequivalence study
and allows raw data to be accessed for further analysis. Reviewers can
compile a review by using efficient word processing tools and query
functions to expedite the review process. In addition, ESD allows
reviewers to instantly check individual data without manually searching
pages of hardcopy data. These functions save review time and improve
the quality of reviews. Nine electronic submissions have been received
to date for this program, with four during fiscal year 1997. Also, OGD
has begun accepting submissions of similar chemistry, manufacturing and
controls data for beta testing. It is anticipated that this electronic
submission will also provide a more efficient means of review.
Also, OGD initiated a process of providing pen and ink changes to
proposed labeling rather than preparation of a detailed narrative
letter. This reduces the time required for drafting and finalizing
letters, and provides for a faster labeling review process.
The Office continues to utilize overtime for the reviewers in a
effort to help reduce cycle times and improve approval times.
The Office has hired a Medical Officer to facilitate timely review
of ANDA's with bioequivalence studies with clinical endpoints. In the
past, these complicated studies were consulted to Medical Officers in
the Office of Review Management (ORM) for review. Responses to these
consults were often delayed due to Prescription Drug User Fee Act
(PDUFA) priorities in ORM. Evaluation of these studies by an OGD
Medical Officer has permitted more timely completion of the review
process.
The Office also initiated a procedure to contact applicants that
undergo two or more major deficiency cycles. Applicants are requested
to contact OGD for discussion or clarification regarding the
deficiencies. If OGD is not contacted, the Office will call the
applicant within 30 days to see if any further discussion, or perhaps a
meeting, is necessary. OGD is attempting to provide guidance to
applicants and reduce or eliminate additional review cycle, thus moving
applications to approval more quickly.
The Office issued a Manual of Policies and Procedures entitled:
``Procedure for Public Release of Bioequivalence Protocols and
Reviews.'' Firms frequently submit proposed bioequivalence protocols to
OGD. Often these are duplicates of already submitted and reviewed
protocols. In order to decrease the burden of reviewing several
protocols for the same drug product, OGD is now making available copies
of acceptable protocols and related review comments. OGD believes that
by utilizing completed review comments, firms will need to submit fewer
protocols, freeing time for reviewer evaluation of applications.
Since the inception of the initiative to publicly release
bioequivalence protocol reviews, 40 protocols have been issued to date,
34 of which were issued in fiscal year 1997. Making these protocols
publicly available reduced the total number of protocols received by
the Office from 153 in fiscal year 1995 to 60 in fiscal year 1997,
since multiple protocols for the same drug no longer require individual
review. This initiative has also reduced the need to develop
Biopharmaceutic Guidances to the same extent as before. These guidances
are now developed only for drugs products with special/unique
bioequivalence issues.
The Office has identified and started development of several
Biopharmaceutic Guidances for drugs products with special/unique
bioequivalence issues predicted to be the subject of multiple generic
drug application submissions during the next few years. It is
anticipated that this proactive guidance program will reduce the review
time for the selected drug products, thus reducing the number of
overdue applications. One revised guidance was issued in fiscal year
1997. Eleven others are being developed and are expected to be issued
in fiscal year 1998.
Chemistry review branches with a significant actual or predicted
backlog have been reassigning reviews in accordance with Office
procedures to other branches with lower workloads in an effort to
reduce the number of overdue applications and supplemental
applications.
The Office implemented a policy on ``Substitution of an Alternate
Source of the New Drug Substance in Unapproved Abbreviated
Applications.'' Previously, if a generic drug application was otherwise
approvable with the exception of an unsatisfactory current good
manufacturing practice (cGMP) inspection for the primary new drug
substance (NDS) supplier used to manufacture the exhibit/bioequivalence
batch, it would not be approved until those cGMP issues were resolved.
In order to qualify an acceptable alternate source, a new exhibit batch
based on the alternate source would be needed. Additionally, a
bioequivalence study would be required, depending on dosage form to
support use of the alternate source. For unapproved applications OGD
now allows substitution of an alternate source of the NDS based on
assurance that the specifications and test data are essentially the
same as those of the original source used in the exhibit batch and
bioequivalence study if required, provided that the original source
would have been acceptable except for cGMP issues. Generally, a new in
vivo bioequivalence study will not be required for the alternate
exhibit batch, but it will be necessary to provide comparative
dissolution data depending on the dosage form of the proposed product.
This new policy should reduce approval times in certain situations.
In addition, to facilitate streamlining, improve review and
approval times, and increase communication with applicants, OGD will
continue to issue letters to the generic drug industry and hold
meetings with the three generic drug trade associations: the Generic
Pharmaceutical Industry Association (GPIA), the National Association of
Pharmaceutical Manufacturers (NAPM), and the National Pharmaceutical
Association (NPA).
We do not believe, however, that the number of pending applications
is likely to be reduced substantially, due to two factors. As
previously stated, OGD has established a facsimile program for
communicating deficiencies to applicants. If the applicants respond to
the minor deficiencies within 30 days, the OGD reviewers will then
complete review of the applications rather than issuing a deficiency
letter that closes the review cycle. This program has significantly
contributed to the reduction in approval times, but does increase the
number of pending ANDA's (including overdues) as the reviews are kept
in pending status until the firms respond and the reviewers complete
their reviews. Traditionally, the process just described was conducted
in two shorter cycles which reduced the number of overdue applications
but increased the overall time to approval. The other factor is that
the number of original applications submitted to OGD has increased from
300 ANDA's received in fiscal year 1991 to 462 ANDA's received in
fiscal year 1997. Staffing has remained relatively constant during this
period.
As we mentioned earlier, review cycles comprise FDA's portion of
overall approval times. The reduction in the number of cycles has
subsequently resulted in reduced overall approval times. We will
provide this information for the record.
[The information follows:]
APPROVAL TIMES
[In months]
------------------------------------------------------------------------
Fiscal year Median Mean
------------------------------------------------------------------------
1995.......................................... 28.2 35.3
1996.......................................... 24.7 33.2
1997.......................................... 19.6 25.6
------------------------------------------------------------------------
The reduction in review cycles and overall approval times enabled
FDA to continue the increasing yearly approval trend for abbreviated
applications.
Total ANDA's
Fiscal year approved
1991.............................................................. 141
1992.............................................................. 239
1993.............................................................. 215
1994.............................................................. 255
1995.............................................................. 288
1996.............................................................. 340
1997.............................................................. 404
Question. How many FTE's are currently assigned to review generic
drug applications?
Answer. As of April 1, 1998, 133 FTE have been assigned to OGD.
Question. How many FTE's would be needed to meet FDA's statutory
requirement to approve generic drug applications within 180 days?
Answer. The statutory requirement is to review generic drug
applications within 180 days. A review may result in an approval or not
approval action.
However, provided there is a steady submission rate of original
ANDA's, the Office estimates that it will need approximately 75
additional FTE to review the majority of applications within 180 days.
There will always be a few applications that cannot be reviewed within
180 days due to complicated scientific issues or other barriers outside
the direct control of OGD. In addition to these FTE, other parts of the
Food and Drug Administration that support the generic drug review
program will need additional FTE, such as the Office of Regulatory
Affairs and the Office of Compliance.
Question. I have been informed that the report to the President on
food safety showed that FDA was in ``critical condition'' with respect
to its food safety inspection functions, and that the agency regulates
53,000 plants and has an average inspection frequency of once every 10
years. Are food plants currently required to register? If not, how does
the agency know who to regulate? Would registration of food processors
help the agency to conduct more frequent food safety inspections?
Answer. Food plants are not required by law to register with the
FDA. The only exceptions are producers of Acidified and Low Acid Canned
foods, which are required to register and file scheduled processes with
the Agency, and Infant Formula producers which are required to notify
the Agency prior to initial product marketing or major changes in
formulation.
The Agency maintains an inventory of food processing establishments
that are subject to our jurisdiction. This inventory is maintained in a
variety of ways to include reviewing industry data bases, such as Booz-
Allen and Hamilton directories, reviewing product labels, and
following-up to industry/consumer complaints and inquires.
Requiring food processors to register with the Agency may provide
FDA with more complete and up-to-date information on firms that go out
of business or begin food production. However, such a system will
require the allocation of additional resources both for the maintenance
of the system as well as the verification of the accuracy of data in
the system. We believe that given other priorities for scarce
resources, the current inventory maintained by the Agency provides a
reasonably accurate database of food producers in the U.S.
Question. I have been informed that the FTE's dedicated for food
safety inspections average only about 17 inspections per year. Why so
few? What can be done to increase the effectiveness of the inspection
program?
Answer. While it is true that the number of food inspections per
investigator per year, now at 17, has been steadily declining for the
last few years, there are a number of factors that impact this
situation. FDA Consumer Safety Officers, also called CSO's, or
inspectors, are employed to engage in a variety of consumer protection
and enforcement activities. While inspections and sample collections
are the most frequently mentioned and easily counted output activities,
investigational personnel historically do many other tasks and have
taken on additional responsibilities consistent with reinvention
initiatives that while they are not output measures as such, are
important to the outcome goal of a safe food supply.
First, the kind of inspections conducted by FDA investigators has
changed over the years. Because of changes in the food supply with more
ready-to-eat foods and increased pathogens, FDA conducts fewer
sanitation inspections and more microbiological inspections. These
microbiological inspections take longer to conduct and, when combined
with constant turnover in Consumer Safety Officers, have a negative
impact on the number of inspections per CSO per year.
Moreover, CSO's conduct activities under at least 14 established
categories, only one of which is factory inspections. Besides
inspections, Consumer Safety Officers perform such tasks as sample
collections, audit checks, recall follow-ups, and provide training and
technical assistance. For example, food safety checks of establishments
made after a natural disaster are not reported as inspections but
rather investigations, as are epidemiological trace backs after a food
borne illness outbreak, for example lettuce contaminated with E-coli.
Consumer complaint follow-up, and incidents associated with food
allergens also consume FDA investigator time, none of which is
associated with output measures and all of which take away from time to
conduct inspections. FDA Consumer Safety Officers are not assigned to
inspect individual plants in a local duty station day after day as are
some inspectors in other agencies. Rather, FDA investigators travel
great distances to inspect a wide variety of food processing plants.
Food safety inspections are also performed by state authorities
under contract to FDA and in partnership with FDA. As such, FDA
investigators provide assistance, training and oversight to these food
safety activities. While these activities are not output measures and
not routinely reported as inspectional time, they do leverage FDA
inspection resources in the foods area. In recent years, as the number
of field management and support personnel has declined, more
investigator time has had to be devoted to industry assistance in the
form of meetings and presentations, training of industry employees, and
pre-operational process reviews that provide manufacturing guidance to
company officials to better enable them to comply with FDA regulations.
All of the preceding are examples of activities that FDA Consumer
Safety Officers must do besides conduct inspections. While most are not
output oriented, all are important in assuring consumer protection and
a safe food supply. Nonetheless, we believe there are a number of areas
that can be examined and modified or re-engineered to provide our
investigators more time to conduct inspections and thereby increase the
total number of inspections conducted in a year. For example, we plan
to initiate efforts to shorten in-plant times by conducting more
directed inspections of certain products or processes and increased
monitoring of in-plant time by supervisors. We will also review the
requirements of written inspection reports for non-violative
establishment inspections, and increase our use of abbreviated
inspection reports or checklists. We will also look for innovative ways
to collect food samples rather than relying on our investigators.
Question. Last year, the Committee supported increased funding for
FDA to implement the President's Food Safety Initiative. I have been
informed that a portion of that money, $8 million was dedicated to
hiring 80 new seafood safety inspectors to help with the implementation
of the new HACCP program. Why does each food safety inspector cost
$100,000?
Answer. The $8 million of Food Safety Initiative, or FSI, funds for
fiscal year 1998 are supporting more FDA field activities than just the
payroll and benefits costs of 80 investigators. The average salary and
benefits per inspector is estimated at $70,000, for a total of about
$5.6 million. In addition to salaries and benefits, these funds support
the costs of training and outfitting these new FTE with equipment. FSI
funds also pay inspectional travel costs, the costs of purchasing
products that the agency wishes to sample, packing and shipping samples
to laboratories, as well as the costs for analyzing samples and
identifying pathogens, if any are found. The inspection activities
supported include implementing the HACCP regulations, and applying
HACCP principles to retail food service operations. These funds are
also supporting Federal/State Partnerships to ensure consistency in
HACCP techniques, enhanced coordination, and communication between the
FDA and the State regulators.
Question. I have been informed that the FDA implemented a new
program to improve the safety of seafood products last December. How is
the agency enforcing the program for our trading partners?
Answer. FDA has a three-part strategy for enforcement of the
seafood HACCP program. We plan to continue FDA's traditional sampling
program at ports of entry; inspect importers to verify that they are
meeting their obligations under the seafood HACCP program; and develop
HACCP-based equivalence agreements with U.S. trading partners that are
found to meet the U.S. level of protection for seafood safety.
Importers would have an obligation to take ``affirmative steps'' to
ensure that the products they are importing meet U.S. HACCP
requirements. Importers must keep records of their affirmative steps.
Inspections of importers have begun. FDA has scheduled over 1,500
audits of paperworks for imported seafood products for the first year.
Under the FDA seafood HACCP program, importers will be able to meet
their affirmative steps obligations by importing from countries with
which FDA has an equivalence agreement for seafood. FDA will never have
the resources to inspect the many thousands of foreign processors that
ship to the U.S. from over 135 countries. Where equivalence is
determined to exist, the foreign government performs the inspections
and FDA verifies that the government's regulatory system achieves the
U.S. level of protection. FDA has received inquiries from over 30
countries seeking equivalence determinations. The determination process
is rigorous and can take at least a year per country. FDA expects the
first determinations of equivalence to occur this year.
Question. How did FDA reach the conclusion that the seafood HACCP
systems could operate without any laboratory verification to ensure
that the plans are operating effectively?
Answer. The seafood HACCP regulations do not mandate laboratory
verification but they do list it as an option. There are several
reasons for this policy. FDA's seafood HACCP program is designed to
rely on preventive measures that have been scientifically determined to
work. It is well established, for example, that pathogens can be
destroyed by cooking at specific temperatures for specific times. If a
HACCP system that involves cooking is able to consistently maintain the
scientifically established temperature and time, the outcome is
essentially assured. The original creators of HACCP used this concept
of scientifically established preventive controls to replace expensive
end-product testing as a means of determining whether a food is safe.
FDA's Fish and Fishery Products Hazards and Controls Guide is
essentially a compendium of scientifically established preventive
measures. Processors are free to take measures other than those
recommended in the Guide, but they must be able to demonstrate that
their measures are equivalent from a safety standpoint. This
demonstration may well involve laboratory verification. It is worth
noting that the Guide is receiving international recognition. For
example, the Canadian seafood regulatory program has informally adopted
it and it is being translated into other languages for use in a number
of countries.
FDA was persuaded by the comments received on the seafood HACCP
proposal, such as those from the American Society for Microbiology,
that end-product testing has limited value in measuring the success of
a HACCP system. A considerable amount of testing beyond what can
reasonably be required, would be needed to verify a HACCP system with
anything approaching full confidence.
Nonetheless, FDA continues to take samples as part of its overall
verification strategy for seafood HACCP. It continues to take ``for
cause'' samples as warranted, and also now takes ``HACCP verification''
samples under certain circumstances to determine the relationship
between compliant HACCP systems and safe products. Additionally, the
Seafood HACCP Regulation does require other forms of verification,
including, record review, calibration of process control instruments,
and periodic reassessment of the hazard analysis and HACCP plan.
Question. Does FDA have any plans to make their HACCP programs
consistent with the one developed by USDA for use on meat and poultry
products?
Answer. At its core, HACCP involves the application of seven
internationally recognized principles that collectively provide for a
system of preventive controls for food safety. Both FDA and USDA HACCP
regulations require the seven principles with only minor variations. In
that respect, the programs are highly consistent. Those differences in
detail that do exist are essentially attributable to differences in
circumstance, such as the nature of the industry, or the nature of the
inspection program.
Beyond that, there are differences in implementation and in program
design outside of the basic seven principles of HACCP that are due to
differences in the nature of the hazards and the controls for those
hazards. For example, the majority of seafood is harvested from wild
fish populations while the majority of meat and poultry is obtained
from a more controlled and crowded farm environment. The regulatory
strategy for seafood will inevitably be different in this regard than
that for beef and poultry. These differences should not be interpreted
as inconsistencies between programs. For the same reason, it should be
expected that there will be differences in detail between the FDA
seafood HACCP program and future FDA HACCP programs for other
commodities.
Question. Has the rate of imported food products increased in the
last few years?
Answer. Yes, the rate of imported food entries has doubled over the
past seven years, and based on recent trends, we expect at least a 30
percent increase in imported foods by 2002. FDA focuses its examination
of import entries on products that have a history of violations, or
which have a high potential for pathogen contamination, or which are
epidemiologically associated with illness. As international trade in
food increases, and FDA's resources have been reduced, FDA's
examination of imported foods has declined from an estimated 8 percent
in fiscal year 1992 to less than 5 percent in fiscal year 1997. Based
on FDA data, in fiscal year 1997 there were over 2.5 million ``entry
lines'' of FDA regulated foods imported into the U.S.--an entry can
contain several different ``lines'' of distinct products that must be
evaluated separately--and processed through its automated system for
imports, OASIS, or the Operational and Administrative System for Import
Support. This does not include a substantial number of informal food
entries valued at $1,250, which is to be raised to $2,000 effective
July 2, 1998, or less that may not be processed through OASIS. As food
entry lines have dramatically increased, and FDA resources have
declined, the number of entries examined by FDA has declined
substantially. It is clear that the increase in imported food products
has made maintaining an effective import inspection and sampling
program more difficult.
Question. What impact has this had on your import inspection
program?
Answer. Prior to the development of FDA's import system, OASIS, FDA
did not have an automated system for accurately determining the number
of import entry lines it reviewed and relied on U.S. Census data.
``Entry lines'' is a more realistic way of determining the volume of
imports which FDA must evaluate. Since each entry could contain more
than one ``line'' of FDA regulated foods--on average each formal entry
contains 1.7 lines--the number of entries underestimates the challenge
posed in maintaining an effective import inspection system.
The increase in imported food products has had an effect in several
areas on our import inspection program. For example, as international
trade increases, and emerging pathogens, sometimes unique to particular
environmental niches not normally found in the U.S., become associated
with foods, our ability to rapidly develop effective detection
methodology has been increasingly challenged. Food safety research is
critically needed to develop the means to identify and characterize
more rapidly and accurately foodborne hazards, to provide the tools for
regulatory enforcement, and to develop effective interventions that can
be used as appropriate to prevent hazards at each step from production
to consumption.
The President's Food Safety Initiatives include a focus on imported
products. This will address many of the deficiencies in FDA's current
import program by directing resources toward the source and point of
origin of foreign produce.
FDA, along with USDA, and EPA, is working directly with many
foreign countries to enhance the food production system and regulatory
oversight infrastructure of these countries to better ensure that
exports meet U.S. standards. The U.S. provides technical assistance to
help correct deficiencies in production practices or foreign monitoring
and enforcement programs. In addition, the U.S. serves in leadership
positions in international food safety standard-setting organizations.
In response to the increase in imported products, FDA also plans to
expand the number of mutual recognition agreements, also called MRA's,
with trading partners and will continue to review and evaluate ways to
increase coverage of imports.
Conclusion of Hearings
Senator Cochran. That concludes the hearings. The
subcommittee will recess and reconvene at the call of the
Chair.
[Whereupon, at 12:08 p.m., Tuesday, March 31, 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 1999
----------
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
1999 budget request. Those statements follow:]
DEPARTMENT OF AGRICULTURE
Departmental Administration
Prepared Statement of Pearlie S. Reed, Acting Assistant Secretary for
Administration
Mr. Chairman and Members of the Subcommittee, I am pleased to
report on current accomplishments and present the 1999 budget request
for Departmental Administration, Agriculture Buildings and Facilities,
and Hazardous Waste Management. The 1999 budget request for
Departmental Administration affects each of USDA's staff offices, and
will provide the level of support and accountability required to ensure
that all USDA employees treat co-workers and customers fairly and
equitably and with dignity and respect. Over the paste twelve months,
we have set the stage for being able to make this assurance.
major civil rights accomplishments
I will provide you with copies of the one year implementation
report, ``Civil Rights at the United States Department of Agriculture:
One Year of Change'' which outlines in detail the implementation status
of the February 1997 Civil Rights Action Team (CRAT) Report. We have
started to implement 90 of the recommendations. Today, I would like to
note some of the highlights of this report.
Since January 1, 1997, USDA has settled or closed 224 of the 1,088
program discrimination complaints in the backlog, including some cases
which dated back to the mid-1980's, and has closed another 5 cases
filed since then. The current program complaint backlog will be
completely eliminated in fiscal year 1998. New complaints received by
the Department will be brought to the point of adjudication within 180
days of their filing.
USDA re-established the program complaints investigation unit in
the Office of Civil Rights. The unit is working with the Department of
Justice, the White House and the Federal Courts in an effort to resolve
the class action suit filed by the Black farmers late last summer.
Of the 2,091 employee complaints that were active on January 1,
1997, nearly half--905--have been resolved, and we have closed another
10 cases filed since then.
USDA has established a new position within the Office of the
General Counsel--the Associate General Counsel for Civil Rights--to
provide additional legal resources needed to assist with resolution of
future program and employee complaints in accordance with civil rights
laws.
Agency Heads are being rated each quarter on their civil rights
accomplishments by the Assistant Secretary for Administration. All
managers and employees from the Subcabinet to the field level will be
held accountable for civil rights. Allegations of reprisal and abuses
of power by USDA employees will be immediately investigated, and where
the allegation appears meritorious, the official will be removed from
managerial duties pending full investigation. Disciplinary action will
be taken against any manager found guilty of reappraisals against any
USDA employee or customer.
In April 1997, USDA halted all pending foreclosures of USDA farm
loans until a review of each case could be made. An independent review
team in Washington, D.C. reviewed 3,148 pending foreclosures. We halted
actions in 116 cases, pending investigations of possible civil rights
violations. USDA has now directed each state to appoint a diverse Civil
Rights Independent Review group, representative of the state's
population, to review each case and future cases to determine if
discrimination or inequitable treatment contributed to the failure of
each farming operation.
On August 22, 1997, the Office of Outreach was established to
provide Department-wide leadership and coordination to assure that all
eligible customers have access to USDA programs and services and to
administer the Socially Disadvantaged Farmers Outreach Program.
Authorized by Section 2501 of the Food, Agriculture, Conservation, and
Trade Act of 1990, the program is designed to assist socially
disadvantaged farmers and ranchers to participate in USDA programs and
be successful in their operations by providing outreach and technical
assistance. The 1999 budget proposal would provide $10 million for this
program in direct funds, an increase of $7 million, rather than
continuing to rely upon additional funding from the Fund For Rural
America.
A 30-member National Commission on Small Farms has made
recommendations to Secretary Glickman for a national strategy for small
farms and ranches that will help ensure economic viability and address
the rapid decline in the numbers of minority farmers and ranchers. The
Deputy Secretary will head a task force to implement the Commission's
recommendations.
USDA has instituted new human resources management hiring,
retention, promotion, and training policies for employees to help
prevent workplace conflicts, disputes, and problems before they occur.
A new Conflict Management Unit has been designed to address conflict
early and pro-actively. Managers will be held accountable for managing
workplace conflict. The goal is to address workplace disputes before
they become disciplinary actions, grievances or EEO complaints.
These reforms will benefit both customers and employees in reduced
conflict, a more productive workplace, better morale and working
relationships, more effective programs, better management, better
service to customers and employees, increased productivity and more
efficient operations throughout USDA.
Several legislative proposals were introduced by Congress last year
to effect legislative changes needed to implement some of the CRAT
Report recommendations. Most of the issues were addressed by
Congresswoman Eva Clayton of North Carolina in her legislation, H.R.
2185. The Department is working on a legislative proposal for civil
rights initiatives that would modernize the Farm Service Agency state
and county committee system, improve access to credit, reconstitute the
lease back/buy back programs, and help ensure equity in funding for
minority-serving educational institutions.
sustaining the civil rights changes
Now, I want to tell you about our 1999 budget request. The policy,
oversight, and program changes in USDA's civil rights arena cannot be
sustained unless they are vigorously supported with adequate resources.
The President's 1999 budget request calls for the largest increase in
civil rights funding in two decades to carry out the CRAT
recommendations as well as the recommendations of the National
Commission on Small Farms which support our civil rights agenda. In
total, USDA is requesting about $250 million for civil rights-related
activities that would increase farm ownership and operating loans;
increase loans and grants to construct housing for the Nation's farm
workers; support an integrated research, extension, and education
competitive grants program for new technology adoption and transfer to
small farms; eliminate disparities in funding and enhance the
Department's efforts with institutions of higher education that are
primarily devoted to the needs of minority students; and improve
outreach and technical assistance to socially disadvantaged farmers and
ranchers through a substantial increase in the Section 2501 outreach
program.
Departmental Administration staff office activities will account
for nearly $18 million of USDA's 1999 civil rights initiative. These
funds will support additional staffing to improve personnel services
and assistance to USDA agencies, including ethics compliance; improve
outreach to USDA customers including support for the new USDA Office of
Outreach that will ensure that all customers, especially under-served
populations, have full access to USDA programs and services; enhance
management-employee relations that support early resolution of employee
grievances and conflicts within USDA; and ensure that a backlog of new
program complaints does not develop because we are doing nothing to
prevent new instances of discrimination.
The increased funding will be used to improve civil rights
personnel oversight, training and services to USDA agencies to correct
management and program practices that resulted in the Department's past
poor civil rights performance. The funds would also be used for
outreach to USDA customers, institutions and businesses. They would
support outreach to under-served farmers and ranchers; increase
opportunities for small and disadvantaged businesses to participate in
USDA contract and program activities; and accelerate outreach to 1890
and 1994 Institutions and Hispanic-serving institutions by providing
the opportunity to convey excess federal property to them. A conflict
prevention and resolution unit will be established to prevent
management-employee relations from reaching complaint status that will
negatively impact USDA services and internal operations.
other 1999 budget initiatives
A portion of the increased funds will be used to establish a Health
Unit for USDA employees at the new Beltsville complex, and to support
the Secretary's breast-feeding mothers initiative for nursing mothers
at Headquarters and Beltsville by providing adequate space, furnishings
and medical supervision. An increase for the Office of Administrative
Law Judges will be used to hire an additional law judge to meet
projected workload requirements. Finally, $1.9 million of the proposed
increase is needed for ongoing Departmental Administration activities
that were reduced by more than 20 percent in the 1998 appropriation. A
permanent funding reduction of this magnitude cannot be absorbed
without a reduction-in-force to meet the payroll, and will reduce
services to a caretaker role. It is important to keep in mind that
these activities provide basic support essential for the new civil
rights initiatives proposed in the Departmental Administration budget.
fiscal year 1998 supplemental budget request
The President has proposed a $4.8 million fiscal year 1998
supplemental to ensure that the high priority activities supporting the
CRAT report's recommendations and the administrative support units
which make these reforms happen can be sustained in fiscal year 1998.
Of this amount, $2.4 million will be used to accelerate by six months
implementation of the Departmental Administration CRAT recommendations
proposed to be fully implemented in fiscal year 1999; $500,000 will be
used to establish a no year fund for a new Civil Rights Advisory
Committee; and $1.9 million will be used to partially restore the civil
rights related operating base of Departmental Administration activities
which were reduced in the 1998 appropriation to fully establish the
program complaints investigations unit. This supplemental request will
be offset by proposed rescissions in ten USDA agencies.
agriculture buildings and facilities and rental payments
The 1999 Budget request for Agriculture Buildings and Facilities
and Rental Payments of $155,689,000 is a net increase of $24,711,000
above the adjusted 1998 level. This increase includes an increase of
$9,564,000 for rental payments to GSA and $18,505,000 for the
continuation of the USDA Strategic Space Plan which is based on
projected reductions in staff levels. These increases are partially
offset by a decrease in operations and maintenance of current
facilities and by a one-time reduction in relocation expenses.
usda strategic space plan
I would like to thank the Congress for its past support and ask for
your continued support of our efforts to reduce costs associated with
housing our employees. Through the long term Strategic Space Plan, we
will consolidate USDA Headquarters into two Government-owned locations
which will provide modern and safe facilities and enhance USDA
operations. This plan consists of two major projects--the Beltsville
Office Facility and the modernization of the South Building. In fiscal
year 1998, the funding level for the plan is $5 million. In fiscal year
1999, we are requesting an increase of $18.5 million for a total of
$23.5 million to continue the South Building modernization including
the construction of Phase 2, wing 4, and related costs for design of
Phase 3. In the fiscal year 1998 request, the Administration proposed a
one-time reduction from $23.5 million to $5.0 million to ensure that
the budget and program operations were coordinated and so that program
funds were requested when they were actually needed. The fiscal year
1999 request represents a restoration of funding for the strategic plan
to the fiscal year 1997 level.
The Beltsville Office Facility, now substantially completed, is
located on Government-owned land at the Beltsville Agricultural
Research Center in Maryland. This facility has been designed as a low-
rise campus of four buildings with 350,000 gross square feet capable of
housing up to 1,500 employees. Construction of the Beltsville Office
Facility was begun in June 1996 by Tompkins Construction. As of January
1998, the buildings are being occupied. Work is continuing to fit out
and occupy the new space. The agencies selected to house some of their
staff in the facility include the Office of the Inspector General, the
Agricultural Research Service, the Food Safety and Inspection Service,
the Natural Resources Conservation Service and some Departmental
Administration staff.
The 61 year old Agriculture South Building, which is eligible for
listing on the National Register of Historic Places, is in dire need of
repair and renovation to make it safe, efficient and functional. The
required renovation work includes fire protection systems; abatement of
hazardous materials such as asbestos, PCB light fixtures and lead
paint; replacement of old, inefficient heating ventilation and air-
conditioning systems; improved accommodations for disabled persons; and
accommodation of modern office telecommunications systems. The current
plan is to modernize the building in eight primary phases and to
consolidate USDA agencies into the modernized areas as each
construction phase is completed.
We are now making great progress on the modernization of the South
Building. The first phase, which includes reconstruction of Wing 3, is
about to begin. The design for Phase 2 is underway, and a construction
contract is planned to be awarded in fiscal year 1999 if our fiscal
year 1999 budget is approved. By the end of the South Building
modernization project, USDA Headquarters offices will be consolidated
into two government-owned locations, the Beltsville facility and the
downtown Headquarters Complex. This will reduce our reliance on leased
space, which will result in considerable savings.
buildings operations and maintenance
We are requesting a net decrease of $658,000 for Buildings
Operations and Maintenance in fiscal year 1999. The request includes an
increase of $667,000 and three full-time staff and associated costs to
provide operations at the new Beltsville Office Facility for a full
year; an increase of $450,000 to fund contract price increases
determined by the Department of Labor, the Fair Labor Standards Act and
the Service Contracts Act; and an increase of $216,000 for pay cost and
related retirement costs. These increases are offset by decreases of
$1,000,000 for one-time security upgrades identified in the Department
of Justice assessment of vulnerability in U.S. Federal office buildings
and funded in 1998, and $991,000 for operating reductions.
hazardous waste management
The safe disposal of hazardous waste is a challenge we must meet.
We are now paying the cost of cleanups associated with environmental
problems caused by past disposal at our facilities including primarily
the activities of others on lands under the jurisdiction, custody, or
control of USDA. Of some 38,000 abandoned and inactive mines, mainly on
Forest Service lands, we currently estimate 1,700 could require
environmental cleanup. Up to 120 inactive or abandoned landfills are
closing or are undergoing evaluation for cleanup. In addition, there
are USDA Commodity Credit Corporation leased grain storage facilities
in communities throughout the mid-west where fumigants may have
contaminated the ground water. USDA is investigating drinking water
wells in these communities to determine whether actions need to be
taken to ensure safe drinking water supplies. Kansas and Nebraska, the
U.S. Environmental Protection Agency, and the Commodity Credit
Corporation are currently working on 42 sites, and have identified an
additional 30 sites that may need cleanup. The Department requests
$15,700,000 for the central Hazardous Waste Management Program under
the Comprehensive Environmental Response Compensation and Liability Act
and the Resource Conservation and Recovery Act. Funding from this
appropriation is allocated to agencies based on priority needs and made
available until expended. The funds will facilitate the cleanup of
abandoned mines and landfills, identify and clean up drinking water
sources, and support other agency cleanup efforts throughout the
Department on a small fraction of sites needing action.
conclusion
This concludes my statement, Mr. Chairman.
Farm Credit Administration
Prepared Statement of Marsha Pyle Martin, Chairman and Chief Executive
Officer
Mr. Chairman, Members of the Subcommittee, I am Marsha Martin,
Chairman of the Board and Chief Executive Officer of the Farm Credit
Administration (FCA/Agency). I will highlight FCA's accomplishments
during the past year, report briefly on the condition of the Farm
Credit System, and present our fiscal year 1999 budget request.
mission of the farm credit administration
The FCA is charged with a highly challenging, increasingly complex
mission: to promote a safe and sound, competitive Farm Credit System
(System) by creating an environment that enables System institutions to
serve rural America as a dependable source of credit and financial
services within the authorities established by Congress. We take this
mission seriously, and it is one we take great pride in fulfilling. In
support of this mission, we operate under a dynamic, and recently
revitalized, strategic plan which focuses our efforts at accomplishing
two major goals.
Our first major goal is to supervise risk in the System for the
benefit of stakeholders.
Our second major goal is to maximize opportunities for the System
to provide competitive and dependable services to agriculture and rural
America.
Within our strategic plan we have developed several comprehensive
objectives and specific actions, each crafted, and continuously
refined, to ensure these goals are met. Embedded throughout our plan is
our commitment to improve customer service, effect clear and candid
communication, produce quality products, and ensure sound financial
institutions thrive to better serve agriculture. This commitment is the
foundation of my operating philosophy for the Agency, and, I hope, Mr.
Chairman, our commitment comes through loud and clearly today in this
proposal to fund the critically important job FCA performs in
regulating the Farm Credit System.
fiscal year 1997 accomplishments
During fiscal year 1997, FCA continued to reduce costs, streamline
operations, improve communication, and lessen regulatory burden. These
successes reflect our efforts to improve operational efficiency and
strengthen communication with our constituencies. I believe we
continued to clearly demonstrate our commitment to effectiveness and
cost efficiency this past year as we reduced Agency full-time
equivalents (FTE's) from 361 to 319, established a new organizational
structure and leadership team, reorganized several offices to better
fulfill our mission, reduced a level of management by eliminating the
regional offices within the Office of Examination (OE), and closed two
field offices. We also continued to exercise effective controls over
Agency spending, as our overall obligations were $2.5 million less than
budgeted for in fiscal year 1997.
I particularly am proud of the fact that we were able to accomplish
significant improvement without compromising our ability to oversee the
safety and soundness of System institutions. Meeting the needs of our
customers, without compromising safety and soundness, will always be
our central focus and our greatest challenge. This delicate balance
requires regulatory approaches which we have become quite adept at
accomplishing.
Mr. Chairman, if I may, let me briefly share with you some more
specifics on our accomplishments during fiscal year 1997.
examination process improvements
We place a high priority on developing increasingly efficient and
innovative examination programs that not only ensure our evaluation
requirements are met, but also result in minimal disruption to the
vital business activities of our customers. Our examinations are
conducted according to risk-based examination principles whereby we
deploy resources based on the level of risk present in an institution's
operation. This risk is continuously evaluated and proactively
addressed. When appropriate, off-site examinations are conducted on
lower risk institutions. Also, beginning with fiscal year 1997, we
implemented an 18-month examination cycle for institutions that meet
specific thresholds for asset size, operations and performance.
Combined, off-site examinations and the 18-month examination cycle
allow us to efficiently use Agency resources and concentrate our
examination presence in higher risk institutions.
During fiscal year 1997, we further enhanced our electronic access
to System information systems and developed a standard method to
electronically warehouse critical examination and System information.
These accomplishments resulted in greater efficiencies through the use
of improved electronic workflow methods. Presently, we are developing a
uniform methodology to identify and respond to deteriorating
performance trends in System institutions. While we are confident we
have accurately identified current risk, we must remain vigilant so we
can respond vigorously, with timely and appropriate action, to any
warning clouds looming on the horizon that could mushroom into a
systemic problem.
enhanced communication
In an effort to further improve communication with our
constituencies, the FCA Board continued to hold annual information
meetings with board chairmen and chief executive officers of System
institutions. These highly productive meetings provide an opportunity
for essential two-way communication on important topics ranging from
the Agency's internal operations to current regulatory issues. FCA
Board members and executives also visited System institutions and other
agricultural organizations to keep in touch with grass roots level
issues. These contacts provide us additional insight into how to direct
our operations in a more responsive, customer-oriented manner. Also
last year, the Agency revised and reissued one of its widely utilized
publications, The Director's Role: Farm Credit System Institutions.
This publication is used by many System institutions as the cornerstone
for their director training programs.
annual performance plan completed
Another major accomplishment this year was development of our first
Annual Performance Plan in accordance with good business practices and
the Government Performance and Results Act of 1993. Our plan depicts
how the FCA will implement initiatives detailed in the strategic plan
and includes specific performance criteria that communicate clearly
what we intend to do and how we will measure the effectiveness of our
performance. The plan identifies the following four key outcomes from
Agency operations:
--Effective Risk Identification and Corrective Action;
--Effective Regulation and Public Policy;
--Effective and Efficient Agency Administration; and
--Effective External Relationships.
These outcomes link directly to the FCA's mission, functions, and
strategic goals and provide a thorough and balanced system of
performance measures to assess the Agency's ultimate effectiveness in
ensuring the safe and sound operation of the System. The performance
measurement system incorporates individual criteria for each FCA office
that rolls up to support the overall Agency-level measures. This will
ensure that the Agency as a whole is pulling together toward the same
goals.
year 2000 preparedness
The most pervasive technological change that will take place over
the next several years will involve the efforts of FCA and Farm Credit
institutions to ensure computer systems correctly interpret dates
associated with the Year 2000. While the parameters of the problem can
be stated simply, its scope is vast, and fixing it may be enormously
time consuming. Problems associated with Year 2000 preparations pose
potentially serious safety and soundness concerns because there is zero
tolerance for late delivery or project failure.
The Agency views Year 2000 preparations with great seriousness, and
we have placed a high priority on remediation of the problem by
requiring each System institution to develop an action plan that will
ensure business continuity for critical systems when the next
millennium begins. Presently, we are analyzing each System institution
to accurately assess what degree of exposure exists as a result of the
millennium date change. This assessment will enable us to identify high
risk System institutions early enough so that appropriate corrective
action can be implemented.
In respect to our internal operations, the FCA Board last month
approved a plan that details how the Agency will assess Year 2000
potential problems, including a comprehensive process to become Year
2000 compliant. Over the past three years, we completed implementation
of a network operating system that is warranted as Year 2000 compliant.
Throughout the process, our programmers have taken the required steps
to accommodate the millennium change for the custom applications that
run on the new system. This year we will run the final tests needed to
assure ourselves and others that systems and applications will
transition to the next century without adverse impact on their
availability, integrity, or confidentiality. We are confident that all
our systems will pass the testing process.
client/server migration implemented
We have moved aggressively toward full implementation of a client/
server computer architecture as the foundation for applying technology
to improve Agency operations. This technology permits easier access to,
and use of, information needed to accomplish our mission. It will
enable us to streamline the examination process, enhance efficiency and
effectiveness, and share information more quickly among headquarters
and field staff.
regulatory burden minimized
The FCA Board has legal authority to establish policy and interpret
the Farm Credit Act to ensure System institutions comply with the law
and operate in a safe and sound manner. Our objective is to promulgate
only those regulations needed to implement the law or achieve safety
and soundness goals while minimizing regulatory burden on the
institutions we regulate. Fiscal year 1997 was an active regulatory
year for the Agency in which we clarified safety and soundness
requirements in several areas. We also eliminated, or proposed for
elimination, several Agency prior-approval requirements and deleted
several obsolete regulatory provisions identified through public
comment or internal Agency review. On a continuing basis, staff provide
recommendations to address unnecessary policies, regulations,
bookletters, and other forms of guidance.
Currently, we are clarifying Agency requirements and expectations
in the System's young, beginning, and small (YBS) farmer program.
Available data indicates that the System provided nearly $6 billion of
credit to almost 113,000 farmers categorized as young, beginning, and
small during 1996. This is about 13 percent of total System loan volume
and about 19 percent of their total number of loans. While the numbers
are impressive, as the complexities of farming multiply and the capital
requirements to enter farming escalate, the Agency must ensure the
System's commitment to fund the next generation of farmers does not
falter. Presently, Agency staff are drafting a FCA Board policy
statement on providing service to YBS farmers to enhance existing
System programs and safely ensure credit is available. Additionally, we
are reviewing the continued appropriateness of current definitions and
will revise reporting requirements for the YBS farmer program to ensure
reporting is consistent with how other financial entities report their
data.
lawsuit dismissed
Recently, the Independent Bankers Association of America and the
American Bankers Association lawsuit challenging the authority of the
FCA Board to revise the 25-year-old rules under which System
institutions make loans to eligible borrowers was dismissed by the
United States District Court for the District of Columbia (Court). In
dismissing the suit, the Court noted that the Agency had adopted the
new customer regulations in a thoughtful, reasoned manner, taking care
to consider the concerns of the affected parties during the notice and
comment period. The customer rule, coupled with new capital standards
we established for System institutions, may be our most significant
accomplishments of the decade. Together, they ensure strong financial
standards and a continuing, competitive source of credit for
agriculture and rural America.
We are extremely disappointed that the bankers' associations
decided to appeal the Court's ruling. We consider it unfortunate they
have chosen to expend more resources to challenge such a strongly
stated Court opinion on this matter.
condition of the farm credit system
FCA activities ensure System institutions exercise safe and sound
banking practices and that they comply with the law and regulations. We
are proud of our performance in carrying out the Agency's activities,
and we are satisfied with the continued progress the System has made in
strengthening its financial condition and improving its operational
practices.
Mr. Chairman, I am pleased to report that the Farm Credit System
continues to operate on a safe and sound basis with further improvement
noted in all key financial and operational areas. During 1997, its
earnings reached $1.3 billion, a slight improvement above 1996 results.
System capital increased to $11.6 billion at the end of 1997 and
represented 14.8 percent of total assets. Total capital was 14.1
percent of total assets at yearend 1996. The quality of System assets
also continued to improve. Nonperforming assets decreased by $115
million during the year and comprised only 1.4 percent of total loans
and other property owned at the end of 1997. Overall loan volume
climbed by $2.3 billion during the year.
The strengthened financial condition of the System is further
reflected by improved CAMEL ratings--the Agency's evaluation of an
institution's capital, asset quality, management, earnings, and
liquidity. With a number 1 being the best rating, the percentage of
System institutions rated 3, 4, or 5 dropped from 26 percent at the end
of 1993 to only 2 percent on December 31, 1997. The number of System
institutions under enforcement action also declined substantially, from
49 at yearend 1993, to 5 at yearend 1997. These 5 institutions
accounted for less than 4 percent of the System's total assets, as
compared with nearly 40 percent of the System's total assets at yearend
1993.
federal agricultural mortgage corporation
FCA has oversight responsibility for the Federal Agricultural
Mortgage Corporation (Farmer Mac). After becoming profitable for the
first time in 1996, Farmer Mac recorded a net profit of $4.6 million
for the year ended 1997. Farmer Mac also had a successful stock
subscription, increasing its capital to nearly double the $25 million
required by law. Although these are encouraging signs, we recognize
that additional growth in Farmer Mac's core business is needed for it
to become a key factor in agricultural finance.
During 1997, FCA implemented provisions of the Farm Credit System
Reform Act of 1996 (Reform Act) by approving final regulations to
govern a Farmer Mac conservatorship or receivership and began work on
risk-based capital standards, as required by the Reform Act. Also, in
coordination with the Treasury Department, FCA monitors the operations
and the financial condition of Farmer Mac and provides periodic and
timely reports to Congress.
fiscal year 1999 budget request
Mr. Chairman, we are very proud of our accomplishments as the
safety and soundness regulator of the Farm Credit System and of our
ability to contain costs while fulfilling our mission. I assure you,
Mr. Chairman, during fiscal year 1999 we will continue with our
commitment to effectiveness and cost-efficiency, and we will regularly
review how further progress can be made in meeting this objective.
Mr. Chairman, before I present the budget request, I respectfully
bring to the Committee's attention that FCA's administrative expenses
are paid for by the Farm Credit System institutions FCA regulates. FCA
does not receive a Federal appropriation, but instead is funded through
annual assessments of System institutions. I would also point out that
FCA has not requested a budget increase in the prior four years. In
fiscal year 1995, our budget request remained the same as it was for
1994. In the three fiscal years following 1995, our budget request
averaged a 5 percent reduction from each previous year for a total
reduction of nearly 15 percent since 1995.
For fiscal year 1999, I propose a budget of $35.8 million. This is
a $1.4 million increase, or about 4 percent, above the $34.4 million
requested for fiscal year 1998 operations. Most of the increase is for
salary and benefits for the FCA staff. In addition, our plan calls for
7 additional examiners in the field.
Our fiscal year 1999 budget request supports a staffing level of
318 FTE's. This proposed staffing level will maintain a ratio of 4.3
staff per billion dollars of System average earning assets and give FCA
the right mix of positions and skills to implement our strategic plan
and accomplish the Agency's mission. Please note, Mr. Chairman, the
proposed FTE level remains substantially below the Office of Management
and Budget's established target of 408 FTE's by fiscal year 1999 for
FCA, and represents nearly a 30 percent reduction from the 450 FTE's we
were authorized for fiscal year 1993.
Mr. Chairman, we welcome any questions the Subcommittee might have.
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 1999 budget request for
the National Appeals Division.
introduction
The National Appeals Division (NAD) was established by the
Secretary's reorganization Act of 1994. The Act consolidated the
appellate functions and staffs of several USDA agencies to provide for
hearings of appeals from adverse agency decisions, and review of appeal
determinations by a director. NAD appeals currently involve program
decisions of the Farm Service Agency, Risk Management Agency, Natural
Resources Conservation Service, Rural Business-Cooperative Service,
Rural Housing Service, and Rural Utilities Service. NAD is
headquartered in Alexandria, Virginia, and has regional offices located
in Indianapolis, Indiana; Memphis, Tennessee; and Lakewood, Colorado.
NAD's staff of 130 includes over seventy hearing officers nation-wide.
mission
Our mission is to correctly determine appeals arising from the
program operations of assigned agencies. That is, our mission is to
issue timely and accurate determinations that recognize the rights of
program participants and promote the lawful operations of agency
programs. Our mission supports the USDA Strategic Plan Goals 1.1,
Enhance the economic safety net for farmers and ranchers, 1.3; Provide
access to capital and credit to enhance the ability of rural
communities to develop, grow, and invest in projects to expand economic
opportunities and improve the quality of life for farm and rural
residents; and 3.1, Promote sustainable production of food and fiber
products while maintaining a quality environment and strong natural
resource base.
fiscal year 1999 budget request
NAD is requesting $13,297,000 in direct appropriations for fiscal
year 1999. This request represents an increase of $1,579,000 over the
fiscal year 1998 appropriation. The increase is comprised of $271,000
for pay costs, $24,000 for an increase in Agency contributions for
employees covered under the Civil Retirement system, and the remainder
for two initiatives. The first initiative is completing the development
and implementation of a nationwide Management Information System (MIS)
($695,000), which conforms to Year 2000 requirements and replaces a
system which only supported the former FmHA National Appeals Staff
operations. During fiscal year 1998, NAD began work on phase one of the
MIS, which is the development and implementation of a case tracking
system. This system is designed to provide information on all case
activity such as the number of requests for a hearing, the type of case
being adjudicated, length of time being adjudicated, and the
disposition of appeal determinations on review. It is critical to NAD
to be able to track an appeal as it proceeds because of legislative
time frames. This one-time increase will provide the necessary funding
for system development and training to complete phase two of the MIS,
which is an administrative system. The administrative system is
designed to provide information to aid management in accomplishing the
goals and objectives stated within our Strategic and Annual Performance
plans, and to enhance the delivery of NAD services to program
participants. Reliable information on appeal rights, as well as public
access to historical records of prior NAD decisions are service
enhancements we intend to accomplish. The enhancements specifically
impact farming communities, agribusiness, and the general public. The
purpose of this initiative is to capture relevant financial and non-
financial information for use in analyzing the efficiency,
effectiveness, and results of NAD operations, and to disseminate
information to the public regarding NAD's appeal process and how to
participate in it.
The second initiative is for training ($589,000). The operating
environment for NAD is dynamic because of the wide range of programs
subject to NAD adjudication, and the changes in such programs which
give rise to new and complex issues. NAD hearing officers issue
decisions arising from agency programs that include; administrative
off-sets pursuant to the debt collection laws; drought and disaster
assistance; farm ownership loans; home ownership; conservation reserve
programs; emergency loans; environmental programs under the
``swampbuster'' law; production flexibility contracts; rural rental
housing loans; and multi-family housing projects among others. In order
to make fair and equitable determinations, NAD hearing and review
officers must possess not only a broad, in-depth knowledge of many
program areas, but be aware of USDA policies, administration, ethics,
and civil rights. It is critical that NAD maintains a well trained work
force because the decisions NAD issues directly affect the quality of
life for farm communities and other rural areas as well as the nation's
environment, and directly impact the operation of agency programs.
Decisions that are factually accurate and complete, legally correct,
and rendered in a timely manner provide results that enable appellants
to fully and fairly participate in agricultural programs which are
efficiently and effectively managed. Continuous training and
development is essential to providing the public competent and fair
service which recognizes the rights of program participants and
promotes the lawful operation of USDA programs. We expect these
initiatives to improve the quality of service provided to rural and
farm communities throughout the United States, as well as our customers
within the federal government from Congress, to agencies within USDA.
conclusion
Our mission is statutorily specific, but it is filled with complex
challenges arising out of changing laws and policies. The opportunity
that NAD makes available to the public is an opportunity for a review
of an adverse decision made by a USDA agency, before an impartial
hearing officer, and if requested, the opportunity for a review of the
hearing officer's decision. Simply put, if a participant in one of
USDA's programs is denied benefits by a USDA agency, that person has
the right to have the denial reviewed by an impartial hearing officer.
Further, there is a right to have the hearing officer's decision
reviewed by the Director of NAD. The appeals process in NAD is a cost
effective service for program participants to have their adverse
decision adjudicated in a timely manner without incurring a lengthy,
costly judicial proceeding. The initiatives in NAD's fiscal year 1999
budget will ensure that NAD meets its mission requirements in a more
efficient and effective manner. They provide the necessary groundwork
for accomplishing USDA strategic goals as well as the goals and
objectives outlined in NAD's strategic and annual performance plan.
More importantly, these initiatives provide farmers, ranchers,
cooperatives, agencies, and other groups with an avenue to a fair and
equitable adjudicative process. More detailed information regarding
these budget initiatives is contained within our Explanatory Statement.
That concludes my statement, and I am looking forward to working with
the Committee on the 1999 National Appeals Division budget.
Office of the Chief Economist
Prepared Statement of Keith Collins, Chief Economist
This statement discusses the functions and fiscal year 1999 budget
request of the Office of the Chief Economist.
OCE is a small staff of analysts located in Washington, D.C.,
although a weather office staffed by one person will begin operation
during 1998 in Mississippi. OCE reports directly to the Secretary of
Agriculture and 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 also coordinates
several activities that cut across USDA mission areas, including
sustainable development and agricultural labor.
OCE has 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.
Examples of key activities during the past year are:
Supporting agency program and policy decisions.--OCE works with
other agencies to assess program options and guide effective
Departmental decisionmaking with respect to key program provisions. For
example, OCE participated in a task force convened by the Secretary to
develop the rules and selection procedures for the Conservation Reserve
Program as authorized by the 1996 Farm Bill. OCE has participated in
the process to determine maximum permitted rental rates, evaluate bids,
and assess the impacts of accepted acreage on commodity markets.
OCE has been deeply involved in coordinating analysis of a variety
of dairy issues. OCE led USDA's monitoring effort on the Northeast
Interstate Dairy Compact. OCE also chaired USDA's Interagency Dairy
Analysis Team which coordinated the analysis of the Agricultural
Marketing Service's proposed rule for Federal Milk Marketing Order
consolidation and reform. This analysis led to significant changes in
the options presented for public comment.
OCE continues to assist the Animal and Plant Health Inspection
Service--APHIS--in verifying compensation claims for producers,
handlers and others adversely affected by the Federal quarantine
established for the eradication of Karnal Bunt.
OCE developed and analyzed models of the Standard Reinsurance
Agreement (SRA) to assist the Risk Management Agency--RMA--in their
1998 SRA negotiations with the crop insurance industry. The models were
used to analyze the budget implications and industry rates of return of
various reinsurance proposals, including reinsurance for catastrophic
and revenue products.
OCE coordinated Departmental analysis of the proposed settlement
between tobacco companies and State Attorneys' General. The analysis
examined the effects of the settlement on tobacco leaf production and
producer income.
OCE continued to play a major role in the Department's efforts to
understand and address structural issues. Follow-up activities
continued with respect to the Secretary's Advisory Committee on
Concentration in Agriculture, with a series of programmatic changes
developed and expected to be announced during the first half of 1998.
OCE participated in the advisory team that assisted the Grain
Inspection, Packers and Stockyards Administration in its efforts to
reorganize in order to more effectively conduct market review and
investigations on uncompetitive practices and the effects of market
structural changes.
Agricultural Market Analyses.--The 1997/98 marketing years for
commodities have witnessed a continuing adjustment to the record and
near-record prices for many commodities during the prior year. OCE
briefed the Secretary many times on the market developments, including
the large increase in meat supplies, low pork prices and lower-than-
expected beef prices; the initial decline and then recovery in milk
prices during 1997; and the large 1997-crop production increases and
reduced prices, particularly for wheat.
OCE helped organize a Departmental team to assess the effects on
agriculture and rural areas of the currency devaluations occurring
during 1997 in southeast Asia and in South Korea. These analyses were
used to keep the Secretary up to date and support USDA forecasts for
total agricultural exports and commodity forecasts reported in the
World Agricultural Supply and Demand Estimates report.
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 on the
consequences of estate and capital gains taxes for producers and on
price and income variability facing producers under the new farm bill.
In late 1997, OCE also testified on economic outlook for agriculture.
In addition, the Chief Economist frequently appeared before Congress
with the Secretary, Deputy Secretary or others on issues ranging from
the USDA budget, dairy issues, trade and climate change.
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, since late 1997, OCE
has increasingly coordinated the Department's response to requested
information on the effects of global climate change. OCE represented
the Department in the development of the National Ambient Air Quality
Standards issues during 1997. OCE chairs the Capper-Volstead Committee
which responds to requests related to permissible activities of
cooperatives. OCE responded to many requests for rapid analysis of
issues such as the effects of El Nino; the rail mergers and performance
of the rail industry; monitoring of the Northeast Dairy Compact; and
the dairy options pilot program.
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 represents the
Department on the United Nations Methyl Bromide Task Force. OCE also
participated in the proposal reviews for the Fund for Rural America and
provides staff support to the Secretary's Special Assistant for Trade.
Regulatory Review and Clearance.--The immediate office staff
reviews and clears regulatory impact analyses of USDA regulations.
During fiscal year 1997, OCE reviewed and cleared approximately 40
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
rulemaking efforts this past year ranged from the Federal milk
marketing order reform to organic certification, Argentine beef
imports, the livestock disaster program, peanuts, tobacco, Karnal bunt
and the WIC program.
Agricultural Labor.--OCE fulfills the statutory mandate to consult
with the Attorney General and the Department of Labor--DOL--with
respect to the H-2A temporary agricultural worker program. OCE also
consults with DOL, the Environmental Protection Agency, and the
Immigration and Naturalization Service on other issues affecting
agricultural workers. OCE staff was active with the agricultural worker
issues of USDA's Civil Rights Implementation Team and has been
assisting a consortium of California organizations in developing a
Welfare-To-Farm work initiative.
Sustainable Development.--OCE coordinates sustainable development
activities within USDA. This is done chiefly through USDA's Council on
Sustainable Development, chaired by the Director of Sustainable
Development, which develops, coordinates, and integrates the principles
of sustainable development into policies and programs across all
mission areas of the Department. During the past year, the Council has
focused on removing credit and crop insurance obstacles hindering use
of sustainable development practices and identifying sustainable
development research needs. The Director advises the State Department,
Foreign Agricultural Service--FAS--and others on sustainable
development issues for negotiations, treaty formulation and
implementation, and trade discussions. The Director led the USDA
delegation to the meetings of the United Nations' Commission on
Sustainable Development, which is now focusing on irrigated land
resources for the year 2000 meetings. The Director participated with
FAS in preparing for meetings on sustainability for the Summit of the
Americas and development of the U.S. Action Plan on Food Security, the
follow-up to the World Food Summit. The Director serves as liaison to
the President's Council on Sustainable Development (PCSD) and helped
organize the September 1997 meeting with the city of Tulsa, Oklahoma
and the Kerr Center for Sustainable Agriculture, which dealt with water
quality in the Tulsa watershed. The Director also serves with the
PCSD's Metropolitan and Rural Strategies Task Force.
world agricultural outlook board--waob
The WAOB prepares world agricultural and weather assessments and
coordinates USDA's work related to agricultural outlook, projections,
weather, and remote sensing. The Board, with a staff of twenty-five,
issues a monthly publication known as the World Agricultural Supply and
Demand Estimates report and oversees long-term USDA forecasts required
for preparation of the Federal budget. The Board also operates and
manages the Joint Agricultural Weather Facility--JAWF--in cooperation
with the National Oceanic and Atmospheric Administration--NOAA, and is
home to the Department's Chief Meteorologist. In addition, it provides
technical assistance and coordination for USDA's remote sensing
activities.
Coordinating USDA Economic Forecasts.--The WAOB plays a critical
role in assuring that the Department's commodity information system
responds to today's rapidly changing world. The Board's mission is to
ensure that USDA's intelligence on domestic and foreign agricultural
developments is timely, accurate, and objective, and to speed the flow
of that information to producers, consumers, and policy makers.
One of WAOB's primary functions is to coordinate and review all
USDA forecasts and analyses of foreign and domestic commodity supply
and demand conditions. USDA's Interagency Commodity Estimates
Committees are chaired by staff of the WAOB. The purpose of these
committees is to assure that sound information from domestic and
international sources is fully integrated into the analytical process
and that USDA's economic forecasts are objective, thorough, and
consistent. The committees, with representatives from the Economic
Research Service, Farm Service Agency, Foreign Agricultural Service,
Agricultural Marketing Service, and WAOB, are responsible for
developing official estimates of supply, utilization, and prices and
reviewing economic reports issued by USDA agencies. In fiscal year
1997, the Board reviewed and approved for release approximately 200
such reports.
Each month, the WAOB publishes the World Agricultural Supply and
Demand Estimates (WASDE) report, which forecasts production, trade,
utilization, prices, and stocks. Coverage includes U.S. and world
grains, oilseeds, and cotton and U.S. livestock and poultry products
and sugar. Release is simultaneous with the U.S. Crop Production
report. WASDE is internationally viewed as a benchmark for agriculture
and provides timely knowledge of world commodity markets that is
increasingly critical to our export-led farm economy. Equally
important, the WASDE report gives early warning of changing crop
production and supply prospects in the United States and in other
countries.
Oversight of Long-Term USDA Commodity Projections.--WAOB chairs the
Department's Interagency Agricultural Projections Committee that
oversees preparation of long-term projections for farm commodities, the
U.S. agricultural economy, and world agricultural trade. The Economic
Research Service has the lead role in preparation of the projections.
WAOB's role is to ensure a strong multi-agency effort and sound
analytical procedures for the projections. The projections are used for
a variety of analytic and mandated functions of the Department, such as
preparing the USDA portion of the President's budget. These
``baseline'' projections provide an objective, rigorous, and thorough
view of the likely path of the farm sector over the long term.
The most recent set, Agricultural Baseline Projections to 2007, was
publicly released in February 1998 at the Department's annual
Agricultural Outlook Forum. The projections indicate that the economic
crisis in Asia will have a limited negative impact on the longer term
positive trends in world food consumption and agricultural trade. The
projections also point to favorable long-term trends in U.S. farm
prices and income.
The annual USDA Agricultural Outlook Forum, conducted under OCE's
leadership, is a public meeting on farm, food, and trade prospects. To
provide a stronger programmatic foundation for the Forum, the Chief
Economist invited the Agricultural Marketing Service, Animal and Plant
Health Inspection Service, Grain Inspection, Packers and Stockyards
Administration, Natural Resources Conservation Service, and Risk
Management Agency to participate as co-sponsors in 1998. Per-agency
participation costs were reduced and the event is now enriched with
expertise on risk management, marketing, grain inspection, plant and
animal health, and soil and water conservation.
Outlook Forum 1998, the seventy-fourth annual meeting, took place
in late February 1998. Attendance, topping 1,000, was the highest in
recent years. The program featured a spectrum of issues affecting the
future of agriculture, discussed from many vantage points. In addition
to near-term and long-range agricultural prospects, topics ranged from
new organic food standards to the impacts of biotechnology and
environmental regulation. Speakers were drawn from farming,
agribusiness, environmental groups, government, and academia. Extensive
media coverage and posting of speeches on the Internet shortly after
the Forum ensured the timely dissemination of information presented.
Monitoring Weather Impacts on Agriculture.--USDA places a high
priority on incorporating weather-based assessments into all analyses.
The focal point for this activity is the Joint Agricultural Weather
Facility (JAWF). JAWF staff continually monitor global weather and
assess its probable impact on agricultural output. JAWF briefings,
reports, and special alerts are key inputs to the development of USDA
crop yield estimates for both competitor and customer countries. JAWF
weather assessments are made available to the public through the Weekly
Weather and Crop Bulletin, the WAOB home page, and the news media.
During the 1996/97 winter and early spring months, unusually heavy
snow cover raised concerns about U.S. spring planting conditions. JAWF
staff cautioned that such conditions would not necessarily cause long
planting delays by showing that 1969, an analog year, experienced a
similar pre-season weather but turned out ``normal.'' During the
winter, high precipitation and flood potential in the pacific Northwest
and California were closely tracked. To assess the probably impact of a
freeze episode which occurred in Mid-January, JAWF analysts assembled
data from sources along the Gulf Coast and in southern Florida. These
alternate sources were needed because of data losses associated with
budget cuts at the National Weather Service.
The Chief Meteorologist and the JAWF staff briefed government
officials and media on the agricultural impacts of spring floods in the
upper Mississippi River basin. WAOB's Remote Sensing Coordinator
obtained imagery of spring flooding along the Red River in North Dakota
and Minnesota and along the Ohio and Mississippi River. Through an
arrangement with the National Imagery and Mapping Agency and Radarsat,
WAOB enabled the Natural Resources Conservation Service, Agricultural
Research Service, Foreign Agricultural Service, Forest Service and
National Agricultural Statistics Service to obtain a complete set of
flood imagery for free, a substantial cost savings to the Department.
Disseminating USDA Numbers to the Public.--As commodity prices are
affected less by Government programs and more by market forces, the
need for objective and current market information is becoming
especially critical. The WAOB recognizes the need for rapid information
dissemination and strives to place the WASDE report Weekly Weather and
Crop Bulletin in the hands of farmers and other users as quickly as
possible. The goal is to provide simultaneous access at a minimum cost
to all market participants.
During fiscal year 1997, WAOB began posting the market-sensitive
World Agricultural Supply and Demand Estimates on its home page within
minutes of release, replacing the Department's expiring Computerized
Information Dissemination System (CIDS) as the locus of first release.
Most of the Weekly Weather and Crop Bulletin also is posted each week.
WAOB continues to be a key participant in the management of the
USDA Economics and Statistics System, a website for periodicals and
data bases maintained by Cornell University. In 1997, this site was
selected as a ``Best Library-Related Web Site'' by Library Hi Tech
magazine. Free e-mail subscriptions to crop reports are a popular
feature of the site. The number of e-mail subscriptions to the WASDE
report continued to increase in fiscal year 1997. WAOB and other
partner agencies met with Cornell University staff in December 1997 to
plan future enhancements to the site.
Technical Cooperation with China.--As part of an agreement between
China's State Statistical Bureau and USDA's Foreign Agricultural
Service, WAOB took part in technical exchanges that are yielding
important analytical benefits. China requested USDA's assistance as the
country prepared to execute a comprehensive agricultural census during
1997. A USDA team visited Beijing under leadership of the WAOB
Chairperson to explain the Department's agricultural sampling
techniques and present seminars on near-term and long-term agricultural
prospects. In two return visits, Chinese analysts shared their first
commodity balance sheets for rice and cotton, prepared with help from
the WAOB. The balance sheets provided critical new data for evaluating
USDA's estimates for China.
Understanding TCK Smut.--WAOB meteorologists continued to work with
Agricultural Research Service scientists to develop a scientifically-
based response to China's concerns that TCK smut from imported grain
will spread dwarf bunt disease in China's winter wheat. USDA's position
is that meteorological conditions in China will not support significant
spread of the fungus.
Information Exchange with South Africa.--WAOB took part in an
initiative with South Africa to share weather technologies and data.
Getting better data from South Africa is important because of its role
in world corn trade. A meteorologist of the WAOB's JAWF provided
support at a Binational Commission ministerial meeting in Capetown. He
also accompanied a team of South African scientists to observe
Oklahoma's ``Mesonet'' weather data system, which is under
consideration as an adaptable model for South Africa, and took part in
a return visit to South Africa in February 1998.
Planning Assistance for Colombia.--At the invitation of the
Government of Colombia and Institute for Inter-American Cooperation on
Agriculture, WAOB participated in a two-day agricultural seminar in
Cali, Colombia entitled, ``Visions for Future and Long-Term Planning.''
The WAOB Chairperson presented USDA's long-term baseline projections to
an audience of 250 Colombian agricultural leaders.
Restoring Farm Weather Data.--Recent termination of specialized
agricultural weather services by the National Weather Service (NWS) has
created a gap in weather data needed by agriculture. WAOB has been
leading USDA efforts to revitalize plans for a National Agricultural
Weather Information System, which was initially authorized in the 1990
Farm Bill. In fiscal year 1997, alternatives were developed to achieve
cooperation with NWS and the private sector and link with existing
local agricultural data collection networks.
Southeast Meteorological Position Established.--WAOB obtained
approval to establish a meteorological position co-located at the
Cooperative State Research, Education, and Extension Service site in
Stoneville, Mississippi, recently vacated by the National Weather
Service. The new position will be dedicated to collecting
meteorological data in the Southeast and marks the first step in
development of a USDA National Agricultural Weather Observing Network.
Interagency Initiatives.--WAOB's Chief Meteorologist represented
the Department in a number of climatic activities, including liaison to
the Office of the Federal Coordinator for Meteorology and the World
Meteorological Organization. The Chief Meteorologist supported USDA's
Deputy Secretary in his role as co-chair of the Western Drought
Coordination Council, a cooperative project with the Western Governors
Association. In fiscal year 1997, the Chief Meteorologist helped
organize the Council's first meeting in Albuquerque, New Mexico.
The JAWF worked closely with the National Water and Climate Center
of USDA's NRCS and with NOAA Regional Climate Centers on a Unified
Climate Access Network to provide on-line access to weather and climate
data from a variety of sources. At the request of the World
Meteorological Organization, JAWF staff prepared a training course on
agricultural data management procedures. Plans are afoot for JAWF staff
to present the course to WMO member countries. JAWF has also begun to
put updated sections of its popular handbook Major World Crop Areas and
Climatic Profiles on the Internet, and is working with the U.N. Food
and Agriculture Organization to develop an expanded CD-Rom version
using geographic information system (GIS) technology.
Weather Data Receiver Upgraded.--The National Weather Service now
requires recipients of its data, including the JAWF, to install
compatible hardware and software or purchase NWS data elsewhere at
substantially greater cost. The Office of the Chief Economist obtained
Departmental approval to install a suitable receiving site in Kansas
City, Missouri. Once operational, a customized stream of real-time
meteorological data will be downloaded and made available to all USDA
end-users, free of charge.
Remote Sensing Activities.--As the chair of the Department's Remote
Sensing Coordination Committee (RSCC), WAOB coordinated revision of a
draft Memorandum of Understanding between USDA and the National
Aeronautics and Space Administration (NASA), which was signed by the
Secretary in February 1998. WAOB arranged for more than 20 briefings of
the RSCC on technical and space program issues. WAOB established a
remote sensing web page to enable customers and clients to access all
USDA remote sensing offices and selected imagery products. At present,
WAOB is coordinating USDA inputs for a proposed NASA research
announcement on agricultural remote sensing. Also, WAOB is coordinating
a study being conducted by the Office of Science and Technology Policy
to identify potential agency requirements for remote sensing data from
commercial sources.
1890 Institution Partnership.--WAOB strengthened its relationship
with the University of Maryland at the Eastern Shore (UMES), an 1890
institution. WAOB employed two UMES students as interns. One found
permanent employment with a USDA statistical agency and the second
worked on a application of GIS technology, a burgeoning field. WAOB
conducted an agricultural career seminar for preregistered UMES
students (high school seniors) to introduce them to the work of USDA
and opportunities in agriculture.
office of risk assessment and cost-benefit analyses--oracba
The principal task of ORACBA, with a staff of five, is to promote
effective and efficient USDA regulation of hazards to human health,
human safety and the environment. This is accomplished by bringing
science and management together in policy and regulatory development.
By statute, ORACBA is required to ensure that the analysis supporting a
major rule proposed by USDA includes a risk assessment and a cost-
benefit analysis for mitigation measures that are performed
consistently, and use reasonably obtainable and sound scientific,
technical, economic, and other data. ORACBA serves as a focus in USDA
for developing new methods and approaches to risk assessment for
agriculture related hazards. To accomplish this, ORACBA works with USDA
agencies in coordinating analyses supporting major regulations.
Supporting and Expanding USDA Risk Assessment Capabilities.--ORACBA
programs for training, information resources, analytical support, and
peer review are the primary means for integrating science-based risk
assessment and regulatory impact analysis. For example, ORACBA sponsors
two interagency work groups to coordinate these activities. One, for
food safety issues, is the Interagency Food Risk Assessment Group (I-
FRAG). The other, for ecological and conservation issues, is the
Ecological Risk Assessment Work Group (ERAWG). Both groups are actively
carrying out research on methods and application of methods to hazards
managed by USDA. The groups include representatives for every pertinent
USDA unit as well as members from other government agencies and
industry associations.
ORACBA continues to sponsor monthly seminars, the Risk Forum, which
brings in notable speakers for discussion of technical and scientific
issues relating to food safety, human health and ecological risk
assessment. The ORACBA Newsletter continues to provide an outlet for
further discussion of risk assessment issues within USDA. Circulation
for hard copies has reached 850; all newsletters available through the
Internet.
ORACBA continues to support an interagency Fellowship program
between USDA and FDA, sponsored through the American Association for
the Advancement of Science. This expands our government ties to the
research community to stimulate research in critical areas where USDA
and FDA programs affect human health, safety, or the environment. Two
scientists from the Agricultural Research Service work with ORACBA to
assess food safety risks and examine risk assessment and management for
USDA's conservation programs.
ORACBA has joined the Joint Institute for Food Safety and Nutrition
(JIFSAN) in the development and establishment of a curriculum in risk
analysis. The curriculum will be taught at JIFSAN as summer institutes,
at University of Maryland for semester courses, and at the USDA
Graduate School as short courses. Other colleges and universities will
also have access to these materials, allowing them to offer courses on
their own campus. Tuskegee University is working with USDA and JIFSAN
in developing these course materials.
Conducting Reviews and Supporting Risk Assessments.--ORACBA has
reviewed a number of risk assessments and related activities, both from
within USDA and through its role in interdepartmental review. For
example, ORACBA provided support and technical assistance to FSIS
during the dioxin in chicken episode. ORACBA's input helped develop a
policy which protected consumers while helping identify the dixoins as
from a natural source. ORACBA has worked with the Animal and Plant
Health Inspection Service to develop a policy for animal health
regionalization regulations and will review all risk assessments for
imports brought in under the rule. ORACBA has also advised on the
recently proposed organic rule, the Animal Feeding Operation Strategy
Working Group under the Vice President's Clean Water Action Plan, the
President's Initiative on Fruit and Vegetable Safety, EPA's report to
Congress on mercury in fish, and the interagency development of a plan
to assess the risk of illness due to salmonella in eggs.
fiscal year 1999 budget request
For fiscal year 1999, OCE is requesting $6,173,000 in direct
appropriations. This request represents a net increase of $1,125,000
over the fiscal year 1998 adjusted base. The proposed budget includes
an increase of $131,000 for the annualization of the fiscal year 1998
pay raise and the anticipated fiscal year 1999 pay raise, an increase
of $32,000 for retirement costs, a decrease of $38,000 to achieve the
Streamlining Level in support of the President's Executive Order and
$1,000,000 are for the following items.
(1) A net increase of $219,000 for Modernization of Weather and
Climate Data Acquisition.--This consists of a decrease of $525,000
included in the fiscal year 1998 budget for a one-time equipment
purchase for NOAAPORT telecommunications equipment which was installed
at a central USDA location to serve as a hub for interagency access to
the National Weather Service (NWS) data and products. This was the
first phase of a multi-year modernization initiative.
The increase items include an increase of $410,000 and two staff
years for the Modernization of Weather and Climate Data Acquisition.
The expected outcome is expanded access for USDA to weather and climate
data needed to accomplish USDA's administrative responsibilities and
Congressional mandates related to the impact of weather and climate on
agriculture and the national forests. The NWS is implementing a multi-
billion dollar modernization and restructuring initiative which
includes the adoption of state-of-the-art communications technologies.
The collection, dissemination, and quality control of weather and
climatic data will be accomplished on AWIPS/NOAAPORT equipment, which
was installed during fiscal year 1998. The next phase of modernization
will be to provide staffing and pre-Advanced Weather and Information
Processing System (AWIPS) equipment at strategic sites. The increase
will provide for the purchase of hardware and software necessary to
fully implement operational sites, telecommunications and maintenance,
as well as the hiring of two staff years. The staff will be tasked with
managing the system, hardware and software, maintaining the integrity
of the data network, and utilizing an AWIPS compatible Geographical
Information System package to ensure near real time availability of the
data at all operational sites. The acquisition of AWIPS technology will
also provide USDA with a link to the Unified Climate Access Network
(UCAN), an information delivery system which provides complete and
efficient access to all weather data sources in the United States.
Through UCAN, a wide variety of climate applications that are essential
to USDA will become more readily accessible to weather and climate
analysts in both the public and private sectors.
(2) An increase of $334,000 and four staff years for the National
Agricultural Weather Observing Network (NAWON).--As a result of the
full implementation of NAWON, an infrastructure will be created to
rapidly deliver local level weather and climate data for agricultural
areas to public and private sector users. The data could then be used
for a broad range of analytical purposes. NAWON will link different
agricultural weather data collection networks already in existence,
such as the NWS volunteer ``Cooperative Observer'' (COOP) network
around the Nation; the State and university operated networks such as
the Oklahoma Mesonet and the High Plains Automated Weather Station
(AWS) Network; and the USDA operated networks such as the NRCS SNOTEL
(SNOpack TELemetry) and FS RAWS (Remote Automated Weather Station)
networks. Some new sites in major agricultural areas will also be
established. The effort would be a full partnership between the Federal
and State agencies, extension specialists, agricultural research
scientists, university researchers and the private sector.
This is the second year of implementation of this initiative. The
focus in fiscal year 1999 will be to reestablish access to data that
has previously been collected through the COOP program and to establish
new data collection sites in key agricultural areas. As part of the
restructuring and modernization, NWS has announced plans to eliminate
about three-fourths of the active 12,000 COOP sites. USDA staff will be
placed in strategic locations around the Nation to assist state
climatologists, Regional Climate Centers, and COOP observers in
preserving an accurate and reliable network for agricultural weather
data. Without access to basic weather and climate data for agricultural
areas, the accuracy of their advisories and forecasts is compromised.
In addition, both public and private sector analysis and decisions
concerning agricultural commodity trade and markets, fire weather
management, forest management, ecosystem conservation, assessments of
crop conditions and yield potential, and responses to natural disasters
affecting agriculture, all depend on the availability of this data.
(3) An increase of $255,000 and two staff years for support for the
World Agricultural Outlook Board.--This funding would be used to
support two additional agricultural economists. These analysts would be
assigned lead responsibility for analyzing selected oilseeds and
grains, while providing needed statistical and computer support to the
senior analysts for these commodities. A primary mission of the World
Agricultural Outlook Board (WAOB) is to produce the Department's highly
market-sensitive World Agricultural Supply and Demand Estimates Report.
The Board was designed to be a small staff, consisting of only 25
FTE's, including staff supporting all weather and climate activities.
The commodity marketing analysis core of the Board is comprised of the
Chairperson and six senior level agricultural economists, each of which
chairs an Interagency Commodity Estimates Committee (ICEC) for a major
commodity group, i.e., wheat and feed grains, rice, oilseeds,
livestock, cotton, and specialty crops. The membership of each ICEC
includes representatives from other USDA agencies which contribute
relevant information and expertise to the analytical process. As
originally conceived, the Board was to function primarily as a
coordinating body with strong resident analytical capability.
As commodity expertise within the Department has eroded due to
agency budget reductions and reallocations, the Board's role has
gradually shifted from interagency coordination, as originally
intended, to one of primary responsibility for the situation and
outlook products released by the Department. Increasingly, industry
requests for current market intelligence are being deflected to the
Board from participating agencies. At the same time, support provided
to the Board such as data collection, quality control, and data entry,
have, in many cases, been withdrawn or curtailed by participating
agencies. The ICEC chairpersons now have difficulties filling
information voids and providing the in-depth analyses needed to
generate the quality commodity situation and outlook assessments for
which the Department is renowned worldwide. ICEC chairpersons are
working under enormous pressure, and analytic underpinning of USDA
forecasts is deteriorating. Four years ago, the Deputy Chairperson
position was lost to downsizing and reorganization and the six senior
level ICEC chairpersons function with no backup or in-house analytical
or statistical support.
While numerous factors have caused agencies within the Department
to cut support for commodity situation and outlook work, public and
private sector demands for objective and unbiased analyses have
increased sharply. With the passage of the 1996 Farm Bill, risks
associated with agricultural enterprises have increased. Marketing
alternatives to manage risk have become more, not less important. To
serve its constituency, the Department must not abandon its long-
standing tradition of providing the highest quality unbiased market
information possible. However, at this time, the WAOB is barely able to
maintain the current forecast and projection program and is not likely
to be able to do so in the future without additional resources.
This initiative would help maintain OCE's capability of improving
the U.S. agricultural economy by facilitating efficient price discovery
in agricultural markets by coordinating the release of comprehensive,
consistent, reliable, timely and objective USDA estimates, forecasts,
and projections of commodity supply, demand, and prices.
(4) An increase of $78,000 to support a Risk Assessment Fellows
Program.--The Office of Risk Assessment and Cost-Benefit Analysis
(ORACBA) undertakes a limited number of efforts to develop partnerships
in agricultural risk analysis activities. Experience over the past
years has proven one of the most valuable efforts to bringing
outstanding young scientists to work at USDA for one year. During
fiscal year 1998, ORACBA participated with the American Association for
the Advancement of Science (AAAS) and the Food Safety and Inspection
Service to fund a limited number of fellows who contributed importantly
to food and animal risk analysis projects. During fiscal year 1999, an
increase in risk analysis related to food safety and international
trade in animal products is expected. The annual increase of $78,000
would allow an additional fellow to participate in this young
scientist's program and provide temporary assistance in addressing the
risk analysis program needs. ORACBA would also conduct an outreach
program with universities to promote risk analysis research in support
of USDA program needs. This initiative supports the achievement of
OCE's strategic goal to ensure regulations affecting the public are
based on sound, objective and appropriate economic and risk analyses.
(5) An increase of $98,000 for ORACBA to support the President's
Food Safety Initiative.--The President's Food Safety Initiative cites
six critical elements for a comprehensive and more effectively
coordinated nationwide program to improve the safety of the food supply
and, thereby reduce the possibility that consumers will suffer the
adverse health and economic consequences of foodborne infections. One
of these elements is the development of improved risk assessment
methods for foodborne pathogens. Risk assessment methods help
characterize risks to human health of foodborne hazards and help
regulators make decisions to ensure effective and efficient
interventions for improving public health. This increase would fund
activities in the Office of Risk Assessment and Cost Benefit Analysis
to support the improvement of risk assessment methods for foodborne
pathogens.
The first of these activities is Peer Review--review by independent
scientists and risk assessors of key risk-based methods, programs, and
activities for the purpose of making improvements. For example, a risk
assessment model is currently under development in USDA through
ORACBA's Interagency Food Risk Assessment Group (IFRAG) to consider
microbial risks to beef products from farm to table. It is expected
that this model will be widely useful in Government and industry for
risk-based evaluation of procedures and processes important in beef
production and processing. This model will become part of the risk
assessment capability for the National Food Safety Initiative, as well
as support efforts in international trade of food commodities. Another
example concerns FSIS' use of risk analysis to revise the residue
testing program. The program will develop a risk-based system for
allocation of inspection and testing resources to assure the safety of
red meat. Since the current USDA system for residue evaluation has been
criticized by international trade groups, it is important that the
system under development have peer review to assure adequacy of the
proposed program to support domestic needs and export activities.
The increase would also be used to fund activities to develop
greater expertise in risk assessment research related to food safety
issues, and to assure trained and competent analysts are available to
complete risk analyses, both within and outside USDA. Overall, these
activities will benefit USDA food safety programs, help develop the
analytical capabilities of USDA staff, and enlarge the number of
trained professionals involved in food safety risk analysis. This
budget initiative also supports the achievement of OCE's strategic goal
to ensure regulations affecting the public are based on sound,
objective, and appropriate economic and risk analyses.
(5) An increase of $350,000 for the Commission on 21st Century
Production Agriculture.--The Commission on 21st Century Production
Agriculture authorized by the Federal Agricultural Improvement and
Reform Act of 1996 (Farm Bill), was created to make farm program policy
recommendations to Congress regarding future farm legislation beyond
the year 2001. The Commission is comprised of three members appointed
by the President and eight members appointed by the Chairmen of the
Senate and House Agricultural Committees.
The Commission is to conduct a comprehensive review and assessment
of the success of production flexibility contracts in supporting the
viability of U.S. farming; assess the economic risks to farms
delineated by size; assess the changes in farmland values as a result
of the 1996 Farm Bill; assess the extent to which regulatory relief and
tax relief for agricultural producers is implemented; and assess the
effects of trade embargoes, international trade agreements and export
programs on U.S. agriculture; assess the likely effect of transferring
peanut quotas across State lines; assess the personnel and
infrastructure requirements of the Department of Agriculture necessary
to support the future relationship of the Federal Government with
production agriculture and make specific legislative recommendations to
the Congress in this regard.
Office of the Chief Financial Officer
Prepared Statement of Sally Thompson, Chief Financial Officer
Mr. Chairman and members of the Subcommittee, it is a pleasure to
appear before you today as we present the President's budget proposal
for fiscal year 1999 for the Office of the Chief Financial Officer--
OCFO--and the Department's Working Capital Fund. I would like to
introduce Ted David, the Deputy Chief Financial Officer, Steve
Dewhurst, the Department's Budget Officer, and Constance Gillam, my
budget officer.
Mr. Chairman, the OCFO administers its programs and activities, as
required by the CFO Act of 1990, and delegated by the Secretary of
Agriculture, to provide financial management leadership and service to
support program delivery in USDA. As important examples, we develop
financial management systems policies that promote complete, reliable,
timely and consistent information from financial systems; provide
policy guidance and oversight of the Department's internal controls and
management accountability programs, to ensure adequate controls over
Department assets; coordinate implementation of the Government
Performance and Results Act--Results Act--in USDA, including strategic
planning and performance measurement; and provide budget support for
Departmental Offices and the Office of the Secretary. In addition, the
CFO is responsible for leadership of USDA's National Finance Center.
progress in financial management in usda
I'd like to share with the Committee today the progress OCFO has
made in strengthening financial management in USDA as well as our
current plans for further improvements in financial management in USDA.
Our plans are based on the following four major strategic goals for
OCFO which have been identified in USDA's Strategic Plan:
--Ensure the provision of timely and reliable financial management
information, advice, and counsel to support informed decision
making by USDA policy and program personnel.
--Ensure accountability for assets and resources entrusted to the
Department.
--Provide coordination, compliance, and monitoring services to USDA
agencies for specified financial management and related
legislation, regulations, and administration policy.
--Develop and maintain administrative and financial management
information processing systems at the National Finance Center
that are responsive to user and customer needs. It should be
noted that this particular goal is financed through the
Departmental Working Capital Fund but is under the direction
and guidance of the Office the Chief Financial Officer.
We are committed to these Strategic Goals. Our Annual Performance
Plan and budget request for fiscal year 1999, which are directly linked
to these goals, are designed to ensure that USDA's policy and program
officials have the financial information they need to deliver quality,
low cost programs and services to the American public.
financial management information advice and counsel
In today's Government environment, unless policy and program
officials have accurate, timely, reliable, consistent, and accessible
financial information, they cannot adequately assess the effectiveness
and efficiency of their programs, as required by the Government
Performance and Results Act (GPRA) and by good management practice. In
recognition of this need, OCFO has defined the need to provide quality
information in a timely fashion as a major strategic goal and devoted
significant resources toward its accomplishment.
As part of our Annual Performance Plan, we have identified four
performance goals for fiscal year 1999 to achieve the strategic goal of
providing financial management information and advice to policy and
program officials. The first performance goal is the continued
implementation of the single integrated financial management
information system to modernize financial systems through the multi-
year Financial Information Systems Vision and Strategy (FISVIS)
project.
We already have made significant progress in implementing FISVIS.
For example, we have developed a single set of financial standards and
definitions for USDA that are consistent with Governmentwide standards
and requirements. This in itself is a major achievement considering
several years ago there were different financial standards for each
USDA agency, with a single account code having many different
definitions. We are also progressing in implementing the Foundation
Financial Information System (FFIS), using Commercial Off-the-Shelf
software. Toward that end, we have converted the appropriation accounts
of OCFO and three organizational units in the Forest Service to the
FFIS system. We have also developed a tool kit that will simplify
future implementations of smaller agencies to the new systems. Further,
the Farm Service Agency is well on its way to implementing the new
system. By fiscal year 1999, we plan to implement the remainder of the
Forest Service. We will implement other USDA agencies beginning in
fiscal year 2000 and plan for complete implementation by the beginning
of fiscal year 2001. Of equal importance, we will ensure Year 2000
(Y2K) compliance for our financial systems long before the inevitable
deadline of January 1, 2000.
While USDA has had major achievements in implementing our single
integrated financial information system, our progress has not been as
rapid as planned. We have encountered some of the difficulties inherent
in the implementation of complex financial systems. We are working with
the Chief Information Officer to assess current status and, if
necessary, to modify our project approach. I believe, however, we are
well on our way to implementing a new single integrated financial
information system which will enable program policy and management
personnel to fulfill their responsibilities.
As part of implementing the single integrated financial information
system, OCFO is responsible for ensuring that other financial systems
and the financial portions of the mixed systems developed by USDA
agencies are in compliance with Departmental standards. We are also
working with the Office of the Chief Information Officer to ensure that
all financial systems in USDA will be Y2K compliant before we enter the
new millennium.
Our second major performance goal is to achieve an unqualified
opinion on USDA's financial statements. An unqualified opinion is
required by legislation, such as the Government Management Reform Act.
More importantly, an unqualified opinion on the financial statements
provides assurance to our users and customers that the financial
systems which underlie those financial statements are sound and
generate consistent, reliable, and useful information. OCFO is
continuing to make significant progress in achieving that goal.
Implementation of FFIS is expected to be a key factor in our success.
In addition, the Forest Service financial health project, upgrading of
our credit reform accounting policies and improving the quality of
information received from our State partners are all significant
factors in our ability to achieve an unqualified opinion. Our strategic
and performance plans call for achieving an unqualified opinion on
USDA's fiscal year 1999 consolidated financial statements as verified
by the OIG audit opinion which we will receive in fiscal year 2000.
A third performance goal is to fully implement cost accounting
systems and methodologies in USDA. Accurate, reliable, consistent cost
data at the lowest organizational level are essential for good
financial management. We want to ensure that sound cost principles are
applied consistently throughout USDA. With improved cost data, we can
generate credible information on the cost of services, products,
outputs, and outcomes as required by the Results Act as well as for
day-to-day decision making. In fiscal year 1998, our consolidated
financial statements will show the full costs of major USDA programs.
In fiscal year 1999, cost accounting standards will be implemented at
lower levels of the organization. In fiscal year 1999, USDA will meet
the requirements of the CFO Act, to review all fees and other charges
every 2 years for compliance with cost accounting and other standards
by reviewing 50 percent of its fees, annually.
Our fourth performance goal is to provide financial management
advice, counsel and technical expertise to USDA policy and program
personnel. This is, perhaps, one of the most important services that we
offer and one of the most difficult to measure. We have chosen to use
customer satisfaction as our measure of performance. The timeliness and
quality of the advice and assistance we provide will be assessed and
validated by a customer service survey. The baseline will be
established during fiscal year 1998. Action plans to improve
performance will be implemented and incremental improvement achieved in
fiscal year 1999 as validated by a follow-up survey.
accountability for assets and resources entrusted to usda
Our second strategic goal is to ensure accountability for assets
and resources entrusted to USDA. The Department is responsible for
approximately $136 billion of taxpayer assets. It is critical that we
demonstrate our accountability for those resources and that we are
indeed good stewards of the public's funds.
Our first performance goal in demonstrating accountability is to
achieve incremental progress on ensuring effective management controls
throughout USDA and timely completion of corrective action plans. The
adequacy of management controls is primarily determined by two
processes: internal reviews by management as reported in the Federal
Managers Fiscal Integrity Act (FMFIA) and audits by the Office of
Inspector General. I am proud to report that for the first time in 7
years, USDA has provided reasonable assurance that, taken as a whole,
the Department is in compliance with the management accountability and
control provisions (Section 2) of FMFIA. We are still not able to
report compliance with the financial systems provisions of the Act
(Section 4); however, our current efforts to improve our financial
systems will enable us to achieve such conformance.
During fiscal year 1999, we will focus on the remaining corrective
actions for Section 2 material weaknesses and resolve the Section 4
nonconformances. Our performance goal is to achieve full compliance
with FMFIA for fiscal year 1999.
Our second accountability performance goal is to publish an
Accountability Report for fiscal year 1999. The new Accountability
Report will combine into one document the FMFIA Report, the Secretary's
Management Report to Congress, the consolidated financial statements,
the Prompt Pay Report, and others, so that Congress may get an overall
view of accountability for those assets entrusted to the Department. We
plan to issue our first Accountability Report for fiscal year 1999.
In addition, as part of this strategic goal, we plan to improve the
quality of the budget and related services which we provide to Working
Capital Fund activities and to client agencies. These services assist
client agencies in determining and justifying resource needs,
allocating resources, and reporting on the utilization of those
resources. In fiscal year 1999, we will continue to improve the
timeliness, accuracy, responsiveness and reliability of these services,
including implementation of new tools and techniques to improve the
efficiency and effectiveness of our operations.
departmentwide policy and oversight
OCFO's third strategic goal is to provide coordination, compliance,
and monitoring services to USDA agencies for specified financial
management and related legislation, regulations, and administration
policy. In this role, OCFO establishes departmentwide policies,
provides expert advice, coordinates systems development, and monitors
agency performance to ensure that policies are implemented in
accordance in Department and Governmentwide requirements. These policy
and oversight services enable us to ensure compliance with the GPRA,
the Debt Collection Improvement Act (DCIA), the Cash Management
Improvement Act (CMIA), Prompt Pay Legislation, Credit Reform Act, and
other legislation. In addition, OCFO provides similar services for
other fiscal requirements, including travel policy, federal assistance,
asset management, and other fiscal matters.
During fiscal year 1999, we will continue to provide expert
assistance, consultation, and oversight in these areas; however, we
will accord a high priority to the following activities:
Government Performance and Results Act.--Fiscal year 1999 is the
first year for which Annual Performance Plans are ``in effect'' for all
USDA agencies and the first year for which an Annual Performance Report
is required. OCFO will assist agencies in identifying and developing
performance information, develop the form of the Performance Report
itself and prepare the Performance Report. While the Report will be for
fiscal year 1999, by law it is to be submitted by March 2000. In
addition, we will continue to provide technical assistance and support
to USDA agencies, as they institutionalize strategic and performance
planning in their organizations.
Debt Collection Improvement Act.--During fiscal year 1998,
significant portions of DCIA will be implemented, including those
portions relating to administrative offset and cross-servicing. During
fiscal year 1999 we will continue offset and cross-servicing activities
and implement the requirements for electronic funds transfer (EFT)
which are to be put in place by January 1, 1999. Other aspects of the
Act will be implemented based on Treasury guidance. We will also
monitor agency achievement of delinquent debt reduction goals and, as
with GPRA, continue to provide technical assistance to USDA agencies on
overall improvement of our credit programs.
Implementation of new credit card programs.--In early fiscal 1999
the General Services Administration will put into effect new credit
card programs available to USDA and other Federal agencies. These new
programs provide significant flexibility to USDA to use one or more of
the vendors on the approved list. We will work with USDA agencies to
implement that combination of credit card programs which is most
advantageous for USDA program officials.
New travel systems.--We will, with USDA agencies, begin to develop
a new travel system, taking advantage of new legislation and advanced
technology.
Other.--USDA agencies have identified specific goals for reduction
in delinquent debts, on-time payment under the Prompt Payment Act, use
of advanced methods for payments and cash collections and other
operating performance indicators. We will monitor achievement of those
goals as well.
Since much of the guidance, coordination, and oversight is provided
through consultation with USDA officials on travel, grants, cash, debt,
and other fiscal policies, we will strive to improve the quality and
timeliness of our service and will measure the success of our efforts
through use of customer surveys.
fiscal year 1999 budget request
Our fiscal year 1999 budget request of $4,562,000 is an increase of
$279,000 and 2 staff years over our fiscal year 1998 appropriation. The
increase covers additional personnel costs of $123,000 for pay costs
and $35,000 for the Civil Service Retirement System. The remaining
$121,000 and 2 staff years are needed to develop cost-related
performance information. This increase supports two of our strategic
goals financial management information, advice and counsel, and
Departmentwide policy and oversight with specific focus on implementing
GPRA. We will provide leadership throughout USDA to develop cost
management systems and information and to identify suitable cost-
related measures to be used to measure the cost of achieving mission
areas' and agencies' strategic and performance goals.
working capital fund--national finance center
Mr. Chairman, I would like to conclude with a brief overview of our
major initiative for the largest activity financed by the Working
Capital Fund the National Finance Center. While the Fund finances 22
activities, most of those are managed by the Assistant Secretary for
Administration and Chief Information Officer. They can speak in greater
detail about their WCF-funded activities. Since the NFC is under my
administration, I will focus my comments on NFC initiatives.
During fiscal year 1998, one of the major activities at the
National Finance Center is to assure that all of our systems are
compliant with Year 2000 requirements. Thus, we are devoting
significant effort this year to modify and test computer systems code.
In the process, we are eliminating a number of computer programs which
are no longer necessary and are renovating those systems which will be
used in the new millennium. Our current plan is to renovate all code in
fiscal year 1998 and to continue our testing throughout fiscal year
1998 and early fiscal year 1999. NFC will be Y2K compliant on or before
the target date established by the Office of Management and Budget and
the USDA Chief Information Officer.
We have allocated significant NFC resources to assure that we can
achieve Y2K compliance, as we continue to modernize and upgrade some of
our major systems in fiscal year 1998 and fiscal year 1999. The
objectives of these modernization efforts are to reduce the cost of NFC
services to our client agencies and to reduce the costs of
administrative activities by our client agencies. These modernization
efforts include:
--The implementation of the Foundation Financial Information System
(FFIS) discussed previously, an integral part of the
Department's ability to provide financial information to
program and policy personnel.
--Modernization and enhancements to the payroll system. This will
reduce the costs of NFC services and enable our client agencies
to reduce their costs of processing personnel and payroll
actions.
--The implementation of a new purchase card management system which
will significantly reduce the costs of small purchases of our
customer agencies.
--Ongoing efforts to develop a procurement management system, working
closely with the Assistant Secretary for Administration and the
procurement community. Continued compliance with the technical
infrastructure requirements of the Chief Information Officer.
--Achievement of Level 2 of the Capability Maturity Model which will
enable us to develop systems more effectively and efficiently.
--Implementation of methods to reduce the volume of paper sent to our
clients so as to reduce NFC and client costs.
In addition, we are continuing to actively market NFC services to
other Federal agencies. We continue to obtain new clients, particularly
for the payroll/personnel system, for example, the Capitol Police--
Senate--and we anticipate that our modernized systems will result in
additional cross service business.
NFC cannot achieve these ambitious goals without the participation
and support of our customer agencies inside and outside USDA. That
support comes with an obligation to us to reduce costs wherever the
opportunity presents itself. An example will illustrate the point. As I
mentioned, we are devoting significant effort to assuring that our
systems are Y2K compliant. To do this, we have not asked for additional
resources from our client agencies. Instead we have reallocated
resources within the Center to ensure that Y2K costs are absorbed
within the resources available to NFC. This means we have suspended
certain of our maintenance activities and that some agency specific
requests for work cannot be accommodated this year. Given the similar
difficulties our agency partners are experiencing in achieving Y2K
compliance, we believe that our customers understand our strategy and
appreciate our efforts to hold down costs. We will continue to ensure
that cost increases are fully justified and that agencies are informed
of increases and involved in decisions that affect their budgets.
Mr. Chairman, the National Finance Center has become a benchmark
against which other providers of financial and administrative services
are measured. The initiatives identified here today will enable NFC to
continue to serve as a benchmark well into the future.
I appreciate the opportunity to meet with you this afternoon and
will be pleased to answer any questions the committee has.
Biographical Sketch
sally thompson
Sally Thompson served as the State Treasurer of Kansas. First
elected in 1990, Thompson won reelection in 1994. Thompson resigned as
State Treasurer to become the Chief Financial Officer for the U.S.
Department of Agriculture. As Treasurer, Thompson managed a staff of 54
employees with an annual budget of more than $90 million. During her
tenure as State Treasurer, Thompson initiated a complete overhaul of
the agency, which consisted of a $5 billion municipal bond portfolio
and cash management services of $11 billion annually.
Thompson's efforts to reform the State's investment laws have
earned Kansas $700 million in interest income since 1992. Thompson
served on the Pooled Money Investment Board (PMIB), the entity that
directs the State's investment policies. Thompson also developed the
Municipal Investment Pool, an investment alternative for local
governmental entities that has earned participants more than $150
million combined in interest income since 1993. In addition, Thompson
updated the State's unclaimed property laws, returning $13 million in
unclaimed property to its rightful owners. The program includes the
Kansas Cash Connection, a portable computer database that contains more
than 300,000 records of unclaimed property. Thompson also served as a
trustee on the Kansas Public Employees Retirement System Board (KPERS)
and was a member of the Surety Bonds and Insurance Committee.
Active in treasury issues at the National level, Thompson served as
Secretary/Treasurer of the National Association of State Treasurers.
She is a past chair of the National State Debt Management Network and
served as treasurer of the Midwest Association of State Treasurers as
well as a member of the Executive Committee for the Council of State
Governments.
Before entering public life, Thompson spent 20 years in the private
sector, Thompson served as President and Chief Operating Officer of
Shawnee Federal Savings in Topeka. Prior to that position, she worked
as Vice President of Business Planning and Development for the United
Banks of Denver. A certified public accountant, Thompson began her
career as a financial manager at Touchc Ross, a multinational
accounting firm.
Thompson combined her professional experiences with community
involvement. She has served on the boards of the Topeka YWCA,
Everywoman's Resource Center, Downtown Topeka and the Topeka Chamber of
Commerce. Thompson also graduated from the Leadership Kansas,
Leadership Topeka and the Council of State Governments' Toll Fellowship
programs.
Thompson graduated magna cum laude from the University of Colorado,
Boulder, with a bachelors degree in business, accounting and finance. A
nontraditional college student, Thompson graduated at the age of 35.
She has three children and three grandchildren. A longtime Topeka
resident, she now resides in Arlington, Virginia.
Office of the Chief Information Officer
Prepared Statement of Anne F. Thomson Reed, Chief Information Officer
introduction
Mr. Chairman, Senator Bumpers, members of the Subcommittee: thank
you for inviting me here today. I will submit my testimony for the
record and also offer a few remarks.
I am honored to have been chosen by Secretary Glickman to serve as
Chief Information Officer of USDA, and to lead the Department's efforts
in implementing, developing and maintaining applications of new
technologies which will cut waste, serve USDA's customers more
efficiently, and open new opportunities for farmers, families, and
rural communities.
I am proud to work for Secretary Glickman whose leadership and
commitment has transformed USDA into a vibrant, vital force for the
American people and their communities. With the strong bi-partisan
support and cooperation of the Congress, USDA is stronger, abler,
leaner and more cohesive, which will better serve our nation.
Though USDA has turned the corner on a new path of efficiency and
quality program delivery, we still face many challenges, such as
assuring Year 2000 compliance and in the area of implementing new
technologies. We recognize that these challenges come at a time when
the federal government has fewer and fewer resources. And we realize
that creativity, innovation, and hard work are needed to assure that we
stretch every dollar in our budget.
President Clinton has laid out a balanced budget plan that works to
aid families, strengthen education, and promote the expansion of
economic opportunities, which is welcomed news for all Americans. The
benefits of a balanced budget will show themselves in continued
economic growth and prosperity. A strong national economy is critical
to a strong farm economy and critical to the mission of USDA. Secretary
Glickman has worked long and hard with the White House to lay out a
vision for USDA, and the President's budget seeks to fund and promote
these priorities: Expanding opportunities for family farmers and rural
communities; Making a major commitment to food safety and to fighting
hunger in America; Providing wide stewardship of our natural resources;
and Protecting the integrity of USDA programs.
Within each of these priorities lies the need for the expanded use
and integration of new technological applications, whether it be faster
program delivery to small farmers, new PC's and Internet access for
rural grade schools, computerized testing to assure food safety, or new
telecommunications vehicles and further system integration which create
greater long-term savings and efficiencies for USDA. Implementing new
information technology will turn these visions into reality.
usda information technology budget highlights
The 1999 total budget request for information technology at the
Department is $1.2 billion. This includes the Department and all of its
agencies. This total includes approximately $327 million for
acquisitions, including equipment and software; $236 million for
commercial support services for operations and maintenance; $31 million
for supplies; $447 million for inter-governmental payments, such as
grants to states and FTS 2000 services; $280 million in personnel
costs; and $75 million in other services, including non-FTS 2000 voice
and data communications. Offsetting these costs are collections from
non-USDA agencies of approximately $146 million.
By targeting our efforts to promote these priorities, it is our
hope that all USDA customers and employees will benefit. I look forward
to working closely with you and your staffs on this task in the days to
come. Let me begin to discuss our challenges in more detail.
systems integration
The Department is making real headway in its efforts to integrate
systems and expand the application of new technologies. Over the past
year, USDA has reduced the unnecessary paperwork burden on the public
by 30 percent, exceeding the President's goal of 25 percent; more than
40 percent of USDA's 1,320 mission critical systems are already Year
2000 compliant and the remaining systems are projected to be completed
by no later than March 1999; and USDA won three Government Technology
Achievement Awards. This past year saw the National Resources
Conservation Service's (NRCS) flood management system, Rural Housing
Services' (RHS) Dedicated Loan Origination and Servicing System, and
the Agricultural Research Service's (ARS) computerized irrigation
system all come away with this prestigious recognition.
In addition, other USDA infrastructure investments in 1999 include
an estimated $27 million to ensure that every USDA system and
application is year 2000 compliant. A proposed $67 million for the
Common Computer Environment (CCE), a USDA Service Center Implementation
project, will provide a single computing platform for USDA's Service
Centers, which deliver farm and housing loans, conservation assistance,
and other programs in America's rural communities. Also, the Forest
Service seeks to invest $143 million in Project 615, a continuing
effort which provides geographic information, telecommunications, and
hardware and software infrastructure in support of program delivery
throughout the country. The Animal & Plant Health Inspection Service's
Integrated Systems Acquisition Project (ISAP) will provide a common
electronic mail system allowing for a more efficient communications
environment. ISAP implementation is underway or planned for key APHIS
science centers, regional and field offices. The fiscal year 1999
planned investment is $6.7 million.
Other USDA agency proposed technology expenditures include $8.1
million for the Dedicated Loan Origination and Servicing System, a
Rural Development program which provides centralized escrow and
servicing of housing loans made by USDA in rural communities.
Approximately $14.3 million has been requested by the Food Safety &
Inspection Service for information technology to facilitate the
implementation of the Pathogen Reduction/Hazard Analysis and Critical
Control Point System (HACCP)--a science based food safety system, and
to support field restructuring.
office of the chief information officer budget request
This proposed funding for OCIO will facilitate continuing efforts
to integrate USDA technological programs and services, and assure that
USDA Information Technology (IT) resources are expended wisely. The
fiscal year 1999 Office of the Chief Information Officer budget request
totals $7,222,000, an increase of $1,671,000 and 6 staff-years over the
1998 level of $5,551,000.
Within this increase, $500,000 and 6 staff-years are requested to
support Information Technology Capital Planning and Investment Control
programs. The Clinger-Cohen Act of 1996 and the Office of Management
and Budget Circular A-11 Part 3 require USDA to intensify its review
and analysis of information technology systems as capital assets.
Numerous internal (IG) and external (GAO) audits and studies in recent
years have found the Department's Information Technology management and
acquisition systems to be lacking, and criticized the deployment of
these IT assets. There is a clear and critical need for a centralized,
Departmentwide approach to capital planning and investment control for
USDA's IT assets. The Secretary and I have responded with a moratorium
on IT acquisitions and begun to build the decision making structures,
policies, and support systems for a USDA IT Capital Planning process.
An Executive Information Technology Investment Review Board (EITIRB)
was established in 1996, and efforts are underway to support this
Board, but much more needs to be done from both a policy and a
practical aspect to provide needed information to the Board on capital
planning, life-cycle cost analyses, and risk assessment for IT
investments. Work has begun in this area with two efforts underway to
accomplish the development of a model capital planning and investment
control (CPIC) process and a case study of how a USDA agency uses the
model to document and operate the process. This effort is jointly
funded with the Department of Energy and the National Performance
Review. After the results of the study and the model are determined,
the tools developed as part of the model will be made available to the
agencies.
The design and implementation of a USDA-wide capital planning and
investment control program and supporting automated information system
is a multi-year effort requiring an infusion of resources to OCIO for a
permanent, ongoing program management staff. As the process is used
across USDA, skilled staff will be needed to perform and review
benefit-cost, return on investment, and other detailed analyses in
order to reduce as far as practicable the risk of failure in the
development, deployment, and operation of USDA information technology
systems. The necessary skills are beyond those of current staff and
will be of particular importance in providing support to the EITIRB.
Revised management processes need to be established, training on the
use of the planning and tracking tools for CPIC provided, and project
management systems set up to report accurate cost, schedule and
performance data. The resources requested will allow us to successfully
carry out the process.
The greatest portion of the 1999 funding increase is $1,000,000 for
continued development of the USDA Technical Architecture, including
technical standards, business data, and telecommunications, and for
contractor expertise for the Department's Earned Value Management
System to track and account for the cost, schedule, and performance of
information technology projects, and to provide valid, timely audit
data for management. Contractor expertise is required to assess the
completeness of the USDA Information System Technical Architecture
(ISTA) against accepted industry standards, which takes into account
the multiple layers of an information systems architecture, including
basic scope and purpose, enterprise or business model (design of the
business and how its entities and processes interact), system model
(the data elements and functions that represent the business entities
and processes for the information system), the technology model (the
adaptation of the system model to detailed technologies), and the
detailed description of the system. The ISTA model will provide a
framework for USDA agencies to migrate their existing technology base
to the new architecture, resulting in an increased level of
interoperability and data sharing. The architecture is the vehicle for
applications used by one agency to interoperate with applications used
by another agency. OCIO needs contractor skills and modeling
capabilities to achieve this important work. It will cost less to
manage and operate under this single ISTA than it will for each agency
to manage their own unique component.
Development and use of an Earned Value Management System (EVMS)
will improve the management of information technology projects in terms
of cost, schedule, and performance. The Earned Value Management concept
requires the integration of a program or project's technical, cost, and
scheduling requirements into a comprehensive performance management
baseline against which progress is assessed. EVMS analyzes the added,
earned value that IT resource investments bring to program delivery and
provides a common framework for communicating program status to
managers for informed decision-making. EVMS will improve accounting for
IT projects expenditures, fostering better management decision-making
on the investment of the Department's IT resources and will correct a
material weakness in many USDA control systems. EVMS will improve
management of information technology project scheduling, prevent cost
overruns and slippages, and generate performance data needed to support
the CPIC process. My office needs contractor expertise to benefit from
the contractor's often first hand experience with other agencies and
firms' best practices. Provision of these resources will strengthen our
ability and flexibility to meet USDA's IT challenges successfully and
without costly failures.
cio plan of action
The appropriate application of information technology is critical
to the Department's ability to deliver programs and services to the
public. We have invested many resources in technology to improve
government accountability and to transform program delivery through the
use of modern business practices. Secretary Glickman has challenged the
Department to significantly strengthen our corporate management of
technology so that information can be more readily shared across
organizational lines, assuring that investment decisions are based on
sound business principles.
This plan of action is firmly based on the requirements of the
Clinger-Cohen Act coupled with the business needs of USDA to improve
service to our customers. The Act has guided our actions through the
capital planning and investment control process. This pathway directed
our portfolio investment policies and the creation of a technology
architecture over the past year. Our plans may initially appear
ambitious, but they are necessary, and USDA is up to the task of
applying these management principles to all IT capital investments.
Today, we are building on the foundation which we have worked
arduously to create. The activities of my office are structured around
five critical objectives:
--Assure that mission-critical systems are Year 2000 compliant;
--Implement a single information technology infrastructure and
supporting organization for the Farm and Foreign Agricultural
Services agencies, the Rural Development agencies, and the
Natural Resources Conservation Service;
--Improve the Department-wide management of telecommunications;
--Develop policies and procedures for implementing the provisions of
the Clinger-Cohen Act through strengthening the capital
planning process, instituting an information technology program
review and evaluation strategy, refining the enterprise-wide
architecture, providing for business process reengineering and
developing work force planning capacity; and
--Build a strong management team and develop strategies for improving
the corporate management of USDA's information infrastructure.
These objectives support the Department's strategic plan for
information technology, establish clear milestones for achievement, and
identify responsible parties.
year 2000 strategy
The Department is taking a strong management approach to
effectively respond to the challenges of Year 2000 remediation. USDA
has begun implementation of a strategy to assure that the Department's
systems and operations are compliant. The Department is also working to
raise awareness in the communities which we serve, to assure that they
do not suffer prolonged interruption in services or incur hazards to
public health and safety. During the past year USDA has:
--Made OCIO, in particular the Year 2000 Program Executive and
myself, responsible for planning, oversight, and evaluation of
the USDA's efforts to achieve Year 2000 compliance. The Under
and Assistant Secretaries and Agency Directors have been given
the programmatic, budgetary, managerial, and technical
responsibility for ensuring that USDA's mission-critical
systems nationwide are Year 2000 compliant by March 1999 in
their respective areas.
--Appointed a senior executive in each agency area to address the
Year 2000 issue. For purposes of Year 2000 remediation, this
designee reports directly to the Agency Administrator, and is
charged with establishing a Year 2000 project team. In order to
establish accountability, Year 2000 remediation is a critical
element in the performance standards of the executive sponsors.
--Issued a procurement moratorium requiring CIO approval of any IT
procurement over $25,000. Under this moratorium, purchases will
only be approved on an emergency basis or when the acquisition
is directly related to Year 2000 remediation. I have sole
signatory authority under the moratorium, which will remain in
place throughout fiscal years 1998 and 1999 to assure that the
Year 2000 is the Department's information technology priority.
OCIO has begun to reach out to USDA customers--corporations,
farmers, non-profits, and rural communities--to increase awareness
about the need to address the integrity of their technological
applications in regards to the Year 2000 problem.
--I was an active participant in agricultural industry forums that
have addressed the Year 2000 issue and have discussed
compliance issues with agricultural manufacturers.
--USDA initiated an effort to raise Year 2000 awareness across rural
America. The OCIO, REE, FSA, and RD mission areas are
increasing their contact with partners and constituents in the
state and local sector, including the National Association of
Counties, the National Governors Association, and the National
Association of State Universities and Land Grant Colleges.
--I have actively participated in government-wide initiatives to work
with the states on Year 2000 compliance.
The OCIO has identified more than 8,000 external data exchanges
with states and other entities. Approximately 95 percent of the
exchanges have been assessed for Year 2000 compliance with 58 percent
already compliant. In addition, USDA has undertaken a comprehensive
inventory of all network and telecommunications equipment and software.
More than 3,700 network routers have been specifically identified, and
several hundred will require software upgrades in order to be Year 2000
compliant.
The Department currently estimates the total cost of becoming Year
2000 compliant to be $120 million. This includes costs beginning in
fiscal year 1996 and continuing through the Year 2000.
administrative convergence/service center implementation
Over the past several years, we have been addressing the difficult
challenge of modernizing and streamlining delivery of program services
at the county level. The consolidation and collocation of the county
offices is nearing completion. By the end of this year, we will have
reduced the number of county office locations from 3,700 to fewer than
2,600 USDA Service Centers. The Secretary's vision is that any USDA
customer of the county based agencies, FSA, NRCS, RD, can go to any
USDA Service Center to conduct business. Furthermore, the continued
implementation of modern integrated technology will allow many
customers to do some business from their homes.
The first phase of modernizing the technology infrastructure is the
deployment of an integrated telecommunications system for both voice
and data. This system will link these agencies within the Service
Centers as well as with other offices, thereby enabling the sharing of
equipment and information as we achieve a Common Computing Environment
(CCE). Deployment of the telecommunications systems will be completed
by the end of the year.
Interagency Business Process Reengineering initiatives are moving
forward to define improved and more integrated ways of delivering USDA
programs to customers. The results of these efforts provide the
framework and requirements for technology improvements. We are
initially testing these business and technology improvements in a
laboratory environment, then moving to field pilots, beginning in
April. We anticipate beginning the acquisition of parts of the
technology infrastructure in late fiscal year 1998 and continuing with
acquisition and deployment of the new infrastructure over the next four
years.
A related initiative is the decision to consolidate administrative
and information technology staffs of the county based agencies into one
unit as part of the Secretary's administrative convergence strategy.
These consolidations will bring about immediate efficiencies and
savings that will rapidly increase as we build and deploy our
integrated technology systems and dispose of our legacy systems.
My office has oversight responsibility; however, direct
responsibility for managing Service Center initiatives rests with the
Agency Administrators. Last year, I established an oversight unit with
Senior Executive leadership to manage this responsibility. This staff
works continuously with the agencies, Service Center Implementation
Team, and other policy officials to facilitate and monitor progress on
these initiatives. Outside, independent resources are also used
regularly to identify the need for modifications and for mid-course
corrections. Through these efforts, and the moratorium, USDA has
dramatically changed its approach to managing modernization efforts.
telecommunications
In the last year, I have taken significant steps to change
telecommunications management practices at USDA. When reviewing the
process previously used to order telecommunications equipment, I
learned that 300 people had procurement authority and many had not been
adequately trained. Furthermore, there were not adequate mechanisms to
allow for the sharing of information and resources.
Today, only 17 people have authority to order equipment. They
receive training quarterly, and they have access to a database of
information that allows for more efficient decision-making. Through
these and a series of specific cost reduction initiatives, we have
saved several million dollars over the past year.
Now, USDA is continuing to focus its efforts on establishing a
telecommunications environment which optimizes improvements in mission
performance while minimizing program operational costs. USDA is doing
so through three major initiatives: The Telecommunications Enterprise
Network, the Telecommunications Ordering, Billing and Inventory System
(TOBI), and a comprehensive review and update of telecommunications and
security policies. The Telecommunications Enterprise Network will
eliminate further proliferation of agency private, wide-area data
networks, and capitalizes immediately on savings from efficiencies.
Measures are in-place today which permit USDA to stabilize its current
telecommunications environment. A key example is the establishment and
certification of Telecommunications Mission Area Control Officers who
manage mission area and agency needs centrally while identifying and
implementing planning which optimizes consolidation and cost avoidance
opportunities from a broader corporate perspective. The Network plan
will also allow for a national infrastructure to be constructed and
managed under the authority of the USDA CIO, as a corporate enterprise
asset allowing greater planning and system integration between the
various USDA agencies significantly reducing costs and speeding program
delivery.
The TOBI system integrates the recently reengineered administrative
processes with an automated management information system, allowing for
greater control and accounting of USDA telecommunications acquisitions.
The third major telecommunications initiative encompasses a
comprehensive review and update of the existing telecommunications and
security policies. Policy development and implementation are imperative
to ensure that the Department moves in a uniform direction, standards
are applied consistently, information and resource sharing
opportunities are maximized, and cost reductions are realized. Policy
revisions are needed to address the changing environment resulting from
enactment of the Clinger-Cohen Act, the proliferation of new
technologies such as Internet and Intranets, and the increasing number
of network security threats. A strong security program is our first
line of defense against increased threats and vulnerabilities. My staff
has greatly increased coordination on security efforts with all USDA
agencies--sharing information and raising awareness at all working
levels.
clinger-cohen compliance
capital planning and investment controls
New processes have been implemented for approving capital
investments in IT. USDA adopted procedures recommended in the OMB
Capital Programming Guide. The Executive Information Technology
Investment Review Board met to review and endorse the fiscal years
1998-99 investment portfolio. As we move forward, we will strengthen
the analytical support provided to these senior policy decisions. My
office established a capital planning and investment control (CPIC)
process for implementing the Clinger-Cohen Act. Concurrently with this
process development, we are participating in a joint development effort
with the Department of Energy and the National Performance Review to
implement an information system which will assist us in this
management. This project is named the Information Technology Investment
Portfolio System (I-TIPS). I-TIPS will provide USDA managers with ready
and shared access to a variety of up-to-date information about
individual IT initiatives as well as their entire IT investment
portfolio. I-TIPS is a World-Wide-Web application that requires only an
Internet connection and a browser to access.
I am happy to report that there is wide interest for I-TIPS in the
federal community, with many agencies already committed to I-TIPS
installations including: Energy, Justice, Labor, and HUD. Both the
General Accounting Office and the Office of Management and Budget have
reviewed I-TIPS and firmly support its use as a management tool to help
agencies monitor their IT investments. USDA plans to use this system
this budget year for our analysis of agency IT investment initiatives
and Department level decision-making for our entire IT portfolio.
independent verification and validation efforts (iv & v)
My office embarked on an independent verification and validation
program in 1996. We recognize that non-partisan analyses and
observations are needed at various points in the life cycle of a
program to identify deficiencies before systems are built. Our IV&V
program targets major information technology initiatives and has
several objectives: Assess the quality of plans and management
strategies; assess how well systems address customer needs; and verify
that every system is well-designed and meets all USDA specifications.
Several IV&V tasks already completed include the review of the
management and plans for the installation of telecommunications
facilities in the field service centers, analysis of the technical
alternatives and business case for the future computing environment at
the service centers, an analysis of the Department's developing
information technology architecture, and an analysis of the
requirements of the Department-wide financial information system.
We expect to continue to employ the IV&V concept as part of our IT
management strategy. Unlike in the past, we want to make sure that all
future technology expansion is part of a cohesive and integrated
planning process. We want to ensure that it works right the first time,
and that USDA and the American taxpayer get what was paid for.
information systems architecture
A rapidly changing information intense environment demands new
approaches, particularly in the way the Department deploys technology
to meet its business information needs. USDA recognizes that
effectiveness can be achieved and economies gained through coalescence
of business activities and information technology resources. Under my
leadership, USDA has developed the Information Systems Technical
Architecture (ISTA) to meet these immediate and future needs. The ISTA
will be one of the mechanisms used to strategically manage information
and information technology resources at USDA. The ISTA will evolve
through continuous assessment of USDA's business needs, modern
management practices, and technology advancements.
As I indicated earlier, the USDA ISTA was reviewed by an outside
contractor under the IV&V Program to evaluate the existing ISTA against
an accepted architecture methodology and make recommendations regarding
the integration, implementation, and management of the architecture.
While the IV&V findings were generally positive regarding USDA's first
effort, there are several recommendations that we will incorporate. My
office is currently examining the plan to ensure that USDA is taking a
highly pragmatic and cost-effective approach to architecture design and
implementation. In this regard, OCIO will leverage existing agency
projects by identifying best practices in the various architectural
components. We will also establish a configuration management board,
standards criteria, and a program management staff. The ISTA is linked
to the Capital Planning and Investment Control process and is a
required input for the selection phase and for the implementation of
the Information Technology Investment Portfolio System (I-TIPS).
usda technological work force
As this Committee is all too aware, current Bureau of Labor
Statistics' projections show a major shortage of information technology
workers in the fields of computer engineering, computer sciences and
computer programming. We have anecdotal evidence that this is becoming
a problem at USDA. We have many talented individuals, and that is well
known to the corporate sector.
To address this work force crisis, I have recently designated a
staff member to oversee USDA's IT workforce planning and development
efforts. I am also working within USDA and in conjunction with the CIO
Council to develop recruitment and retention strategies to ensure that
USDA's information technology systems are competently managed and
operated in the years to come.
cio management strategies
Every successful organization has strong and effective leadership
at its highest levels. With the continued support of Secretary Glickman
and Deputy Secretary Rominger over the past year, great strides have
been made toward building a competent management team within my office,
and a credible, business-like information technology program for the
Department. One of my earliest appointments was a Senior Executive to
provide oversight of Service Center Implementation activities. In May
1997, a Deputy CIO was named to create a strong management focus on all
USDA IT matters. The executive team includes an Associate CIO for
Policy, the Director of the NITC, and a Senior Policy Advisor for Year
2000 remediation. A search will soon begin for a telecommunications
executive to fill a recent vacancy. Each of these executives has
demonstrated an understanding of USDA business and customer service
requirements and the role of information technology in supporting these
requirements. All have demonstrated their leadership, energy,
communications, and technical skills.
As the team evolved, we have been unified in our vision and focus
for managing USDA's information technology resources from a corporate
perspective. My in-house expertise has been further leveraged through
the development of strong partnerships with USDA agency Chief
Information Officers and counterparts in other federal organizations.
Recognizing that we face common goals of increasing performance while
meeting the challenges of reduced staffs, shrinking budgets, and
greater time constraints, these partnerships have demonstrated synergy
in developing new approaches and solutions to shared problems.
In addition, through benchmarking and other opportunities, I have
sought the advice of corporate CIO's who manage large and complex
organizations. This advice has proved instrumental as we have
established new IT governance strategies.
Also as part of OCIO's management strategies implementation
process, we recently completed the development of our comprehensive
reorganization plan, of disparate USDA IT elements, into a strong
corporate program agency to meet the challenge of providing the right
mix for leadership and program delivery for USDA information
technology.
fiscal year 1998 management investment strategy
Deputy Secretary Rominger issued the USDA IT investments moratorium
on November 12, 1996. The initial purpose of the moratorium was to
restrict USDA agencies from purchasing IT resources until improvements
were fully implemented which control our management of IT resources. To
assure that agencies focused on correcting Year 2000 issues before
initiating new IT projects, the moratorium rules were revised to apply
to any IT acquisitions of over $25,000. Agencies now receive a
moratorium waiver from my office only for true emergencies and Year
2000 remediation actions.
Through the moratorium, the Department has been able to ensure that
USDA agencies are focusing on the Year 2000 problem and carefully
evaluating their IT needs in conjunction with their partner agencies,
allowing for more coordination and cooperation.
concluding remarks
As with most other CIO's, my top priority for the coming year is
Year 2000. In addition to priorities associated with Service Center/
Administrative Convergence, Clinger-Cohen implementation, and
telecommunications, there are significant issues to address with legacy
systems, security, inter-operability, electronic commerce, management
of change, skilled labor shortages, and exploding technology. There is
a growing awareness that improved corporate management of USDA's
information infrastructures can only occur when leadership and the
right mix of business, management, and technical skills are present.
With my current team in place, I believe I am positioned at the highest
level of my organization to meet current and future challenges.
The historic balanced budget which President Clinton has introduced
provides a framework to meet the many technology challenges that we
face, in a way that is good for USDA and good for America. Over the
past year, USDA has made great strides in righting past wrongs and
redirecting our technological goals. Aside from our internal systems
usage, USDA has taken technology to deliver our programs to the
public--quicker and more efficiently. We instituted the HACCP program
to make food safer for America's families. The Electronic Bid Entry
System (EBES) is creating more business opportunities for the
commodities industry and our nation's businesses. The USDA telemedicine
loan and grants programs are bringing the latest medical innovations
into rural communities across the nation. And the Forest Service,
through Project 615, is using technology to improve our stewardship of
America's precious natural resources and public lands.
There is still more to accomplish--more challenges ahead of us. And
we must stay focused on addressing these challenges. We must continue
to take action on reconciling our internal Year 2000 problems, while at
the same time reaching out to our broad constituencies in rural America
and the agriculture industry to make them aware of the threat to their
systems and their health and safety. We must address the IT work force
shortage, to ensure that USDA will have the expertise in the future to
continue to deliver services and address the needs of both the
Department's staff and the public. And most importantly, we must
continue to work together to prove to the American people that we can
meet these challenges in a creative, competent, common-sense manner.
Over the past year, I have had the privilege of working with this
sub-committee in a positive way to meet these challenges. I look
forward to working with all of you in the months to come to build on
this relationship and meet our mutual needs and objectives as we head
into a new century. I expect to be able to report tangible results on
these initiatives at next year's hearings. Thank you.
Office of Communications
Prepared Statement of Tom Amontree, Director of Communications
Mr. Chairman and members of the Subcommittee, I am pleased to
discuss the fiscal year 1999 request for the Department of
Agriculture's Office of Communications--OC.
When in 1862, Congress wrote the law establishing what is now the
U.S. Department of Agriculture, it said the Department's ``general
designs and duties shall be to acquire and to diffuse among the people
of the United States useful information on subjects connected with
agriculture in the most general and comprehensive sense of the word.''
The Office of Communications coordinates the implementation of that
original mandate.
The Office of Communications coordinates communications with the
public about USDA's programs, functions, and initiatives, providing
information to the customers and constituency groups who depend on the
Department's services for their well-being. It also coordinates the
communications activities of USDA's seven mission areas, and provides
leadership for communications within the Department to USDA's
employees.
In keeping with President Clinton's balanced budget plan, this
office continues to streamline its operations. For fiscal year 1999, we
will have 120 staff years, 30 less than in fiscal year 1993. At the
same time, we are adopting new technologies to meet the increased
demands for information. Using the Internet's world wide web, radio,
television and teleconference facilities, we are able to ensure that
the millions of Americans whose lives are affected by USDA's programs
receive the latest and most complete information.
The Office of Communications' 5-year strategic plan includes the
following goals:
--Increase the general public's awareness of USDA policies, programs
and initiatives, with particular attention to reaching
traditionally underserved communities.
--Using the latest and most efficient communications technology,
methods and standards, improve access to and distribution of
USDA information to news media, constituent groups, and
individual customers.
--Improve communications with USDA employees by leading and
coordinating internal USDA communications.
--Continue development of an efficient and effective results-
oriented, public affairs community within USDA that provides
high-quality customer service.
--Foster civil rights and diversity throughout USDA's public affairs
community and its communications products and services.
To accomplish these goals, we will continue to take an active part
in policy and program management discussions, coordinating the public
communication of USDA initiatives. We will continue to provide
centralized operations for the production, review, and distribution of
USDA messages to its customers and the general public, and we will
monitor and evaluate the results of these communications.
The Office of Communications will continue to acquire and instruct
staff in using the most effective and efficient communications
technology, methods, and standards in carrying out communications
plans.
The Department values its employees as good Government
``ambassadors'' who need to be kept informed. The Office of
Communications intends to improve communications with USDA employees,
especially those away from headquarters. We will help employees
understand USDA's general goals and policy priorities, to become more
familiar with USDA programs and services, and to understand
initiatives, especially cross-cutting ones, and how they relate to each
employee's specific job duties.
OC is also working hard to ensure compliance with Government
Performance and Results Act. We will be working to update USDA
regulations and guidelines for communications; conducting regular
training sessions for USDA communications staffs about using
communication technologies and processes to enhance public service;
fostering accountability for communications management performance
throughout USDA; and continuing to work to create a more efficient,
effective and centralized Office of Communications.
The Office of Communications will also provide equal opportunity
for employment and promote an atmosphere that values individual
differences. We will continue to provide equal opportunity for
contracting goods and services. We will increase availability of USDA
information to underserved communities and geographic areas to ensure
equal opportunity in USDA's outreach efforts, and will continue to
develop universally accessible information products.
fiscal year 1999 budget request
The Office of Communications is requesting a budget of $8,319,000.
This is a net increase of $181,000 over our fiscal year 1998 current
estimate. The net increase covers additional personnel costs of
$195,000 for pay costs, and $51,000 for the Civil Service Retirement
System; a decrease of $100,000 based on the approval of two buyouts;
and an increase of $35,000 for an initiative to improve communications
to underserved groups. This effort is directly related to OC's
Strategic Plan management initiative to improve efforts to reach groups
that are working with small and limited resource producers in
underserved communities and geographic areas, and to improve their
understanding of USDA programs and initiatives. It would also increase
awareness among USDA stakeholders and consumers about such important
issues as food safety.
This concludes my statement, Mr. Chairman. I will be pleased to
respond to any questions.
Office of the General Counsel
Prepared Statement of Charles R. Rawls, Acting General Counsel
introduction
Mr. Chairman and members of the Subcommittee, I am pleased to have
this opportunity to present our fiscal year 1999 budget request and to
also provide you with an overview of our agency to include some of the
current activities and issues facing the Department.
mission
The Office of the General Counsel (OGC) is the law office for the
Department. As an independent, central agency within the Department,
OGC provides all legal services necessary to support the programs and
activities of USDA. OGC provides legal advice and services to the
Secretary of Agriculture and other officials of the Department of
Agriculture with respect to all USDA programs and activities.
organization
OGC's services are provided through 12 Divisions in Washington and
18 field locations. The headquarters for OGC is located in Washington,
D.C. The Office is directed by a General Counsel, a Deputy General
Counsel, six Associate General Counsels, and a Director for
Administration and Resource Management. The attorneys located in
headquarters are generally grouped in relation to the agency or
agencies served. Our field structure consists of five regional offices,
each headed by a Regional Attorney, and 13 branch offices. The field
offices typically provide legal services to USDA officials in regional,
State, or local offices.
Our full staffing levels are approximately 242 attorneys and 108
support staff, including 17 paralegals, in the Washington, D.C.
headquarters and field locations. Approximately half of our personnel
are located in the field.
fiscal year 1999 budget request
For fiscal year 1999, OGC is requesting $30,446,000 in direct
appropriations. This request represents an increase of $1,922,000 over
the fiscal year 1998 appropriation. Of this amount, $683,000 is for the
anticipated pay raise, which is needed to maintain staff so that
existing levels of mission efforts may continue. OGC is requesting
$219,000 to cover the increase in Federal agency contributions for
employees covered under the Civil Service Retirement System.
OGC has made substantial improvements in the automated data
processing (ADP) computing environment, upgrading both its hardware and
software as well as making substantial improvements to the OGC
communication network. In order to continue to implement a centralized
work tracking system for correspondence, document and opinion
archiving, as well as database management for a variety of OGC work
items, an increase of $100,000 is necessary.
OGC is also requesting an increase of $250,000 to support and
maintain current staffing needs because the demand for legal services
by agencies within USDA has not diminished. This increase will enable
OGC to meet its strategic objective of providing effective legal
services in a timely and responsive manner to support USDA activities.
Also included in this request, is an increase of $670,000, which
includes a $235,000 supplemental ($470,000 on an annualized basis) for
civil rights. In accordance with the recommendation of the USDA Civil
Rights Action Team (CRAT), a separate Civil Rights Division in OGC was
established, headed by an Associate General Counsel, reporting directly
to me. For the Associate General Counsel for Civil Rights and CRD to be
effective in effectuating their mission, additional resources are
sorely needed. The additional funding requested for the Civil Rights
Division will ensure that the Department can meet its civil rights
reform goals without limiting OGC in other important mission areas. The
new Division must expand on with the work performed last year by the
General Law Division--assisting in carrying out the CRAT
recommendations, reviewing program discrimination cases, and assisting
the Office of Civil Rights in processing decisions in civil rights
complaints brought by USDA customers and employees. With the high
priority placed by the Secretary on ensuring that the civil rights laws
are vigorously enforced, the Civil Rights Division will be working
side-by-side with the Office of Civil Rights, and the rest of the
Department, to make sure that this key objective is met.
current activities and issues
There are several areas of our current work that I would like to
highlight to demonstrate how OGC serves the Department. During the past
year, OGC has supported the activities of the Foreign Agricultural
Service (FAS) in numerous areas. Pursuit of the benefits and
enforcement of the commitments of the Uruguay Round Agreements on
Agriculture and on the Application of Sanitary and Phytosanitary
Measures (SPS Agreement) continues to be of paramount concern to FAS
and OGC.
Accordingly, OGC played a leading role in the victory of the United
States in the World Trade Organization (WTO) dispute on the European
Union's (EU) import ban on meat produced with the use of growth-
promotant hormones. During the EU appeal of the initial panel result,
OGC played an instrumental role in formulating and coordinating the
United States strategy and submissions. The WTO Appellate Body ruled in
favor of the United States, finding the ban not consistent with the
EU's obligations under the SPS Agreement. OGC will continue active
involvement in the development and application of the effort necessary
to compel the EU to fulfill its international obligations.
WTO litigation is increasingly a priority area for OGC. The United
States has recently invoked the dispute settlement process within the
WTO in several agricultural matters, and OGC has played a leading role
in all of them:
(1) Philippines--Administration of tariff-rate quotas for pork and
poultry meat. The efforts of OGC were a significant factor in the
development of a Memorandum of Understanding with the Philippines that
is expected to lead to significantly improved access in that market for
U.S. pork and poultry meat exports;
(2) Japan--Requirements to re-establish the efficacy of quarantine
treatments for pests on a varietal basis. This issue is of particular
importance to apple, nectarine, cherry, walnut, and other stone fruit
exports;
(3) Canada--Access for U.S. fluid milk and cream and Canadian
export subsidies through application of milk class price-pooling; and
(4) European Communities--Export subsidies on processed cheese
manufactured under inward-processing arrangements.
In efforts to realize the benefits of the Uruguay Round Agreements
other than through litigation, during the past year the United States
and the EU resolved many of the difficult outstanding issues that had
precluded an equivalency agreement on veterinary inspection matters.
Due in large part to the efforts of OGC, the text of the agreement has
now been finalized, but a few implementation issues remain. OGC will
continue to be actively involved in the effort to achieve a signed
agreement.
OGC also has provided valuable drafting assistance in connection
with the ongoing negotiation of a veterinary biologics annex to the
recently concluded Mutual Recognition Agreement between the United
States and the EU. Agreement on a veterinary biologics annex would
allow the United States and the EU to accept imports of veterinary
biologics from one another on the basis of a mutual recognition of the
efficacy of one another's regulatory systems.
After two years of negotiations in which the United States played a
significant role, the United Nations Food and Agriculture Organization
Conference adopted a revised text of the International Plant Protection
Convention (IPPC). A primary objective of the revisions was to
strengthen the ability of the IPPC members to develop phytosanitary
standards as envisioned in the SPS Agreement. OGC was a principal
participant in the review of iterations of draft text and other
documents and also participated in the interagency group. These efforts
ultimately led to United States support of adoption of the revised
text.
OGC also continues its active involvement in other FAS program
areas. OGC continues to provide extensive legal advice in the
rejuvenated export credit guarantee program, as well as in the
development of the supplier credit guarantee program, the facilities
guarantee program, and the emerging markets program. During this past
year, OGC has also become more actively and directly involved in
efforts to reduce the necessity and enhance collection of admiralty
claims arising from damaged or distressed cargo shipped in connection
with title III of Public Law 83-480.
Attorneys from OGC have provided significant assistance with
respect to commodity, disaster and conservation programs.
Implementation of the provisions of the Federal Agriculture Improvement
and Reform Act of 1996 (the 1996 Act) authorizing Production
Flexibility Contracts (PFC) has resulted in numerous requests for OGC
assistance to resolve such issues as those involving the division of
program payments between landowners and tenants and the succession-in-
interest by new owners and tenants to existing program contracts. In
addition to routine requests for assistance, implementation of the
peanut poundage quota provisions of the 1996 Act has resulted in the
filing of two major lawsuits against the Government.
The administration of the revised Conservation Reserve Program
(CRP) required a major devotion of OGC resources to develop new CRP
regulations and contracts as a result of the enactment of the 1996 Act.
These efforts included: the resolution of unintended conflicts between
PFC provisions of the 1996 Act, the CRP provisions of the Food Security
Act of 1985, and the tobacco and peanut program provisions of the
Agricultural Act of 1938 in a manner that provided enhanced
opportunities for participation in the CRP by tobacco and peanut
producers without remedial legislation; development of agreements for
administration of the Conservation Reserve Enhancement Program portion
of CRP, including the drafting of the agreement between the State of
Maryland and the Commodity Credit Corporation concerning the protection
of the Chesapeake Bay; and the provision of daily assistance on CRP
matters as a result of the conduct of the 15th and 16th CRP enrollments
which involve several hundred thousand contracts and approximately 24
million acres.
OGC attorneys have been working with the Office of the United
States Attorney for the Eastern District of North Carolina, the Farm
Service Agency (FSA) and the Office of Inspector General (OIG) to bring
approximately 40 criminal cases, 40 civil false claim cases, and
numerous administrative cases as the result of an extensive OIG
investigation of the 1990-1992 activities of more than 100 tobacco
warehouse operators and dealers in North Carolina.
Working with FSA officials, OGC attorneys provided expeditious
assistance in the development of the various livestock emergency feed
assistance programs implemented as a result of severe winter blizzard
conditions. Similarly, OGC attorneys were significantly involved in the
development of program regulations for the Tree Assistance Program and
the Livestock Indemnity Programs authorized by Congress in 1997.
OGC attorneys are substantially involved in providing legal
services related to the continuing changes in the Department's crop
insurance program, especially the review of private insurance company
initiatives including crop revenue coverage; nonprocurement suspension
and debarment issues; the development of new crop insurance programs
and amendments to old ones. OGC has been particularly involved in the
development of the risk management education initiative and the Dairy
Option Pilot Program.
The enactment of welfare reform legislation in 1996 has continued
to raise many legal issues. The implementation of the alien provisions
and the provisions restricting the eligibility of persons convicted of
trading in controlled substances generated substantial Constitutional
challenges. OGC attorneys are also working closely with the Food and
Nutrition Service (FNS) in connection with the implementation of the
Debt Collection Act of 1996 and to enhance food stamp program
efficiency and integrity through implementation of electronic benefit
transfer systems. Debarment and suspension activities continue with OGC
attorneys assisting FNS in taking actions to protect the federal
government and the public with respect to over 200 dairy companies and
individuals convicted of bid rigging on school milk contracts.
In trade practices, we are continuing to give assistance and
counsel to the Secretary on issues of concentration in agriculture and
the continuing response of the Department to recommendations of the
Advisory Committee on Agricultural Concentration. We are continuing to
pursue administrative enforcement against the nation's largest packer
on allegations that the packer gave an undue or unreasonable preference
to certain feedlots in the procurement of cattle, and that case is now
before the Department's Judicial Officer for decision. We are working
with agency personnel on a number of investigations into procurement
and other trade practices in areas of production where there are high
levels of concentration, and on investigations and enforcement actions
involving allegations of false or misleading statements or
representations in the marketing of agricultural products.
The last year has been an especially busy year for OGC as it
relates to work for the food safety mission area. We dedicated
substantial resources to the Food Safety and Inspection Service (FSIS)
in connection with the implementation of the new requirements for
standard sanitation operating procedures in all inspected
establishments. We also assisted FSIS in the related redraft of its
existing sanitation regulations and the promulgation of a proposed rule
that would eliminate most ``command and control'' rules and replace
them with a streamlined set of performance standards for sanitation.
Additionally, we provided daily support to FSIS as it prepared for the
January 1998 implementation of the Hazard Analysis/Critical Control
Points (HACCP) inspection procedures in the largest FSIS-inspected
establishments. Our work on HACCP implementation and compliance issues
can be expected to increase over the next two years as the ``small'',
and then the ``very small'' plants are brought under the HACCP
requirements.
Enforcement matters under the meat and poultry inspection laws have
continued to require extensive legal support, and in the coming year,
we will be working closely with FSIS to publish final rules of practice
governing enforcement actions under the HACCP, microbiological testing,
and pathogen reduction regulations.
Finally, we spent considerable time with FSIS on the development of
a legislative proposal to enhance the Department's food safety
enforcement authorities under the meat and poultry inspection laws, and
a proposal involving the interstate shipment of meat and poultry from
state-inspected plants.
We worked closely with the Animal and Plant Health Inspection
Service (APHIS) by assisting in the implementation of our WTO
obligation to regionalize our regulatory requirements governing the
importation of animals and animal products. This past year, for
example, regulations allowing the importation of beef from Argentina,
and pork from Sonora, Mexico, were promulgated. In addition, a
comprehensive policy statement and complementary rule changes were
adopted establishing the regulatory structure APHIS will use to review
and act on requests for regionalization, and how it will use risk
assessment methodology to arrive at proposed safeguards to prevent the
introduction of communicable diseases of livestock and poultry.
We have also been heavily involved in defending a lawsuit filed by
five environmental groups challenging APHIS regulations governing the
importation of logs, lumber, and other unmanufactured wood products. In
June of 1997, the court found for the Department on most issues, but
nonetheless enjoined APHIS from issuing new permits for the importation
of certain temperate wood products until a supplemental environment
impact statement (EIS) is prepared and regulations based on it are
promulgated. We worked assiduously with APHIS to see that the draft
supplemental EIS, which was published in December 1997, meets the
requirements of the court's order. We anticipate that the final
supplemental EIS will be published before a scheduled status conference
on May 15, 1998.
In 1997, after lengthy court proceedings, we settled a $34 million
lawsuit filed by the State of Florida arising out of the 1984 to 1986
citrus canker eradication program. The settlement stipulated that the
funds paid to Florida in settlement of all claims would be used
exclusively in the current program to eradicate the most recent citrus
canker infection in Florida. We also worked closely with APHIS on its
regulatory measures to eradicate a large infestation of Mediterranean
fruit flies in Florida discovered in May of 1997. We have also assisted
in the development and promulgation of an array of quarantines and
regulations throughout the U.S., including the refinement of the Karnal
bunt (Kb) regulatory measures and the issuance of regulations providing
for compensation for those affected by the Kb outbreak.
There continue to be very significant developments in connection
with marketing order regulations and litigation. The issuance of two
voluminous and complex regulations concerning organic food labelling,
and the reform of milk marketing orders required extensive legal
involvement and assistance. In the litigation arena, we provided
counsel and assistance in successfully applying the Supreme Court
decision in Wileman Bros. et al. v. Glickman to challenges under both
marketing orders and free-standing research and promotion programs as
well as defending the appeal of the Northeast Interstate Dairy Compact
case.
In the area of animal welfare, we successfully litigated numerous
significant cases, including a case involving the death of a circus
elephant. The circus operator's license as an exhibitor under the
Animal Welfare Act was permanently revoked and he was assessed a civil
penalty of $200,000, the highest civil penalty ever assessed in an
Animal Welfare Act case. We also took actions against several research
facilities to require that they provide humane care to animals used for
research. We assisted in developing the strategic plan for the Horse
Protection Act program. The plan will give the Tennessee walking horse
industry an enhanced role in the enforcement of the Horse Protection
Act through the USDA authorized inspection system.
OGC also provides legal services to agencies which manage some of
America's largest lending portfolios. The ongoing implementation of
centralized processing (CSC) for Rural Housing loans uses substantial
legal resources. OGC continues to be heavily involved in debt
collection and foreclosure work with many cases going back to the
emergency loan programs of the 1970's and 1980's. Implementation of the
Debt Collection Improvement Act of 1996 and the flexibility gradually
being made available under the Rural Community Advancement Program of
the 1996 Act also requires substantial legal resources.
The Secretary is committed to regulatory reform. We continue to
work with Department officials to implement the President's regulatory
reform package. This is a significant undertaking as we work with
agencies throughout USDA to reduce regulatory burdens, eliminate
obsolete or unnecessary regulatory requirements, and streamline
regulation, particularly in the areas of rural, farm and utility
lending. This year we look for a substantial push in this area from the
Rural Utilities Service (RUS), Farm Service Agency (FSA), Rural
Business-Cooperative Service (RBS), and Rural Housing Service (RHS).
OGC provided considerable assistance to the Rural Utilities Service
(RUS) on a range of matters related to the changing electric and
telecommunications industries. In particular, the introduction of
competition in the electric industry has resulted in increased demand
for legal services by RUS on a number of key electric program matters.
For example, OGC has provided legal services in connection with the
restructuring of borrowers' power supply arrangements through mergers,
alliances, and other types of reorganizations and through the
renegotiation of borrowers' power supply contracts. OGC has also
dedicated substantial resources to the negotiation and drafting of new
security arrangements for some large power supply borrowers. These
arrangements, patterned after indentures used in the private sector,
will provide borrowers with more flexibility in operating in the new
competitive environment while facilitating access to private market
financing.
As a result of the Telecommunications Act of 1996, which introduced
deregulation and competition to the telecommunications industry, the
RUS telecommunications programs is facing a wide range of issues and
concerns requiring legal services. These include issues of loan
purposes, loan security and borrower structure as well as the impact of
FCC orders implementing the Telecommunications Act on RUS borrowers and
program interests. RUS for the first time made distance learning and
telemedicine (DLT) loans in addition to its DLT grants. Legal
assistance is required both in the promulgation of new regulations
implementing the DLT program and in developing the documents for these
loans and grants. One cannot underestimate the legal resources which
will be required by the movement to deregulate in the rural electric
and telephone area.
In the natural resources area, we have been involved in a number of
extremely significant undertakings concerning national forest
management and soil conservation programs. We have provided assistance
nationally to the Natural Resources Conservation Service in
implementing a number of conservation programs including the
Environmental Quality Improvement Program (EQIP), the Wetlands Reserve
Program (WRP), the Farmland Protection Program, the Conservation Farm
Option and Emergency Watershed Protection.
Management of our National Forests is a subject of intense debate
and litigation, with a great deal of legal work generated by the impact
of new scientific information on ongoing Forest Service projects and
commitments. Such legal questions include challenges regarding the
nature of forest planning in the Circuit Courts of Appeal and in the
Supreme Court (Ohio Forestry Association v. Sierra Club), the
relationship of the Endangered Species Act to the forest planning
process and revisions of the first generation of forest plans.
Further, we are defending against numerous timber sale claims
arising from legally created delays and contract modifications to
protect the habitat of endangered species. We also successfully
defended challenges in several places in the West by local governments
and individuals under the so called ``County Supremacy'' movement
disputing federal ownership or jurisdiction over public lands.
We have also devoted substantial resources to other legislative and
regulatory initiatives, such as land exchanges, Clean Water Act
questions, water adjudications, relicensing of hydro projects, grazing
reform, reauthorization of the Endangered Species Act, the Safe
Drinking Water Act and the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA). OGC also provided the Forest
Service with support in the administration of the National Forest lands
as they are affected by the complex statutes related to mineral
exploration.
In addition, we regularly provide advice on compliance and
litigation arising under the pollution control laws. Most frequently,
pollution control issues involve abandoned and inactive mines and
landfills on federal lands, the use and storage of agricultural
chemicals, and management of hazardous waste at agricultural research
facilities. We have worked with other federal resource management
agencies on implementation of executive authority under CERCLA to
address cleanup of hazardous substances affecting federal resources.
As the Administration and the Congress continue their efforts to
re-invent the Federal government, and as the Department takes its own
initiatives to make its delivery of services more efficient,
streamlined, and customer friendly, we anticipate greater demands in
the general law area. These range from providing legal services
regarding personnel and labor matters; increased legal services as we
implement the Electronic Freedom of Information Act, debt collection
initiatives, and Year 2000 compliance; and legal support for creative
approaches of doing more with less through mechanisms such as
partnering.
Agency implementation of new administrative offset procedures
pursuant to the Debt Collection Improvement Act of 1996 have triggered
numerous appeals to the National Appeals Division (NAD) and resulting
legal questions regarding the intersection of the offset process and
the NAD appeal process. Last year, the U.S. Court of Appeals for the
Eighth Circuit held that the Administrative Procedure Act and the Equal
Access to Justice Act apply to NAD proceedings, thus allowing recovery
of legal fees incurred by appellants in NAD proceedings.
With regard to the procurement of property and services, the
Clinger-Cohen Act of 1996 mandated many changes that address source
selection procedures in negotiated procurements; the acquisition of
commercial items; and the acquisition, use, and disposal of information
technology by the Federal Government. In particular, the general law
division will continue to devote substantial resources to assist the
Chief Information Officer created by the Act in fulfilling her duties
both under the Act, and under separate Secretarial mandates, to improve
information technology management in the Department.
Also with regard to procurement, the most recent revision of the
General Accounting Office (GAO) protest rules has resulted in the
general law area, providing more and an enhanced level of legal
representation of USDA agencies in protests before GAO. This includes
the provision of legal representation to the Forest Service in all
Forest Service GAO protests.
OGC continues to provide legal services to the Alternative
Agricultural Research and Commercialization Corporation regarding the
scope of authority of the Corporation, as well as issues relating to
grants, cooperative agreements, loan guarantees and other financial
assistance provided to entities by the Corporation for the purpose of
commercializing new non-food uses for agriculture commodities.
We continue to provide legislative drafting and related assistance
to the Department and Congress on major legislative activities that
involve the Department. We are providing assistance in the development
of legislation to reauthorize the Department's research, education, and
extension activities and the Department's child nutrition activities.
We are preparing legislation to improve the Department's food safety
programs. In addition, we are participating in the preparation of
legislation in a number of areas in support of the President's fiscal
year 1999 budget requests for USDA.
Over the past year the Department has engaged in massive efforts to
reform its civil rights performance. The Secretary wants to ensure that
all our customers and employees are treated with dignity and respect
and are afforded equal employment opportunity and equal access to all
USDA programs. The Civil Rights Action Team appointed by the Secretary
in December 1996, and the Civil Rights Implementation Team formed in
January 1997, both concluded that an essential component to achieving
the Secretary's civil rights goal is to establish a new division within
OGC staffed with lawyers fully trained in, and dedicated to, civil
rights compliance and enforcement.
Our first Associate General Counsel for Civil Rights has been
hired. The Associate General Counsel for Civil Rights is the chief
civil rights attorney for USDA and is responsible for providing advice
on civil rights law to the Department and its officers. The Associate
General Counsel for Civil Rights is responsible for establishing and
directing the newly created Civil Rights Division (CRD). CRD will
assist USDA in fashioning responses to discrimination claims and
provide assistance to the Department of Justice in relation to
litigation of civil rights claims.
The CRD will provide legal advice to the USDA Office of Civil
Rights, which is responsible for investigating and administratively
adjudicating complaints of discrimination by employees and farmers in
the delivery of credit and other services by USDA. CRD will also assist
the Office of Civil Rights in ensuring that investigations and
decisions are conducted in accordance with the law. This effort
includes assisting in the effort to resolve the significant backlog of
program and employment complaints. The Secretary has requested that
these complaints be resolved as quickly and fairly as possible.
CRD will ensure that every mission area and agency within USDA
receives timely and accurate legal advice on issues impacting the
Department's compliance with, and enforcement of, civil rights laws.
Further, CRD will proactively work to identify civil rights issues and
potential problems, notify the General Counsel, the Secretary, and
other appropriate Department officials of the issues and problems and
possible courses of action, and work with the General Counsel,
Secretary and Department officials to address the issues and problems.
OGC has requested a supplemental in fiscal year 1998 which would
provide funds needed to staff the newly created Civil Rights Division.
The activities of this division cannot be carried out at current OGC
resource levels without substantially reducing vital legal services to
other areas of the Department. Since OGC has appointed an Associate
General Counsel for Civil Rights, additional resources are now required
to staff and maintain this new division with attorneys who are
committed to civil rights in USDA and who specialize in civil rights
law.
Mr. Chairman, it is important to note that these comments only
touch on the dozens of daily issues that come before the legal office
of a Department with over 100,000 employees administering programs in
an extremely wide range of areas.
closing
That concludes my statement, Mr. Chairman. We very much appreciate
the support this Subcommittee has given us in the past. Thank you.
Office of Inspector General
Prepared Statement of Roger C. Viadero, Inspector General
introduction and overview
Good afternoon, Mr. Chairman and members of the Committee. I am
pleased to have this opportunity to visit with you today to discuss the
activities of the Office of Inspector General (OIG) and to provide you
with information on our audits and investigations of some of the major
programs and operations of the U.S. Department of Agriculture (USDA).
Before I begin, I would like to introduce the members of my staff
who are here with me today: James Ebbitt, Assistant Inspector General
for Audit; Jon Novak, Acting Assistant Inspector General for
Investigations; and Del Thornsbury, Director of our Resources
Management Division.
I want to thank the Committee for its support during the nearly
3\1/2\ years since my appointment as Inspector General. We have tried
to work closely with you, and I hope that we have been able to address
some of your concerns.
I am proud to say that in fiscal year 1997, we continued to more
than pay our own way. In the audit arena, we issued 255 audit reports
and obtained management's agreement on 207 recommendations. Our audits
resulted in questioned costs of approximately $900 million. Management
also agreed, as a result of our audit work, to recover $19 million and
put $267 million to better use. Additionally, our investigative staff
completed 958 investigations and obtained 703 convictions.
Investigations also resulted in nearly $83 million in fines,
restitutions, and other recoveries and penalties during the year.
We continued to work closely with agency officials to address key
issues and to expand our cooperation with other Federal, State, and
local law enforcement and audit agencies to broaden the impact of our
work. Our achievements would not have been possible without the actions
of the Department's program managers who worked closely with us in
carrying out our mission. Working together, our staffs identified
program weaknesses and program violators. Capitalizing on the staffs'
respective expertise, we created solutions for positive action.
In fiscal year 1998, we are focusing our audit efforts on the
Department's financial accounting systems, farm credit programs, civil
rights, the Rural Rental Housing Program, and the Food Stamp Program
including its Electronic Benefits Transfer project. Our investigative
priorities include the timely and thorough investigation of threats to
the health and safety of the public, emergency responses, child and
adult care programs, employee integrity issues, and fraud in the
Department's loan, regulatory, and benefit programs.
Before I move to our special law enforcement initiative and other
specific audit and investigative activities, I would like to update the
Committee on our progress in implementing the requirements of the
Government Performance and Results Act (GPRA) and our forfeiture
authority.
We have made significant progress in implementing GPRA in OIG. We
have prepared a 5-Year Strategic Plan that describes our mission and
sets forth our general goals and objectives through fiscal year 2002.
We have completed our first Annual Performance Plan under GPRA, which
contains specific performance goals and objectives for the fiscal year.
We have also developed performance measures to assess our progress in
achieving these goals and objectives under the plan so that we might
make adjustments to maximize our effectiveness.
On the forfeiture front, as I discussed last year, with the
Committee's support we are now authorized to receive proceeds from
forfeiture actions arising from our investigations. While we have
seized over $11 million in assets for possible forfeiture to the
Government as a result of our investigative actions since OIG was
provided the authority in November 1995, to date, OIG has received only
about $100,000 from these proposed forfeitures. We are continuing to
work with the Department, the Office of Management and Budget, and the
Departments of Treasury and Justice to ensure OIG receives its
appropriate share of proceeds from these proposed forfeited assets as
approved by you. However, after more than 2 years, the Department of
Justice has not signed a memorandum of understanding with this agency.
Special Law Enforcement Initiative
Mr. Chairman, at this time I would like to discuss our special law
enforcement initiative included in our fiscal year 1999 budget request.
This initiative will be a major undertaking for the agency, and we ask
your support to provide the resources necessary for it. I have provided
each of you a handout on the initiative, highlighting our need and what
we expect to achieve from this effort.
This special law enforcement initiative is to provide funding for
OIG to crack down on fraud and abuse in the Food Stamp and other
nutrition programs, assistance programs such as the Rural Rental
Housing Program, and disaster and health and safety programs requiring
immediate response.
Health and safety of food from production to the consumer is of
special concern because of such highly visible emergencies as
contaminated strawberries in the School Lunch Program and tainted meat
in the food distribution chain which resulted in the recall of 25
million pounds of ground beef. Also, OIG's recent pilot effort,
Operation Talon, in 24 metropolitan areas around the country, has been
extremely successful, resulting in the arrest of over 2,200 fugitive
felons and the potential savings of millions of dollars to the U.S.
Treasury. This initiative is to allow the agency to expand such efforts
nationwide.
Operation Talon
The Department estimates that over $50 million a year in food
stamps go illegally to convicted felons and prison inmates, and that a
sizable number of retailers who accept Food Stamps make money from them
illegally. Prior to the passage of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, also known as Welfare Reform,
the exchange of information between law enforcement and State social
service agencies was not allowed. Welfare Reform provided many useful
tools to the law enforcement community, such as making fugitives and
people who are violating conditions of probation and parole ineligible
for food stamps. Additionally, the legislation made it possible for
State social service agencies to provide law enforcement authorities
certain identifying information from their files pertaining to
fugitives.
As a result of the tools provided by Welfare Reform, we initiated
``Operation Talon,'' a law enforcement initiative led by OIG and
carried out in conjunction with other law enforcement agencies and
State social service agencies across the country. Under this
initiative, law enforcement agencies' fugitive records are matched by
social service agencies with their food stamp recipient records.
Information on fugitives is then shared with OIG and other law
enforcement officials who use it to locate and apprehend the fugitives.
As of January 13, 1998, ``Operation Talon'' has resulted in 2,235
arrests of fugitive felons, the vast majority of whom were food stamp
recipients or former recipients. These fugitives included numerous
violent and dangerous felons who were wanted for murder, child
molestation, rape, and kidnapping.
I have included a chart which identifies the offenses for which
these felons were wanted.
Total
Offense arrests
Murder............................................................ 9
Attempted murder.................................................. 10
Child molestation................................................. 10
Rape.............................................................. 7
Attempted rape.................................................... 2
Kidnapping........................................................ 6
Assault........................................................... 115
Robbery........................................................... 86
Drugs............................................................. 645
Other............................................................. 1,345
An example of the type of individuals we arrested is a fugitive
wanted for selling a large quantity of marijuana. He was arrested at a
sting site in Chicago, Illinois. The individual came to the site
believing he had an appointment to discuss his food stamp benefits.
When he was confronted by a Cook County Sheriff's deputy, the fugitive
attempted to flee, running down a small corridor where an OIG special
agent and local police officer tackled and subdued him. This fugitive
later threatened to burn down the Cook County detention facility and
kill the police officers and special agents. On his person, and in a
bag, he was carrying 8 knives, 11 assorted lengths of steel pipe, 2
screwdrivers, 1 wrench, and materials such as glass containers, wicking
material, and candles needed to make Molotov cocktails.
Operation Talon is a success story. I say this not only for OIG,
but also for the State and local law enforcement agencies we helped to
locate and arrest fugitive felons. Even more importantly, Operation
Talon is a success for the American people who can know that their
communities are safer now that these people wanted for murder, rape,
drug dealing, and other violent and dangerous crimes have been taken
off their streets and that food stamp benefits go only to those who
need them.
On December 18, 1997, Vice President Gore publicly announced
Operation Talon during a press announcement at the White House. Also
present for this announcement were 10 members of State and local law
enforcement agencies with whom we worked during this operation. These
participants included the Sheriff of Cook County, Illinois, where
Operation Talon ``bagged'' 470 fugitives. Two deputies with the Pierce
County, Washington, Sheriff's office, the entire fugitive squad for
that office, traveled all the way across country to participate and to
express their appreciation for our efforts, which they characterized to
us as the ``best thing that has happened.'' They just could not get
over that, with this new information, 90 percent of the doors they
knocked on produced the fugitive they were looking for. This kind of
positive feedback exceeded even what we had expected.
Successful as they are, activities such as Operation Talon are not
without their price. As of January 13, 1998, 116 OIG special agents had
expended nearly 2,500 staff days on this operation. We can continue to
recover and save money for the taxpayers only if we have the resources
needed to perform our mission. Adequate funding and staffing for OIG
makes good sense because we help create a Government that works better,
produces positive results, and saves the taxpayers' money. We believe
the success demonstrated through our pilot work in Operation Talon and
the other areas of our special initiative provide outstanding examples
of what can be accomplished if the necessary resources are made
available to the agency to perform this critical work.
Child and Adult Care Food Program (CACFP)
Another area we are looking at in our initiative is the Child and
Adult Care Food Program. The objective of CACFP is to ensure that
children and adults being cared for in participating day-care homes and
centers receive nutritious meals. To accomplish this, the Food and
Nutrition Service (FNS) reimburses day-care providers for the meals
they serve and sets nutritional requirements for the food. The program
is administered by State agencies through sponsors, who are generally
public or private, nonprofit organizations. Sponsors act as the link
between the State agency and individual day-care providers. More than
14,000 sponsors administer the program in just over 230,000 day-care
homes and centers nationwide. CACFP funding for fiscal year 1996 was
$1.5 billion.
To ensure the integrity of the program, sponsors are required to
train providers in program requirements and perform onsite visits to
providers' homes and centers to make sure they are fulfilling these
requirements. Sponsors are also responsible for reviewing provider
claims to ensure that the meals are nutritionally balanced and that the
children are eligible. Sponsors are ultimately responsible for program
operations in the day-care homes they oversee. In return for carrying
out their responsibilities, sponsors are reimbursed for their costs of
administering the program.
In a CACFP investigation in California, four executives of a non-
profit child-care sponsoring organization are awaiting sentencing in
March after they pled guilty to mail fraud in connection with their
participation in CACFP. The organization oversaw in excess of 60 day-
care centers and 175 day-care homes in the Los Angeles and Orange
County areas.
Our investigation disclosed that, through various fictitious names
and bogus entities, two of the executives fraudulently obtained and
diverted approximately $2.3 million in CACFP funds for personal and
nonprogram-related expenses, including the purchase of a $1.5 million
residence and the payment of their children's college-related expenses.
The other two executives claimed and received over $60,000 in CACFP
funds for nonexistent day-care home providers.
One of the executives was also employed by the California
Department of Education (CDE), the State agency responsible for
administering CACFP. In that capacity, she was specifically responsible
for monitoring her own sponsoring organization's compliance with CACFP.
She and her husband used various aliases to conceal their business and
family affiliations from her employer. She was subsequently fired by
CDE as a result of her conflict of interest involving her association
with the sponsoring organization. This investigation was conducted
jointly by OIG and the U.S. Postal Inspection Service.
A separate civil forfeiture action was filed against four
residential properties in Southern California, owned by the subjects,
and valued in excess of $2 million. This is being handled through the
U.S. Postal Inspection Service and the Civil Division of the U.S.
Attorney's Office, Eastern District of California in Sacramento.
In the audit arena of CACFP, our reviews revealed a breakdown in
controls at the sponsor level. In our pilot test, we have concentrated
on the approximately 1,200 sponsors who primarily sponsor day-care
homes. We reviewed 12 sponsors in 10 States and found 11 of them to be
seriously deficient in their administration of the program--and this is
only the tip of the iceberg, considering there are about 1,200 sponsors
of some 195,000 day-care homes nationwide.
As part of our sponsor reviews, we conducted unannounced visits to
a substantial number of day-care homes and found widespread
deficiencies in their operations. Many providers did not have adequate
records to support the meals they claimed or had no records at all.
Claiming of unallowable meals by providers appeared to be common. Many
of the children for whom the providers claimed meals were not present
when we visited, and we questioned whether they were actually in care.
We also questioned whether some providers were eligible to claim the
meals they served to their own children. At some homes, we found unsafe
or unsanitary conditions and licensing violations, and we reported
these conditions to the local health or licensing authorities.
Based on the large numbers of problems we found at the homes, we
concluded that the sponsors' training and monitoring efforts were
generally ineffective. Sponsors did not provide all required training
and did not conduct all required reviews. Reviews that were performed
were often ineffective. Sponsor visits were usually scheduled in
advance, were brief, in many cases, only 5 or 10 minutes in length, and
very seldom disclosed any problems. Some of the extensive problems our
unannounced home visits found included the following.
--Conditions were unsafe or unsanitary at 10 providers of an Illinois
sponsor. At one home, the only sources of heat, in the month of
February, were the gas and oven burners on the kitchen stove.
Several homes were seriously over capacity, with only 1 adult
caring for up to 25 children, versus State licensing provisions
which allow 1 adult to care for not more than 8 children.
--One Oregon sponsor did not adequately monitor or train its
providers, claimed unallowable administrative expenses, and
failed to accurately report administrative costs on its monthly
claims for reimbursement. The sponsor also may have been
conducting unrelated outside business activities and charging
their costs to the program. Based in part on our audit report,
the State agency terminated this sponsor from the program.
--Nearly one-third of a New Mexico sponsor's providers we attempted
to visit were not home, yet they later claimed meals which were
purportedly served at these times.
--One-sixth of the reimbursements claimed by one Alabama sponsor's
providers were improper. Numerous providers claimed
reimbursement for meals not served or for ineligible meals. We
recommended recovery of the $3,000 paid for ineligible meals
and meals not served.
Because of the serious deficiencies, FNS has terminated the
participation of 5 of the 12 sponsors. Four of the five sponsors are
being investigated for fraud-related activities.
Due to the significant problems found, we have included this work
in our national initiative to expand our efforts to identify abusive
sponsors. These efforts will include ``sweeps''--unannounced, targeted
visits--of sponsors and providers conducted jointly by OIG auditors and
investigators with the assistance of FNS and State agency personnel.
Because the ``sweeps'' place a large cadre of reviewers at selected
onsite locations simultaneously and without warning, they will provide
an authentic snapshot of CACFP operations in the targeted areas. Those
sponsors found to be abusing the program will be removed from
sponsorship; ineligible payments recovered; and, if warranted,
prosecuted.
Electronic Benefits Transfer (EBT)
Another area we plan to emphasize in our initiative is monitoring
of EBT systems that deliver program benefits. OIG remains the lead
agency, under agreement with the President's Council on Integrity and
Efficiency (PCIE), to review EBT systems that deliver State-
administered programs. For USDA, the State-administered programs are
the Food Stamp Program (FSP) and the Special Supplemental Nutrition
Program for Women, Infants, and Children (WIC). Also included as State-
administered programs are the Temporary Assistance for Needy Families
(TANF), funded by the U.S. Department of Health and Human Services
(HHS), and States' general assistance programs.
While the majority of FSP benefits are still distributed in the
form of paper coupons, electronic distribution of benefits is growing
rapidly and currently sends about 27 percent of local food stamp
benefits. Currently, 26 States have operational online food stamp EBT
systems with 8 of the States operating statewide systems. Two States
have operational off-line systems using the smart cards with one of
these States using its system for the WIC Program. Many of the
remaining States have selected EBT vendors and are at various stages of
awarding contracts. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 mandates EBT for all States by 2002.
EBT has an impressive impact in identifying individuals and
retailers who are committing fraud in the program. While trafficking of
benefits has not been eliminated by EBT, we believe the number of
individuals involved in street trafficking has been reduced. EBT
benefits are less negotiable ``on the street'' and, thus, less likely
to be used as a ``second currency.'' We have not found, to any
significant extent, the exchange of EBT benefits for illegal drugs, a
not too uncommon occurrence with coupons. Instead, the individuals now
exchanging cash and non-food items with recipients are generally
retailers or those working with them.
In addition, information available under EBT is now used to
identify and prosecute those who engage in illegal transactions. While
paper food coupons are generally not traceable to individual
recipients, under EBT, details of all transactions are recorded. The
system records the date, time, amount, recipient and store involved in
all benefit transactions. This information is used to identify and
prosecute both the retailers and the recipients involved in
trafficking. FNS has also used EBT data to disqualify violating
retailers, and State authorities are using information obtained from
EBT records to disqualify recipients who have sold their benefits.
An example of a significant EBT investigation was completed
recently in Baltimore, Maryland. Maryland was the first State to
implement EBT statewide. In this case, eight people pled guilty in
Federal court to a variety of money laundering, conspiracy, and food
stamp trafficking charges for their roles in a conspiracy that
defrauded the program of $2.4 million.
The group used eight stores, both authorized and unauthorized, to
purchase and then redeem EBT benefits. In the unauthorized stores, ring
members obtained the account and personal identifier numbers from
recipients and then relayed the information over the telephone to
members in authorized stores. The authorized stores had EBT machines
which were used to access the recipients' accounts and remove the
benefits. The recipient was then paid a reduced amount of cash. In
addition, other ring members purchased benefits ``on the street'' and
used mobile telephones to call in recipient information.
The ring leader was sentenced to 48 months in Federal prison, while
five others received prison terms ranging from 4 to 21 months.
Additional subjects are pending prosecution and sentencing.
This case is also useful in demonstrating how EBT data can identify
traffickers. During analysis of EBT data during another trafficking
investigation in Baltimore, our agents identified the above-mentioned
conspiracy. We used the system to follow recipients with suspicious
transactions to a second group of stores. We also followed recipients
from the second set of stores to yet another trafficking operation in
Baltimore. Members of all three trafficking operations were prosecuted.
As mentioned earlier, EBT has also been used by State authorities
to disqualify recipients who have sold their benefits. This has been
occurring on a large scale in Maryland. For the past 3 years, we have
provided lists of recipients who used their EBT benefits in stores
which we found to be buying benefits, along with transaction
information, to the Maryland Department of Human Resources (MDHR)
Baltimore City Food Stamp Trafficking Unit. This information was
compiled from data developed during OIG investigations of 14 stores.
As an unfortunate indication of the extent of food stamp fraud and
abuse, to date, over 5,200 heads of households in Baltimore, or 8.3
percent of all Baltimore households receiving benefits, have been
disqualified from FSP based upon the EBT data. These disqualifications
have thus far resulted in a savings of over $3 million in suspended
benefits. Additionally, another 11,604 Baltimore households--18.2
percent of the total households receiving benefits in the city--are in
various stages of administrative action by MDHR.
We would like to take this opportunity to commend MDHR, especially
its Baltimore City staff, and the prosecutors with the Office of the
State's Attorney for Baltimore City for their efforts in addressing the
problem of recipient fraud trafficking. Their aggressive administrative
disqualifications and prosecutions of recipients have saved the
taxpayers millions of dollars and should serve as an excellent
deterrent to others who might consider abusing this valuable program.
During the course of another OIG investigation into suspicious EBT
transactions in Essex and Hudson counties in New Jersey, 10 authorized
stores were identified as having engaged in food stamp fraud. Those
stores redeemed an estimated $9.5 million in food stamp benefits during
the period of investigation, of which $6 million is alleged to have
been involved in fraudulent transactions. In addition, approximately
1,000 individual food stamp benefit recipients were identified as
having engaged in suspect transactions larger than $1,000. Thirteen men
and three women who owned and/or operated the 10 stores pled guilty for
various charges including conspiracy, food stamp fraud, and fraud in
connection with electronic access devices. Seizure warrants netted
$75,000 in cash, and asset seizures of real property are pending. We
worked on this investigation with the U.S. Secret Service (USSS); the
Internal Revenue Service (IRS); and the East Orange, New Jersey, Police
Department. The investigation was initiated after a review by FNS'
Compliance Branch identified the stores as potential violators of the
Food Stamp Program.
During the past year, we have performed audits of EBT systems used
to issue FSP benefits in Illinois, New Mexico, North Dakota, South
Dakota, and Wyoming. In Wyoming, we included the WIC Program in our
review since Wyoming's EBT system delivers WIC benefits in six
counties.
Overall, security policies and control processes in the States
reviewed were adequate to ensure timely and accurate availability of
FSP and WIC Program benefits to recipients and payments to retailers.
We did identify some areas in the individual States needing
improvement. For example:
--In Illinois, controls needed to be strengthened over State employee
access to the EBT system, reconciliations of data transfers
between the State and the EBT processor needed to be
documented, and the aging of FSP accounts needed to be modified
to comply with FSP regulations. Illinois also needed to address
the EBT processor's timeliness in installing equipment at
authorized retailers.
--New Mexico's contract with its processor expires in 1998, but New
Mexico does not have a contingency plan to continue FSP
benefits if it must operate without an EBT processor. Dormant
accounts remained accessible to recipients beyond the 1-year
authorized period.
--North Dakota and South Dakota use the same EBT processor, which
agreed to provide interoperability between the two States. The
EBT system did not document the full cycle of FSP activities
and did not report approved FSP transactions pending retailer
payment. As a result, the States cannot adequately monitor the
processor's use of Federal funds or reconcile transactions to
reimbursement drawdowns, which may increase the States'
potential liabilities.
--Wyoming's WIC EBT system did not allow clients to purchase the full
amount of their WIC food prescriptions because it rounded the
weights of foods purchased. Variations in product coding
sometimes prevented clients from purchasing sale items and
unnecessarily increased program costs. The FSP portion of EBT
had a design feature to expunge unused benefits over a year
old, but it was not in use. Appropriate recommendations were
made in the individual State reports to address the problems
found and strengthen controls.
Emergency Response--Health and Food Safety
OIG's highest priority is the investigation of criminal activity
which poses a threat to the general health and safety of the public.
Because of the high-profile cases in this area during the past year and
our belief that these are only examples of possible threats to the
health and food safety of the public, we have included health and food
safety as part of our special initiative efforts that must be enhanced.
Among these crimes are violations involving the processing and sale of
adulterated meat, poultry, and egg products; criminal tampering with
food products consumed by the public; and product substitution,
adulteration, or other misrepresentation of food products which are
regulated or purchased by USDA.
OIG investigations in the health and safety area have traditionally
been focused almost exclusively in the red meat industry. OIG agents
traditionally investigated meat packers who clandestinely slaughtered
diseased cattle and supplied the meat for public consumption, and
processors who surreptitiously mixed tainted meat with wholesome meat
which was sold to the public. The financial incentives for those who
commit this type of crime remain so high that OIG expects to continue
responding to these types of criminal activity far into the future.
While OIG continues to conduct these traditional health and safety
investigations, recent investigations of health-related criminal
activity involving the inspection programs and other USDA programs have
identified an increasing need for OIG attention. Last spring, OIG
immediately responded and took control of an investigation surrounding
an outbreak of hepatitis A in Michigan which eventually sickened 190
school children and which was believed to have spread through their
eating of strawberries served through USDA's School Lunch Program. The
president of a San Diego based food processing company, his company,
and the former sales manager pled guilty to conspiracy in regard to
substituting Mexican strawberries for U.S. domestic strawberries in
this case. Sentencing for all three defendants has been scheduled for
next month. The company, through three brokers, supplied 1.7 million
pounds of frozen strawberries to the School Lunch Program, for which
USDA paid over $900,000. The USDA contract called for frozen
strawberries that were 100 percent grown and processed in the United
States. The company's president certified to USDA that all of the 1.7
million pounds of frozen strawberries were domestically produced and
processed, when in fact, at least 99 percent of the product supplied to
USDA was grown in Mexico. This investigation was conducted jointly with
the Food and Drug Administration (FDA), with assistance from the
Federal Bureau of Investigation (FBI).
Also during the past year, OIG was called upon to investigate the
circumstances surrounding another life-threatening emergency, this time
involving the often deadly bacteria E-coli 0157:H7. Knowing this to be
the same type of outbreak which had caused fatalities in previous
occurrences, OIG immediately dispatched an Emergency Response Team to
the Nebraska meat-processing plant which prepared the ground beef
patties identified by State Health Department officials as the source
of the bacteria. While our criminal investigation into this matter
continues, and it would be inappropriate for me to discuss our findings
at this time, this is a perfect example of how OIG reacts to emergency
situations involving USDA-regulated matters and the type of activity we
plan to expand as part of our special law enforcement initiative.
Rural Rental Housing (RRH)
We also plan to place special emphasis on the Rural Rental Housing
(RRH) Program as part of our initiative. A recent legislative change
provided a new weapon to OIG and to the Rural Housing Service (RHS) for
use in the fight against program fraud and hazardous living conditions
in the Nation's 16,300 rural multifamily housing projects. With these
new criminal sanctions, the agencies can take aggressive action to
identify and eliminate the worst offenders--those who convert tenant
rental proceeds and Federal assistance to personal use while neglecting
the physical condition of deteriorating properties. Owners, agents, or
managers convicted of ``equity skimming,'' or diversion of project
assets, can be fined up to $250,000 or imprisoned for not more than 5
years, or both.
Using automated audit techniques and in consultation with RHS
staff, we will identify RRH projects that have certain risk factors,
such as chronically underfunded reserve accounts that may point to
financial irregularities and threats to tenants' health and safety. A
team comprising an auditor, an investigator, and an RHS employee will
make visits to high-risk projects. We will follow up with detailed
audit and investigative work where indications of fraud or unsafe
living conditions are identified. To the extent necessary, local
officials such as fire marshals and building inspectors may be involved
to further corroborate any problems and to provide an additional
impetus for improving substandard living conditions.
As an example of the type of financial abuse we expect to find, the
general partner of a Pennsylvania management company pled guilty to
nine counts of false statements made to RHS. The individual planned,
built, and managed 32 apartment projects in Pennsylvania, New York,
Maryland, Delaware, and West Virginia, all under the RRH program. The
general partner established a central disbursement company to oversee
the operation of the projects and their accounts. It was determined
that the individual made more than $1.3 million in unauthorized
withdrawals from the tenants' security deposit and replacement reserve
accounts. The money was used to support private real estate ventures
that were losing money, which included housing developments and
shopping malls. Sentencing is pending.
Additional Controls Over the U.S. Department of Housing and Urban
Development (HUD) Section 8/515 Projects Not Fully Implemented
Under the Section 515 RRH Program, RHS approves loans to provide
housing for persons with low or moderate income and for persons aged 62
or over. Rent paid by tenants of these projects can be supplemented
through RHS rental assistance or Section 8 rent subsidies provided by
HUD. In September 1993, we reported several situations where
improvements in servicing for projects receiving Section 8 rent subsidy
were needed. RHS officials agreed to implement regulations requiring
RHS countersignature for reserve withdrawals. RHS also issued
instructions requiring servicing officials to identify and monitor
projects with excess funds and cancel unneeded interest credit or
recover the unneeded interest credit by collecting overages. In
addition, RHS agreed to monitor lump sum retroactive rent subsidy
payments from HUD.
In followup to our 1993 audit, we selected 33 projects to determine
if new procedures improved the cash management practices used by
Section 8/515 borrowers and achieved savings. We found some borrowers
were not investing project funds, in order to avoid tax liability. We
estimated that interest income could have been increased by
approximately $918,000 by investing reserve funds in accounts yielding
higher interest rates. Countersignature reserve accounts were either
not established or not operating effectively for approximately 48
percent of the projects reviewed. Also, $45.2 million of reserve funds
was not adequately secured for 422 projects in our universe of 895
projects. In addition, we estimated that 46 percent of the projects did
not transfer approximately $16.5 million from nonsupervised operating
accounts to reserve accounts requiring the countersignature of an RHS
official. In total, an estimated 258 borrowers, with interest credit
agreements dated before RHS obtained regulatory authority, received $2
million of unneeded interest credit annually. In addition, we estimated
326 borrowers, with agreements dated after RHS obtained reduction
authority, received unneeded interest credit totaling $3.4 million
annually. An estimated 55 percent of projects accumulated excess funds
totaling $31.3 million. In addition, we estimated that had
approximately 28 percent of projects applied excess funds to loan
obligations, annual savings to the Government and borrowers totaling
$1.7 million would have resulted. We identified $169,000 of project
funds used for questionable purposes, and we projected that $3 million
had been used for questionable purposes.
We recommended RHS seek legislation to eliminate dual subsidies
arising from unneeded interest credit and require project managers to
deposit reserve funds in an escrow account directly under RHS control.
In addition, we recommend RHS strengthen servicing and establish
procedures for situations where project managers did not timely
establish or maintain countersignature reserve accounts. We recommended
recovery of the questioned costs.
Mr. Chairman, at this time, I would like to highlight some of our
other audit and investigation activities.
entitlement programs
food and nutrition service (fns)
Food Stamp Program (FSP)
The Food Stamp Program is our nation's primary nutritional ``safety
net'' for those in need. Program expenditures in fiscal year 1997 were
about $21.5 billion, with benefits provided to about 23 million
recipients monthly across the country. The program is administered by
FNS through various State and local government entities. According to
FNS, as of the end of fiscal year 1997, about 75 percent of food stamp
benefits was issued using food stamp paper coupons. However, States are
rapidly moving to implement EBT systems, and under welfare reform, EBT
is mandated by 2002. About 187,000 retail grocery and other stores are
authorized by FNS to accept food coupons or EBT benefits from
recipients.
Because of the huge size of the program and its vulnerability to
fraud and abuse, OIG devotes a significant portion of its total
resources to audit and investigative work in FSP. Our audit work
focuses on the adequacy of controls and systems used to manage program
areas such as issuance operations, wage-matching requirements, bank and
retail store monitoring, and quality control procedures. Our audit
staff is also working closely with FNS, other Federal agencies, and the
States to monitor and review EBT systems as they expand in use. Our
investigative emphasis is on food stamp trafficking, which is the
illegal exchange of food stamp coupons or EBT benefits for cash or for
other nonfood items. During fiscal year 1997, we devoted approximately
46 percent of our investigative resources and 8 percent of our audit
resources to FSP work. During the year, we conducted 598 food stamp
fraud investigations, and we issued 19 audits relating to FSP. Our food
stamp investigations resulted in 540 criminal convictions of
individuals and businesses and over $17 million in fines, restitutions,
and other monetary penalties. For fiscal years 1995 through 1997, OIG
has conducted over 1,900 investigations of food stamp fraud, which have
resulted in over 1,800 convictions and $49 million in monetary results.
Trafficking
Trafficking in food stamps has been a problem since the program
began. While most food stamps are properly issued to eligible
recipients and are used as they were intended to buy food in FNS-
authorized stores, a significant amount of trafficking continues and
remains a problem to this day. Street trafficking involves persons who
purchase or barter food stamps for cash or other nonfood items. Street
traffickers often obtain food stamps from recipients at a substantial
discount of their face value, frequently in exchange for drugs or other
nonfood items. Retailer trafficking involves FNS-authorized store
owners and their employees who purchase food stamps for cash at a
discount of their face value and then redeem them at their banks for
full face value. Retailers traffick with both individual recipients and
with street traffickers. Since the FNS-authorized retailer is the key
to the eventual redemption of illegally obtained food stamps, OIG's
primary investigative focus is on identifying and investigating those
retailers who purchase food stamps. During fiscal year 1997, about 80
percent of our food stamp investigations involved FNS-authorized
stores. During the year, 326 retail stores were disqualified by FNS
based upon OIG investigations. Those stores had annual redemptions of
$65 million.
FNS' Sanction Settlements Do Not Always Enhance Error Control
As an incentive to control food stamp certification error rates,
States are awarded additional administrative funding for low error
rates and sanctioned for excessive error rates. As outlined in our 1997
audit which covered a 14-year period ending in 1995, 48 States were
sanctioned for excessive error rates. The States overissued
approximately $8.5 billion in food stamps and were liable for
approximately $1 billion for excessive errors.
Between fiscal year 1981, when the sanctioning process became
effective, and fiscal year 1995, FNS had collected only $6.2 million of
the $1 billion in liabilities. FNS may waive collection of a State's
liability incurred after fiscal year 1985 on the condition that the
State invests its own funds in error control activities. Through
settlements with FNS, States were required to reinvest $65.1 million in
FSP, with contingency provisions for reinvestment of another $36.7
million. Almost $765.4 million in potential sanctions was waived by FNS
as part of the settlement agreements negotiated with the States.
We reviewed the settlements that FNS had negotiated with the
States, as well as the reinvestment activities the States engaged in.
We found that the settlements (1) absolved States of their liabilities
regardless of their error rates, (2) did not always provide incentives
for States to reduce error rates, and (3) included payment of Federal
matching funds for activities that should have been fully funded by the
States. We also found ineligible projects and costs included in the 45
reinvestment projects we reviewed in 17 States. The States had budgeted
$70.8 million for the projects. We questioned an unduplicated $50.2
million of the budgeted and actual costs. For example:
--We questioned the eligibility of 11 projects budgeted for $42.3
million because most of the work performed under the projects
constituted the basic activities required for program
administration. Also, the States funded some of the projects by
reallocating existing resources rather than budgeting new
expenditures.
--The States charged ineligible costs to their reinvestment
activities. We evaluated the propriety of costs charged to the
30 projects conducted by 11 of the 17 States. Of the $40.5
million the States had charged to the projects, we questioned
$10.5 million in costs.
We recommended that FNS (1) collect sanctions from States with
historically excessive error rates; (2) make any settlement agreement
contingent on a State's ability to reduce its error rate below the
national average; (3) ensure that reinvestment activities enhance the
controls over errors, not merely meet the minimum requirements for
program administration; (4) ensure that reinvestment projects are not
funded by reallocation of resources; (5) review each State's
reinvestment activities to evaluate its eligibility; and (6) recover
the questioned costs or require the States to reinvest in error rate
control activities that qualify.
FNS officials generally disagreed with our conclusions regarding
the amount of questioned costs. We continue to work with them on
resolution of the recommendations.
One State Overclaimed As Much As $25 Million in Employment and Training
Funds
The Employment and Training Program (ETP) provides funds to train
food stamp recipients to find work. FNS approves each State's
Employment and Training plan, and reimbursements are based on the size
of each State's food stamp work registrant population, as a percentage
of food stamp work registrants nationwide, and on actual costs that
exceed those calculated by the population formula. Reimbursed costs may
not include overhead costs of normal educational operations.
At the request of FNS, we evaluated Wisconsin's methodology for
identifying those costs to be submitted for Federal Employment and
Training matching funds, and we reviewed the State's procedure for
determining the number of eligible program participants.
FNS approved Employment and Training matching funds totaling $10.2
million in fiscal years 1995 and 1996 to which Wisconsin was not
entitled. The State's calculation of work registrants included food
stamp recipients who were ineligible for ETP. Wisconsin also charged
for costs of operating the Wisconsin Technical College System even
though neither the colleges nor the attending food stamp recipients
were given any Employment and Training funds by the State. FNS was
unaware of these conditions because the regional office did not
recognize the large increases in the State's claim for matching funds
as an indicator of possible problems.
An additional $15.3 million in Federal matching funds was approved
for the costs of continuing a U.S. Department of Health and Human
Services (DHHS) jobs program whose normal allocations had run out.
Reimbursement of these transferred costs could constitute a violation
of appropriation laws and, thus, may need to be refunded to FNS.
We recommended that FNS collect $10.2 million from Wisconsin for
the ineligible costs of the technical college system and for the
overstated number of Employment and Training participants. We also
recommended that FNS' regional office obtain a legal opinion from the
Office of General Counsel on whether the payment of costs allocated to
a DHHS program constitutes a violation of law and whether the
associated funds should be collected. Finally, we recommended that FNS
strengthen its monitoring procedures to prevent future recurrences of
these problems in other States.
FNS officials agreed that the State's grant and matching funds may
have been overstated. They also agreed to obtain a legal opinion
regarding the possible appropriations violation.
Other Food Stamp Investigations
In cooperation with the local Oregon police department, our
investigation of an individual in Oregon who was illegally receiving
food stamps, led to his January 30, 1998, guilty plea on two counts of
Aggravated Murder. Our investigation determined that the individual,
who was suspected of multiple homicides while riding railroad lines
throughout the United States, had applied for and received food stamps
using false identities in 12 States. Information we obtained from food
stamp files around the country established a time line which tracked
the individual around the country and helped place him in the locations
where the homicides occurred and provided the motive for some of the
murders. He admitted to using the identities of some of his homicide
victims in order to receive their food stamp benefits. In Connecticut,
15 individuals were arrested in a food stamp sting operation. Owners
and employees of eight authorized stores had purchased approximately
$256,000 in food stamps for $118,450 in cash, two handguns, and two
vehicles. The 13 store owners and employees involved with food stamp
trafficking were charged with Federal and/or State violations. The
owner of one store was a city councilman, who pled guilty to State food
stamp charges. During the course of the investigation, the owner of an
authorized store introduced the OIG undercover agent to a Connecticut
State Representative, who was also a police officer, for assistance in
expediting a pistol permit. The OIG agent paid the Representative $400
for his assistance. Even before the OIG investigation, the chief
State's attorney's office had been investigating the Representative for
election law violations. The OIG agent, while conducting this business,
was approached by a second State Representative who was a police
officer, as well. The Representative made a similar arrangement to
assist in expediting the pistol permit. The OIG undercover agent paid
this State Representative $200 for his assistance. Both Representatives
were arrested and charged with various State violations by the chief
State's attorney's office. Subsequently, both pled guilty, resigned
from their positions, and were given suspended sentences with
probation. The case was worked jointly with Connecticut's chief State's
attorney's office, IRS, and the U.S. Attorney's Office.
While the vast majority of our investigative time spent in the Food
Stamp Program involves trafficking, we also conduct investigations of
other types of criminal activity in the program, such as large-scale
thefts of coupons from issuance offices and multiple issuances of
benefits to the same individual, particularly if interstate fraud is
involved.
One recent investigation resulted in guilty pleas from three
individuals who broke into food stamp issuance centers in Georgia,
Oklahoma, and Alabama and stole nearly $500,000 in food coupons and
over $47,000 in cash. The robbers gained entry to the businesses by
cutting holes in the roofs. When employees arrived at work early in the
morning, two of the armed robbers--dressed in black ski masks, gloves,
and coveralls--crashed through the ceiling and climbed down ropes into
the businesses. Two members of this robbery ring have pled guilty to
multiple Federal crimes, including food stamp violations, and were
sentenced to prison for 151 months and 60 months, respectively, along
with total restitution of $142,380. The ringleader, who was wanted for
numerous armed robberies in several States, was tried in Texas for a
similar robbery which did not involve food stamps. He received two
consecutive life sentences under the new Federal ``Three Strikes and
You're Out'' law. The three gunmen have also been implicated in nine
other armed robberies.
farm programs
farm service agency (fsa)
Tobacco Fraud
A North Carolina tobacco dealer, who was also affiliated with the
Montana Freemen organization, and a Fredericksburg, Virginia, tobacco
dealer were among the 40 tobacco dealers, warehousemen, farmers, and 1
corporation who have been convicted of felony charges for their roles
in a tobacco fraud scheme that resulted in the illegal sale of more
than 34 million pounds of excess tobacco valued at over $57 million.
The Freeman pled guilty to charges of conspiracy to commit mail fraud
and to making false statements regarding tobacco marketed on USDA
tobacco dealer cards, after he and others used dozens of persons
throughout the Southeastern United States to illegally sell the excess
tobacco. He was sentenced to 5 years in prison for the tobacco-related
charges. Information developed by OIG during the tobacco investigation
laid the groundwork for another Federal prosecution and conviction of
the Freeman relating to crimes associated with the Freemen group,
including conspiracy to commit bank fraud and conspiracy to intimidate
a Federal officer. The sentence for that conviction was 12 years in
prison. The Fredericksburg tobacco dealer was sentenced to nearly 16
years in prison following his trial and conviction. Additionally, the
Government was awarded property, including the defendant's residence, a
colonial era estate known as ``Beauclaire Plantation,'' which IRS has
appraised at over $900,000, and $3 million in cash and substitute
assets. The substitute assets seized include a registered American
Quarter Horse, known as ``Coosa Lad,'' valued at nearly $500,000, and
additional real estate valued at over $150,000. Administrative action
has been initiated to collect up to $42.5 million in tobacco marketing-
quota penalties. Civil suits have also been filed against some
warehouse operators under the False Claims Act.
Mohair Incentive Program
Although the Mohair Incentive Program was eliminated in 1996, OIG
continues to investigate criminal violations of this once-important
program. This program allowed mohair producers to receive Government
subsidies approaching 400 percent of the amount of their actual mohair
sales. Prior to its elimination, this Program was defrauded out of $1.6
million by three Texas ranchers. A fourth rancher submitted additional
false claims for over $400,000 in program payments; however, the
payments were not made. The producers, who were required to have
actually owned the goats which produced the mohair for which they sold
and received subsidy, actually purchased the mohair from other sources,
resold it, and submitted bogus receipts to support their claim to USDA.
All four of the defendants in this case pled guilty to charges of
making false statements, and three of them have been sentenced to
prison terms from 22 to 40 months and ordered to pay over $2.5 million
in restitution. Sentencing is pending for the fourth. Interestingly,
the Federal District Court Judge ordered the restitution to include
interest on the amount of the fraud calculated, from the date the
payments were received.
Adulteration, Misgrading, and Misweighing of Grain
A multinational food company headquartered in Omaha, Nebraska, pled
guilty to charges of adulteration, misgrading, and misweighing of grain
by the company's grain division and paid $8.3 million in fines and
disgorgement of criminal profits. A significant part of the sum is
being disbursed to more than 4,000 farmers who were cheated by the
company's schemes to defraud. In addition, four former managers of the
grain company pled guilty to misgrading grain. Two of the managers also
pled guilty to wire fraud. One of the managers found guilty of wire
fraud was sentenced to a prison term of 15 months, followed by
probation of 2 years, and the other manager was fined $3,000 and placed
on 4 months' home detention. The other two managers were fined $500 and
$200, respectively, because they cooperated in the investigation and
had not led the schemes. In lieu of debarment, the company signed a
compliance agreement that establishes a corporate code of ethics and
conduct and provides for training in ethics, as well as grading and
weighing. The agreement also ensures a prohibition against adding water
to grain except for processing.
Our investigation found that the company used several schemes to
defraud farmers and grain buyers and increase its grain inventories and
profits. Soybeans were purposefully misgraded, allowing the company to
pay less to the farmer yet sell at higher rates. The company also
significantly misweighed grain it sold, thereby allowing it to ship
less grain than it was paid for. In addition, water was added to grain
inventories, which increased the grain's weight and the company's
profits when the grain was sold. The excess moisture also caused
spoilage of grain in transit, prompting international complaints.
Further, the company paid gratuities to federally licensed grain
samplers who worked for a Government contractor. These licensed
personnel then allowed the grain company to exchange poor-quality grain
samples for samples of a higher quality. The samples were used to
prepare ``Official Certificates,'' which are used throughout the grain
trade to market grain. End users received poor-quality grain but paid a
higher price. Investigative findings of the questionable grain-handling
practices prompted lawmakers to increase the level of violations of the
USDA Grain Standards Act from misdemeanors to felonies. Subsequent
rulemaking severely restricted the addition of water to grain. The 4-
year investigation was a joint effort with FSA and the Grain
Inspection, Packers, and Stockyards Administration.
FSA Oversight of Certified State Mediation Programs Needs Strengthening
The Secretary of Agriculture has the authority to help States
develop certified mediation programs. These programs make a trained,
impartial person available as a mediator to facilitate communication
between disputing parties to promote reconciliation, settlement, or
understanding among them. At the local level, mediation programs may be
administered directly by the State. Since 1988, USDA has obligated
$19.7 million for 20 State mediation programs.
Although grant agreements give USDA officials full access to
mediation records, OIG was denied access by all four State agencies
visited. State officials withheld all records that would identify
mediation participants, as well as the final agreement resulting from
the mediation. State officials considered such records confidential. As
a result, we were unable to fully evaluate the use of Federal funds and
the accomplishments of the States. It is important to note that
mediation programs are available for a variety of USDA loan and payment
programs, which total approximately $33 billion. Since any borrower or
participant in these programs can request mediation services, $33
billion is the value of USDA funding impacted by the decision to deny
OIG access to records.
Through review of the limited records that were provided, we
identified $2.1 million since 1988 in excessive or questionable
reimbursements for activities that did not involve mediation. These
activities included financial analysis, credit counseling, and other
technical assistance for individuals not in mediation. In our opinion,
mediation funds should be used to reimburse expenses associated with
mediating disputes involving farmers directly affected by USDA actions.
We also reported that the average cost per mediation case for FSA-
administered mediation programs was $537 while the average cost for
State-administered programs was $3,719 per case. In addition, we noted
that the total fiscal year 1996 appropriation for the mediation program
was $2 million; however, FSA obligated $3.1 million to the States and
allowed them to carry forward unused amounts to the succeeding fiscal
year.
We recommended that FSA (1) withhold grant funds from the four
States we visited until records are made available, (2) amend
regulations to specify what costs can be claimed for reimbursement, (3)
recover $1.2 million in questionable and unsupported costs, (4) reduce
the cost per case for the State mediation program, and (5) stop
obligating more grant funds in a fiscal year than are appropriated by
Congress. We are working with FSA officials to resolve the issues
identified in the report.
Subsequent to the release of our audit report, OGC issued an
opinion regarding USDA access to records. The opinion states in part:
--Section 1946.4 of 7 Code of Federal Regulations (CFR) requires that
any State requesting a mediation grant comply with 7 CFR parts
3015 and 3016. Section 3015.24 of 7 CFR in turn provides, in
part, that USDA and any of its authorized representatives ``* *
* shall have the right of access to any * * * records of the
recipient which are pertinent in a specific USDA award in order
to make audit, examination, excerpts, and transcripts.''
OGC concluded that FSA should notify the grantees of the regulatory
requirements and that continued failure to grant access in accordance
with the regulations will be considered a material violation of the
grant award under 7 CFR part 3015, subpart n. FSA has notified the
grantees of the OGC opinion.
Currently OIG, FSA, and State-administered mediation officials have
reached a compromise in our effort to complete a review of the
mediation program, and the review is continuing in selected States. Our
review objective, for this phase, is limited to determining whether the
mediation program is effectively resolving USDA-related issues in
accordance with applicable laws and USDA regulations and procedures.
This phase is being limited since, in our earlier review, we made
recommendations to FSA concerning matters eligible for funding with
mediation grant funds. We continue to work with FSA officials to
resolve these matters.
Tobacco and Peanut Marketing Penalties Not Assessed
The Omnibus Budget Reconciliation Act of 1993 requires that
marketing assessments be collected on imported tobacco, while the
Omnibus Budget Reconciliation Act of 1990 requires that producers and
handlers remit marketing assessment fees for the sale and purchase of
farmer stock peanuts.
Tobacco importers who do not remit the assessment promptly are
subject to marketing penalties and late payment interest charges. Over
the period 1994 to 1996, potential marketing penalties and interest
charges approximating $123 million were not timely identified and
collected. FSA's failure to identify the penalties and interest could
result in a material understatement of accounts receivable for the
Commodity Credit Corporation (CCC).
While peanut handlers generally remitted marketing assessments
timely, FSA did not assess penalties against handlers who remitted the
fees, or a portion thereof, late even though the legislation required
it. Of the almost 12 million tons of peanuts marketed between 1991 and
1996, assessments were remitted late on 700,000 tons, or 5.8 percent.
The unassessed late payment penalties would have totaled $46.4 million.
For tobacco, we recommended FSA (1) notify the respective importers
of their liabilities and give them an opportunity for a hearing, (2)
recover the net amount of marketing penalties determined due, (3)
ensure that any reductions to marketing penalties are in accordance
with legislated mandates, and (4) record accounts receivable in CCC's
financial statements for penalties assessed. For peanuts, we
recommended that penalties be assessed for late payments. FSA officials
are in the process of taking corrective actions.
Improper Conservation Reserve Program (CRP) Scoring Reduces
Environmental Benefits of Land Accepted
Under CRP, producers receive annual payments from FSA to take
highly erodible cropland out of production and establish and maintain a
vegetative cover on it. Last year, FSA opened the program to the
fifteenth signup. During signup, producers designated tracts of land
that were determined environmentally sensitive, and personnel from the
Natural Resources Conservation Service (NRCS) reviewed the tracts and
scored them according to values on the Environmental Benefits Index
(EBI). One subpart of the index identifies the environmental benefits
of the land, such as providing cover beneficial to wildlife, and
specifies what numerical scores may be given for the different kinds of
conservation practices--planting mixed grasses, legumes, etc.--that the
producer established to enhance each benefit. Tracts that have been
awarded higher scores are regarded as more worthy of conserving and
qualify for CRP consideration ahead of tracts with lower scores. Tracts
that fall below a minimum score are excluded from the program.
Our audit disclosed significant inconsistencies in the
methodologies used by States when they assigned scores for various
conservation factors. Specifically, producers in some States received
high scores for preserving cover beneficial to wildlife or for
protecting threatened and endangered species even though the required
cover or the endangered species were not present on the tracts of land.
Such inconsistencies in scoring can result in greater CRP consideration
for cropland in one State even though its environmental benefits are no
greater than those of its neighboring States.
Our review focused on two environmental benefits of land tracts
offered to CRP--providing cover beneficial to wildlife and providing
habitat for threatened and endangered species. Additional work was
conducted in Kansas because of a complaint about that State's EBI
scoring methods. Kansas, like most other States, provided little
monitoring of county signups by State NRCS representatives to prevent
counties from misapplying EBI criteria.
Nationwide, we reviewed CRP land offers in 55 counties in 17
States. Scoring errors and inconsistencies occurred on 47 percent of
the CRP worksheets we verified. Inconsistencies occurred because States
unilaterally modified EBI values, awarding 10 points, for example, for
a category that allows either 15 points or no points. Errors occurred
because some States developed EBI scoring software that was not always
accurate and because some States entered improper values on CRP
worksheets.
We recommended that FSA and NRCS (1) provide additional guidance on
criteria for assigning points for the environmental benefits we found
improperly scored and (2) require field offices to review and correct
EBI scoring, based on the additional guidance, before the CRP contracts
are signed. We also recommended that software developed for future
signups be field-tested for accuracy prior to use. Specifically, in
Kansas, we recommended that CRP contracts not be finalized until the
offers were reviewed and corrected.
Based on a management alert we issued during our audit, FSA
officials issued clarifying information and instituted a second-party
review of CRP worksheets for the six counties with the largest number
of land offers in each State that had CRP activity. NRCS management
also issued a guidance document that addressed some scoring problems
noted in our review. USDA also allowed 1 year of payment to producers
whose offers were incorrectly accepted due to errors made determining
EBI scoring. Due to the large error rate in the fifteenth signup, we
have expanded our audit coverage into the sixteenth signup.
Borrowers With Delinquent Farm Loans Received Full Benefit From Other
FSA Programs in the Past, but Offsets Are Scheduled
Farm loan borrowers whose accounts were delinquent have continued
to get full Government payments from other FSA programs--for example,
the Acreage Reduction Program or the Conservation Reserve Program--
regardless of their delinquent debt to FSA. FSA did not offset the
program payments to reduce the delinquent amounts because it did not
have an automated system that could identify delinquent borrowers who
were scheduled to receive other program payments. The offsetting was
further complicated by procedures--inherited from the former Farmers
Home Administration, that allow FSA to apply the offset only after it
has ``accelerated'' the delinquent account--started formal foreclosure
proceedings against the borrower.
During 1995 and 1996, FSA made $72.1 million in program payments to
over 4,000 borrowers whose total indebtedness was over $885 million and
who were at least 180 days delinquent on these debts. It had
accelerated the delinquent accounts of those who received $9.7 million
of this amount, and it offset only $3.1 million in payments to those
borrowers with the accelerated accounts.
FSA's procedures regarding offsets were incompatible with
departmental procedures. The Department does not require agencies to
accelerate delinquent accounts before applying any offsets, and it
gives agencies 10 years from the date the debt arose to collect the
debt through the offset. FSA procedures required the acceleration and
limited FSA to 6 years to collect the debt through the offset.
In response to our management alerts, FSA issued interim
regulations on August 1, 1997, authorizing the agency to offset program
payments to delinquent borrowers without accelerating the loan accounts
and by expanding the collection period to 10 years. We concluded that,
with timely implementation of the new rules prior to the final 1997
farm program payments, $34 million in program payments could be offset
from borrowers whose accounts are more than 180 days delinquent.
We recommended that FSA expedite the release of all procedures to
implement the new regulation and that necessary actions be taken,
manually if necessary, to offset 1997 payments due delinquent
borrowers. We also recommended that FSA ensure that its automated
administrative offset system will (1) identify delinquent borrowers who
are also receiving program payments, (2) provide for an offset of those
program payments, and (3) apply the offset to the delinquent account.
The agency agreed with the findings and recommendations and initiated
corrective actions.
Disaster Overpayments Result from Improper Reporting and Weak Oversight
As part of our nationwide review of FSA's noninsured crop
assistance program (NAP), we reviewed producers' applications in two
counties in California and one county in Alabama. Producers in a
designated area are eligible for payments if a natural disaster reduces
their crop yields below 50 percent of the expected yield.
In California, we questioned payments in the 2 counties, totaling
about $1.6 million, because 48 of 136 producers we reviewed had
overstated their losses. In one of the counties, we also found that the
Agriculture Credit Office made loans of $569,000 to two producers based
on possible false certifications which underreported their production.
In other cases, FSA made errors which resulted in overpayments of
$88,000 and underpayment of $8,300.
In the one Alabama county, the county office improperly used State-
assigned yields to calculate benefits rather than the producers' actual
production histories. Twenty-six of the 53 producers who applied had
received disaster payments from FSA in 1 or more of the previous 4
years and had production histories on file. Using these histories, we
determined the 26 producers were eligible for only about $23,000 of the
$126,000 determined by FSA.
Since we found that assigning yields, rather than using actual
yields, was a Statewide practice in Alabama and also occurred in other
States, we recommended to FSA's national office that it base yields on
actual production histories. As a result, Alabama halted payments to
producers, pending national office instructions. In California, we
recommended that FSA broaden the definition of ``misrepresentation'' to
include inaccurate producer reporting that benefits the producer and
that measures be taken to strengthen program controls. In all cases, we
recommended recovery of overpayments and corrections of underpayment.
FSA Reacts Quickly to Needs of Endangered Livestock in Upper Great
Plains
In response to severe winter storms in early January 1997, FSA
implemented the Emergency Feed Grain Donation Program to provide
immediate assistance to livestock producers in North Dakota, South
Dakota, and Minnesota. It also implemented the Foundation Livestock
Relief Payment for producers in the three States and other bordering
States who needed feed to enhance the diet of foundation livestock
weakened by the winter weather. FSA provided about $25 million in
assistance through both programs.
We worked closely with FSA officials during the programs'
implementation and provided suggestions on how to address control
weaknesses and abuses often associated with emergency programs. Based
on our field work in selected locations, FSA issued notices to clarify
provisions on producer eligibility and the duration of available
assistance.
In June 1997, Congress created the Livestock Indemnity Program to
provide about $50 million in assistance for livestock and poultry
losses that occurred between October 1, 1996, and June 12, 1997. We
reviewed the program during the signup period and found that third-
party verification statements were being accepted as evidence of losses
instead of documented evidence. We also noted one State's
interpretation of eligible loss conditions was inconsistent with
national office guidance and noted inconsistencies in program
administration between States. We made recommendations to FSA to
address these issues. We are making further reviews of eligibility
determinations, payment calculations, and spot-checks of livestock and
poultry operations.
natural resources and environment
Forest Service (FS)
A former FS employee and a self-employed aircraft broker were
recently found guilty at trial of conspiring to steal 28 Government-
owned airplanes--22 C-130A cargo planes and 6 P-3A submarine attack
planes--valued at up to $28 million.
The Federal Property Management Regulations administered by the
General Services Administration (GSA) allow excess Federal property to
be transferred from one agency to another. However, under this program,
title to the excess property must remain with the United States
Government. Historically, the Air Force has provided used military
aircraft to FS, which uses them to fight fires.
Our investigation disclosed that five airtanker-operating companies
signed exchange agreements with FS in which they exchanged alleged
historic aircraft for either C-130A or P-3A aircraft owned by the
United States Government. The C-130A and P-3A aircraft had originally
been transferred to FS from the Air Force and the Navy as excess
aircraft through the GSA exchange program. Both defendants assisted the
airtanker operators in facilitating the aircraft exchanges. Also, both
defendants made misrepresentations to officials of GSA, the Air Force,
the Navy, and other Federal agencies to accomplish these exchanges. One
of the airtanker operators, who received six C-130A aircraft from FS,
transferred two of the planes back to the aircraft broker. The broker
then transferred these two planes back to the same airtanker operator
and received $450,000. Another airtanker operator, who also received
six C-130A aircraft, transferred two of them back to the broker. The
broker then transferred title of the two planes to a third airtanker
operator in exchange for cash payments and other benefits with a value
of $600,000. Sentencing for both defendants is scheduled next month.
FS Cooperative and Reimbursable Agreements Neither Safeguard Funds Nor
Identify Conflicts of Interest
FS is authorized to cooperate and share scientific information and
technology with other Government agencies, colleges and universities,
businesses, and private landowners. During fiscal years 1994 and 1995,
FS awarded $70.3 million in research grants and agreements to colleges
and universities.
We reviewed 33 grants and agreements awarded to 23 recipients by 7
FS research stations in fiscal year 1994. More than one-third of the
recipients in our sample did not always comply with Federal assistance
regulations, Federal cost principles, or the terms of specific grants
and agreements. Noncompliance included not providing sufficient
resources to meet the agreement, failing to satisfy cost-share
requirements, not obtaining FS prior approval for large purchases of
equipment, and not maintaining adequate records to support claims.
We recommended that FS (1) perform periodic national reviews of
research grants and agreements and (2) require research stations to
periodically review a sample of reimbursement claims from cooperators.
FS officials have generally agreed with our findings and
recommendations and are developing an acceptable corrective action
plan.
Controls Over USDA Environmental Hazardous Cleanup, Abatement, and
Prevention Efforts Need Further Assurance Against Liabilities
From Land Acquisitions
The Hazardous Waste Management Program was established as a
separate USDA appropriation to bring its agencies' past and current
actions into compliance with Federal, State, and local environmental
standards. Departmental policy provides for the initiation of
agricultural and forestry programs that abate, control, and prevent
pollution. OIG has assisted the agencies' efforts toward achieving
environmental compliance for the facilities they own and operate by
reviewing the adequacy of the individual policies, procedures, and
actions they have adopted for meeting these standards and requirements.
Over the past 6 years, OIG has reviewed the progress being made in
USDA's management and disposal of hazardous chemical, biological, and
radioactive materials and provided recommendations to make these
efforts more effective and efficient. Eleven USDA agencies are involved
in the purchase, exchange, assumption, or sale of lands and perform
hundreds of transactions per year. Our immediate concern is to help
these agencies avoid the accumulation of further environmental
liabilities in the acquisition, management, and disposal of properties
under their stewardship.
natural resources conservation service (nrcs)
Water Quality Inventive Projects (WQIP) Need Clearer Focus
The goal of WQIP is to provide incentive payments to reduce
agricultural pollutants through environmentally and economically sound
management practices. We found that funding of State and locally
identified priority areas did not always increase conservation benefits
on the most vulnerable lands. In addition, inconsistencies existed in
the methodologies followed by States and local areas to identify and
rank prospective projects and to prioritize requests to enroll land.
Practice components were not always adequately planned or the most
effective for improving water quality because plans did not always
address all water quality problems identified, and incentive payments
were approved for practices previously implemented or required to
comply with the highly-erodible-land provisions.
We recommended that NRCS coordinate with other conservation
partners in developing the focus for the Environmental Quality
Incentives Program (EQIP) and establish whether EQIP should address all
existing resource concerns. EQIP, which was established by law in 1996,
consolidated WQIP and three other USDA conservation programs into one
program. We also recommended that NRCS develop policy and guidance for
EQIP to promote total resource management planning and to prohibit
payment for practices that were previously implemented or required to
comply with highly-erodible-land provisions. NRCS officials agreed to
implement our recommendations.
consumer protection
food safety and inspection service (fsis)
FSIS User Fees Did Not Fully Cover Cost of Export Inspections
In addition to the basic meat and poultry inspections performed by
FSIS, products for export are reinspected to ensure they comply with
meat and poultry regulations and specific requirements of the importing
country. FSIS performs an estimated 450,000 reinspections of products
to be exported which were previously inspected under the normal
inspection process. FSIS does not collect user fees for these
reinspections.
FSIS could offset the Government's costs of providing export
inspection services by collecting additional user fees. For certain
services, such as export reinspection and preparation of certain export
certificates, FSIS would need congressional authorization to collect
user fees. If FSIS were to obtain this authority, some export
inspection functions could become self-sufficient, thereby making an
estimated $13.7 million of appropriated funds available annually for
other inspection activities. In other areas where user fees are
currently authorized and charged, FSIS did not charge for the full cost
of the services provided. We estimated that FSIS could collect an
additional $921,000 annually if such fees were adjusted to reflect all
associated FSIS costs.
We recommended that FSIS (1) seek statutory authority to assess,
collect, and retain user fees for all export inspections/reinspections
and for the preparation of the export certificates where such authority
does not currently exist and (2) increase the user fees currently
authorized and charged for products to be exported to cover the full
costs of the services provided. FSIS management agreed with the
reported findings and is taking corrective actions.
FSIS Needs To Strengthen Policies and Procedures Over the Progressive
Enforcement Action System
FSIS developed the Progressive Enforcement Action system as a tool
to monitor meat and poultry plants with continuing food safety problems
and bring them back into compliance. However, the current system does
not permit FSIS to suspend or withdraw inspection when contaminated
products or conditions that may compromise food safety are first
detected, even though such authority is provided for in the law and
FSIS regulations. The Progressive Enforcement Action system requires
inspectors to develop supporting documentation proving noncompliance
before they can suspend or move to withdraw inspection. The four plants
we reviewed produced 212 million pounds of products under conditions
that could have caused contamination. Products included full carcasses
of beef and poultry, and poultry for slaughter. FSIS neither took
action to suspend inspections of the plants we reviewed nor established
specific timeframes during which plants must complete corrective
actions. Currently, plants are allowed to remain under progressive
enforcement for extended time periods while continuing to produce
products under conditions which do not meet food safety standards.
Further, the current system places the responsibility for ensuring
plant compliance on FSIS inspectors rather than on plant owners/
managers. To comply with requirements contained in the Progressive
Enforcement Action guidelines, inspectors must spend an inordinate
amount of their time performing inspections and documenting the
results. Plant management is required to provide an action plan but is
not primarily responsible for ensuring compliance. FSIS' present grant
of inspection does not provide for specific performance expectations or
standards and does not establish the consequences or penalties for
noncompliance.
We recommended that FSIS improve progressive enforcement by
developing and implementing procedures to ensure that (1) inspectors
refuse or withdraw inspection when conditions that may lead to
adulterated products are first detected and (2) specific timeframes are
developed for plant management to complete corrective actions in
noncomplying plants. We further recommended that FSIS revise (1) its
progressive enforcement policies to require plant owners/managers to
assume primary responsibility for establishing permanent corrective
actions and (2) the grants of inspection to make plant owners/managers
responsible for quality of plant operations and compliance with
regulations by specifying expected plant performance levels and
repercussions for noncompliance.
FSIS management generally agreed with the reported findings and
pointed out that publication of the Pathogen Reduction and Hazard
Analysis and Critical Control Point (HACCP) final rule has changed FSIS
enforcement strategies. FSIS now has specific regulatory requirements
for plant-developed and -operated systems for process control and
sanitation to prevent direct contamination or adulteration, and these
preventive measures are a condition of receiving inspection. Compliance
with procedures contained in the Pathogen Reduction and HACCP final
rule should address the type of problems we identified.
grain inspection, packers, and stockyards administration (gipsa)
Investigative Techniques Lacking Against Anticompetitive Practices in
Meat Packing Industry
The Packers and Stockyards (P&S) division of GIPSA is responsible
for enforcing Federal laws against anticompetitive practices in the
meat packing industry. Recent changes in the meat packing industry have
resulted in fewer companies controlling an ever-increasing share of the
market. This has raised concern among livestock owners and others who
depend on the sale of cattle to meat packers at open-market prices. In
1995, the price livestock owners received for cattle decreased sharply
while the major meat packers earned record profits. The perception
among livestock owners was that the meat packers were manipulating the
price of cattle. The Secretary of Agriculture requested that we assess
GIPSA's efforts to monitor and investigate anticompetitive practices.
P&S has performed few investigations of anticompetitive practices
in the last few years which have been litigated successfully by OGC.
This occurred partly because of the type of evidence available and
partly because P&S has not kept pace with the techniques needed to
monitor an industry that has changed. The evidence collected through
traditional investigative methods is no longer sufficient, by itself,
in litigating anticompetitive cases. Additional evidence from economic
analysis is now needed, but P&S does not deploy sufficient economic
resources in anticompetitive investigations to provide this evidence.
P&S needs to deploy its economists better and obtain additional
economic and statistical resources to prepare complex economic models
that can demonstrate the adverse effects, if any, of industry
activities on open and free competition in the marketplace. P&S also
needs to integrate legal expertise into its investigations and consult
with departmental attorneys at the beginning of an investigation to
ensure that the evidence necessary to litigate a case is collected.
Other Federal agencies use teams of attorneys and economists to
investigate antitrust violations.
We concluded that P&S needs to restructure its organization, both
to place more of its resources in the regions and to redirect staff
efforts toward monitoring of the meat packing industry. P&S has several
economists on staff but has placed only one econometrician at the full
disposal of its investigative staff. P&S' economists should be located
at the regional offices, where investigations of anticompetitive
practices are performed and where market data is more readily
available.
We presented a number of options to P&S to strengthen its
operations: (1) reorganize its national and regional offices; (2)
integrate its economics staff into the investigations of
anticompetitive practices; (3) assess staff qualifications and obtain
additional staff with economic, statistical, and legal backgrounds; (4)
transfer its economic research activities to another USDA agency; (5)
develop procedures to consult with OGC before initiating and during
anticompetitive practice investigations; and (6) retain the services of
a manager with expertise in all areas of directing anticompetitive
investigations or request the U.S. Department of Justice (DOJ) and/or
the Federal Trade Commission to provide a manager, on detail, to assist
in the reorganization of P&S' functions related to anticompetitive
practice investigations.
Since it will take several, if not all, of the above options for
P&S to develop an effective investigative staff, the Department may
want to consider requesting legislative action to transfer USDA's
responsibilities for performing anticompetitive practice investigations
to another Federal agency.
Another example of our activity in the health and food safety arena
includes:
--In Oklahoma and Texas, OIG and Food and Drug Administration agents
are currently conducting investigations involving the
adulteration of milk. To date, 12 dairymen and milk truck
drivers have been convicted for conspiring to add water and
salt to raw milk. It was also found that one driver pumped
water directly out of a 55-gallon barrel, which was exposed to
insects, bird droppings, and other outdoor elements, into his
milk container truck. By adding salt to the water, these
individuals evaded quality control detection and defrauded the
Associated Milk Producers Incorporated (AMPI), AMPI cooperative
members, and the general public. Criminal charges are pending
against other identified drivers, and additional investigations
involving several other dairymen and drivers are ongoing.
agricultural marketing service (ams)
More Measures Needed To Ensure Dairy Processing Plants Meet Sanitation
Standards
AMS has improved its operations by implementing additional
monitoring, training, supervising, and reporting measures related to
sanitation in dairy-processing plants. However, improvement is still
needed to ensure that regulatory agencies are notified of sanitation
deficiencies, and increasingly stiffer penalties are needed for dairy
processing plants with repeated sanitation deficiencies.
AMS neither reported serious sanitation deficiencies to FDA if the
conditions could be corrected quickly nor reported plants which were
denied participation in the inspection program because the initial
inspection disclosed serious unsanitary conditions. AMS' policy was to
notify FDA only when it had withdrawn inspection services from a plant
because of serious unsanitary conditions.
We identified three instances where plants were repeatedly
ineligible because of unsanitary conditions and appeared to implement
only temporary fixes in order to obtain an approved status. Although
the deficiencies were corrected sufficiently during inspections, the
corrections were apparently only temporary. Though relatively few
plants have this problem, for those that do, AMS needs to implement a
system whereby plants are sanctioned for repeatedly failing to maintain
acceptable standards or develop procedures to notify regulatory
agencies of plants with repeated violations.
We recommended that AMS report all significant sanitary
deficiencies identified during plant inspections, regardless of a
plant's status, to FDA. We further recommended that AMS develop
procedures to notify regulatory agencies when plants have repeated
sanitary deficiencies.
AMS officials supported our conclusions and agreed to report all
significant unsanitary conditions to FDA, State regulator agencies, and
industry trade associations. They also agreed to develop procedures to
notify regulatory agencies when plants have repeated sanitary
deficiencies.
insurance
risk management agency (rma)
New Initiatives Under the Federal Agriculture Improvement and Reform
(FAIR) Act
The FAIR Act authorizes new revenue insurance programs. In 1995,
the Federal Crop Insurance Corporation (FCIC) had already approved, for
two crops in two States, the Crop Revenue Coverage (CRC) program, a
privately developed insurance program that offered alternative coverage
to FCIC's multitiered crop insurance. The FAIR Act also provided for
phasing in of a single delivery system for catastrophic risk (CAT)
coverage. In 1997, this involved transferring over 108,000 CAT policies
to 15 private insurance companies in 14 States. In May 1997, the
Secretary approved the transfer of all remaining policies. For both
programs, FCIC reinsured companies that would service the policies.
Through various interim reports, we provided RMA with recommendations
to strengthen controls over these new activities. Regarding CRC
implementation, we recommended that RMA develop regulations for
administering privately developed programs. We also recommended that
FCIC amend or establish new reinsurance agreements with the companies
to shift additional risk to the private sector and reduce
administrative expense reimbursements for CRC in line with other FCIC
policies.
Our reviews of the transfer of CAT policies in the first 14 States
found a lack of interest by local agents in servicing policies and an
unawareness of special provisions to forgo the $50-per-crop fee for
producers with limited resources. For future transfers, we recommended
that RMA determine the availability of agents in ``local'' areas and
whether this is adequate. It should also measure the effectiveness of
the transfer process in the first 14 States. We also recommended that
RMA require reinsured companies to provide information to limited-
resource producers on fee-waiver requirements. RMA agreed with our
recommendations.
Crop Insurance for Florida Fresh Market Tomatoes Was Not Properly
Managed
We audited the 1996 Dollar Plan Fresh Market Tomato Crop Insurance
program in Florida and concluded that RMA should take sanctions against
reinsured companies in Florida because their servicing of claims filed
under the program was poorly managed. All seven indemnity payments we
reviewed were improperly made, resulting in questionable indemnity
payments of almost $1.5 million. The companies paid indemnities even
though the insureds had (1) abandoned their crops because of low market
prices, (2) claimed against losses that occurred after the reinsurance
coverage period had ended, (3) planted crops on converted wetlands they
had promised to restore to their natural state, and (4) failed to
report all production.
We found that the practices and procedures used in administering
the insurance program for fresh market tomatoes allow indemnities to be
paid to producers who did not experience a loss of commodity but,
instead, suffered financial losses due to low market prices. We met
with OGC officials and discussed the legality of paying indemnities
based on low market prices and no loss of commodity. OGC officials
verbally advised us that, to qualify for an indemnity, the insured must
suffer a quantity or quality loss of a commodity caused by an insurable
peril. We requested a formal, written opinion.
We also found two reinsured companies' sales agents were employed
by the policyholders to whom they sold policies that resulted in
claims. The agents involved in the conflict of interest received almost
$400,000 in commissions, and one of the policyholders received over
$2.4 million in indemnities on his claims.
We recommended that RMA officials develop a plan of action to
ensure that reinsured companies comply with program regulations in
their management of the Fresh Market Tomato Crop Insurance Program. In
addition, we recommended that RMA obtain data on all cases where
indemnities were paid on fresh market tomato claims where there was no
commodity loss and, based on the results of OGC's formal opinion,
recover any indemnities that should not have been paid. Other
recommendations included one in which we asked RMA to determine what
sanctions should be taken against the reinsured companies and the sales
agents involved in the conflicts of interest. RMA management generally
agreed with the reported findings and is addressing the
recommendations.
Errors in Establishing Yields and Adjusting Claims Resulted in
Incorrect Indemnity Payments
Our review of 12 California crop insurance claims for 1995 and 1996
identified errors in the calculation of indemnity payments for 8 of the
12 claims. Sales agents, loss adjusters, insured producers, and FSA
personnel misstated historical yields, miscalculated appraised
production, and inconsistently established insurable acreage and
production-to-count. It is to the producer's advantage to overstate
historical yields and understate production during a loss year; an
overstated historical yield will increase the amount of actual
production that can still qualify for indemnities. Of the eight claims
we found in error, indemnities for seven were overpaid by approximately
$125,000, and the indemnity for one was underpaid by approximately
$9,500.
We also reviewed the 1995 claims of one cotton producer in
Mississippi. The audit identified errors made by the reinsured company
in calculating indemnity payments and premiums. In adjusting the loss
claim, insurance company officials (1) overstated the number of acres
affected by the disaster by 60 acres and (2) understated the producer's
prior yield by 157 pounds per acre. The errors resulted in overpaid
indemnities of approximately $32,000; underpaid indemnities of $4,400;
and overpaid premiums of just over $1,000.
In these two audits, we recommended that RMA recover overpaid
indemnities totaling approximately $152,000; pay $14,000 to the
underpaid producers; and require the reinsured company to credit the
insured's account for the $1,000 premium overpayment. RMA should also
ensure that proper adjustments are made to historical yields for
policies where errors were identified by our review. RMA management
agreed with the reported findings and is implementing corrective
actions.
market development
foreign agricultural service (fas)
During this past year, as a result of an OIG investigation, the
Government concluded a global settlement with a prominent international
grain company in New York and its foreign affiliate. As agreed to by
the parties, the grain company paid $25 million to the United States
Government in settlement of any potential civil claims, and its
affiliate paid a $10 million fine after pleading guilty to a criminal
charge of conspiracy. In addition, three associated entities agreed to
permanent debarment from participation in any Federal programs.
This settlement represented the culmination of a series of
investigations conducted by OIG special agents since 1989 into fraud
related to USDA's General Sales Manager 102 and 103 Export Credit
Guarantee Programs, which were administered by FAS on behalf of CCC.
In 1989, two employees of the Banca Nazionale del Lavoro (BNL),
Atlanta, Georgia, branch disclosed to the U.S. Attorney's Office that
BNL branch management issued unauthorized loans to foreign governments
and exporters. Repayment of some of those loans was guaranteed by CCC
under Export Credit Guarantee Programs. The guarantees enabled foreign
entities that otherwise could not obtain credit to purchase U.S. farm
commodities and products. If the foreign entity defaulted on its loan,
CCC paid the holder of the guarantee 98 percent of the unpaid principal
and interest.
OIG initiated an investigation after inquiry with FAS revealed that
BNL held CCC loan repayment guarantees exceeding $1.6 billion. The USDA
investigators were joined by agents from the U.S. Customs Service, FBI,
and IRS, and examiners from the Federal Reserve. The team included
Assistant U.S. Attorneys in the Northern Judicial District of Georgia,
and various divisions of DOJ's national office, who worked closely with
the agents.
In 1991, a Federal grand jury in Atlanta had handed down a 347-
count indictment. Named in the indictment were a Turkish-owned
corporation, its manager, a bank owned by the Iraqi Government, four
Iraqi Government officials, and two former officers and an employee of
the BNL Atlanta branch. The indictment alleged that officials of the
BNL Atlanta branch, without authority and in disregard of BNL internal
policies and procedures, issued more than $4 billion in loans and
credit extensions to the Government of Iraq. Approximately one-half of
those loans involved USDA programs. The ten defendants were charged
with conspiracy, mail and wire fraud, money laundering, false
statements to USDA, falsification of documents presented to USDA, and
other counts.
The Turkish company named in the indictment pled guilty to 20
counts of the indictment, paid $5 million in restitution to BNL and a
$1 million fine to the U.S. Treasury, and agreed to voluntary permanent
debarment from participation in all U.S. Government-funded programs.
The three BNL employees named in the indictment pled guilty to various
charges. Three additional BNL employees, not named in the indictment,
also pled guilty to various charges. The Turkish company's manager and
the four Iraqi Government officials remain fugitives, with an
unconfirmed report that one of the Iraqi officials has died.
The BNL investigation resulted in numerous spinoff investigations.
One of those spinoff cases investigated by the USDA agents resulted in
a U.S.-based trading company pleading guilty to charges that it
conspired to make false statements to CCC. The trading company paid
over $8 million in restitution to CCC and a maximum fine of $10,000.
The responsible division of the company and three employees agreed to
debarment from U.S. programs for periods up to 3 years.
The USDA portion of these investigations resulted in $38 million of
restitution and over $11 million in fines. These investigations also
developed sufficient evidence to allow FAS to cancel $500 million in
additional CCC guarantees requested by Iraq for 1990, saved the
American taxpayers even more losses, and led to the debarment of seven
parties from participation in USDA and U.S. governmentwide programs.
Changes Are Needed To Improve Delivery and Effectiveness of
Humanitarian Aid
FAS and CCC provided $81 million to the Russian Federation and the
Kyrgyz Republic to establish joint commissions. We found that the joint
commissions did not operate efficiently and impacted embassy workloads
adversely, and funds were misspent. As recommended, the U.S. Department
of State issued a protest to the Government of the Russian Federation
resulting in the return of over $6 million to the joint commission from
the Russian tax authorities, and the Government of the Kyrgyz Republic
agreed to use the funds owed to support the activities outlined in the
original agreement. The joint commissions are being terminated.
Commodities Donated to Russia Mismanaged
A U.S. private voluntary organization that was sponsoring the
distribution of donated USDA commodities under the Section 416(b)
Program was negligent in its sponsorship. It provided little or no
management oversight of overseas operations, essentially abdicating its
responsibilities to its Russian agent and the Salvation Army.
We found the sponsor's Russian agent misappropriated commodities
valued at $1.5 million. Another $653,000 in commodities could not be
accounted for, and $2 million in commodities would have ended up ``in
the streets'' of Moscow if the Salvation Army had not paid $55,000 of
its own money to secure storage space. Also, contrary to its agreement,
the sponsor did not use half of the approximately $3.6 million from
commodity sales to support humanitarian projects in Russia.
FSA officials were unaware of the problems because the sponsor did
not provide adequate logistical reports nor did the sponsor fully
comply with its plan of operation and its project proposal. We
concluded the sponsor was negligent in its management of the sale and
distribution of $19.6 million in USDA commodities and that it should be
debarred from further participation.
FAS officials agreed to require the sponsor to make a full
accounting of all commodities and repay USDA for any misappropriated
and unaccounted-for commodities. Although they would not debar the
sponsor, they agreed to keep the sponsor out of any new programs until
all issues raised in the audit are fully resolved.
rural development
rural business-cooperative service (rbs)
Intermediary Relending Program (IRP) Borrowers Used Loans for
Ineligible Purposes
RBS provides IRP loans at 1 percent interest for up to 30 years to
intermediary relenders, who reloan the funds at low interest rates to
ultimate recipients in rural areas--those areas with populations less
than 25,000. Relenders use the income from the recipient loan
repayments to cover operating expenses, make loan payments to RBS, and
make additional loans. Loan repayments from the recipients are known as
second generation funds.
We questioned loans to 21 recipients, totaling almost $2 million,
because (1) relenders made ineligible loans and loans in cities with
populations of 25,000 or more, (2) relenders used second generation
funds for purposes not in the loan agreement or work plan and for
relending in urban areas, and (3) conflicts of interest existed between
relenders and ultimate recipients. In addition to the loans we
questioned, we reviewed the relenders' annual reports and identified
other possibly ineligible or inappropriate loans, totaling $1.6
million.
Relenders requested and received IRP advance funds from RBS far
exceeding the amount necessary to cover a 30-day period. As a result,
advance funds were held for periods ranging from 4 months to almost 2
years before being used. Also, relender IRP loan accounts often
exceeded the federally insured amount of $100,000.
In addition, relenders held excessive amounts of IRP funds and were
not loaning them timely. Fifteen relenders had rural business loans,
totaling $17.7 million which closed in 1993 and 1994 but had requested
advances of only $1 million or 6 percent. Seven of the 15 relenders,
with loans of $7.7 million, had made no drawdowns of loan funds to
reloan to ultimate recipients.
We recommended that RBS (1) recover the funds used for ineligible
purposes, (2) revise IRP regulations to state clearly that second
generation funds are for rural development and for purposes that meet
the eligibility requirements for initial loans, (3) clarify regulations
to provide detailed guidelines for making conflict-of-interest
determinations, (4) improve procedures for more efficient use of
program funds, and (5) improve reporting and monitoring procedures.
research, education, and economics
cooperative state research, education, and extension service (csrees)
Schedule A Extension Appointees' Rights Need Clarification
There are approximately 8,000 CSREES Schedule A appointees working
nationwide in the State Cooperative Extension System (CES). The
appointees receive Federal benefits including participation in the
Federal Health Benefits program and Civil Service retirement plan. Our
review of adverse actions taken against two of these appointees by one
State university CES director disclosed that the universities are not
always aware that protection, such as counseling and appeals
procedures, apply. In this case, the university offered no protection
and stated its own policy allowed CES to dismiss the appointees without
taking any such actions. OGC provided CSREES with an opinion that these
positions fall within the due process requirements of the Merit
Protection System. The Merit Systems Protection Board is currently
reviewing an appeal by the individuals. OIG continues to support action
by CSREES that will inform all CES offices of the appointees' current
status and direct them to seek the agency's advice before taking
actions that would invalidate these appointments.
employee integrity
Investigation of serious misconduct by USDA employees remains a
high priority for OIG. During fiscal year 1997, OIG issued 82 reports
of investigation concerning serious breaches of employee integrity by
USDA employees. Our investigations resulted in 21 convictions of
current and former USDA employees and 67 personnel actions, including
reprimands, suspensions, removals, resignations, and alternative
discipline. For example:
--In Kentucky, 12 people, including the FSA County Executive Director
(CED), a program assistant, and the FSA building landlord, pled
guilty to defrauding three FSA programs of approximately
$850,000 over a 9-year period. All 12 defendants were sentenced
to terms ranging from probation to 57 months in jail and were
ordered to pay fines and restitution totaling approximately
$607,000. Forfeiture of $246,350 was ordered against the CED
and the building landlord, and both of the FSA employees have
been dismissed. The investigation also prevented an additional
$15,500 in funds from being issued by FSA. The multifaceted
scheme involved the Feed Grain, Disaster, and Tobacco Programs.
The two FSA employees falsified documents, enabling the
coconspirators to receive payments they were not entitled to,
and, in return, approximately half the proceeds were given to
the CED. The numerous checks were made payable in the names of
the various coconspirators and to fictitious names. Of the 12
who pled guilty, only 1 was a farmer. In addition, the CED and
the building landlord conspired to steal Burley Tobacco
Marketing Cards and tobacco poundage quotas from various farms.
The proceeds were laundered through a business account
belonging to the building landlord. We were assisted in this
investigation by the FBI.
--A Texas FSA program assistant who was charged with theft and
embezzlement of more than $945,500, confessed and pled guilty,
and was suspended without pay pending conclusion of the
criminal action. The employee had created numerous false loans,
altered several CCC checks to bear her name, forged the
signatures of two FSA county supervisors on the CCC checks, and
deposited several CCC loan and program payment checks into her
personal bank account. Our investigation determined the
employee used some of the fraudulent loans to pay off other
fraudulent loans in order to keep the scheme active. The actual
dollar loss to the Government was approximately $286,400.
Sentencing is pending.
administration
The Department's Backlog of Discrimination Complaints Has Increased;
Greater Technical Assistance is Needed for Loanmaking and Loan-
Servicing
As requested by the Secretary, we reviewed the backlog of
complaints made by disadvantaged and minority farmers. We issued a
report in February 1997 that detailed the staffing problems, obsolete
procedures, and lack of direction from management that resulted in a
backlog of 530 civil rights complaints within the Department. During
the second phase of our work, we found that the backlog had increased
from 530 to 984, as of August 1997. In FSA alone, the backlog nearly
doubled, increasing from 241 to 474.
Although an ad hoc team was formed in April 1997 with the goal of
eliminating the backlog by June 1997, the Office of Civil Rights (OCR)
found that the complaints had never been properly investigated. As a
result, the ad hoc team was disbanded without accomplishing its goal.
We believe additional efforts are needed by ad hoc teams, under the
direction and control of OCR, to help address the backlog of
complaints. Further, we think the task of performing preliminary
inquiries on FSA complaints should be performed by OCR investigators,
who can be more objective and independent than FSA employees in
performing the task.
The Secretary also asked us to review a broad range of issues
concerning program participation by minorities. For this review, we
selected 11 States and 33 counties to determine if FSA provided
sufficient technical assistance to help minority farmers apply for and
receive farm credit loans and if FSA processed minority farm loan
applications and serviced minority accounts in the same manner as for
nonminorities. Our review disclosed the following.
--FSA needs to provide greater technical assistance during the
loanmaking and loan-servicing processes. One of the greatest
frustrations to applicants is the extent of the information
needed to complete the multiple documents for financial
assistance. Statewide data for the 11 States reviewed showed
that it took minorities and nonminorities about the same number
of days, on average, to get their applications processed from
receipt to loan closing. However, in certain locations, it took
minorities longer than nonminorities to complete an approved
application from receipt to completion status. At certain
locations, disparities were noted in the number of multiple
servicing decisions provided to nonminority farmers compared to
the number provided to minority farmers. In those locations,
the percentage of accounts that were delinquent was higher for
minorities than for nonminorities.
--FSA could improve its relations with the minority community by
better targeting its outreach efforts, upgrading the status of
its minority advisors, and increasing its work force diversity
at the local level. The field offices visited used traditional
means to reach out to minority farmers, relied on 1890 Land
Grant colleges to promote their programs for them, or were
satisfied with the status quo and awaited guidance from
headquarters.
County officials told us that outreach has been a pointless
exercise in recent years because funding for loans has been
unavailable. However, we found that during fiscal years 1992
through 1996, $557 million in available loan funds nationwide
was allowed to expire and was never obligated. Most of these
funds, approximately $542 million, were available in fiscal
years 1992 and 1993.
--Concerning FSA's fund allocating decisions, the agency needs a
recordkeeping system to account for its unspent direct
operating loan funds which are redistributed to States from a
national reserve account. FSA's current practice of ``pooling''
and redistributing its unspent direct operating loan funds does
not always follow the normal ``first-come, first-served''
procedure. We also believe that socially disadvantaged
applicant (SDA) direct operating loan funds should be
``pooled'' along with non-SDA funds that are sent to the
national reserve account for redistribution. Pooling of SDA
funds, however, will require a legislative change.
The Secretary also asked us to determine the degree of
participation in farm credit programs by minority farmers. We attempted
to make direct correlations between FSA's direct loan portfolio and
Government census data but were unable to make any meaningful
correlations. Neither the general population census or the agricultural
census identified the number of individuals in the business of farming.
Further, the FSA portfolio itself may contain borrowers who are still
indebted to FSA but are no longer farming.
We did compare the applications received and approved from minority
and nonminority farmers for the sites visited. We found that, during
fiscal year 1996, the loan service centers that serviced the 33
targeted counties received 1,416 applications for direct loans; 317, or
22 percent, were submitted by minority applicants and 1,099, or 78
percent, were submitted by nonminority applicants. A total of 190, or
60 percent, of the minority applications were approved, whereas 729, or
66 percent, of the nonminority applications were approved.
We recommended that the Secretary seek changes to legislation which
will allow FSA to ``pool'' SDA direct operating loan funds and allocate
the funds to States instead of allowing them to expire. We also
recommended that the Secretary (1) convene ad hoc teams to help address
the backlog of civil rights complaints in the Department and (2) revoke
the delegation of authority that granted FSA responsibility to conduct
preliminary inquiries and return this authority to OCR.
We also recommended that the Secretary direct FSA to provide
greater technical assistance to farmers for the entire application
process and throughout loan-servicing, establish effective methods of
outreach, and develop standards and benchmarks by which to evaluate
outreach performance.
The Secretary has requested the Acting Assistant Secretary for
Administration to work closely with OIG to ensure that the
recommendations are promptly implemented.
accounting, financial, and information management
Financial Statement Audits
As required by the Chief Financial Officers Act of 1990 and the
Government Management Reform Act, we completed seven financial
statement audits. We issued unqualified (clean) opinions on the fiscal
year 1996 financial statements of the Federal Crop Insurance
Corporation and the Rural Telephone Bank. Audits of the Rural
Development mission area and FNS resulted in qualified opinions. Rural
Development received a qualified opinion because we were unable to
assess the reasonableness of its estimated loan subsidy costs for loans
obligated after fiscal year 1991. FNS received a qualified opinion
because we were unable to assess the reasonableness of its gross, non-
Federal accounts receivable for the Food Stamp Program and the related
account balances, and notes to the financial statements. We issued a
disclaimer of opinion on FS, CCC, and USDA consolidated statements for
fiscal year 1996.
FS received a disclaimer because it was not able to produce
auditable financial statements in a timely manner for the year. We are
working with FS in a coordinated effort towards correcting weaknesses
addressed by our prior audit reports. Corrective action plans have been
developed, and significant progress has been achieved in cleaning up
invalid accounting data. Through consulting services and monitoring
reviews, we continue to help FS personnel implement applicable
accounting standards and improve accountability.
CCC received a disclaimer of opinion due to a scope limitation
resulting from restrictions imposed on our access to necessary records.
Our initial review of FSA's mediation program indicated a variety of
program abuses. When we attempted to determine the scope and
materiality of irregularities and expand our review to three additional
State-administered programs, officials in the States denied us access
to the mediation records needed for our assessment. FSA's management
asserted that the records available for our review in its State offices
were sufficient when, in fact, they were not and did not aggressively
assist us in resolving the encumbrance. Because management within FSA
has a significant role in CCC's internal control structure, the actions
taken to deny our access to records needed to assess compliance with
applicable laws and regulations caused us to question the
representations by CCC's management.
The USDA consolidated statements received a disclaimer of opinion
because the Department could not provide assurance that its
consolidated statements were presented in accordance with applicable
accounting principles. This lack of assurance was primarily due to (1)
FS' inability to provide the Department with complete, auditable
financial statements and (2) the Department's inability to provide
assurance that, as a whole, its internal control and financial
management systems comply with requirements under the Federal Manager's
Financial and Integrity Act.
information resources management
Department Progressing with ``Year 2000'' Conversion
The ``Year 2000'' date conversion crisis poses a significant
challenge to all users of affected information technology. Every
organization, whether Federal or private, must ensure that its
information systems are fully Year 2000 compliant well before December
31, 1999, or risk catastrophic failure of those systems. The Office of
the Chief Information Officer (OCIO) serves as the Department's focal
point for addressing Year 2000 issues.
We initiated a review to assess the readiness of USDA agencies and
service centers to achieve Year 2000 computer compliance. This review
will encompass a determination as to whether agencies have (1)
established an overall strategy; (2) prioritized the conversion or
replacement of certain systems and/or hardware, including system
interfaces; (3) a strategy to convert, replace, or eliminate certain
hardware and software, including operating systems software and
application software; (4) a strategy to test, verify, and validate
converted or replaced systems; (5) devoted sufficient resources to
accomplish the plan and prioritized critical systems and activities;
and (6) a contingency plan for critical systems and activities.
Generally, we have found the agencies we have examined thus far
have initiated actions to address their individual Year 2000 conversion
projects. We have, however, found areas for improvement at four USDA
agencies visited and have reported those matters to them. For example,
USDA agencies, under a departmentwide contract, purchased a large
number of personal computers which were found to be Year 2000
incompatible. The particular vendor sold various types and
configurations of computers, totaling approximately $31.6 million, to
10 USDA agencies. These findings and others have been provided to the
affected agencies in interim reports, and the agencies have responded
to our recommendations. Our audit of the Year 2000 issue continues, and
we will issue a report early in 1998.
On a personal note, I am pleased to report that OIG is Year 2000
compliant.
conclusion
This concludes my statement, Mr. Chairman. As you can see, the work
of OIG is far-reaching and expansive. I appreciate the opportunity to
appear today and present this information, and I hope that my comments
have been helpful to you and the Committee. I will be pleased to
respond to any questions you may have at this time.
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
NONDEPARTMENTAL WITNESSES
The following testimonies were received by the Subcommittee
on Agriculture, Rural Development, and Related Agencies for
inclusion in the record. The submitted materials relate to the
fiscal year 1999 budget request for programs within the
subcommittee's jurisdiction.
Prepared Statement of the Ad Hoc Coalition
Mr. Chairman, Members of the Subcommittee, this statement is
respectfully submitted for the hearing record on behalf of the ad hoc
coalition \1\ supporting fiscal year 1999 appropriations of not less
than $244.5 million for title I of Public Law 480, the same level as
provided in the current fiscal year.
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\1\ The ad hoc coalition is composed of the USA Rice Federation,
the National Association of Wheat Growers, the National Council of
Farmer Cooperatives, the American Soybean Association, the American
Maritime Congress, the Maritime Institute for Research and Industrial
Development, the Transportation Institute, Gulfcoast Transit Company,
and Liberty Maritime Corporation.
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The ad hoc coalition also strongly supports the administration's
request that $109 million of CCC funds be used to support Food for
Progress in fiscal year 1999, and that the program level for Public Law
480, title III, be maintained at $30 million for the fiscal year. The
coalition also supports full funding for title II at the level
requested by the Administration. Using carryover funds, title I
programs can be increased by maintaining appropriations of budget
authority at fiscal year 1998 levels.
In its fiscal year 1999 budget, the Administration without
explanation recommends a title I program level of only $112 million, a
drastic decline to less than one-half of that established for the
current fiscal year. While acknowledging the importance of title I in
promoting long-term markets for U.S. agriculture, the Administration
fails to recommend the resources required to do the job. At a time when
U.S. agricultural exports are declining, the Department should increase
its efforts, with strong Congressional support, to alleviate hardships
in friendly countries and promote new markets for our farmers.
long-term significance of public law 480
Mr. Chairman, the title I program has an illustrious history. From
enactment in 1954 until the mid-1960's, title I shipments accounted for
about 20 percent of the annual value of all agricultural exports. Until
foreign sales dramatically increased in the 1970's, title I shipments
continued to represent more than five percent of all agricultural
exports. As recently as fiscal year 1990, moreover, title I export
values regularly exceeded $700 million. Only in recent years has the
U.S. commitment to this program eroded substantially, to a low of $202
million in title I credit sales in fiscal year 1997.
Under the leadership of the Agriculture Appropriations
Subcommittees of the Congress, funding for title I was modestly
increased in fiscal year 1998, and the Administration's estimated
program level for this fiscal year currently stands at $245 million.
This funding will permit the shipment in fiscal year 1998 of 1.2
million metric tons of grain equivalent, up from a low of 900,000
metric tons in fiscal year 1997.
Mr. Chairman, the export subsidy reduction commitments established
in conjunction with the Uruguay Round Agreement on Agriculture severely
restrict U.S. flexibility in agriculture export market development.
Those commitments curtail the use of the Export Enhancement Program and
similar strategies that might be implemented in the future. But Food
for Peace is exempt from the Uruguay Round restrictions: Public Law 480
remains one of the principal programs for penetrating new overseas
markets, for establishing trading relationships that will surely become
essential to the economic survival of our agricultural sector.
In the two decades following World War II, Food for Peace was
instrumental in securing long-term, stable markets for American food
and fiber. In fiscal year 1996, U.S. agricultural exports reached a
record value of $59.8 billion, representing more than 25 percent of
total farm cash receipts for crops and livestock. In that year, the
U.S. share of the global agricultural export market reached 23 percent,
an increase of more than one-third in a single decade. But the record
level achieved in fiscal year 1996 was no more than a snapshot of
conditions at a given moment in time. The current picture is troubling:
pessimistic forecasts for agricultural trade in fiscal year 1998
require enhanced effort, a renewed dedication to the principles of
market development.
fiscal year 1998 outlook for u.s. agricultural trade
Mr. Chairman, the Foreign Agricultural Service on February 27,
1998, reported that fiscal year 1998 agricultural exports are forecast
to decline by $1.3 billion from fiscal year 1997 levels, and that
exports will fall $3.8 billion below the record established in fiscal
year 1996. The reasons for the falloff in U.S. foreign sales are
increased competition in corn markets, weaker prices for grains and
soybeans, and reduced Asian demand due to the current financial crisis.
Agricultural export volume is forecast to reach 149.2 million
metric tons in fiscal 1998, up 1.9 million tons from 1997 but about 20
million tons below the record established in 1995. In terms of bulk
commodity sales, the value of U.S. exports in fiscal year 1998 is
expected to fall $1.6 billion to $22.5 billion, largely due to lower
prices and export volumes for corn, and lower wheat and soybean prices.
According to FAS, increased export competition from China and Eastern
Europe is reducing U.S. corn sales, while South American competition is
being felt in the world soybean market.
In the former Soviet Union and other emerging market economies,
important new opportunities for sales of U.S. agricultural commodities
will emerge in coming years: The United States must compete
aggressively for these markets. For the duration of the current
economic crisis in East Asia, America must maintain export volumes and
market share.
The Foreign Agricultural Service of the U.S. Department of
Agriculture, in administering Food for Peace, will be instrumental in
protecting existing markets and developing potential new markets.
Through sustained title I funding, Congress must give the Department
the tools it needs to do the job.
usda should be directed to use title i resources
Mr. Chairman, the ad hoc coalition strongly recommends a fiscal
year 1999 appropriation for title I of Public Law 480 of not less than
$244.5 million, the level provided in fiscal year 1998. Using carryover
funding from prior fiscal years, increased program levels can be
achieved without diverting resources from other worthwhile programs of
the Department.
On February 26, 1998, the Foreign Agriculture Service announced its
revised Second Quarter country allocations for title I funded programs
in the amount of $227.8 million. This is substantially below the
Department's established program level of $245 million for the current
fiscal year. The newly independent states of the former Soviet Union,
together with a number of Eastern European countries, are prime
candidates for increased concessional credit sales under title I of
Public Law 480. The Department of Agriculture should be encouraged to
promote this program throughout the world, both for humanitarian
reasons today and for the development of foreign markets in future
years.
Mr. Chairman, the ad hoc coalition respectfully requests report
language accompanying the fiscal year 1999 funding bills which would
direct the Department of Agriculture to increase title I country
allocations and make full use of the resources available for this
worthwhile program. Working closely with the representatives of
recipient countries, we are confident that USDA can restore title I
program levels to those most recently achieved in fiscal 1996.
conclusion
Mr. Chairman, the administration has long acknowledged the
importance of title I of Food for Peace as a program to promote long-
term markets for U.S. commodities, and to alleviate hardship in
friendly countries. But the administration suggests a title I program
level for fiscal year 1999 of only $112 million, a drastic decline to
less than half that established for the current fiscal year.
With enactment of the 1996 farm bill, Government price supports and
producer payments are being phased down. As a result, agricultural
producers have become increasingly dependent on export markets to
sustain a healthy economy. The title I, Public Law 480 program, coupled
with the other export programs, have become of even greater
significance than ever before in meeting this objective, sustaining the
many allied industries dependent upon a healthy agricultural economy,
as well as providing valuable humanitarian assistance to developing
countries.
The members of the ad hoc coalition respectfully request an
appropriation of not less than $244.5 million for the title I program
and committee report language directing the Department of Agriculture
to establish a program level for the title I program that makes full
use of this appropriation and the carryover funds. The need is there.
We also request that the Agriculture Appropriations Subcommittees of
Congress closely monitor the performance of the Department in
fulfilling this objective over the course of the fiscal year.
Our farmers and the U.S. maritime transport system depend upon
Congress to set the standard, and upon the Department to meet that
standard, as we enter an era of uncertainty and volatility in trading
relationships. The title I program of Food for Peace must be preserved
and effectively employed to promote American interests in an
environment of uncertain markets and increasing global competition.
______
Prepared Statement of the American Association of Retired Persons
The American Association of Retired Persons appreciates this
opportunity to comment on appropriations next year for various programs
which benefit the low income elderly in rural America. Initiatives such
as Section 515 Rural Housing Loans and Section 504 Very Low Income Home
Repair Grants and Loans make a real difference in the quality of life
for many elderly Americans.
AARP's recommendations may be summarized as follows:
--Provide at least current funding for Section 504 Very Low Income
Home Repair Grants and Loans;
--Maintain Section 515 Rural Housing Loans at current level;
--Provide the Administration's recommended increase for Section 521
Rental Assistance; and
--Provide sufficient resources for Food Stamp outreach activities.
poverty among rural older people
Some of the nation's most persistent economic, housing, and health
problems are concentrated in rural areas among older people. In 1996,
older people living in nonmetropolitan areas had a poverty rate over 13
percent, compared with approximately 9 percent for those living in
other areas. Poverty increases with age, rising to a rate of more than
25 percent for rural Americans who are 85 and above.
Economic problems are particularly severe among older minorities
and among rural women living alone. When these factors are combined,
poverty is nearly universal. According to the 1995 American Housing
Survey, 36 percent of all nonmetropolitan households consisted of older
women living alone. Especially hard hit are older minorities living in
areas where poverty is highly concentrated. Among rural Americans age
65 and older, the poverty rate in 1996 was 34 percent for Hispanics and
nearly 40 percent for those of African descent. Poverty rates are
higher among elderly households in the southern U.S.--23 percent--
compared with approximately 17 percent in other parts of the country.
The Association urges special attention to the plight of older
migrant and seasonal farmworkers. Working and living conditions, which
are generally bad for farmworkers of all ages, are abysmal for older
workers. Earnings for those over age 65 continue to be far below the
poverty threshold, and many receive no Social Security or other
benefits. Not surprisingly, farmworkers often experience problems
characteristic of the elderly before reaching their fiftieth birthday.
Disability levels are disproportionately high. Unfortunately, access to
needed services has often been blocked by prejudice, language barriers,
and a lack of outreach activities.
rural housing
One result of high rates of rural impoverishment is a striking
concentration of housing problems among rural older people. Data from
the 1995 American Housing Survey indicate that 39 percent of older
households living in moderately or severely inadequate housing reside
in rural areas, though only 28 percent of all older households live in
rural areas. To address the needs of these older households and other
vulnerable populations, it is critical that federal housing programs
targeted to rural America be continued and strengthened.
For Section 515 Rural Housing Loans, AARP urges at least a freeze
next year at the existing $150 million loan level. We also support the
Administration's recommended increase in Section 515's companion
program: Section 521 Rental Assistance (from $541.3 million to $583.3
million). Loans made under the Section 515 program have decreased
substantially over the past few years--down from more than $500 million
in fiscal year 1994 to the current $150 million. Demand for both new
construction and rehabilitation far exceeds available resources.
The Administration's recommended $50 million cut next year for
Section 515 would push funding to the bare minimum required to continue
a national program. Trade-offs will be necessary between badly needed
new construction and rehabilitation loans to maintain current stock.
Section 515 is the only federal program to target funds directly to
rural areas for rental housing production. Half of these loans have
historically gone to provide housing for the elderly poor and disabled
tenants of all ages. More than half of older renters living in rural
areas spend at least 30 percent of their income on housing. Given the
extreme poverty which exists in many rural areas, the availability of
such housing is vital for many families.
AARP recommends that more emphasis be placed on the development of
congregate facilities and on the retrofitting of existing Section 515
projects. Because of the scarcity of social services in many rural
communities, congregate housing projects which provide nonmedical
assistance such as meals, housekeeping and transportation can be
especially crucial to the independence of frail older residents.
AARP further recommends that greater attention be given to
initiatives which provide affordable housing to remote rural areas and
areas with large concentrations of underserved populations such as
older and disabled farmworkers. We also support funding for the program
for migrant workers and rural homeless people. Migrant workers tend to
be older than other farmworkers and are more likely to be minorities
with extremely low incomes. Farmworker housing very often has no heat
or running water, creating barely tolerable living conditions for most
families and a health-threatening situation for older persons.
The Association appreciates the Subcommittee's continued support of
the Section 504 Very Low Income Home Repair Program. Funds are used to
remove safety and health hazards for the elderly poor or to install
basic necessities such as indoor plumbing. We support the $25 million
assumed in the Administration's budget for Section 504 grants,
contingent upon congressional approval of the funding request for Rural
Housing Assistance. We recommend that Section 504's loan component be
maintained at the existing $30 million. The Administration recommends a
$5 million reduction. The Very Low Income Home Repair Program makes a
tangible difference in the quality of life for elderly Americans. Cuts
made here really do hurt those most in need.
food stamp outreach activities
Many older people in rural areas also suffer from nutrition-related
health problems because they are economically unable to maintain a good
diet. All too often, these individuals are forced to limit food
purchases in order to manage the increasing costs of other necessities
such as medical care, housing, and energy.
Food Stamp benefits can be a lifeline for such families but
participation rates remain low due to a lack of information about the
program or distance from Food Stamp offices. The social and physical
isolation of rural older people makes outreach activities difficult but
all the more critical. We urge the Subcommittee to provide sufficient
resources for outreach activities next year.
Thank you again for the opportunity to present our views on rural
housing and food stamps. We look forward to working with the
Subcommittee to improve the lives of rural Americans of all ages.
______
Prepared Statement of the American Farm Bureau Federation
farm bill implementation
Farm Bureau supports continuation of the principles of the Federal
Agriculture Improvement and Reform Act (FAIR).
Full implementation of the FAIR Act should not be compromised. As
you know, the FAIR Act set agriculture on a seven-year course that
reduces income supports by establishing a hard cap on total spending
regardless of prices or the volume of production. Agriculture's support
for the FAIR Act was based upon the promise and assurance given that it
was a seven-year contract between the federal government and
agricultural producers. Accordingly, any change in current policies and
programs would represent a violation of that agreement.
Farm Bureau believes in free and open movement of markets and
prices. We oppose the Administration's program to extend non-recourse
crop loans for an additional six months. While an extension would be
budget neutral when market prices are well above loan rates, the
potential for high costs exists if producers store their crops under
loan for an extended period of time causing burdensome supplies to
depress market prices.
We support the Commission on 21st Century Production Agriculture
and urge sufficient funding to ensure that the Commission will be able
to conduct a thorough evaluation of the effectiveness of the FAIR Act
and potential agricultural policy alternatives. In just four years,
Congress will again need to address agricultural policy and the
recommendation of the Commission will be important to that activity.
risk management
Farm Bureau places a high priority on the development of risk
management tools to supplement or provide an alternative to
traditional crop insurance.
The expansion of risk management programs is of importance to
farmers and ranchers. Farm and ranch income is increasingly at risk due
to the phase-out of traditional price and income support programs. New
and innovative tools to manage risk are needed by farmers everywhere.
We support the continued expansion of new risk management tools
that may be offered by private companies and reinsured by the federal
government. To the extent that those programs are actuarially sound, we
believe they should be expanded to cover as many crops as is feasible.
conservation programs
Farm Bureau places a high priority on funding for voluntary incentive-
based conservation programs.
Conservation funding is an integral component of the nation's
overriding food and natural resource policy. Farmers and ranchers
respond to positive incentives that enable them to: improve soil, water
and air quality; reduce erosion; provide additional wildlife habitat;
and increase green space. Because conservation projects can be very
costly to implement, priority should be given to initiatives that
provide education, technical assistance, training and financial
assistance to accomplish the nation's farm and resource policy
objectives.
We oppose all user fees for conservation programs. Conservation
programs are often costly to implement and benefit everyone, not just
farmers and ranchers. Public policy should encourage farmers and
ranchers to increase conservation efforts, not place additional
impediments to their efforts.
We are concerned that while the Administration has proposed
increasing the National Resource Conservation Service (NRCS) budget,
the net effect may be a decrease in NRCS staff that work directly with
farmers and ranchers because the Administration budget does not provide
funding for increased NRCS workload and administrative costs. Congress
should appropriate funds so that programs which benefit farmers and
ranchers and the environment are maintained and expanded.
The Environmental Quality Incentive Program (EQIP) is an important
program that strives to improve water quality. The program should be
available to all producers, regardless of size of operation. We support
increased funding for EQIP, but it should not come at the expense of
other agricultural programs or through user fees, including user fees
for NRCS technical assistance.
Farm Bureau continues to be a strong supporter of the Conservation
Reserve Program (CRP). We are concerned that increased emphasis on the
Conservation Reserve Enhancement Program will detract from the
traditional CRP program and its goals. The focus of the program should
not be broadened to the point that it loses its effectiveness in
meeting soil conservation and water quality goals.
We support continued funding for the Forestry Incentive Program
(FIP) at $6 million. Private forestry is an important part of American
agriculture and makes a strong economic contribution to the nation's
economy. FIP has played an important role in reforestation efforts and
is strongly supported by the agricultural community and maintains
strong congressional support.
Farm Bureau continues to support the goals of the Grazing Lands
Conservation Initiative. The program allows farmers and ranchers to
accomplish further conservation and environmental gains without
compromising net farm income by providing technical assistance.
food safety and inspection
Farm Bureau supports the modernization of food safety and inspection
programs.
No group is more concerned about food safety than farmers and
ranchers. USDA programs that keep food safe as it moves from farm to
market and those that monitor the safety of consumer ready products are
very important.
Meat and poultry inspection is a public health function mandated by
public law which should be paid from the general fund. We oppose user
fees to finance federally-mandated meat and poultry inspection. In
general, user fees are not passed onto the consumer, but rather are
passed downward to producers in the form of lower prices paid for
livestock. If the fees are passed onto consumers, they would be a food
safety tax.
Farm Bureau supports adequate funding to implement Hazard Analysis
Critical Control Point (HAACP) meat and poultry inspection reforms. We
are concerned about the impact on smaller processors and ask that an
unreasonable burden not be placed on these plants.
Farm Bureau supports USDA funding for the Pesticide Data Program
(PDP). PDP provides valuable pesticide residue information to the
Environmental Protection Agency so that chemical registration decisions
can be made on actual pesticide residues rather than on presumed
maximum possible residue levels. This program should remain within USDA
because it has the scientific expertise and working agreements with
state agencies to effectively administer this program.
Improper implementation of the Food Quality Protection Act may
force the unnecessary and unwarranted cancellation of essential crop
protection products. The USDA Office of Pesticide programs should
provide advocacy for farmers' continued access to safe and effective
crop protection products, and must be adequately funded to perform this
important task.
Key functions of the office must include assisting EPA in
establishing accurate data for risk assessments where current data is
inaccurate or incomplete. USDA must be a full partner with EPA in all
key implementation policy decisions. To reduce disruption of U.S.
agricultural producers, USDA should conduct an economic impact analysis
of proposed EPA implementation strategies, including EPA's proposals
relating to risk assessments for organophosphate and carbamate.
Also important is funding for USDA to update its database on human
food consumption patterns. The Food Quality Protection Act requires EPA
to evaluate the total risk associated with pesticide use. To do this,
accurate information on human diets is needed. Funding to keep this
information current should be a priority.
The Food Animal Residue Avoidance Database (FARAD) has been an
invaluable tool for veterinarians and producers in assuring the proper
use of animal health products. It is an important cog in our overall
food safety assurance effort. Funding is needed to allow it to continue
to operate.
agricultural research
Farm Bureau places a high priority on funding for research which is
focused on food and production agriculture.
Agricultural research, education and extension activities should be
focused on improving the performance of the food and agriculture
sector. The benefits of this research will accrue not just to
agricultural producers, but also to the general public. The food and
fiber needs of a growing world population can be met only if there is a
sharp focus on securing answers to questions challenging production
agriculture.
Innovative research depends upon the availability of modern
facilities. Many of the major Agricultural Research Service facilities
were constructed prior to 1960 and are now functionally obsolete and in
of need major modernization to bring them up to current health and
safety code requirements. A total of $35.9 million is needed in fiscal
year 1999 to update and modernize numerous facilities nationwide.
Increased funding for the National Research Initiative Competitive
Grants Program and the Food Genome initiative are important.
Farm Bureau supports allowing the Agriculture Research Service to
regain ownership of the National Swine Research Center. This center
will conduct essential research to resolve the odor and water quality
issues facing the pork industry and will integrate production issues
with nutrient management.
Increased funding for the National Research Initiative Competitive
Grants Program and the Food Genome initiative are important.
international market development
Farm Bureau supports programs to maintain and expand foreign markets
for agricultural products.
Farm Bureau places a high priority on export promotion programs,
especially given the current Asian economic crisis. Foreign sales
continue to provide a market for 30 percent of U.S. agricultural
production. Passage of the 1996 farm bill has increased the
significance of overseas markets to farm and ranch profitability as
farmers and ranchers become more dependent on exports to expand their
incomes.
The Market Access Program (MAP) supports the development,
maintenance and expansion of commercial agricultural export markets by
partially reimbursing participating organizations for the costs of
carrying out foreign market development activities in designated
countries. This program is more important than ever because the FAIR
Act phase out of commodity programs increases the importance of export
markets and because new markets must be found to make up for export
markets lost due to the Asian financial crisis.
Maximum funding for the Market Access Program (MAP), the Foreign
Market Development Program, the Export Enhancement Program (EEP) and
Dairy Export Incentive Program (DEIP) are critical to maintaining and
expanding foreign export markets. Funding provided for EEP and DEIP
should be $320 million and $82 million, the maximum allowed. Stable
funding for MAP, at $90 million, will allow that program to continue to
expand markets.
Farm Bureau also supports stable funding for Public Law 480
programs which finances sales of agricultural commodities to developing
countries for dollars on credit terms or for local currencies. The
needed appropriation for Public Law 480 grants I and II is estimated at
$949 million for fiscal year 1999.
The Overseas Private Investment Corporation (OPIC) should be funded
at no less than last year's levels to guarantee access and investment
in developing counties and territories. Because OPIC targets emerging
markets for American products, the program provides access to markets
with the greatest potential for growth.
We support the flexibility to maximize the use of available
resources by allowing funds not utilized for direct export subsidies to
be made available for other GATT-allowed or ``Green Box'' programs
(including market development, research and promotion).
Last year's appropriations bill prohibited the use of MAP funds for
promotion of mink in international markets. We believe that no
agricultural commodity should be discriminated against in allocation of
MAP funding. The only criteria should be the potential to increase
sales of agricultural products and the availability of funds.
animal and plant health
Farm Bureau places a priority on programs that protect plant and animal
health.
The Animal and Plant Health Inspection Service (APHIS) must be
adequately funded to meet the high demands of protecting the nation's
agriculture industry and its role in maintaining consumer confidence in
the safety of the U.S. food supply.
APHIS must have state-of-the-art diagnostic and processing
procedures to ensure plant and animal health and to guarantee the
safety of agricultural imports and exports. Funding for diagnostic
tests, vaccine development, disease surveillance and emergency
preparedness must be increased as we increase international trade.
Important to this effort is funding for such programs as Animal Health
Monitoring and Surveillance.
Farm Bureau continues to support eradication of the boll weevil and
requests full funding to provide a 30 percent match with producer
funding. USDA should continue to work with the Boll Weevil Eradication
Program to collect funds from farmers, certify cotton acreage, assist
in conducting referendums and make maps available. We also ask for
increased availability of low interest revolving loan funds to
facilitate expansion of the program.
The President's operating budget for APHIS Wildlife Services is
$26.1 million, a reduction of $2.5 million from fiscal year 1998. These
cuts would reduce levels of animal damage control funding in 28 states.
We recommend funding at the fiscal year 1998 level of $28.6 million.
The President's budget for Wildlife Services Methods Development
(Research) is $9.7 million, a reduction of $855,000 from fiscal year
1998. If this level of funding were adopted, one of the casualties
would be the National Trap Testing Program which tests trap types to
determine the most humane design while maintaining efficiency. Funding
should remain at the level of fiscal year 1998 of $10.2 million.
Congress authorized the construction of a $37.7 million Wildlife
Services Wildlife Research Center in Fort Collins, Colorado. A
appropriation of $20.5 million should be provided to complete this
project.
The present Wildlife Services Management Information Reporting
System is outdated, uses obsolete hardware and is limited in the amount
of data it collects. Funding of $700,000 should be provided to for
implementation of a new system.
With the expansion of wolf numbers and areas where they are
dispersing, the Wildlife Services wolf management budget should provide
$275,000 in new funding for the increased workload.
The Berryman Institute for Wildlife Damage Management at Utah State
University is the nation's premier academic institution in this field.
The institute needs to improve its capabilities in social science
research, expand continuing education programs and begin publishing a
quality journal on wildlife damage management. We recommend an increase
in Wildlife Service funding of $236,000 for the Berryman Institute.
The President's budget would require states and other cooperators
to pay at least 50 percent of the Wildlife Services program costs in
each state. Animal damage problems don't lend themselves to a ``one-
size-fits-all'' approach and instead should include flexibility for
cost-sharing mechanisms.
agricultural credit
Providing farmers and ranchers with a variety of credit at the lowest
possible interest rates is important to Farm Bureau.
For the past 10 years, Farm Bureau has supported the shift away
from direct USDA operating and farm ownership loans to loans provided
by private lenders and guaranteed by USDA. This is consistent with
making maximum use of limited USDA funds and ensuring that the loans
will be creditworthy over the long term. We oppose the Administration
proposal to increase funding for direct operating and farm ownership
loans.
usda administration
Farm Bureau believes that USDA should monitor domestic and
international agriculture affairs and provide an accurate
source of agricultural data.
We support funding for Packers and Stockyards Administration
programs. Expenditures to enable electronic submission of industry
data, to increase poultry compliance activities, to monitor and analyze
packer market competition and implications of structural change and
behavioral practices in the meat packing industry are important.
The Administration's budget includes $500,000 for the first-ever
census for the aquaculture industry. It would survey all farms that
report in the 1997 agricultural census at least $1,000 of aquaculture
sales. Aquaculture is a billion-dollar industry, but information on the
industry is very incomplete and a census would be of great value.
______
Prepared Statement of Ruth Goldstein, Federal Policy Program Manager,
American Farm Trust
Dear Mr. Chairman: I write regarding the fiscal year 1999
appropriations for USDA natural resource conservation and research
programs under NRCS, CSREES, and ARS. I'd like to request that this
letter be made a part of the record.
American Farmland Trust is a 30,000 member, private, non-profit
organization founded in 1980 to protect our nation's farmland. AFT
works to stop the loss of productive farmland and to promote farming
practices that lead to a healthy environment.
Land protection and natural resource conservation must go hand in
hand. USDA must be able to protect our nation's farmland through the
Farmland Protection Program; ensure a vital natural resource base
through conservation technical assistance and voluntary programs such
as WRP, CRP, WHIP and EQIP; and identify ways to produce safer,
healthier food and maintain America's working landscapes through the
Sustainable Agriculture Research and Education programs. USDA
conservation and research programs have the potential to work together
to address the long-term sustainability of our natural resource base
and the availability of this base for agricultural production.
natural resources conservation service
Farmland Protection Program.--We strongly support funding of the
Farmland Protection Program at $50 million per year through fiscal year
2002. Every minute of every day America loses two acres of farmland to
sprawling development. This is the land that produces three-quarters of
our fruits and vegetables and more than half our dairy.
States have taken the lead in addressing this national problem
through voluntary purchase of development rights (PDR) programs, which
are so popular with landowners that there is typically a six-year
waiting list. Eighteen states and dozens of local governments have
spent $900 million to protect more than a six hundred thousand acres of
important farmland.
The FAIR Act directed USDA to implement a new $35 million Farmland
Protection Program to support these state and local farmland protection
efforts. The FPP has thus far helped protect nearly 82,000 acres of
farmland on more than 230 farms. Moreover, it has generated a
substantial amount of new farmland protection activity at the state and
local level.
The last of the $35 million will be disbursed by the end of fiscal
year 1998. We urge the subcommittee to request $50 million for fiscal
year 1999 to continue the Farmland Protection Program and continue its
success.
America's Private Land Conservation (Conservation Technical
Assistance).--The America's Private Land Conservation account (formerly
Conservation Technical Assistance) allows NRCS to provide basic
technical conservation services to private agricultural landowners
across the country. NRCS employees work with producers to create farm-
wide conservation plans; design and build grassed waterways, sediment
retention ponds, and stream-side buffers; collects and analyze soil
quality data for nutrient management and erosion control; and design
and establish wildlife habitat or manure management systems. NRCS works
with communities and conservation districts to share information about
conservation opportunities and technologies. These services are
critical both to all producers regardless of whether they participate
in cost-share programs like EQIP, WHIP, CFO, WRP and FPP.
The Administration's fiscal year 1999 request for the APLC account
will limit the availability of general technical assistance services.
Limitations on EQIP's technical assistance funds means the agency will
have to supplement EQIP funding with $27 million from the America's
Private Land Conservation account. (Technical assistance funding under
EQIP is limited to 10 percent of the total instead of over 19 percent
needed by NRCS to effectively carry out the program.) In addition, over
$43 million of the APLC account is earmarked for specific activities.
This reduces the availability of funds for general technical assistance
activities discussed above.
We support funding for the APLC at $616.110 million (an increase of
$27 million over the Administration's fiscal year 1999 request of
$589.110) to meet the conservation needs of producers across the
country.
Conservation Farm Option.--The Conservation Farm Option provides a
voluntary approach to implementing full-farm conservation. Six regional
pilot programs, authorized by section 335 of the 1996 FAIR Act, will be
conducted for the purpose of soil and water conservation; water quality
protection or improvement; wetland restoration, protection and
creation; wildlife habitat development or protection, or other similar
conservation purposes. CFO provides an opportunity to achieve multiple,
targeted conservation benefits on farmland. AFT supports the
Administration's fiscal year 1999 request of $25 million for the
Conservation Farm Option.
Wetlands Reserve Program.--The Wetlands Reserve Program, authorized
by the 1990 FACT Act, is an example of the kind of incentive driven
approach to wetlands protection and restoration that should be a
centerpiece of national agricultural policy. AFT supports the
Administration's $127.741 million request for fiscal year 1999.
Environmental Quality Incentives Program.--EQIP provides technical
and financial assistance to landowners for changes in cropping and
grazing systems, and manure, nutrient and pest management. Land
management practices such as installing riparian buffer strips, are
eligible for assistance. AFT supports the Administration's fiscal year
1999 request for $300 million to help farmers voluntarily address water
quality, soil erosion, and wildlife habitat needs.
Wildlife Habitat Incentives Program.--WHIP is a positive step
towards helping landowners continue to sustain healthy wildlife
populations on private agricultural land. We support the
Administration's request for $20 million for the WHIP program.
agriculture research service
Healthy, well-managed grazing lands can be instrumental in
maintaining healthy watersheds across the country. ARS soil, water,
plant and animal sciences strengthens our understanding of how grazing
systems impact water quality and provides tools for reducing impacts on
watersheds. We support the Administration fiscal year 1999 budget
request for a $7.5 million increase for Environmental Quality and
Natural Resources research.
cooperative state research, education and extension service
Sustainable Agriculture, Research and Education.--Sustainable
Agriculture, Research and Education (SARE) funds high quality, farmer
involved research and education on economic, agronomic, and
environmental aspects of sustainable agriculture farming systems.
Professional Development Grants (Chapter 3) fund outreach and education
workshops for natural resource professionals, soil and water
conservation districts, RC&D's, NRCS, and extension personnel on
community development, whole farm planning, and farmland protection. We
support the Administration's fiscal year 1999 request for $10 million
for SARE and $3.3 million for SARE Chapter 3 Professional Development
Grants.
Renewable Resources Extension Act.--American Farmland Trust is
pleased to see the Administration has requested renewed funding for the
Renewable Resources Extension Act program (RREA), and we applaud the
action of this subcommittee in restoring that program in spite of the
Administration's request to eliminate it last year. American Farmland
Trust supports this program which helps to train natural resource
professionals regarding the impacts of increasing suburbanization on
ranch and forestlands. We support the Administration's fiscal year 1999
request for $3.4 million dollars for the RREA program.
Thank you for the opportunity to share the views of American
Farmland Trust.
______
Prepared Statement of Kim M. Wardensky, American Federation of State,
County, and Municipal Employees and Steven M. Hollis, American
Federation of Government Employees
i. some of president's budget requests should be supported, as follows
We urge Members of Congress to support, or increase, the following
items in the President's fiscal year 1999 Budget:
Farm Operating Loans, Direct, $500 Million Program Level
This increased funding level for the direct operating loan program
was recommended by the Civil Rights Action Team and the Small Farms
Commission. It is projected to support operating loans to approximately
11,580 farmers, with at least 12 percent targeted to socially
disadvantaged farmers. The share of direct loans made at the reduced
interest rate for limited resource borrowers would be continued at
current levels, approximately 40 percent.
Farm Ownership Loans, Direct, $85 Million Program Level
This increase was also recommended by the Civil Rights Action Team
and Small Farms Commission. It is projected to support about 1,000
small farmers to either acquire their own farm or to save an existing
one--nearly 500 more than in 1998. Roughly 60 percent of these loans
are provided to limited resource borrowers, with at least 18 percent
targeted to socially disadvantaged farmers.
Rural Housing Loans, Single-Family, Direct, $1 Billion Program Level
The single family housing direct loan program provides subsidized
loans for the purchase of modest housing in rural areas. Nationally,
the average income of a direct loan borrower is about $17,000, which is
about 55 percent of area median income.
Water and Waste Disposal Loans, $839 Million Program Level
Water and Waste Disposal Grants, $500 Million Program Level
Continuation of the program at these levels is consistent with the
President's Water 2000 Initiative which was designed to help ensure
that all rural households have access to clean running water by the
year 2000.
Farm Labor Housing Loans, $32 Million Program Level
Farm Labor Housing Grants, $13 Million Program Level
These increases were also recommended by the Civil Rights Action
Team. They would provide for the construction of 658 new units and
rehabilitation of 199 existing units of housing for farm workers.
Rural Development Salaries and Expenses, $527 Million Program Level
This increase of $18 million over the fiscal year 1998 levels is
absolutely imperative. Unless Congress supports this request from the
President's Budget proposal, there will be RIF's in Rural Development
within the next few months. Congress must support the increase in
Salaries & Expenses for Rural Development for the following reasons:
(a) The ill-housed rural poor, and the small rural community
infrastructure needs, must not be expected to continue to bear a
disproportionate share of the sacrifice necessary to achieve a balanced
budget. These programs are crucial to rural America and provide an
invaluable service to minorities and socially disadvantaged citizens.
(b) The President's budget proposal would reduce overall USDA staff
by 14.3 percent during the period from 1993 through 2002, but proposes
to reduce the Rural Housing staff by 33 percent over this same period.
It will be impossible for Rural Development to perform its mission if
these additional disproportionate cuts are allowed to stand.
Section 2501 Socially Disadvantaged Farmers Outreach Program, $1
Million
The Outreach and Technical Assistance program is the most effective
tool developed to carry out the mission of USDA as the technical
provider for small farmers. For a very small investment, the program
has significant multiplier effects in the small and poor communities
where there exist few other possibilities for sustainable economic
development. It also serves as a small token of relief for the many
deficiencies in the service provided to these farmers by the Department
ii. one of president's budget requests must be increased, as follows
We urge Members of Congress to increase the funding for the Section
515 Rural Rental and Cooperative Housing program by at least $50
million over the President's Fiscal Year 1999 Budget request, to at
least maintain the Program Level at the 1998 level of $150 million.
The President's proposal to reduce funding below the 1998 level of
$150 million would end this program as a national program. We would not
be able to fund even one project in each State. Rural Development area
offices have a backlog of applications on hand that need funding.
Multi-Family Housing helps senior citizens and others on fixed low
incomes with many medical expenses.
We urge the Committee to direct USDA to place a priority, in the
use of these limited funds, on rehabilitation of existing units rather
than new construction. Unless this is done, the Rural Housing Service
will become known as the nation's largest slum landlord.
iii. some of president's budget requests should be decreased to offset
the increase needed in the section 515 rural rental and cooperative
housing, as follows
Export Enhancement Program: Fiscal Year 1997, $0; Fiscal Year 1998,
$150 Million; Fiscal Year 1999, $320 Million
The Export Enhancement Program subsidizes American grain companies
to enable them to dump wheat, corn, and other grains into international
markets at below market prices.
This undermines self-sufficient farming in these other counties and
provides direct payments to such corporations as Cargill, Continental
Grain, Louis Dreyfus, Bunge Corporation, and others. There are better
uses for our tax dollars.
iv. usda reorganization and streamlining initiatives
Our labor unions appreciate the recognition by the leadership of
this Subcommittee that we can only create a USDA that ``works better
and costs less'' if we make sure the proposed changes, in their
implementation, will enhance, rather than harm, the ability of the
front-line workers to serve the public in the most effective and
efficient manner. Unfortunately, we must report to Congress that the
Department has failed to adopt this common sense approach.
administrative convergence--ready, shoot! aim?
AFSCME and AFGE urge Members of Congress to block implementation of
Secretary Glickman's proposal for ``Administrative Convergence'', still
scheduled for October 1, 1998, until the following problems are worked
out:
1. Information Technology (IT) and Financial Management (FM)
Workload Has Increased, yet Secretary Glickman proposes to decrease IT
and FM Staff?
(a) Attachment 1 shows, for rural Development, that the Information
Technology workload, measured in terms of lines of code, has increased
from 4 million to 11 million since 1993, while IT staffing for Rural
Development in St. Louis, Missouri, and Washington, D.C., has already
been reduced by over 30 percent since 1993! Attachment 2 documents
where administrative staffing reductions have been accomplished since
1993. The Rural Development staff in St. Louis, Missouri, and
Washington, D.C., has already been cut to the bond. Further cuts would
jeopardize program viability. For example, Rural Development's ability
to make all its software Year 2000 compliant would be placed in great
jeopardy. NRCS and FSA (Kansas City and Washington) have done much less
streamlining.
(b) The Congress and the Administration have actually increased the
Information Technology (IT) and Financial Management (FM) workloads, in
Rural Development and in the Ag Credit/Farm Loan Programs, by placing
greater controls over fraud, abuse, the integrity of loan making, etc.
If IT and FM staffing is reduced too much, or too soon, the very
management controls which have been placed on these programs to improve
accountability will not be implemented in a proper, timely, manner.
(c) To accomplish the ``business reengineering'' proposed by the
Service Center Implementation concept--a Common Computing Environment
and better business and financial practices and supporting computer
systems--also means more work, not less, for IT and FM support
employees.
To proceed with further staff reductions before there is a
reduction in work requirements can only lead to greater problems with
the integrity and effectiveness of program delivery.
2. Contracting Out Will Cost More and Produce Lower Quality
Results.
In 1993, the House Agriculture Committee nearly passed to the USDA
Reorganization Bill that would have required the Department to do such
cost comparisons of current and future service contracts. The amendment
was withdrawn based on the Department's promise to establish such an
in-house procedure. This has not been done. Attachment 3 documents,
from USDA's own figures, the continuing over-reliance on commercial
support contracts for Information Technology.
We urge the Appropriations Committee to require the Department to
conduct cost comparisons on all current and future commercial service
contracts. This includes instructing USDA to abandon FTE controls and
``fee for service'' proposals which require, or even allow, the hiring
of contractors to do the work that can be more cost effectively
performed by Federal employees. No more Federal employees should be
laid off so long as contractors are working for the Department
performing work that Federal employees could perform at better quality
and less cost.
3. Streamlining the middle management bureaucracy.
There should be an upfront requirement that supervisory ratios
within the proposed Support Service Bureau will be less than 1:15, as
mandated by the National Performance Review. We are not opposed to
consolidating multiple administrative support and IT organizations into
a Departmentwide organization, but only if the unnecessary management
bureaucracy is dramatically reduced.
4. County Office Administrative Functions Must Be Included.
The GAO/RCED-97-214 Report emphasizes that about two (2) staff
years of effort per County Office is being devoted to the activities
associated with keeping the offices open and functioning. These duties
include obtaining and managing office space, paying utilities, computer
administration, and processing payroll. It is not possible to honestly
and successfully streamlining administrative functions unless all
administrative activities are included in the streamlining effort.
5. Damage to Civil Rights and Work Force Diversity.
Current plans for Administrative Convergence would cut 1,800 jobs
in Washington, St. Louis, and Kansas City--where the percentage of
minority participation in the work force is greatest. In response to
the obvious Civil Rights implication of this proposal, FFAS
representatives have indicated they will find some way to transfer
minority employees to the State level, presumably bumping out current
non-minority employees. Do Members of Congress want to deal with these
constituent complaints?
6. Damage to Servicing of USDA Loan Programs.
Secretary Glickman's plan for Administrative Convergence would cut
many of the centralized loan servicing staff supporting RD and FSA loan
portfolios by lumping them into the ``administrative'' Financial
Management category. These program servicing positions must be excluded
from Administrative Convergence.
USDA should build on the widely heralded Rural Housing Centralized
Servicing Center and DLOS initiative in St. Louis. It makes no sense to
provide centralized servicing and debt collection for Rural Housing in
St. Louis, and then to duplicate those functions, in Kansas City or the
Field, for the farm loan programs and farm loan debt.
7. Compliance With the Intent of Congress.
Administrative Convergence should comply with the intent of the
Congress before it is implemented. In 1994, the House Agriculture
Committee included the following report to Section 105 of the House
bill, which became Section 216 of Public Law 103-354 (7 USC 6916),
Improvement of Information Sharing:
The Committee intends that the Department fully retrain and
use the employees who are currently responsible for developing
and implementing its program delivery, accounting, and
administrative computer systems to update and improve the
Department's computer systems, and to provide support for the
new systems * * * the Committee intends that the Department
maintain and enhance the current automation, accounting, and
administrative support centers in St. Louis, Kansas City,
Washington, and Ft. Collins as ``centers of excellence'' in
support of multiple programs and agencies. In particular,
(FmHA) service center in St. Louis should continue to provide
automation and accounting support for the farm credit programs
that are being transferred to the ASA, as well as for the
programs of the Rural Community and Economic Development
mission area.
In the House Report on the Fiscal Year 1997 Agriculture
Appropriations Act, your Committee reaffirmed this direction that the
Department maintain Farm Service Agency automation and accounting
support for the farm loan programs in St. Louis, Missouri. We urge the
Appropriations Committee to enforce the previously stated intent of the
Congress, as contained in these authorizing and appropriations reports.
in summary
We urge the Committee to strengthen the oversight role of the
Committee which was envisioned in Section 727 of the Fiscal Year 1998
Agriculture Appropriations Act by adopting language in this year's act
as recommended in Attachment 4.
[attachment 1]
[GRAPHIC] [TIFF OMITTED] T01NDPT.007
[attachment 2]
ADMINISTRATIVE STAFFING REDUCTIONS, 1993-98
----------------------------------------------------------------------------------------------------------------
Total agency staff
years (For comparison
purposes)
Administrative staffing (IRM, FM, PM, HRM) SL KC DC Other -----------------------
Non-
Federal Federal
----------------------------------------------------------------------------------------------------------------
Fiscal year 1993:
Farm Service Agency......................... 147 953 600 ( \1\ ) 7,490 14,953
Rural Development........................... 690 ........ 402 ( \1\ ) 9,347 ..........
Natural Resource and Conservation Service... ........ ........ ( \2\ ) 1,444 13,280 ..........
Fiscal year 1998 (Current):
Farm Service Agency......................... 110 860 491 ( \1\ ) 5,877 11,229
Rural Development........................... 492 ........ 277 ( \1\ ) 7,360 ..........
Natural Resource and Conservation Service... ........ ........ ( \2\ ) 1,204 12,048 ..........
Percent reduction (1993-98):
Farm Service Agency......................... -25 -10 -18 ........ -22 -25
Rural Development........................... -29 ........ -31 ........ -21 ..........
Natural Resource and Conservation Service... ........ ........ ........ -17 -9 ..........
----------------------------------------------------------------------------------------------------------------
\1\ There are also hundreds of administrative (IRM, FM, PM, HRM) positions in the State and county offices in
FSA and RD.
\2\ Some of NRCS administrative staff is located in Washington, DC, some in Ft. Collins, some in Ft. Worth, and
most of it in Regional Offices, to the best of our information. The detailed breakdown is unclear to us.
Summary: Rural Development Operations and Management staff (St.
Louis and Washington) has already been cut to the bone. Further cuts
would jeopardize program viability. NRCS and FSA (Kansas City and
Washington) have done much less streamlining.
[attachment 3]
USDA Over-reliance on Commercial Support Contracts for Information
Technology
The real point about balancing the budget should be taxpayer
dollars, not Federal employee jobs. We need to ensure that
Administrative Convergence does not just lead to replacing Federal
employees with more expensive contractors who can't do as good a job.
AFGE is very concerned about this, because in DOD and other agencies,
the Administration has consolidated administrative functions--and then
tried to contract them out. The following numbers come from the
Agencies' A-11 submissions to OMB, reporting on ``Obligations for
Information Systems.''
[In thousands of dollars]
------------------------------------------------------------------------
Commercial
support Personnel
services
------------------------------------------------------------------------
Fiscal year 1993:
ASCS................................ 39,029 27,657
FAS................................. 4,366 3,033
OICD................................ 183 245
FCIC................................ 8,572 3,627
FmHA/RDA............................ 40,627 36,181
REA................................. 618 1,506
SCS................................. 17,419 38,131
Fiscal year 1998:
FSA................................. 90,894 44,898
FAS................................. 7,252 ..............
RMA................................. 8,597 4,206
RD.................................. 26,148 15,048
NRCS................................ 23,223 25,516
Percent change (1993-98):
FSA/FAS/RMA \1\..................... +51 +30
RD.................................. -36 -60
NRCS................................ +25 -33
------------------------------------------------------------------------
\1\ Some amount of the Rural Development decrease, and the FSA increase,
from fiscal year 1993 to fiscal year 1998, consisted of the transfer
of Farm Credit functions from FmHA/RD to FSA.
The ACAT Team 1 Draft Report (11/3/97) proposed two IT staffing
options under Administrative Convergence Option 2 (50 percent decrease
of Federal FTE's from fiscal year 1993) would require the Department to
replace 397 Federal employees with contractors as compared to Option 1
(30 percent decrease of Federal FTE's from fiscal year 1993). ``The
Standard Costs for a government ITS employee FTE is $69,250. The
average costs for a contractor FTE is $109,000. The option 1 mix of
governmental and contractor ITS personnel will save USDA $15.8 million
per year over the option 2 mix of ITS FTE's.''
Summary: Contractors cost more than Federal employees. USDA already
spends more on IT contractors than on employees, and this will continue
to increase total IT costs more than would reducing contractors and
retaining employees.
[attachment 4]
Proposed Language for the Fiscal Year 1999 Agriculture Appropriations
Act
None of the funds provided by this Act, or provided by previous
Appropriations Acts, to the agencies funded by this Act, or provided
from any accounts in the Treasury of the United States derived by the
collection of fees available to the agencies funded by this Act, shall
be used to implement Administrative Convergence, or any other
initiative to reduce Federal staff performing Information Technology,
Financial Management, Management Services, Civil Rights, Human
Resources, or other administrative functions in support of the county-
based agencies, Farm Service Agency, Natural Resources and Conservation
Service, or Rural Development, until a plan for such convergence and
streamlining has been presented to, and approved by, the Appropriations
Committees of both House of Congress. Such plan shall include, at a
minimum, the following:
(1) the number of additional County Offices to be closed, along
with criteria for determining which offices will be closed, and a
timetable for the closures;
(2) a detailed statement of the Information Technology, Financial
Management, Management Services, Civil rights, Human Resources
(including Training), or other activities considered to be
administrative in purpose as distinct from program delivery,
identifying such workload which will be eliminated or reduced through
convergence and where each activity is proposed to be performed (i.e.,
County Offices, State Offices, Regional Offices, or National Support
Centers such as Washington, DC, St. Louis, MO, Kansas City, MO, New
Orleans, LA, Ft. Worth, TX, Ft. Collins, CO, etc.);
(3) a detailed statement of the program delivery activities which
may be centralized for the purpose of improving consistency and
achieving efficiencies as has been accomplished with the Section 502
Rural Housing program;
(4) a statement as to whether the Department intends to maintain
two personnel systems within the Farm Service Agency, or whether the
Department intends to phase out the County Office Committee personnel
system;
(5) the projected impact (with locations and timetables) on
Federal, non-Federal, and Contractor staff and associated costs; and
(6) a detailed statement of the Civil Rights impact on both
employees and customers of the proposed changes.
Justification:
The 1996 Farm Bill (Public Law 104-127, April 4, 1996) dramatically
reduced the Federal Government's role in supporting agriculture and,
therefore, the county office workload. The Federal Crop Insurance
Reform and Department of Agriculture Reorganization Act of 1994 (Public
Law 103-354, October 13, 1994) also directed the Secretary of
Agriculture to streamline departmental operations by consolidating
county offices and merging various agencies. Yet, both non-Federal and
Federal employees report that USDA workload has not decreased as a
result of these changes. The GAO/RCED-97-214 also reports that it is
not possible to determine the impact of the 1996 act on the workload of
the Farm Service Agency's county offices. GAO also emphasizes that
about two (2) staff years of effort per office is being devoted to the
activities associated with keeping the offices open and functioning.
These duties include obtaining and managing office space, paying
utilities, computer administration, and processing payroll. The
Department has entered into a contract with an outside consulting firm
to conduct a study of the farm and rural program delivery system of
these county-based agencies, FSA, NRCS, and RD, to be completed by
September 1, 1998. Among other things, the study will clearly identify
the purposes agency operations are intended to achieve, an independent
assessment of agency workload estimates, identify criteria for
determining the highest value use of office staff, evaluate county
office efficiencies gained so far, etc. That study should serve as the
basis for any plan to converge the administrative support functions of
these agencies.
______
Prepared Statement of Paul Brouha, Executive Director, American
Fisheries Society
The American Fisheries Society (AFS) appreciates the opportunity to
present written comments concerning the proposed fiscal year 1999
budget of the USDA Cooperative State Research, Education, and Extension
Service (CSREES). We ask that this letter be included in the official
record of the agency's appropriation hearings.
The Society is an international organization of more than 9,000
fisheries and aquatic science professionals. Chartered in 1870, the
Society is the world's oldest and largest scientific body dedicated to
the advancement of fisheries science and the conservation of renewable
aquatic resources.
The American Fisheries Society (AFS) recognizes that the research
and educational programs of the CSREES and its Land Grant Partners
effect relevant, positive changes in attitudes and implementation of
new technologies by private landowners, managers, community
decisionmakers, and the public. This results in significant benefits to
individuals and to the Nation through building and sustaining a more
viable and productive natural resource base and a competitive and
profitable agriculture. Since over two-thirds of our lands,
approximately 1.35 billion acres, are controlled by over 10 million
private landowners and managers, it is most appropriate that the
CSREES-Land Grant System, with its grass roots credibility and delivery
system, be adequately funded to translate and deliver research-based
educational programs and new technologies to help the Nation's private
landowners and managers move towards a more sustainable society.
However, in the President's fiscal year 1999 budget, we see very little
emphasis on natural resources research and education directed toward
helping these clientele.
The American Fisheries Society recommends that the fiscal year 1999
budget for CSREES should redirect funding to accomplish the following
goals:
AFS recommends that the Renewable Resources Extension Act be funded
at a minimum level of $9.5 million in fiscal year 1999. The RREA funds,
which are apportioned to State Extension Services, effectively leverage
cooperating partnerships at an average of about four to one, with a
focus on the development and dissemination of useful and practical
educational programs to private landowners (rural and urban) and
continuing education of professionals. The increase to $9.5 million
would enable the Extension System to accomplish the goals and
objectives outlined in the 1991-1995 Report to Congress. The need for
RREA educational programs is greater today than ever because of the
fragmentation of ownerships, the diversity of landowners needing
assistance, and the increasing environmental concerns of society about
land use. It is important to note that RREA has been reauthorized
through 2002. It was originally authorized at $15 million annually;
however, even though it has been proven to be effective in leveraging
cooperative state and local funding, it has never been funded at a
level beyond $3.4 million. An increase to $9.5 million would enable the
Extension Service to expand its capability to assist over 500,000
private landowners annually to improve decisionmaking and management on
an additional 35 million acres while increasing productivity and
revenue by $200 million.
AFS recommends that Smith-Lever 3(b)&(c) base program funding be
increased by 9.0 percent to a level of $280,950,770 with an appropriate
portion of this increase targeted to Extension's Natural Resource and
Environmental Management programs (NREM). The President's fiscal year
1999 budget requests a reduction of $10,740,000 funding for Smith-Lever
3(b)&(c) funds from the fiscal year 1998 level. AFS appreciates that
Smith-Lever 3(b)&(c) base programs provide ``Block Grant'' type funds
for land grant universities to provide essential educational outreach
based on local needs assessment. This will enable NREM programs to
develop the critical mass of expertise at the state and local levels to
redirect and leverage limited funding to address critical existing and
emerging natural resource and environmental issues that are directly
affecting small landowners and farmers in both rural and urban
communities nationwide.
Expanding Extension programs in natural resource public issues
education on important issues such as forest health, wetlands,
endangered species, and human/wildlife interactions, as well as to
strengthen its programs in urban and community forestry and
environmental education as called for in the 1990 FACT Act is essential
to address natural resource issues that are relevant to the
sustainability of these critical resources. Such an increase targeted
appropriately would help producers better understand and implement the
changes in the 1995 Farm Bill Conservation Provisions. Moreover, we are
concerned that appropriate positions in the Natural Resources and
Environment Unit have not been retained to provide needed national
leadership for critical interdisciplinary resources such as range
management.
AFS encourages continuation of close cooperation between State
CES's and their State Fish and Wildlife agencies, as well as other
appropriate state and federal agencies and conservation organizations.
Extension 4-H Youth natural resource programs and projects continue to
increase with over 1,350,000 youngsters presently enrolled from both
urban and rural communities across the Nation. Increased Smith-Lever
funds targeted appropriately will enable CSREES to carry out its
environmental education and NREM National Strategic Plan obligations
nationwide.
AFS recommends restoration of the Rangeland Research Grants
$500,000 budget for fiscal year 1999. The Society is disappointed that
the practical and applied problems addressed by the Rangeland Research
Grants (RRG) program were zeroed out in the President's 1998 budget and
totally ignored in this fiscal year 1999 budget. Over one half of the
land area of the United States is rangeland; and elimination of the
only federal competitive grants program for rangelands has serious
implications for wildlife, watersheds, and other natural resources.
Modest appropriations for RRG in the past have supported some of the
most important rangeland research conducted over the past decade, and
wildlife issues on rangelands will present some of the more critical
rangeland research problems over the next decade. This would help
increase the interdisciplinary capacity of research and educational
programs to help landowners improve the adoption of forests and
rangelands ecosystem management and the conservation of biodiversity on
an ecoregion level.
AFS recommends that an appropriate portion of the total increased
appropriation for Pest Management should be dedicated to educational
programs for prevention and control of vertebrate pests in urban and
rural communities and to address invasive exotic species and noxious
weed problems on rangelands for restoring, managing, and sustaining the
biological integrity of the Nation's natural resource base upon which
the agricultural and natural resource economies depend. AFS notes that
a combined total increase of almost $15.5 million has been recommended
in the President's budget for Pest Management and related research and
extension programs over and above increases received in fiscal year
1998. Vertebrate pests and invasive species have been identified in
many states as posing the most significant problems, now and in the
future, that agricultural and related crop producers and private
landowners face. This targeting of Pest Management funds for research
and educational programs would advance the knowledge and capability of
landowners to reduce significant losses to vertebrate pests and
invasive species.
AFS recommends that the Hatch and McIntire-Stennis funds be
restored to fiscal year 1998 levels and, if necessary, redirected from
the substantial $32,800,000 proposed increase in NRI funding. AFS is
pleased that the Administration proposes a 9.5 million increase in
basic research identified under the National Research Initiative (NRI)
as Natural Resources and the Environment; however, what is proposed
under this ``Area of Specials Emphasis'' clearly does not address
critical natural resource research needs that the Natural Resource
Community and the public are vitally concerned about. The Society is
alarmed at the significant reduction in both the Hatch Act and
McIntire-Stennis research programs of over $15.5 million. Both of these
research programs, conducted by land grant university partners and
other educational institutions, are crucial to addressing natural
resource and environmental issues critical to agriculture and natural
resource sustainability now and in the future.
summary
The American Fisheries Society, based on the above considerations,
recommends the following for the fiscal year 1999 budget of CSREES:
(a) The RREA budget be increased to $9.5 million;
(b) Smith-Lever 3(b)&(c) base program funding be increased by 9.0
percent;
(c) Rangeland Research grants be restored at $500,000 level;
(d) A portion of the Pest Management and related increase be
targeted to provide increased research and education programs to
address vertebrate pest prevention and control needs and invasive
species and exotic weed problems; and
(e) McIntire-Stennis and Hatch Act funding be restored to fiscal
year 1998 levels.
Thank you for the opportunity to comment on the USDA Cooperative
State Research, Education, and Extension Service programs. If there is
any way we can be of further assistance, please let us know.
______
Prepared Statement of Richard Adee, President, American Honey Producers
Association, Inc.
My name is Richard Adee. I am President of the American Honey
Producers Association, Inc. and I am submitting this statement in its
behalf. The American Honey Producers Association, Inc. is a national
organization of commercial beekeepers with activities in most of the
States in this country.
The Association is seeking the inclusion of sufficient funds in the
appropriation for the Agricultural Research Service of the Department
of Agriculture to meet with the critical needs of the industry.
Specifically, the Association is seeking the restoration of $500,000 in
the baseline funding for the bee laboratory at Weslaco, Texas, and an
increase of $500,000 in the level of funding for the ARS honey bee
breeding, genetics, and physiology laboratory at Baton Rouge,
Louisiana.
Honey bees pollinate over 90 cultivated crops whose estimated value
exceeds $9.3 billion and produce an average of 227 million pounds of
honey annually. Since 1984, the survival of the honey bee has been
threatened principally by a number of problems for which beekeepers are
depending upon research for the answers. Unfortunately, there is no
simple solution to these problems. The honey bee industry is too small
to support the cost of the needed research, and there are no funds,
facilities, or personnel elsewhere available in the private sector for
this purpose. Accordingly, the beekeeping industry is dependent on
research from public sources for the scientific answers. As you know,
there are no longer any federal subsidies on honey, there is no longer
a honey price support program in effect. The key to the survival of the
honey industry lies with the honey bee research program conducted by
the Agricultural Research Service.
Parasitic mites, primarily the varroa mite, are causing a crisis
for the U.S. beekeeping and pollination industry. Hundreds of thousands
of domestic honey bee colonies are being lost annually to varroa mites,
and wild bee colonies are being devastated. The only chemical now
registered for varroa mite control has been rendered ineffective by the
development of resistant mite populations. Moreover, chemical
pesticides for mite control can adversely affect the bees, as well as
being a food safety concern.
The USDA-ARS honey bee research facility at Weslaco has been
working hard in trying to find alternative chemicals to deal with the
varroa mite. It is responsible for finding new and improved methods for
control of parasitic mites and other pathogenic organisms on honey
bees, solving beekeeping problems that interfere with honey production
and effective crop pollination, and determining the impact and spread
of Africanized honey bees. Until the appropriation for fiscal year
1998, it has not been possible to fully operate the facility with full-
time permanent scientists and cover the necessary overhead expenses.
The uncertainty of continued funding is halting the efforts of the
Weslaco laboratory in implementing its plans for making full use of the
fiscal year 1998 appropriation. A reduction of $500,000 in the base
line appropriation for the Weslaco facility will disrupt its operations
and make it more difficult to achieve its research objectives. These
funds need to be restored.
The ARS laboratory at Baton Rouge, Louisiana, is the only
laboratory world wide focusing on the development of long-term,
genetics-based solutions to the varroa mite. After multiple matings,
scientists at this laboratory have found a few colonies of honey bees
that show possible resistance to the varroa mite. These types require
intensive evaluation to assure that the resistance holds up under a
wide range of environmental and beekeeping conditions. Attributes such
as vigor, pollination, and honey production must be evaluated. There is
an immediate need to propagate the resistant queen bees in large
numbers for wide scale distribution to beekeepers so that this
evaluation can be accomplished. The work is slow and tedious. It is
also costly. We are seeking an increase of $500,000 in permanent
funding for the Baton Rouge, Louisiana, laboratory to accelerate the
research, development, and transfer of queen bee stock resistant to
varroa mites to U.S. beekeepers.
We wish to thank you for your support of honey bee research in the
past and would appreciate your continued support by approving an
appropriation for the ARS bee research laboratories at Weslaco, Texas,
and Baton Rouge, Louisiana, that includes an additional $500,000 for
each of those laboratories above the level recommended in the
Administration's budget. Only through research can we achieve and
maintain profitability in U.S. beekeeping and continue to provide
stable and affordable supplies of bee pollinated crops which make up
fully one-third of the U.S. diet.
______
Prepared Statement of the American Indian Higher Education Consortium
introduction
Mr. Chairman and Members of the Subcommittee, on behalf of the
American Indian Higher Education Consortium (AIHEC) and the 29 Tribal
Colleges that comprise the AIHEC land-grant institutions, we thank you
for this opportunity to share our funding requests for fiscal year
1999. On behalf of the Tribal Colleges, we respectfully request full
funding of our four land-grant programs, along with funding under the
Agriculture Research Reauthorization. These include: $4.6 million for
the Tribal College endowment; $1.45 million for the equity grant
program; $5 million for the extension program; $1.7 million for
institution capacity building grants; and $10 million for research.
This statement will cover three key points: first, it will provide
a brief background on the Tribal Colleges and our long-awaited
inclusion in this nation's land-grant system; second, it lays out
Tribal Colleges' ambitious efforts through extension services to
fulfill the agricultural potential of American Indian communities and
to ensure that American Indians have the skills needed to maximize the
economic development potential of our resources; and third, it
describes our additional program requests for fiscal year 1999.
background on tribal colleges
Today, 130 years after enactment of the first land-grant
legislation, Tribal Colleges, more so than any other institutions,
truly exemplify the original intent of the land-grant legislation. The
first Morrill Act was enacted in 1862 specifically to bring education
to the people and to serve their fundamental needs. Mr. Chairman, this
is the definition and mission of the Tribal Colleges. We truly are
institutions by, of, and for our people.
The dismal statistics concerning the American Indian experience in
education brought tribal leaders to the realization that only through
local, culturally-based education could many American Indians succeed
in higher education and help bring desperately needed economic
development to the reservations. In the late 1960's and early 1970's,
the first Tribal Colleges were chartered on remote reservations by
their respective tribal governments, to be governed by boards of local
tribal people. In 1972, the first six tribally-controlled institutions
came together to form the American Indian Higher Education Consortium.
Today, AIHEC is a cooperatively sponsored effort on the part of 31
member institutions in the United States and Canada, 29 of which are
the 1994 land-grant institutions.
Tribal Colleges now serve 26,500 students each year, offering
primarily two-year degrees, with some colleges offering four-year and
graduate degrees. Since their inception, the Tribal Colleges have
helped address the problems and challenges of our welfare system.
Tribal Colleges provide GED and other college preparatory courses,
probably more than any other community colleges in this country. We
have done this because our mission requires us to help move American
Indians toward self-sufficiency and help make American Indians
productive, tax-paying members of our society. Fulfilling this
obligation will become even more difficult over the next several years
as Tribal Colleges feel the impact of welfare reform legislation--
already, our colleges are seeing increasing numbers of welfare
recipients turn to the colleges for training and employment
opportunities. Tribal Colleges serve as community centers, providing
libraries, tribal archives, career centers, economic development
centers, public meeting places, and child care centers.
Despite our many obligations, functions, and notable achievements,
Tribal Colleges are the most poorly funded institutions of higher
education in this country. Historically, states do not have an
obligation to American Indian lands because our reservations are trust
lands under federal jurisdiction. Unlike mainstream land-grant
institutions, we cannot depend on state and local governments to match
or surpass the federal investment. Our core funding under the Tribally-
Controlled Community Colleges Assistance Act of 1978 remains grossly
inadequate; and total funding for the agriculture programs authorized
for all 29 of the 1994 institutions combined equals approximately the
amount the Department of Agriculture gives to just one state land-grant
institution each year.
The members of AIHEC enjoy strong support from the U.S. Department
of Agriculture, as witnessed by the Memorandum of Understanding between
the Department and the Tribal Colleges, signed by Secretary Dan
Glickman on February 3, 1998. The MOU, which was mandated in the 1996
Farm Bill, is targeted at achieving full integration of the Tribal
Colleges into the land-grant system and ensure their full participation
in the USDA's land-grant programs. Objectives were established covering
four key areas: (1) student programs; (2) employment and program
opportunities; (3) capacity building; and (4) full access to grant and
excess property programs. We are heartened by the Department's apparent
commitment to the Tribal Colleges, and we look forward to joining with
the Department and other land-grant institutions in continuing this
important work.
extension services--ambitious efforts to reach economic development
potential
Although current land-grant programs at the Tribal Colleges are
modest, our 1994 authorizing legislation is vitally important to us
because of the nature of our land base. Of the 54.5 million acres that
comprise American Indian reservations, 75 percent are agricultural
lands and 15 percent are forestry holdings. In fact, Indian
agricultural production has been valued at nine times the production
potential of oil and gas resources.
Tragically, due to lack of expertise and training, millions of
acres lie fallow, under-used, or are developed through methods that
render the resources non-renewable. The Educational Equity in Land-
Grant Status Act of 1994 is our hope for turning this situation around.
It is absolutely critical that American Indians learn more about new
and evolving technologies for managing our lands. We are committed to
becoming, as we were when your forefathers came to this land centuries
ago, productive contributors to this nation's--and the world's--
agricultural base.
This year witnessed impressive efforts to address economic
development through land use, as Tribal Colleges entered into
partnerships with 1862 land-grant institutions through extension
services. This program, which is administered and coordinated through
the 1862 institutions, represents an ideal combination of federal
resources and Tribal College-state institution expertise, with the
overall impact being far greater than the sum of the parts. Some
examples of the innovative programs that are funded under extension
services include:
--Fond du Lac Tribal and Community College and the University of
Minnesota Extension Service are partnering in a project to
develop, conduct, and distribute an environmental analysis of
the St. Louis River ecosystem. This project will introduce
students from the college and the university to scientific
research and interpretation, and promote thoughtful management
and use of water resources.
--Salish Kootenai College, through a partnership with Montana State
University, developed a native plant/ecosystem restoration
program, that will create a tribal center for native plants and
horticulture to serve the Confederated Salish and Kootenai
Tribes. As part of this project, the college will conduct a
market feasibility study for tribally grown native plant
materials and encourage, support, and coordinate native plant
knowledge on the Flathead Reservation.
--Sitting Bull College and North Dakota State University will focus
on providing training and support services to ranchers in the
area of bison production and management. This project will
generate a database of producers and offer training sessions
on-site at tribal ranches covering topics like marketing,
processing, herd management, life cycle and grazing patterns.
Additional funding to support such efforts is needed because
extension services provided by the states on our reservations are
woefully inadequate, and the Tribal Colleges need to fill that void. It
is important to note that this program is not duplicative of ongoing
extension activities, and that it will complement and build on the
existing Indian Reservation Extension Agent program.
In fiscal 1997 and fiscal 1998, the 1994 institutions were awarded
$2 million for extension services. In fiscal 1999, we are requesting
that Congress build on the modest funding increase of $1.5 million
proposed in the President's budget, and raise funding to $5 million,
the fully authorized level for this program. The increase recommended
in the President's request emanates from the strong relationship we
have with USDA and is evidence of our successes in this program.
other funding requests for tribal college programs
The twenty-nine 1994 Institutions' appropriations request for
fiscal year 1999 are extremely modest when compared with the annual
appropriations to each existing land-grant institution. Along with our
request of $5 million for the joint 1862-1994 institution extension
program, we are seeking the following amounts for the three other
authorized programs for 1994 institutions: $4.6 million for the Tribal
College endowment; $1.45 million for the equity grant program; and $1.7
million for institution capacity building grants; and $10 million for
research. It is important to remember, as stated earlier, total funding
for the programs authorized for all 29 of the 1994 institutions
combined equals approximately the amount the Department of Agriculture
gives to just one state land-grant institution each year.
The Tribal Colleges are grateful for the Subcommittee's support in
the past for funding of three of our programs. These small programs
catalyzed the 1994 Institutions' crucial first steps in initiating and
strengthening agriculture and natural resource programs in our
communities. However, it is critical that we build on the momentum we
have gained. Justification for our requested funding levels follows.
1. $1.7 million Institutional Capacity Building Grant Program.--
This competitive grant program, which requires a non-federal match,
would provide the 1994 institutions with the investment necessary to
allow us to strengthen and more fully develop our educational
infrastructure. Facilities maintenance and improvement are urgently
needed at many of the Tribal Colleges, which are currently operating in
abandoned, condemned, or donated buildings. Hazards include leaking
roofs, asbestos insulation, exposed wiring, and crumbling foundations.
In a recent needs assessment, nine of the Tribal Colleges identified
facility maintenance and renovation as a high priority, at an estimated
cost of $8.3 million. Many of these facility improvements are needed to
provide American Indian students with the education necessary to fully
compete in the modern agricultural world.
2. $4.6 million Endowment Fund for 1994 Land-Grant Institutions.--
This endowment installment remains with the U.S. Treasury, and only the
interest is distributed to the 1994 institutions. Just as other land-
grant institutions historically received large grants of land or
endowments in lieu of land, this sum assists the 1994 institutions in
establishing and strengthening our academic programs in the areas of
curricula development, faculty preparation, instruction delivery
systems, equipment and instrumentation for teaching, experiential
learning, and student recruitment and retention in the food and
agricultural sciences. As the endowment increases over time, it will
provide each 1994 institution with significant income. The second year
interest payment totaled nearly $116,000, which was distributed to the
29 land-grant institutions on a formula basis.
3. $1.45 million Tribal College Educational Equity Grant Program.--
Closely linked with the endowment fund, this program provides $50,000
per 1994 Institution to assist in academic programs. The 1994
institutions are in their second year of funding under this program.
Through the funding made available in fiscal year 1996, the Tribal
Colleges were able to begin to support vital courses and planning
activities specifically targeted to meet the unique needs of our
respective reservations. Examples of programs include:
--Fort Belknap College in Harlem, Montana, will build on its fiscal
year 1996 project, which established a Global Positioning
System/Geographic Information System (GPS/GIS), using the GPS/
GIS to research, document and inventory the location of
important cultural and ethno-botanical sites on the
reservation. Faculty and students from natural resources
courses will work with traditional leaders and elders from the
Fort Belknap community to complete this project.
--Sinte Gleska University in Rosebud, South Dakota, will use the
equity grant to support its development of a community-based
forestry project that will involve the full life cycle of
trees. The project will document tribal stories and teachings
about trees and their related environment and the acquired
knowledge will form the foundation for an ecological and
cultural understanding of native trees that will be
incorporated into the University's courses and practices.
Other Tribal Colleges have started natural resource management
courses; nutrition and dietetic programs; environmental sciences
curricula; comprehensive horticulture programs; and courses on
sustainable development, forestry, and buffalo production and
management.
Funding for Research.--In addition to these authorized programs for
the 1994 institutions, we are requesting funding for a new research
program, which has been proposed in an amendment to the Agriculture
Research, Extension, and Education Reform Act of 1997 (currently in
conference). This amendment proposes that the 1994 land-grant colleges
receive the same agriculture research authority granted to 1862 and
1890 land-grant institutions, through a competitive program authorized
at $10 million.
This authority, and its corresponding appropriation, is vital to
ensuring that Tribal Colleges finally have the opportunity to become
full partners in this nation's land-grant system of colleges and
universities. Many of our institutions are currently conducting applied
agriculture-based research, yet they struggle to finance this research
and meet their community's other research needs. Some of the research
in progress includes soil and water quality research; amphibian
propagation; pesticide and wildlife research; range cattle species
enhancement; and native plant preservation, for medicinal and economic
purposes. We urge the committee to fully fund this program's pending
authority, as we expect this amendment to be approved in the near
future.
Funding for the Rural Development Trust Fund.--The Tribal Colleges
also support the administration's request for the Rural Development
Trust Fund, which includes a 3-percent transfer dedicated for rural
development programs conducted by federally-recognized tribes.
conclusion
The 1994 institutions are efficient and effective tools for
bringing education to American Indians. The modest federal investment
in the Tribal Colleges has paid great dividends in terms of employment,
education, and economic development, and continuation of this
investment makes sound moral and fiscal sense. No communities are in
greater need of land-grant programs than American Indian reservations,
and no institutions better exemplify the original intent of land-grant
institutions than the Tribal Colleges.
Mr. Chairman, we appreciate your long-standing support of the
Tribal Colleges, and we are grateful for your commitment to our efforts
to bring self-sufficiency to our communities. We look forward to
continuing a partnership with you, the Members of your Subcommittee,
the U.S. Department of Agriculture, and the mainstream land-grant
system--a partnership that will bring equal educational, agricultural,
and economic opportunities to Native America.
Thank you.
______
Prepared Statement of the American Nursery & Landscape Association
Mr. Chairman, the American Nursery & Landscape Association (ANLA)
welcomes this opportunity to present the nursery industry's views
regarding the U.S. Department of Agriculture's (USDA) budget for the
1999 fiscal year.
ANLA is the national trade association for the nursery and
landscape industry. ANLA represents 2,500 production nurseries,
landscape firms, retail garden centers and horticultural distribution
centers, and the 16,000 additional family farm and small business
members of the state and regional nursery and landscape associations.
economic significance of the nursery industry
According to USDA's Economic Research Service (ERS), the nursery
and greenhouse industry remains the fastest growing agricultural sector
in cash receipts. An estimated 18,000 farms (or one percent of all
farms) were engaged in producing at least some nursery and greenhouse
crops in 1969. By 1992, an estimated 47,425 farms were included in this
sector--an increase of 163 percent. Nursery and greenhouse crops in
1996 totaled an estimated $10.9 billion in farm-gate value,
representing nearly 11 percent of the total cash receipts for all U.S.
farm crops.
In 1996, nursery and greenhouse crops ranked 7th in total grower
cash receipts among all agricultural commodities. It is the third
largest plant crop--behind corn and soybeans, yet ahead of wheat,
cotton, and tobacco. Nursery and greenhouse crop production now ranks
among the top five agricultural commodities in 24 states, and among the
top 10 in 40 states. According to USDA, growers produce thousands of
varieties of cultivated nursery, bedding, foliage and potted flowering
plants in a wide array of different forms and sizes on 390,200 acres of
open ground and 678 million square feet under the protective cover of
permanent or temporary greenhouses.
USDA data from 1990 also show that nursery and greenhouse farms had
the highest average net farm income of all agricultural commodity
groups at $53,589. This was four times higher than the average American
net farm income in 1990 of $13,458. Although nursery farms can be
profitable, they are often more capital intensive than other
agricultural operations, and are very labor intensive given the
thousands of different plant species and the wide-ranging sizes in
which they are grown.
agricultural research service (ars)
Reinstatement of Nursery/Greenhouse Research Funding
Noting the increasing economic significance of the nursery and
greenhouse industry, ANLA is very grateful and pleased that Congress
provided $200,000 to ARS in fiscal year 1998 specifically to address
the important research needs of the nursery and greenhouse industry.
Nevertheless ANLA is deeply disturbed that the Administration has once
again failed to provide for a continuation of these research dollars in
fiscal year 1999. ANLA respectfully urges Congress to restore in fiscal
year 1999 the $200,000 funding which serves as a foundation and
springboard for the joint research initiative that the nursery and
floral industry has developed (see below).
Although recognition of the economic significance of the nursery
industry is indeed increasing, very few federal dollars are dedicated
directly to the nursery and greenhouse industry. In fact, only about
0.02 percent of all federal agricultural research dollars are currently
so dedicated. This underscores why last year's provision of $200,000
was so important. Current competitive grant programs and other public
funding mechanisms are unable to meet the industry's research needs. In
fact, the nursery industry has been largely excluded from funding under
the National Research Initiative (NRI) competitive grants simply
because it does not grow food or fiber crops. The only rare NRI
exceptions are when a horticultural crop has been utilized solely by
reason of its rapid production. The nursery and greenhouse industry has
an exemplary record of supporting its own research needs as industry-
funded research grants annually total several million dollars.
The industry will continue to support research efforts through its
own privately funded research foundations, including ANLA's very own
research division (the Horticultural Research Institute) which is
providing $350,000 in research grants this year alone. The federal
government must play a research role more appropriate to its scope. It
must retain the lead in developing the basic building blocks of plant
science, in contrast to the industry's applications of those blocks to
build solutions to its particular challenges. For instance, ANLA
supports the federal funding of biotechnology as ARS fulfills its role
as the international leader of such fundamental research. Biotechnology
is a crucial tool for use in dealing with a wide spectrum of challenges
to environmental horticulture, as well as other important agricultural
sectors. The federal role in research is: (1) longer term; (2) cuts
across multiple disciplines; (3) calls for extensive coordination among
scientists and institutions; and, (4) involves higher risk than can be
undertaken by any one industry. Only the federal government can fulfill
this essential role.
Joint Nursery/Floral Industry Research Initiative
ANLA and the Society of American Florists (SAF) have jointly
developed a detailed $21 million proposal establishing a coordinated
research initiative for the environmental horticulture (nursery and
floral) industry. Its goals are to:
--Protect the environment, including human health and safety through
research leading to reduced use of chemicals and a reduction in
runoff and other wastes.
--Enhance environmental remediation and cleanup efforts on wetlands,
post-industrial sites, air quality and other environmental
areas through research on the ability of plants to reverse and
mitigate environmental pollution.
--Improve the ability to prevent the spread of plant pests and
diseases in international trade.
--Strengthen rural and suburban economies across the U.S. by
providing improved crop production systems and technologies to
nursery and greenhouse crop growers and helping them to
increase production efficiency.
--Contribute to the U.S. agricultural economy and increase
international competitiveness by conducting research leading to
improved nursery and greenhouse products and production
strategies, and by improving technology transfer of research
results to benefit other U.S. agricultural sectors.
--Maintain biodiversity through germplasm preservation enabling
useful botanic traits to be transmitted to future generations.
--Enhance Americans' quality of life by increasing the availability
and diversity of plants and flowers for the consumers' purchase
and enjoyment.
The joint nursery and floral industry research initiative shall
accomplish these goals by focusing on three essential research areas:
(1) Improved environmental and resource management; (2) improved pest
management; and, (3) improved production system practices and
strategies.
ANLA respectfully requests an increase of $8.0 million in fiscal
year 1999 to begin to reach the funding balance envisioned by this
research initiative for the nursery and floriculture industry
representing nearly 11 percent of all U.S. farm crop cash receipts.
ANLA urges Congress to allocate the requested $8.0 million as follows:
(a) $4.5 million to ARS centers including the U.S. National Arboretum;
(b) $500,000 to Ohio State University to establish an ornamental Plant
Germplasm Center in conjunction with USDA's National Plant Germplasm
System; and, (c) $3.0 million to multi-state, multi-location
cooperative agreements between ARS and appropriate university
researchers.
Methyl Bromide
As a widely used fumigant, methyl bromide is a critical input to
many nursery crop management and quarantine systems. However, the U.S.
Environmental Protection Agency has listed methyl bromide as a Class I
ozone-depleting substance under the Clean Air Act and will ban its use
by January 1, 2001. Research and development of effective methyl
bromide alternatives for soil fumigation and quarantine treatments are
absolutely critical to the nursery industry. Effective alternatives to
methyl bromide must be identified. Therefore, ANLA supports the
proposed $2 million in fiscal year 1999 for extramural research on
methyl bromide alternatives. ANLA urges that such research be funded
based on a priority-setting awards process that encourages grower
input. 3
U.S. National Arboretum
When it was founded in 1927, Congress had the foresight to
designate research and education as the mission of the U.S. National
Arboretum. Since its founding, the U.S. National Arboretum has
introduced over 200 important new cultivars, including azaleas, New
Guinea impatiens, crepe myrtles, hollies, magnolias, and disease
resistant elms. ANLA and the nursery industry have immense respect for
this highly successful federal institution. ANLA is proud to support
the Friends of the National Arboretum (FONA)--the non-profit, private
sector organization whose mission is to garner additional resources to
advance the quality and scope of the U.S. National Arboretum's
important research and education activities. ANLA supports full fiscal
year 1999 funding for the U.S. National Arboretum.
Northwest Nursery Crops Research Center (OR, WA, ID)
ANLA appreciates the $500,000 in fiscal year 1998 funding for the
Northwest Nursery Crops Research Center. This collaborative research
center is supported by the American, Oregon, Idaho and Washington
nursery associations, Oregon State University, Washington State
University, the University of Idaho, and the related extension
services. Nursery crop growers in the Pacific Northwest play a pivotal
role in supplying nursery stock--not only to the retail and landscape
segments of the industry. They provide plants and trees to growers in
other areas of the nation for further cultivation and development. ANLA
urges Congress to continue funding the Northwest Nursery Crops Research
Center in fiscal year 1999 at the current level of $500,000.
Nursery Crops Research Station (Tennessee State University)
ANLA appreciates the prior federal funding which helped lead to the
establishment and construction of the Nursery Crops Research Station at
Tennessee State University. Nursery crop growers in the South continue
to face myriad serious plant pest problems. At the same time,
implementation of the 1996 Food Quality Protection Act (FQPA) could
drive the loss of many pesticide uses critical to nursery growers in
the South and throughout the nation. ARS recently established research
positions at the Nursery Crops Research Station at Tennessee State
University. ANLA urges Congress to provide $515,000 in fiscal year 1999
for such positions to conduct the critical research to address pest
management and other nursery crop production issues.
Endorsement of Minor Crop Farmer Alliance's Testimony
ANLA endorses the appropriations testimony of the Minor Crop Farmer
Alliance regarding the following USDA programs: Agricultural Research
Service (ARS)--Food Consumption Survey; National Agricultural
Statistics Service (NASS)--Pesticide Use Surveys and the National
Agricultural Pesticide Impact Assessment Program; and, Agricultural
Marketing Service (AMS)--Pesticide Data Program.
animal and plant health inspection service (aphis)
International and interstate trade in nursery crops is governed by
inspection and quarantine regulations designed to prevent or slow the
artificial spread of hazardous agricultural pests. APHIS works in
cooperation with state departments of agriculture to promulgate and
enforce such regulations. ANLA strongly supports APHIS' request for
adequate program funds for safeguarding plant resources from exotic
pests and diseases. The continued growth and success of the nursery
industry, and all of American agriculture, depend on these vital APHIS
programs.
Agricultural Quarantine Inspection (AQI)
Port-of-arrival inspections and first-class mail inspection under
the AQI program are the first line of defense against damaging pest
introductions. About 80 percent of the funding for this important
program comes from user fees levied broadly across international travel
and commerce.
APHIS does not currently collect user fees associated with commerce
and travel from Canada to the U.S. Given the risks demonstrated in
recent years of movement of such pests as exotic fruit flies into the
U.S. from Canada, APHIS might consider whether collection of user fees
on goods moving from Canada would allow for enhanced pest exclusion
efforts along the U.S./Canada border.
Pest and Disease Management
The Administration's budget seeks about $80 million for pest and
disease management programs in fiscal year 1999. ANLA supports the
proposed modest increase for Pest Detection to $6.685 million in fiscal
year 1999. This increase represents sound public policy as evidenced by
several recent pest outbreaks. For example, detections of Asian
longhorned beetle in New York and Mediterranean fruit fly in Florida
have precipitated expensive quarantine and eradication efforts. These
outbreaks underscore the need for enhanced pest detection programs. The
earlier infestations of damaging exotic pests can be detected, the
better the chances of achieving containment or eradication at
reasonable expense. We are reminded of the wise adage: ``Pay a little
now or pay a lot later.''
Imported Fire Ant
ANLA notes that the Administration proposes to discontinue funding
for the imported fire ant quarantine. The fiscal year 1998 funding
level of $1 million represented only 27 percent of the funding level
four years ago, yet the workload associated with the quarantine has
increased as the pest has continued to spread. ANLA respectfully urges
Congress to direct APHIS to maintain imported fire ant funding in
fiscal year 1999 at the fiscal year 1998 funding level of $1 million.
The small federal funding share is used to carry out cooperative
efforts with infested states in the South and Southeast. Continued
federal involvement strengthens the level of protection enjoyed by
uninfested states wishing to remain free from the agricultural and
public health burdens posed by imported fire ants. The federal
quarantine ensures a fair, consistent framework for domestic commerce
for nurseries located in the 11 affected states from North Carolina
through Florida and west to Texas. In exchange for those benefits,
nurseries in infested states incur substantial quarantine compliance
costs--often in excess of $100,000 in a single nursery--for a pest that
does not cause significant harm to nursery crops. Given the great
environmental and public health benefits to society resulting from a
successful quarantine effort, ANLA strongly believes that a modest
federal expenditure of $1 million in fiscal year 1999 is justified.
Golden Nematode
In 1995, a science panel was jointly appointed by the National
Plant Board and USDA to review, evaluate and make recommendations
regarding the golden nematode program. This action was in part
necessitated by federal and state reductions in funding and support
that jeopardize the very integrity of the federal domestic quarantine.
Federal/state cooperative efforts to control and contain the spread of
this serious pest have been successful and economically beneficial.
In its report, The Golden Nematode: Future Strategies for
Quarantine and Management (May 15, 1996), the science panel found the
golden nematode to be of continued quarantine importance and regulatory
significance. Furthermore, the current quarantine program was deemed
biologically sound. However, federal funding shortfalls truly
jeopardize the continued long-term viability of the golden nematode
management effort. Erosion of this management effort will negatively
impact the entire U.S. potato industry from both production and
international trade viewpoints, and it may also have disruptive impacts
on the nursery industry.
Funding for this program dropped from almost $900,000 in fiscal
year 1992 to $444,000 in fiscal year 1997, and to $435,000 in fiscal
year 1998. ANLA strongly urges that at least the fiscal year 1997
funding level of $444,000 be provided in fiscal year 1999 for the
necessary survey and regulatory enforcement activities. Optimally, a
future appropriation of $862,000 will maintain the integrity of the
quarantine by providing for the necessary supporting research and
regulatory activities.
Chrysanthemum White Rust
Chrysanthemums are an important nursery and greenhouse crop. Annual
farm-gate value of the U. S. chrysanthemum crop is about $160 million.
Chrysanthemum white rust (CWR), a serious disease of chrysanthemums not
known to be established in the United States, has been detected in
recent years in California, Oregon, Washington, New York and New
Jersey. During fiscal year 1995-98, APHIS and state cooperators engaged
in CWR detection survey, control and regulatory activities with these
states. Yet, this level of funding has been inadequate to yield a
comprehensive understanding as to whether eradication efforts have
succeeded. Future regulatory decisions must be based on sound,
comprehensive information. ANLA urges Congress to direct APHIS to
cooperatively fund completion of thorough CWR detection surveys, and
evaluate the success of the eradication program based on the survey
results.
Plant Pest Emergency Fund
In recent years, emergencies have been declared as a result of
discovery of such devastating pests as Karnal bunt of wheat, Asian
gypsy moth, and Mediterranean fruit fly. The long-term benefits of
successful eradication efforts far outweigh the short-term costs of
emergency programs to eradicate such pests. However, such efforts
require rapid response and adequate resources. ANLA supports the
establishment of a ``no-year'' emergency agricultural pest fund that
could be accessed at the sole discretion of the Secretary of
Agriculture in the event of pest emergencies. Such a fund should be
adequate to deal with multiple emergencies, and should be replenished
as needed.
forest service
Gypsy Moth Slow-the-Spread (STS)
ANLA recognizes that jurisdiction for U.S. Forest Service funding
rests with another appropriations subcommittee. Nonetheless, ANLA
believes that the gypsy moth issue is so important that it needs to be
brought to this subcommittee's attention as well.
Gypsy moth is a devastating forest and landscape pest that was
introduced into the U.S. in 1869. It has since spread to all or part of
17 states and the District of Columbia. However, this area represents
only 25 percent of the total area susceptible to gypsy moth outbreaks.
A recent Forest Service pilot program demonstrated that the rate of
gypsy moth spread could be slowed by at least 60 percent through the
application of modern survey and management practices. National
implementation of ``Slow-the-Spread'' (STS) would cost-effectively
reduce the new territory invaded by gypsy moth along a 1,200 mile
``frontier'' stretching from Wisconsin to North Carolina. STS would
protect environmental resources and reduce the burden of quarantines on
the nursery industry.
ANLA urges that the $3.5 million in Forest Service funds provided
for the annual pilot program in recent years be dedicated to the STS
program. ANLA also urges Congress and the Forest Service to vigorously
pursue full STS funding of $8 million by the year 2000.
cooperative state research, education and extension service
Pesticide Clearance
ANLA strongly supports the Administration's fiscal year 1999 budget
proposal of $10.7 million for the JR-4 program under the USDA-CSREES
Special Research Grants Program. Further increases may be needed and
justified in view of the new requirements of the 1996 Food Quality
Protection Act--(FQPA). FQPA requires the reassessment of virtually all
pesticide dietary tolerances over the next 10 years--an enormous task
that will require comprehensive JR-4 support. Together with USDA-ARS
funding, this would increase JR-4 funding to $12.8 million for fiscal
year 1999.
The JR-4 program has achieved unparalleled success in facilitating
the registration of minor-use crop protection tools, including big-
pesticides and other reduced-risk pesticides. While most JR-4 projects
focus on minor-use food crops, the program to date has generated
crucial data supporting uses of most products registered for nursery
and greenhouse use. Private industry resources are also leveraging the
program's successes. For example, ANLA led a successful effort in 1996
to raise $20,000 to fund a high level workshop where key nursery and
floral researchers prioritized production problems and critical
pesticide registration needs. ANLA's research division, the
Horticultural Research Institute, as well as the American Floral
Endowment and the Society of American Florists supported this effort.
national agricultural statistics service (nass)
ANLA thanks Congress for funding the very practical and efficient
Census of Agriculture now under the auspices of the National
Agricultural Statistics Service (NASS). Not only does the Census of
Agriculture and related surveys provide environmental horticulture
statistics unavailable from any other source, these critical surveys
reduce both government duplication and respondent burdens.
ANLA supports the proposed $1.4 million in fiscal year 1999 to
expand the current pesticide use surveys to include the burgeoning
environmental horticulture industry. ANLA believes strongly that
regulations need to be science-based, real world solutions to protect
the environment, valued workers and nursery families. ANLA is concerned
that in the absence of actual use data, regulators employ overly
conservative default assumptions to determine pesticide risks and
application rates.
ANLA strongly supports expansion of the labor statistics gathering
of NASS as part of the Horticultural Specialties survey. As the
industry's single greatest production expense, labor is key to the
ability to move into the future, while attracting, training and
retaining employees.
economic research service (ers)
The nursery industry relies heavily upon the agricultural economic
analyses produced by the Economic Research Service (ERS). In fact, ERS
is this nation's sole source of such comprehensive nursery industry
analyses. ANLA deeply appreciates the past support provided by Congress
for the continued support of economic analyses of the nursery and
greenhouse industry. Despite this congressional support, ANLA remains
concerned that ERS may ignore both the congressional support and the
nursery industry's demonstrated need for continuation of these economic
analyses. Therefore, ANLA urges Congress to earmark $240,000 in USDA's
fiscal year 1999 funds and direct ERS to continue conducting its on-
going economic analyses of the size and scope of the nursery and
greenhouse industry. ANLA respectfully requests Congress to direct ERS
to analyze interstate and international trade flows of the nursery
industry.
conclusion
In closing, Mr. Chairman, ANLA is mindful of the budget constraints
faced by this Committee. Yet, we believe that federal funding of the
kinds of activities supported in our testimony is not only justified,
but necessary, if the nursery industry is to continue to prosper and
play its increasingly significant role in this nation's economic
strength. As in past years, ANLA genuinely appreciates this opportunity
to present the nursery industry's views regarding USDA's agricultural
research programs and the Department's annual proposed budget. Thank
you for your consideration, and we look forward to continuing to work
with you, Committee members and your staff.
______
Prepared Statement of the American Seed Trade Association (ASTA), Corn
and Sorghum Basic Research Committee
strengthening the germplasm base of usa hybrids by enhancing corn
germplasm
summary
We are requesting $500,000 be appropriated annually for enhancing
corn germplasm.
1. Corn is a key resource providing food, industrial uses,
livestock feed, and export.
2. Corn production in the U.S. is based on less than 5 percent of
corn germplasm available in the world. Broadening the germplasm base
would provide genes to improve yields and protect against new disease,
insect and environmental stresses. Exotic germplasm would also be a
source for changes in grain quality being demanded by export markets,
industrial processors, and other end users.
3. Most exotic germplasm is unadapted to growing conditions in the
U.S. This proposal is a joint USDA/ARS, university, and industry effort
to adapt this material, so that it can be used by commercial breeders
in the development of new hybrids to meet the demands of the American
consumer and our foreign markets.
4. We greatly appreciate the $500,000 previously appropriated for
this research, beginning in the 1995 federal budget. This funding is
supporting the two main USDA/ARS locations involved in this research
(Iowa and North Carolina), as well as USDA/ARS and university locations
in Delaware, Georgia, Illinois, Iowa, Mississippi, Missouri, New York,
Tennessee, and Wisconsin. Industry is providing $450,000 in-kind
support annually for this effort.
5. The additional appropriation of $500,000 annually would enable
the Iowa and North Carolina locations to purchase equipment and add
staff necessary for carrying out this research. It would also provide
funding for the increased germplasm evaluation and breeding necessary
to test and enhance the exotic materials available.
background
Corn is the major crop on the cultivated land of the USA where
approximately 75 million acres are planted each year. U.S. corn
production, accounting for about half of the world's annual production,
adds over $16 billion of value to the American economy as a raw
material. About 20 percent ($3.2 billion) of this production is
exported each year, thereby providing a positive contribution to the
nation's trade balance. Approximately 17 percent of the yearly corn
crop is industrially refined. A portion of refined products is exported
resulting in an additional $1.4 billion in export. Through feeding
livestock, the rest of the crop is processed into meat and dairy
products that affect everyone in our society. Corn is a key resource
within our country.
concerns
All of this production is based on using less than 5 percent of the
corn germplasm available in the world. Less than 1 percent of our
commercial corn is of exotic (foreign) origin, and tropical exotic
germplasm is only a fraction of that. This situation exists because
private sector corn breeders have generally concentrated on genetically
narrow based, or elite by elite, sources for their breeding efforts,
since their use results in getting hybrids to the marketplace faster.
Traditionally, corn has been treated as a commodity. In recent
years corn grain users and processors have become more interested in
the quality characteristics of the grain itself and how this affects
their business. Since much of the exotic germplasm has undergone
selection for many indigenous uses (foods, beverages, etc.) by various
cultures, it seems likely that new grain quality characteristics will
be found in exotic rather than the narrow-based germplasm now used. A
small increase in value to the grain, such as 10 cents per bushel,
would increase its annual value by $800 million for an eight billion
bushel harvest.\1\
---------------------------------------------------------------------------
\1\ Salhuana, Pollask, Tiffany 1994. Public/Private Collaboration
Proposed to Strengthen Quality and Production of U.S. Corn through
Maize Germplasm Enhancement, Diversity Vol. 9, no. 4, 1993/Vol. 10, no.
1, 1994.
---------------------------------------------------------------------------
Breeders must still be concerned with breeding for higher yields so
that U.S. corn farmers can remain competitive. Tapping into the broader
germplasm pool could provide new sources of genes for higher yield and
other performance traits, such as disease and insect tolerance or
improved stalk and root strength.
A further concern with a narrow genetic base is the potential for
widespread disease or insect damage due to new diseases or insect
species spreading into U.S. corn growing areas. It is more likely that
resistance to these dangers would be found in genetically diverse
exotic germplasm sources than in our breeding material. One major
benefit would be reduced pesticide use. In addition to protection
against diseases and insects, these exotic materials provide insurance
for unforeseen climatic or environmental problems.
A great deal of excitement has been generated over the new
techniques of biotechnology, especially over the potential value to the
corn industry of gene transformation using genetic engineering.
Research conducted on exotic germplasm could yield many beneficial
genes that genetic engineers could quickly transfer to commercial
hybrids.
lamp project
What would be the source of this exotic germplasm? Over the years,
collections of corn have been made from farmers' fields and other
sources all over the world, and are stored in various germplasm banks.
In 1987, the Latin American Maize Project (LAMP) was initiated to
evaluate these corn collections (accessions). It was a cooperative
effort among 12 countries to identify accessions that might provide
valuable source material for further improvement in hybrid and open-
pollinated cultivars in the U.S.A. and other areas. Pioneer Hi-Bred
International gave USDA/ARS $1.5 million to fund the LAMP research.
Nearly 12,000 maize (corn) germplasm accessions were evaluated. In
successive stages, the project identified the top 268 accessions. The
environmental areas of adaptation for these 268 ``elite'' populations
range from temperate to tropical, and are prime candidates for
enhancing the U.S.A. corn germplasm base.
germplasm enhancement
Most of this germplasm is unadapted to growing conditions in the
U.S. and requires genetic enhancement to make it adapted, or able to
grow and mature in our environmental conditions. Enhancement basically
means that these exotic materials will be bred with U.S. adapted
materials and breeders will select progeny that carry the desired
exotic traits and are also adapted to U.S. growing conditions. This
will require a concerted long-term breeding approach by corn breeders
at numerous locations (environments) throughout the U.S. Only after
this process of enhancement will these exotic materials be ready to
enter commercial corn breeding channels and be effectively utilized by
a broad cross-section of the industry in the development of new hybrids
for farmers and corn users.
The total process of enhancement is too large and long-term for
public institutions and/or seed companies to accomplish individually.
An ambitious task of this nature can only be completed through a
coordinated and cooperative effort between the USDA/ARS, land-grant
universities, and industry.
The Corn and Sorghum Basic Research Committee of the American Seed
Trade Association has been concerned that enhancement of this exotic
germplasm would proceed. The Committee consists of representatives from
about 30 companies actively involved in the corn and sorghum seed
industry, and at the committee's request, Dr. Linda Pollak, Research
Geneticist, USDA-ARS, et al., developed a proposal for enhancing exotic
germplasm starting with materials which will include the elite LAMP
accessions as noted above. This proposal has developed into the U.S.
GEM (Germplasm Enhancement of Maize) Project.
u.s. gem project outline
Since this project serves a national need, the primary effort and
direction has come from the USDA/ARS. Two permanent USDA/ARS locations
are being used as primary sites for enhancement breeding and
coordination. One is at Ames, Iowa, where the USDA/ARS currently
conducts corn evaluation and enhancement efforts. Dr. Linda Pollak,
Research Geneticist, is located there. Dr. Pollak was the Principal
Investigator of the U.S.A. for LAMP, and is the lead scientist for this
project.
The other permanent site is the USDA/ARS location in North
Carolina. This site has responsibility for initial evaluation and
conversion of the tropical materials. Tropical corn populations
normally will not reach maturity in the Corn Belt, but will produce
seed in North Carolina. After initial enhancement of the tropical
materials in the South, they will be sent to Ames for further
enhancement and testing in Corn Belt conditions. Dr. Marty Carson is in
charge of this program.
A number of corn researchers at various land-grant universities and
other ARS locations are also taking part in the enhancement and
evaluation of this exotic germplasm. This cooperative effort is very
important and serves not only as a source of improved germplasm but
also provides excellent training for future plant scientists.
Industry is also involved. A total of 21 companies have pledged
research nursery and yield trial plots to be used in this breeding
effort. This in-kind support is valued at $450,00 per year.
An important component of the project is an annual meeting of all
cooperators to evaluate progress and plan strategies. An information
network has been established to keep everyone up-to-date. A U.S. GEM
Technical Steering Group consisting of members from USDA/ARS,
University, and Industry has been formed for guidance and
administration of this cooperative effort.
This germplasm enhancement project is public and is open to all
public sector institutions as well as private seed companies.
Information will be freely available and publicly developed materials
will remain in the public domain, accessible to all.
accomplishments in 1996-97
Following is a description of accomplishments and research
conducted at various locations using 1996-7 funding.
Ames, Iowa.--Priorities for the corn enhancement work at this
location are overall project coordination, data analysis and
management, management and release of enhanced germplasm, analysis of
materials for value-added traits, and as one of the many breeding
sites. In cooperation with Iowa State University, a postdoctoral food
technologist is working on the utility of unique oils obtained from GEM
accessions and a graduate student is studying environmental effects on
starch quality measurements.
The laboratory is continuing to evaluate oil, starch, and protein
in the exotic accessions and in the breeding populations made up of
exotic materials crossed to proprietary corn belt inbreds. In results
from 1996, a line from one breeding cross measured total protein of 16
percent (corn belt germplasm has 10 percent) and total oil level of 6
percent (corn belt is 4 percent). It is extremely unique to find
increased levels for both of these traits in the same line, and it is
potentially very useful for food and feed applications. In 1997, lines
were identified with unique starch characteristics, which may be
beneficial for human food products.
GEM's World Wide Web site opened on July 15, 1996. From this site
cooperators can obtain the latest data from yield tests, disease and
insect screening, and value-added trait research, as well as news and
upcoming events.
Raleigh, North Carolina.--The focus of this location is twofold.
One priority is to develop enhanced material adapted to the Southern
U.S. corn growing conditions. The second is to be a stepping stone for
adapting tropical material to Midwest conditions.
Breeding populations were tested for resistance to various leaf
diseases and stalk rots. Selections were made for improved material
with resistance to these diseases as well as for improved yield,
standability, and adaptation to North Carolina conditions. For example,
in 1997 significant resistance to Fusarium ear rot was found in 4 GEM
breeding populations. Resistance to Aspergillus ear rot was also found
in 2 of these same 4 populations. Hybrids of about 130 advanced
breeding lines developed from tropical x elite breeding populations
outyielded the mean of commercial check hybrids.
Other public cooperators conducted evaluations in 1997 as follows:
Drought resistance in Delaware. Yield data accumulation in Georgia.
Grain yield, disease resistance and starch content in Illinois. Corn
rootworm and Fusarium ear rot resistance in Iowa. Grain physical
properties, wet milling properties, starch functionality, and other
value added grain traits in Iowa. Resistance to aflatoxin in
Mississippi. Resistance to corn rootworm and corn borer in Missouri.
Resistance to anthracnose stalk rot in New York. Grain yield tests in
Tennessee. Evaluation of silage quality in Wisconsin.
Demonstration nurseries were planted at Iowa and North Carolina for
viewing by cooperators. Fall field days were held at Iowa and
Wisconsin.
In 1997, private cooperators continued the breeding and adaption of
about 15 accessions following the protocol developed by the GEM
Technical Steering Group. Companies increased their nursery and yield
trial in-kind support by approximately 25 percent in 1996.
research in 1998
Research will continue at the various USDA/ARS, university, and
company locations similar to 1997.
effects of increased funding beginning in 1999
Appropriation of the additional $500,000 annually would provide
funds to increase research in the following ways:
Ames, Iowa.--The corn genome is being mapped by researchers in the
corn genome project. This DNA information is only useful if it is
associated with traits of interest. Many unique traits of interest,
such as value-added traits, are being discovered in the GEM materials.
Additional funding will add personnel and resources to speed up the
discovery of value-added traits and help tie these two areas of
research together. The increase in winter nursery funding would allow
the Ames location to support the public breeding activities and allow
public materials to reach commercial breeding programs in half the
time. A small amount of money would be available to help public
cooperators to attend the annual meeting and field day.
Raleigh, North Carolina.--This location has a number of equipment
needs, such as a seed storage unit, because current facilities are
filled to capacity. A technician would be added to handle the expanded
field work. Current resources restrict testing and development work to
relatively few breeding populations. With the increased funding, the
number of breeding crosses could be increased, greatly speeding up the
introduction of adapted GEM material into private and public breeding
programs. Additional funding would provide for yield trial testing at
more locations and more extensive disease and insect resistance
screening, greatly increasing the precision in selecting materials that
are high yielding and have high levels of pest resistance.
Other Public Cooperators.--The increase in funding for public
cooperators (to $202,000 per year in the third fiscal year) would allow
for full evaluation and development of new breeding materials improved
for productivity as well as disease and insect resistance and value-
added traits. It would also provide for the use of biotechnology tools
in this development work. Most public cooperators are willing to
participate, but cannot unless they have at least partial funding.
There are approximately 30 public cooperators now, and as the project
develops we are likely to have more.
conclusion
Corn hybrids in the U.S. have a very narrow genetic base, utilizing
only a small percentage of all available corn germplasm. This greatly
increases vulnerability to unforeseen pest problems, and may lead to an
eventual yield cap. Exotic corn germplasm could provide genes for
resistance to pest problems and for increased yields. These exotic
materials may also contain quality traits to meet new market demands.
This will help ensure the U.S. maintains its world leadership in
providing the best raw materials to meet the demand for the production
of meat, eggs, milk, and many other food and industrial uses.
LAMP project identified the top 268 corn accessions from among
12,000 populations evaluated. The present proposal represents a joint
USDA/ARS, land-grant university, and industry effort to enhance these
and other exotic accessions so that they can enter commercial corn
breeding programs. The result of this cooperation will be an increase
in the productivity, quality, and marketability of hybrid corn in the
U.S. and for export, benefiting the farmer, the feed and processing
industries, and the consumer.
Therefore, the ASTA Corn and Sorghum Basic Research Committee
hereby requests the 106th Congress of the United States to add funding
of $500,000 (in addition to the $500,000 appropriated initially in
1997, for a total of $1,000,000) annually for this corn germplasm
enhancement project beginning with the 1999 federal budget.
budget summary
This is a summary of the operational and capital budgets for 1998,
1999, and 2000; 2000 will only be operational. The budget is divided
into the Corn Belt Location and corresponds to Ames, Iowa (USDA-ARS)
and the cooperators in the Corn Belt area. The Southern Location
corresponds with Raleigh, North Carolina (USDA-ARS) and the cooperators
in the states in the South. For a complete copy of the budget, please
contact Dr. David Harper, Holden's Foundation Seeds LLC, Box 839,
Williamsburg, IA 52361 or 319-668-1100.
----------------------------------------------------------------------------------------------------------------
Items 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
Corn Belt location:
Board reductions............................................ $18,500 $19,100 $19,800
Personnel................................................... 143,500 252,200 262,600
Office/field................................................ 43,600 91,000 91,000
Capital equipment........................................... 34,400 68,700 57,600
Specific agreements for public cooperators \1\.............. 60,000 169,000 169,000
-----------------------------------------------
Total for Corn Belt location.............................. 300,000 600,000 600,000
===============================================
Southern location:
Personnel................................................... 90,000 123,000 126,000
Office/field................................................ 25,100 53,500 54.000
Capital equipment 4,900 68,000 68,000
Specific agreements for public cooperators \1\.............. 30,000 55,500 52,000
-----------------------------------------------
Total for Southern location............................... 150,000 300,000 300,000
===============================================
Summary:
Corn States location........................................ 300,000 600,000 600,000
Southern location........................................... 150,000 300,000 300,000
USDA/ARS overhead........................................... 50,000 100,000 100,000
-----------------------------------------------
Grand total............................................... 500,000 1,000,000 1,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Specific Agreements for Public Cooperators: Agreements for public cooperation can be made with universities
and ARS scientists in many locations which could include the following states: Delaware, Ohio, Pennsylvania,
Indiana, Illinois, Wisconsin, Kentucky, Missouri, New York, Iowa, Michigan, Minnesota, North Dakota, South
Dakota, Nebraska, North Carolina, Mississippi, Georgia, Louisiana, Texas and Tennessee. Research at these
locations would include selection for disease and insect resistance, evaluation for value added traits, and
yield trials.
______
Prepared Statement of Lorin Moench, Jr., President, American Sheep
Industry Association
The American Sheep Industry Association (ASI) is a federation of
state member associations representing the nearly 80,000 sheep
producers in the United States. The sheep industry views numerous
agencies and programs of the U.S. Department of Agriculture as
important to lamb and wool production. Sheep industry priorities
include rebuilding and strengthening our infrastructure, critical
predator control activities, maintaining and expanding research
capabilities and animal health efforts.
The rapid changes that have occurred in the domestic sheep industry
and continue to take place put further emphasis on the importance of
adequately funding the U.S. Department of Agriculture programs
important to lamb and wool producers.
We appreciate this opportunity to comment on those portions of the
USDA fiscal year 1999 budget.
animal and plant health inspection service (aphis)
The mission of APHIS, ``to protect U.S. animal and plant resources
from diseases and pests,'' is very important to the sheep industry of
the nation.
Wildlife Services
The Wildlife Services (WS) program of USDA-APHIS is vital to the
economic survival of the sheep industry. The value of sheep and lambs
lost to predators and predator control expenses are second only to feed
in sheep production costs. Costs associated with predation now exceed
our industry's veterinary costs, labor, and transportation costs.
The sheep industry adamantly disagrees with the Administration's
budget proposal to reduce the Wildlife Services operations budget $3.4
million and to decrease methods development funding $829,000. The
proposed $4.3 million funding cut for programs and research will not
only severely impact tens of thousands of agricultural producers, but
will endanger the health and safety of millions on Americans,
jeopardize a number of endangered species and other wildlife programs,
and carry negative international implications.
The Agricultural Statistics Service estimates that two-thirds of
the nation's farms suffer some form of wildlife damage each year. Most
recent loss surveys found that over 520,000 head of sheep, 117,000 head
of cattle and 35.4 million bushels of corn were lost to wildlife
damage. The president's budget reduction will not only reduce or
eliminate efforts to control livestock losses in a number of states,
buts also threatens efforts to control aquaculture losses to migratory
birds in Arkansas, Alabama and Pennsylvania, rice losses in Louisiana,
sunflower, corn and other small grains losses in North Dakota and Iowa.
Losses of federal cooperative dollars is also expected to result in
corresponding reductions in state and local cooperative dollars,
further reducing the effectiveness of Wildlife Services.
Agriculture is not the only sector of the public affected by the
proposed Wildlife Services budget cut. Urban America makes as many
requests on WS for protection of private property and human health and
safety as agriculture. With over 2,000 commercial jets hitting wildlife
each year, airport safety is also heavily dependent on WS. The
president's budget needlessly threatens to reduce efforts to protect
airlines and passenger safety in states such as Florida, Pennsylvania,
Iowa, Kansas and Utah. The president's budget recommendations to
eliminate $800,000 in rabies control funding for New York, Vermont,
Ohio and Texas also places needless risk on human health and safety.
Due to its cooperative nature, the Wildlife Services program
continues to be the most cost effective and efficient program within
the U.S. Department of Agriculture in managing the public's wildlife
for purposes of reducing wildlife damage to private property and
protecting human health and safety. Wildlife Services is one of the few
federal programs that has been consistently at or above the 50-50
federal to cooperative funding ratios. The president's recommendation
that a 50-50 ratio of cooperator funding be applied at the states and
local level has no justification in statute, regulation or policy.
Efforts by the administration to micromanage this successful
cooperative program will only serve to take away needed flexibility of
WS managers and will inhibit Wildlife Service's ability to accomplish
its mission as mandated by the Animal Damage Control Act, NEPA and the
Government Performance and Results Act.
Although the funding for Wildlife Services has seen slight
increases in the past, most increases have been Congressional
Directives aimed at specific projects. Inflation has slowly eaten away
at funds used to support general operations programs. The sheep
industry strongly supports the funding for fiscal year 1999 Wildlife
Services operations be set at $33,997,600, an increase of $5,511,600
over the fiscal year 1998 level.
Aerial hunting is one of Wildlife Service's most efficient and cost
effective core programs. Past appropriations have not kept pace with
inflationary effects which have almost double the cost of flying since
1980. As the budget availability for aerial hunting has decreased,
Wildlife Service's ability to oversee safety inspections and to conduct
annual certifications on all contract aircraft's has also decreased. A
total of $3,182,500 is needed to offset inflationary effects on the
aerial program and to provide better safety, training and inspection
for Wildlife Service pilots.
The United States Fish and Wildlife Service continues to place
increased budgetary demands on Wildlife Services in terms of endangered
species protection and management. With record numbers of wolves in
Minnesota this past year, also came record numbers of farms where
livestock were verified killed by wolves. Wolf predation on livestock
in Montana, Wyoming and Idaho doubled in 1997 vs. 1996. An additional
$285,000 over fiscal year 1998 levels of funding is needed to manage
rapidly expanding wolf populations.
A total of $700,000 is needed to continue implementing the new
Management Information Reporting system. Implementation is expected to
cost $6 to $8 million over a five year period and is necessary to
replace Wildlife Service' outdated system which is to obsolete to
handle current amounts of information. The new system is necessary for
NEPA compliance and to provide trend information and information on
resources protected, etc. as required by the Government Performance and
Results Act.
As stated in the president's budget, the National Wildlife Research
Center (NWRC) is the only research facility in the world devoted
exclusively to studying and developing socially acceptable methods on
managing wildlife damage and related human health and safety issues.
The president's budget, however, is inaccurate in its statements that
the NWRC cannot accommodate much of the specialized requirements of its
methods development programs within current facilities and therefore
requests a $479,000 decrease. These monies are being fully utilized for
research in areas of airport safety, human health and safety, predator
management and the protection of aquaculture, small grains and forests.
Facilities in Olympia, Washington; Starkville, Mississippi;
Gainesville, Florida; Logan, Utah and others are fully capable of
conducting this research until the Ft. Collins, Colorado facility is
complete. The $479,000 proposed budget cut by the president will only
serve to cripple or close existing facilities.
The sheep industry urges Congress to provide the necessary $20.5
million needed to complete the state-of-the-art facilities and Ft.
Collins, Colorado. Future improvement of humane and effective wildlife
damage management programs depends on identification and development of
more effective control methods.
The president's budget also carries negative international
implications. After five years of negotiation, the United States has
reached agreement with the European Union (EU) to test and develop
scientific information in relationship too safe and humane trapping
standards. Not providing the necessary funding to conduct this research
will cause the United States to renege on its international promises to
the EU. The sheep industry urges Congress to add $450,000 to the budget
for this very critical wildlife management, economic and trade issue.
Scrapie
Adequate funding of the Voluntary Scrapie Flock Certification
Program and other scrapie control measures through USDA-APHIS is of
critical importance to the sheep industry, as well as all segments of
the livestock industries. ASI appreciates this Subcommittee's efforts
in recognizing the seriousness of this devastating disease and the real
need for control and eradication. ASI and others have urged APHIS to
step up its efforts in scrapie control/eradication through a more
aggressive regulatory approach. We request that the scrapie control/
eradication program be funded more adequately in fiscal year 1999 as
requested by the administration.
No country has, to date, conducted an active surveillance study of
scrapie. ASI has requested that APHIS conduct a national surveillance
study of scrapie since our industry's ability to compete in the market
place is encumbered by both existence of scrapie in our flock and the
lack of quantitative data about the disease. ASI has committed to
investing producer funds to help cover laboratory costs associated with
the study. Additional appropriations up to $600,000 are supported by
the industry to insure completion of this critical surveillance effort.
agricultural marketing service
Lamb Market Information and Price Discovery Systems
The sheep industry strongly supports the fiscal year 1999 budget of
$22,166,00 for Market News of USDA-Agricultural Marketing Service. The
increased appropriations of $820,000 is critical for the agency to
conduct the increased international market reporting and activities
associated with the concentration in the livestock industry. The sheep
industry has requested a review and update to the lamb and lamb meat
market reporting system in the U.S. and inclusion of imported lamb
product prices in the market news which brings added importance to
increasing funds for the Foreign Agricultural Service (FAS).
The sheep industry participates in FAS programs such as the Market
Access Program (MAP) and the Foreign Market Development Program. ASI
strongly supports continued appropriations at the fiscal year 1998
level for these critical Foreign Agricultural Service programs. ASI is
the cooperator for American wool and sheep genetics and has achieved
remarkable success in increasing exports of domestic wool, breeding
sheep and semen. Wool exports have increased 170 percent over the last
five years with the aid of this funding. American lamb sales also
benefit from the Foreign Market Development Program though increased
international efforts.
natural resources conservation service (nrcs)
ASI urges increased appropriations for the range programs of the
Soil Conservation Service to benefit the private range and pasture
lands of the United States with conservation assistance. We support the
budget item and recommend an increased level for the Grazing Lands
Conservation Initiative which ASI has worked with, along with other
livestock and range management organizations, to address this important
effort for rangelands in the U.S.
research, education and economics
The sheep industry recognizes that it must be globally competitive,
profitable and sustainable as a user of and contributor to our natural
resource base; that production and processing practices must be
environmentally sound, socially acceptable and must contribute to the
goals and overall well-being of families and communities. It is
therefore essential that an integrated systems approach be used,
focusing on problem-oriented programs utilizing interdisciplinary team
efforts. These efforts should be applied both to plan and to conduct
research on complex problems as well as to apply problem-solving
technologies on farms and ranches through quality educational programs.
We are disappointed in the small increases requested by the
administration for agricultural research and education funding. In
order for U.S. Agriculture to be globally competitive and
environmentally sound in the future we must invest in the discovery of
new technologies for producing, processing, and marketing food. We urge
the subcommittee to give send a strong message supporting agricultural
research and education increases.
Agricultural Research Service
ASI recommends the continued support and expansion of the scrapie/
BSE and other TSE research initiatives at Pullman, Washington and Ames,
Iowa as requested by the administration. The collaborative research
that is ongoing at these locations is recognized world wide and will be
key in finding solutions to these disease problems. We believe
regulatory initiatives to prevent, control, and eradicate TSE's in our
livestock populations will work when based on sound research
information. We also strongly support the administration's request of
$6 million for emerging diseases and we urge significant appropriations
for the animal component of this line item.
cooperative state research education and extension service (csrees)
We strongly support the National Research Initiative (NRI) and we
appreciate the Administration's request of $130 million. The
competitive grants awarded under its program are for the highest
quality research addressing the goals and objectives of FAIR 1995.
The ongoing research in wool is critically important to the sheep
industry. ASI supports continued funding of $212,000 for fiscal year
1998 through the special grants program of the CSREES.
We urge the subcommittee to appropriate both intramural and
extramural funding for research to measure the well being of livestock.
Animal well being is an emotional issue; in order to consider new
management strategies for the enhancement of animals, we need improved
methods of measurement.
The industry greatly appreciates this opportunity to discuss these
programs and appropriations important to the sheep industry.
______
Prepared Statement of the American Society for Nutritional Sciences
(ASNS)
The American Society for Nutritional Sciences (ASNS) is the
principal professional organization of nutrition research scientists in
the United States representing 3,500 members whose purpose is to
develop and extend the knowledge and application of nutrition science.
Our members include scientists involved in human as well as animal
nutrition research. Our members hold positions in virtually every land
grant and private institution engaged in nutrition-related research in
the United States as well as industrial enterprises conducting
nutrition and food related research.
the need for nutrition-related research
The need for nutrition science and research is critical within the
USDA. Nutrition and agricultural research are areas that impact the
constituents of every congressional district in the nation. New
technologies are demanded to reduce the likelihood of pathogen
transmission by food, to improve the quality of processed foods, and to
deliver greater nutritional value in foods. Additionally the economic
impact on society in healthcare costs produced by advances in nutrition
research is significant in the number of dollars saved by the American
taxpayer. As health costs continue to rise, it is imperative that our
medical practices take a preventive approach. This requires a thorough
understanding of the role of nutrients in foods in preventing chronic
illnesses such as heart disease, cancer and diabetes.
Research in the areas of food safety and human nutrition has paid-
off with considerable benefits to society. The USDA has a unique role
in the area of nutrition research, particularly as it applies to human
nutrition. For example, although there is a serious and obvious
commitment to the funding of disease-related research within the
National Institutes of Health, issues important to the basic mechanisms
of nutrient function and the safety of the food supply have
traditionally been the purview of USDA funded research. Most of the
recent work on nutrient content and availability in various foods has
come from USDA-NRI supported research. From a consumer perspective, it
is this type of information that is often the most useful. It is
clearly an important extension of the commodity-oriented research
carried out by our land grant universities. And from the perspective of
nutrition, the goal of this research often achieves optimal health in
the context of using given commodities as part of our diets.
ASNS is aware that nutrition research is among those areas of
public policy that has received bipartisan support, and we hope that
support will continue. Nutrition scientists are grateful to those
members of both parties who have supported scientific research. This
investment increases knowledge that ensures a healthy and productive
society.
We need to continue to invest in research as greater challenges
face us in the 21st century. Increasing populations, international
economic competitiveness, improving the environment and minimizing
healthcare costs through disease prevention are all areas that will
continue to demand solutions for the future. These solutions might
include advances in the understanding of the genetic basis of disease
and the genetic basis of nutrient requirements for optimal health,
which will require greater understanding of how nutrition and dietary
information can be used for disease prevention in at-risk populations.
In recent years nutrition research has led to nutritionally improved
school lunches, implemented changes in safety requirements, and
increased awareness for pregnant women, children and the elderly.
significant nutrition-related research accomplishments
Zinc Intake Important to Maintaining Good Health
National surveys have shown that in the U.S. half of the adults
have inadequate intakes of zinc. Inadequate intakes of zinc can make
one more susceptible to infection, poor wound healing and skin lesions.
It is not known how much zinc is needed to maintain good health. In a
study funded by USDA's NRI, investigators developed a model of zinc
kinetics which shows the relationship between endogenous excretion,
absorption, pool sizes and dietary zinc intakes. They were able to show
that the size and turnover rates of rapidly equilibrating zinc pools
are specific indicators of zinc status and can be used to assess the
prevalence of low zinc in a population. Future studies will entail
developing zinc status tests that can be used in field settings.
Dietary Energy Requirements in Children and Obesity
Data from National health surveys have shown that pediatric obesity
is increasing in the U.S. This is a critical health concern because
obesity in childhood increases the risk for obesity in adulthood and
the many diseases associated with obesity. It has been shown that 26-41
percent of obese preschool children are obese as adults. Diet is
considered to be an important variable, especially dietary fat intake.
In a study supported by USDA's NRI, investigators showed that maternal
obesity influences dietary fat intake in children and in boys there was
a correlation between their fat intake and amount of body fat.
Researchers have been able to show that physical activity (hrs/day) is
more related to body fatness than to energy expenditure (kcal/day).
Total energy expenditure is influenced by season and geographic
location independent of differences in body composition. Gender
influences energy expenditure through its effect on resting energy
expenditure and this effect is consistent among several ethnic groups
tested. They have been able to provide and validate new tools for
assessment of diet, energy expenditure and body composition in growing
children, which can be used in the development of new guidelines for
dietary energy needs in children.
Vitamin B-6 Kinetics in Women
Vitamin B-6 is required for numerous metabolic functions. Lower
serum levels of vitamin B-6 have been found in pregnant women. It is
still unclear what is a good method for assessing vitamin B-6 status in
people, especially in women during pregnancy and lactation, a time of
stress. Pyridoxal, pyridoxamine and pyridoxine are the forms of vitamin
B-6 found in the body and these metabolites provide critical
information about vitamin B-6 status. In a study supported by USDA NRI,
investigators examined the appearance of a stable isotope given to
women in pyridoxic acid (important vitamin B-6 metabolite) in urine and
in pyridoxal in milk of lactating women. They have shown that lactation
may have a greater influence on vitamin B-6 metabolism than pregnancy.
The researchers have also shown that using standard clinical assays for
alkaline phosphatase and phosphorus may be used to estimate pyridoxine
phosphate phosphatase activity in undiluted plasma, an indicator of
vitamin B-6 status.
Vitamin A Critical to Embryonic Development
Numerous studies have shown that adequate vitamin A is critical for
normal embryonic and fetal development in humans. Maternal
insufficiency of vitamin A during pregnancy results in several
abnormalities and death of the fetus. In a study supported by USDA's
NRI, the investigators used an avian model to look at the physiological
function of vitamin A in early development. In vitamin A-deficient
embryos no retinoic acid (metabolite of vitamin A) was found. However,
normal early embryos were shown to be capable of processing vitamin A.
Using molecular biology techniques, developmental patterns between
normal and vitamin A-deficient embryos were compared. These studies
showed a role for vitamin A in heart, central nervous system and
vascular system development. In addition, the researchers were able to
identify a valuable marker (retinoic acid receptor beta), which is
vitamin A status dependent, for vitamin A-dependent developmental
events. It is widely accepted that very early developmental events are
similar across species, thus the finding of this research is relevant
to human embryonic development, which could lead to a scientific basis
for evaluating vitamin A nutrition in humans.
research funding mechanisms and issues
Competitive Grants
A competitive system for allocating government research funds is
the most effective and efficient mechanism for focusing efforts on
cutting edge research aimed at improving the health of the American
people. Competitive grants provides the most effective, efficient and
economic return to the public. ASNS strongly supports the competitive
grants process as reflected in the National Research Initiative and
believes that an open, merit and peer review process, applied as
extensively as possible throughout the research system, is the
preferred way to distribute research funds among qualified scientists
and to support the most meritorious new concepts.
Special Grants
ASNS strongly believes that the best research results come from
research that is peer reviewed. That is why researchers funded by
federal agencies, such as the NIH and the NSF, that award grants on
merit have made such great progress. There is a danger that special
grants and earmarked research funds from USDA may be awarded on the
basis of politics rather than merit, priority or research need.
Therefore, the integrity of the research system and agricultural
science may be eroded. Last year special grants were appropriated at
$66 million even though the Administration's request for this year was
just over half of that figure. We recognize that there is pressure to
maintain these special grants. Special grants, however, do not always
make for the best science or good use of scientific expertise. While
special grants have their place to address emergency needs of national
priority such as food safety, they may also be used to address research
that is not deemed of the highest priority or merit. Thus, the
proportion of special grants in comparison to the total research budget
at USDA should be decreased.
initiative for future agriculture and food systems in the research,
extension, and education reauthorization bill
The Agricultural Research, Extension, and Education Reform Act,
which has been agreed upon in conference, and still pending in the
Senate (4/29/98) includes an Initiative that would create new mandatory
spending that provides $600 million for funding competitively-awarded
research programs at USDA over a five year period. Priority mission
areas to be addressed in the first year are food genome, food safety,
food technology and human nutrition; new and alternative uses and
production of agricultural commodities and products; agricultural
biotechnology; and natural resource management. The Initiative also
includes provisions that allow merit/peer review and lets those who
benefit from agricultural research provide input about the priority
setting process. ASNS supports this Initiative and urges members of
this subcommittee to support the bill when it comes to the Senate
floor.
animal welfare act
Research using animals has been crucial to virtually every advance
in medicine in the past century. Agents for control of high blood
pressure and the management of diabetes, vaccines for the control of
poliomyelitis and mumps, development of artificial joints and heart-
lung machines, and many more medical advances have depended on animal
research.
USDA's Animal and Plant Health Inspection Service (APHIS) is
charged by Congress to enforce the Animal Welfare Act (AWA). Under the
AWA, USDA licenses dealers to buy and sell random-source animals to
research facilities that are unable to obtain them from municipal
pounds and shelters. This provides access to a critical supply of
animals since animals bred specifically for research often lack
characteristics needed by researchers studying health-related problems.
Much of their work relies on older, larger, and genetically diverse
animals.
ASNS recommends that Congress provide APHIS with adequate funding
for enforcement of the Animal Welfare Act in fiscal year 1999 so that
it can continue to ensure compliance with the AWA.
closing remarks
Agriculture has been and will continue to be important to human
health in terms of food that provides proper nutrition for healthier
people. As the future challenges us with more complicated diseases,
research is forced to expand outside the traditional disciplines and
approaches, such as the work that is being done is plant and animal
genomics. Transgenic plants and animals offer potential for new
developments never before thought possible. New approaches must be
implemented to address new societal concerns. For example, despite our
hard efforts to plan healthy diets for school children much of this
food is being wasted. Nutritionists are constantly challenged to
develop nutrient-balanced meals that will encourage our children to
choose more healthful foods. New demands to fit busy lifestyles is
another example. Issues such as product convenience, uniformity of
products, ease of preparation, ``automatic'' nutrient balancing, and
packaging are all areas scientists must address. Research in areas of
how our food is produced, pesticide usage, animal care and food
handling issues also present demands to our scientists. These demands
and opportunities must be answered in a way that sustains or enhances
our quality of life. Although greater challenges lie ahead,
agricultural research funding continues to be stagnant.
It is for these reasons that ASNS recommends to the Committee an
increase in funding for USDA's National Research Initiative Competitive
Grants Program from $97 million to $130 million. This amount reflects
our view that the increase requested for the competitive grants program
is an investment which will lead to a more balanced and productive
research system that is vital to our national interest.
______
Prepared Statement of Carolyn Cheney, Chairman, American Sugar Alliance
Thank you for the opportunity to submit testimony for this
important hearing. I am Carolyn Cheney, Washington Representative for
the Sugar Cane Growers Cooperative of Florida. I also serve as chairman
of the American Sugar Alliance, of which my cooperative is a member.
The ASA is a national coalition of growers, processors, and refiners of
sugarbeets, sugarcane, and corn for sweetener. I am proud to present
the views not only of the Sugar Cane Growers Cooperative of Florida,
but also of the American Sugar Alliance.
summary
The U.S. sugar industry has long endorsed the goal of global free
trade because we are efficient by world standards and would welcome the
opportunity to compete on a genuine level playing field. Until we
achieve that free trade goal, however, we must retain at least the
minimal, transitional sugar policy now in place to prevent foreign
subsidized, dump market sugar from unfairly displacing efficient
American producers. This policy was substantially modified by Congress
in the 1996 Farm Bill, but remains highly beneficial to American
taxpayers and consumers.
Despite its free trade goal, however, the sugar industry has some
serious concerns about the structure of future multilateral or regional
trade agreements.
Multilaterally, we are concerned that, while U.S. agriculture
unilaterally far surpassed its Uruguay Round commitments through huge
government cutbacks in the 1996 Farm Bill, many foreign countries have
yet to even minimally comply with their Uruguay Round commitments.
Regionally, we are facing serious problems with both Canada and
Mexico. Canada is exploiting a loophole to circumvent the U.S. tariff-
rate quota for sugar and threaten the no-cost operation of U.S. sugar
policy. Mexico, three years after the NAFTA went into effect, is
calling into question the validity of special sugar provisions to which
it agreed before the NAFTA was voted upon and approved.
American sugar farmers want free trade. But we have trouble moving
further in that direction when past free trade agreements are being
ignored, or circumvented, by our trading partners, to the possible
detriment of our farmers.
I would like to provide some background on the United States' role
and standing in the world sugar economy and on U.S. sugar policy's
effect on American consumers and taxpayers and discuss the U.S. sugar
industry's trade policy goal, concerns, and recommendations, with
special focus on the next round of World Trade Organization (WTO)
talks.
background on u.s. sugar industry, policy
Size and Competitiveness.--Sugar is grown and processed in 17
states and 420,000 American jobs, in 40 states, are dependent, directly
or indirectly, on the production of sugar and corn sweeteners. The
United States is the world's fourth largest sugar producer, trailing
only Brazil, India, and China. The European Union (EU), taken
collectively, is by far the world's largest producing region. It
benefits from massive production and export subsidy programs.
Despite some of the world's highest government-imposed costs for
labor and environmental protections, U.S. sugar producers are among the
world's most efficient. According to a study released in 1997 by LMC
International, of Oxford, England, American sugar producers rank 19th
lowest in cost among 96 producing countries, most of which are
developing countries. According to LMC, fully two-thirds of the world's
sugar is produced at a higher cost per pound than in the United States.
Because of our efficiency, American sugar farmers would welcome the
opportunity to compete against foreign farmers on a level playing
field, free of government subsidies.
Unfortunately, the extreme distortion of the world sugar market
makes any such free trade competition impossible today.
World Dump Market.--More than 100 countries produce sugar and the
governments of all these countries intervene in their sugar markets in
some way. The most egregious, and most trade distorting, example is the
EU. The Europeans are higher cost sugar producers than we are but they
enjoy price supports that are 40 percent higher--high enough to
generate huge surpluses that are dumped on the world sugar market, for
whatever price they will bring, through an elaborate system of export
subsidies.
World trade in sugar has always been riddled with unfair trading
practices. These practices have led to the distortion in the so-called
``world market'' for sugar. These distortions have led to a disconnect
between the cost of production and prices on the world sugar market,
more aptly called a ``dump market''. Indeed, for the period of 1984/85
through 1994/95, the most recent period for which cost of production
data are available, the world dump market price averaged just a little
more than 9 cents per pound raw value, barely half the world average
production cost of production of over 18 cents.
Furthermore, its dump nature makes sugar the world's most volatile
commodity market. Just in the past two decades, world sugar prices have
soared above 60 cents per pound and plummeted below 3 cents per pound.
Because it is a relatively thinly traded market, small shifts in supply
or demand can cause huge changes in price.
As long as foreign subsidies drive prices on the world market well
below the global cost of production, the United States must retain some
border control. This is our only response to the foreign predatory
pricing practices that threaten the more efficient sugar farmers.
The reformed sugar policy of the 1996 Farm Bill does retain the
Secretary of Agriculture's ability to limit imports, and also provides
a price support mechanism, though only when imports exceed 1.5 million
short tons. We are currency only 240,000 tons above chat critical
trigger level.
Sugar Reforms.--The 1996 Farm Bill drastically changed U.S. sugar
policy, as it did ocher commodity programs. All American farmers,
including sugar farmers, now face a less certain future, with less
government intervention, higher risk, and the prospect of lower prices.
There were six major reforms to U.S. sugar policy in the 1996 Farm
Bill:
1. Marketing allotments eliminated.--With no production controls,
we now have a domestic free market for sugar. Less efficient producers
are more likely to go out of business; more efficient producers are
free to expand. Just two months ago, the only sugarbeet processing
company in Texas announced it is closing, ending sugarbeet production
in that state, because of low returns.
2. Guaranteed minimum price eliminated.--Sugar is the only program
crop that has lost the guarantee of non-recourse loans and a minimum
grower price. Sugar producers will have access to non-recourse loans
only when imports exceed 1.5 million short tons.
3. Minimum imports effectively raised.--Under the Uruguay Round of
the GATT, the U.S. was required to import no less than 1.256 million
tons of sugar per year. The non-recourse loan trigger of 1.5 million
tons effectively raises our import minimum to that level, a unilateral
increase of 20 percent.
4. Marketing tax raised.--The special marketing assessment, or tax,
sugar producers must pay to the government was raised by 25 percent, to
1.375 percent of the loan rate on every pound of sugar produced. This
added burden on sugar farmers will generate about $40 million per year
for the U.S. Treasury, with all this money earmarked for federal budget
deficit reduction.
5. Forfeiture penalty initiated.--To discourage forfeiture of loans
to the government when non-recourse loans are in effect, and to raise
even more money for the U.S. Treasury, a 1-cent per pound forfeiture
penalty was initiated.
6. Commitment to further reductions.--A provision called ``GATT
Plus'' requires that the U.S. will reduce its sugar supports further
if, and when, foreign countries surpass their Uruguay Round
commitments, as the U.S. has done.
Effect on Consumers.--American consumers and food and candy
manufacturers benefit from high-quality, dependable, reasonably priced
supply of sugar. Consumer prices in the United States are fully 32
percent below the developed-country average, according to a world
survey by LMC International. Compared with consumers worldwide, and
taking varying income levels into account, LMC found that in terms of
minutes to purchase one pound of sugar, American consumers are the
second lowest in the world, trailing only the tiny country of
Singapore.
Consumer Cost Myths.--The food manufacturer critics of U.S. sugar
policy repeatedly point to a severely flawed 1993 General Accounting
Office study that estimated a consumer cost of U.S. sugar policy at
$1.4 billion per year. Experts at the U.S. Department of Agriculture
have twice vilified this flawed report, as have noted academicians.
More recently critics are citing a Public Voice ``update,'' which
mimicked the faulty methodology of the GAO report and dropped this
supposed cost to $1.2 billion.
Both of these absurd studies assumed that: (1) All U.S. sugar needs
could be supplied from the world dump market at a price well below the
world average cost of production; (2) We could fulfill our needs from
this thinly traded, highly volatile world market without that price
increasing at all; and (3) Every penny of the food manufacturers' and
retailers' savings from the lower dump market sugar prices would be
passed along to consumers.
For reasons I have already outlined, it is clear that if the United
States destroyed its sugar industry and shifted all its demand for
sugar to the thinly traded world dump market--which would increase
demand on that market by about 50 percent--the price would skyrocket,
as it has in the past with far smaller surges in offtake.
To address the third and most outrageous of these assumptions, one
need only examine price behavior of the past year, or the past decade.
History shows absolutely no passthrough.
No Passthrough to Consumers.--Since Farm Bill reforms went into
effect in October 1996, both raw cane and wholesale refined beet sugar
prices to producers have dropped dramatically, wholesale refined prices
by a whopping 12 percent. But at the retail level, not even the price
of sugar on the grocery shelf has dropped at all. And prices for
sweetened products, such as candy, cereal, ice cream, cakes, and
cookies have all risen by 1-5 percent. Looking back to price changes
since 1990, the story remains the same: producer prices down, by 6-10
percent, but consumer prices for sugar and products up, with product
prices rising 18-26 percent.
The disconnect between producer and consumer prices is even more
pronounced with regard to beverages. Over the past year high fructose
corn syrup producers have suffered a catastrophic 50 percent drop in
the price for their product, the principal sweetener used in American
soft drinks. Have cola consumers seen any benefit? Not a bit.
Carbonated drink prices are up, by almost 1 percent, over the same
period.
Effect on Taxpayers.--Not only has U.S. sugar policy been run at no
cost to the government since 1985, but since 1991 it has been a revenue
raiser. The marketing assessment burden on sugar farmers will generate
an estimated $288 million for federal budget deficit reduction over the
seven years of the 1996 Farm Bill.
u.s. sugar industry's free trade goal
Because of our competitiveness, with costs of production well below
the world average, the U.S. sugar industry supports the goal of
genuine, global free trade in sugar. We cannot compete with foreign
governments, but we are perfectly willing to compete with foreign
farmers in a truly free trade environment.
We were the first U.S. commodity group to endorse the goal of
completely eliminating government barriers to trade at the outset of
the Uruguay Round, in 1986. We understand we are the first group to
endorse this same goal prior to the start of the 1999 multilateral
trade round. We described our goals and concerns to the Administration
in a letter last May to Trade Representative Barshefsky and Agriculture
Secretary Glickman.
The U.S. sugar industry does not endorse the notion of free trade
at any cost. The movement toward free trade must be made deliberately
and rationally, to ensure fairness and to ensure that those of us who
have a global comparative advantage in sugar production are not
disadvantaged by allowing distortions, exemptions, or delays for our
foreign competitors.
To achieve a free trade transition process that is rational and
fair, we offer the following thoughts on past agreements, and our
concerns and recommendations regarding future negotiations.
sugar and the uruguay round
Little Effect on World Sugar Policies.--More than 100 countries
produce sugar and all have some forms of government intervention.
Unfortunately, these policies were not significantly changed in the
Uruguay Round Agreement (URA) of the GATT.
--The agreement failed to reduce the European Union's lavish price
support level and requires only a tiny potential drop in their
massive export subsidies.
--Developing countries, which dominate world sugar trade, have little
or no labor and environmental standards for sugar farmers, have
no minimum import access requirements, and often have high
import tariffs. Nonetheless, developing countries were put on a
much slower track for reductions, or were exempted altogether.
--Important sugar-producing and importing countries such as China and
the former Soviet republics are not GATT members, and need to
do nothing.
--State trading enterprises (STE's) that are prevalent in sugar-
producing countries such as Australia, Brazil, China, Cuba, and
India were ignored.
Furthermore, some countries have not yet even complied with their
URA commitments.
U.S. Sugar Surpasses URA Requirements.--The United States is one of
only about 25 countries that guarantees a portion of its sugar market
to foreign producers and it has far surpassed is URA commitment on
import access. The URA required a minimum access of 3-5 percent of
domestic consumption. The United States accepted a sugar-import minimum
that amounts to about 12 percent of consumption. In practice, U.S.
imports the past two years have averaged 24 percent--double the promise
we made in the GATT, and about six times the global GATT minimum.
All this sugar imported from 41 countries under the tariff-rate
quota enters the United States at the U.S. price, and not at the world
dump price. Virtually all this sugar enters duty free. Just five
countries (Argentina, Australia, Brazil, Gabon, and Taiwan) that lack
Generalized System of Preferences (GSP) status pay a duty, and that is
quite small, about 0.6 cents per pound.
The United States calculated its above-quota tariff rate in the
manner dictated by the URA. These tariff levels are totally GATT
consistent, and are dropping by 15 percent over the 6-year transition
period, as we promised they would in the Uruguay Round.
sugar and the nafta
Canada.--Sugar trade between the United States and Canada, which
imports about 90 percent of its sugar needs, was essentially excluded
from the NAFTA. U.S.-Canadian sugar trade is governed mainly by the
U.S.-Canada Free Trade Agreement and by the WTO.
Currently, Canada is threatening the integrity of U.S. sugar policy
by circumventing the quota with a new product referred to in the trade
as ``stuffed molasses''--a high-sugar product not currently included in
U.S. sugar TRQ classifications. USDA has estimated imports of this
product could add 125,000 tons of non-quota sugar to the U.S. market
this year. That amount could grow if this loophole is not closed.
Mexico.--Mexico had been a net importer of sugar for a number of
years prior to the inception of the NAFTA. Nonetheless, the NAFTA
provided Mexico with more than three times its traditional access to
the U.S. sugar market during the first six years, 35 times its
traditional access in years 7-14, and virtually unlimited access
thereafter.
These provisions were negotiated by the U.S. and Mexican
governments and contained in President Clinton's NAFTA submission to
the U.S. Congress, which Congress approved in November 1993.
Nonetheless, Mexico is now undermining the integrity of the NAFTA by
claiming the sugar provisions are somehow invalid.
concerns regarding the 1999 trade round
Export Subsidies.--The most distorting practice in world
agricultural trade is export subsidies. In the world sugar market,
subsidized exports by the EU alone amount to about a fifth of all the
sugar traded each year.
Export subsidies provide countries the mechanism to dispose of
surpluses generated by high internal production subsidies. In the
absence of export subsidies as a surplus-removal vehicle, countries
would have to reduce their production supports.
The Uruguay Round did not significantly reduce the amount of sugar
sold globally with export subsidies.
State Trading Enterprises (STE's).--STE's are quasi-governmental,
or government-tolerated organizations that support domestic producers
through a variety of monopolistic buyer or seller arrangements,
marketing quotas, dual-pricing arrangements, and other strategies.
These practices were ignored in the Uruguay Round, but are,
unfortunately, common in the world sugar industry. Major producers such
as Australia, Brazil, China, Cuba, and India have sugar STE's, but were
not required to make any changes in the Uruguay Round.
Compliance with Past Agreements.--While the United States has far
surpassed its Uruguay Round commitments, many other countries have yet
to even minimally comply. Numerous examples exist where export
subsidies, internal supports, and import tariffs for many crops are not
in compliance with GATT. A key example in sugar is the Philippines'
failure to lower its import tariffs.
In the NAFTA, Mexican sugar producers are casting doubts on the
validity of the sugar provisions, three years after the agreement's
inception, and have slammed the door on imports of U.S. corn sweeteners
with duties as high as 100 percent.
Widely Varying Levels of Support.--Unilateral reforms to U.S.
agriculture policy in the 1996 Farm Bill far exceeded U.S. commitments
made the year before in the Uruguay Round. Furthermore, developing
countries, which dominate world agricultural trade and particularly
sugar trade, were subject to a slower pace of reductions, if any.
As a result, the United States is way out in front of the rest of
the world in removing its government from agriculture and has placed
its farmers in a domestic free market situation. This gap makes
American farmers uniquely vulnerable to continued subsidies by foreign
competitors.
In sugar, two examples come to mind: (1) The EU sugar support price
is approximately 40 percent higher than the stand-by U.S. support
price. The Uruguay Round's formula-driven percentage reductions in
support levels do not reduce the gap between the EU and the U.S. at
all. (2) Actual U.S. sugar imports the past two years have been nearly
double the 1.26-million-ton minimum import commitment the U.S. made in
the Uruguay Round and about six times the URA global minimum.
It is key that American fanners not be penalized for attempting to
lead the rest of the world toward free agricultural trade. American
farmers must be given credit for the reforms they have endured.
Labor and Environmental Standards.--The gap in government
standards--and resulting producer costs--between developed and
developing countries is well documented and immense. In sugar, the gap
is particularly pronounced because, while the EU and the U.S. are major
players, production and exports are highly dominated by developing
countries, especially in the cane sector.
For example, the LMC International survey of global production
costs revealed labor costs--per worker, per day--in Malawi, ostensibly
one of the world's lowest cost producers, to be a mere one-hundredth of
the average wages paid to sugarcane workers in Hawaii.
Sugar producers in Florida, and every sugar-producing state in
America, comply with the world's highest standards for environmental
protection--at a price. For example, the Everglades Forever Act (EFA)
mandates that Florida farmers pay at least $232 million in taxes for
Everglades preservation activities--on top of the many costs borne by
farmers to monitor and clean water leaving farm areas. In Hawaii,
extremely high environmental compliance costs have been a factor in
driving two-thirds of the state's sugar growers out of business in the
past 10 years. In many developing countries, by contrast, sugar mills
face no restrictions, or no enforcement of restrictions, on the quality
of water or air emissions.
American sugar farmers are proud to raise sugar with the highest
possible regard for workers and the environment. But we should not be
penalized in multilateral trade negotiations for providing these costly
protections. And foreign countries that do not provide such protections
should not be rewarded.
If we are attempting to globalize our economy, we should also
globalize our food safety and worker and environmental protection
responsibilities.
Formula Driven Trade Strategy.--For the many reasons I have
outlined, the rigid, formula-driven, or ``one-size-fits-all,'' approach
for trade concessions does not work for agriculture in general, or for
sugar in particular. Pursuing this approach would:
--Fail to reduce the gap in supports between countries--lowering the
playing field, but not leveling it;
--Again give developing countries a free ride;
--Further diminish our negotiating leverage, which was severely
reduced through our unilateral concessions in the 1996 Farm
Bill.
To date, we have led the world in trade barrier reductions and we
are disadvantaged as long as the rest of the world fails to follow our
example.
We can turn our unilateral concessions to our advantage only if we
follow a request/offer strategy. Essentially, we provide foreign
countries the incentive to reduce their government programs by
promising to reduce ours further when, and only when, they have reduced
their export subsidies, internal support, import tariffs, and STE or
similar practices to our levels.
recommendations for the 1999 trade round
To address these concerns, we would like to make four
recommendations for U.S. negotiators in the next trade round.
1. Elimination of export subsidies, the most trade distorting of
all practices, and of state trading enterprises, which were ignored
previously, must be given top priority in the next trade round.
2. The United States should not reduce its government programs any
further until other countries have complied with their Uruguay Round
commitments and have reduced their programs to our level.
3. The wide gap in labor and environmental standards between
developed and developing countries must be taken into account in the
next trade round, and addressed in a manner that ensures global
standards rise to developed-country levels, rather than fall to
developing-country levels.
4. We can address the huge disparities in supports among nations
and turn the United States' unilateral concessions to our advantage
only if we follow a flexible, request/offer type of strategy in the
next trade round.
conclusion
In conclusion, Mr. Chairman, thank you for convening this timely
and important hearing. U.S. agriculture is extremely vulnerable as we
approach the next trade round. If we negotiate carefully and
rationally, however, there is enormous potential for responsible
American producers to compete and prosper in a genuine free trade
environment, free from the need for government intervention. Thank you
for the opportunity to participate.
______
Prepared Statement of Bernard H. Berne, M.D., Ph.D.
appropriation for fda consolidation
I am a resident of Arlington, Virginia. I serve the Food and Drug
Administration (FDA) as a Medical Officer and as a reviewer medical
device approval applications. I am testifying as a private individual.
I ask your Subcommittee to appropriate $4,000,000 for FDA to study the
feasibility of consolidating its facilities at the Southeast Federal
Center or at another site that is within half a mile of a Metro Station
in the Washington Metropolitan Area.
The FDA Revitalization Act (Public Law 101-635, Nov. 28, 1990) (104
Stat. 4583 et seq.) authorizes the Secretary of Health and Human
Services (the Secretary), in consultation with the Administrator of the
General Services Administration (GSA), to ``enter into contracts for
the design, construction, and operation of a consolidated Food and Drug
Administration administrative and laboratory facility.'' It is
therefore the responsibility of your Subcommittee to initiate the
appropriations of funds to permit the Secretary to develop this single
facility.
In the past, Treasury, Postal Services, and General Government
Appropriations Acts have appropriated funds to GSA to construct
separate consolidated FDA facilities in Montgomery and Prince George's
Counties, Maryland. Public Law 101-635 did not authorize these
appropriations, since this law only authorized a single facility and
only authorized the GSA Administrator to consult with the Secretary
regarding this project.
Further, because of a 1995 rescission (Public Law 104-19, July 17,
1995) and the lack of proper authorization for later appropriations,
there are presently no funds available to GSA or to FDA to design,
construct, or operate the consolidated facilities.
GSA is presently making plans to develop the two new separate
consolidated facilities for FDA. These facilities would be located far
from each other in College Park in Prince George's County and in White
Oak in Montgomery County. If supported by appropriations, GSA's plans
would negate the goal of Public Law 101-635, which authorizes only a
single consolidated facility.
There does not appear be any benefit to the government for FDA to
consolidate in two locations, rather than in one. This is a wasteful
type of consolidation that is not cost-effective to the government or
to the public.
In 1991, a Conference Committee of the Treasury, Postal Services,
and General Government Subcommittees (Treasury Subcommittees) of the
House and Senate Committees on Appropriations created this double
``consolidation'' so that the two facilities would serve the political
jurisdictions represented by certain members of the Treasury
Subcommittees (House Report 102-234 (Oct. 3, 1991)). This so-called
``consolidation'' would benefit neither FDA, the federal government,
the general public, the federal taxpayer, nor the Washington
Metropolitan Area.
The Congressional division of the single consolidated facility and
the forced suburban locations of the resultant FDA buildings
contradicted both Public Law 101-635 and an existing Executive Order
that is designed to strengthen the Nation's central cities. The
location of the facilities also contravened a long-standing National
Capital Region Planning Commission goal of retaining and increasing
federal employment in the District of Columbia. It is difficult to find
a worse example of ``pork-barrel'' legislation.
It is therefore necessary for your Subcommittee to review this
situation and to appropriate funds to the Secretary of Health and Human
Services (not to the GSA Administrator) to design and construct a
single consolidated FDA headquarters facility. Your Subcommittee also
needs to encourage the Secretary to locate the facility at a site that
conforms with existing Executive Orders and Presidential policies that
direct the placement of federal facilities in urban areas and in the
National Capital Region. Previous appropriations acts relating to the
FDA consolidation have disregarded these Orders and policies.
Former President Jimmy Carter's Executive Order 12072 (August 19,
1978, 43 F.R. 36869 (Federal Space Management)) states in Section 1-1
(Space Acquisition), Subsection 101: ``Federal facilities and Federal
use of space in urban areas shall serve to strengthen the nation's
cities and to make them attractive places to live and work. Such
Federal space shall conserve existing urban resources and encourage the
development and redevelopment of cities.''
Section 1-1, Subsection 1-103 of the Executive Order states:
``Except where such selection is otherwise prohibited, the process for
meeting Federal space needs in urban areas shall give first
consideration to a centralized community business area and adjacent
areas of similar character, including other specific areas which may be
recommended by local officials.'' Section 1-3, Subsection 1-301 of the
Executive Order states: ``The heads of Executive agencies shall . . .
economize on their use of space.''
President William J. Clinton has reaffirmed the Administration's
commitment to Executive Order 12072 in his Executive Order 13006, May
21, 1996 (61 F.R. 26071). Section 1 (Statement of Policy) states:
``Through the Administration's community empowerment initiatives, the
Federal Government has undertaken various efforts to revitalize our
central cities, which have historically served as the centers for
growth and commerce in our metropolitan areas. Accordingly, the
Administration hereby reaffirms the commitment set forth in Executive
Order No. 12072 to strengthen our nation's cities by encouraging the
location of Federal facilities in our central cities.''
In March, 1997, President Clinton ordered his Cabinet Secretaries
to assure that federal agencies do not leave the District of Columbia.
The President considers this action to be an important element in his
plan to revitalize the District.
Despite all of the above Executive policies and orders, GSA and FDA
are presently planning to locate the major consolidated facility on a
sprawling 130-acre site at White Oak, Maryland. According to GSA's 1996
Draft Environmental Impact Statement for the project, no building on
this campus-like site would exceed six stories in height. The campus'
site plan is clearly not intended to economize on the use of space.
White Oak is located about a mile outside of the Capital Beltway in
a suburban area of Montgomery County that is far from any centralized
business area, is not in any city, and is three miles from the nearest
Metrorail station. The highways and roads near White Oak are among the
most congested and dangerous of all traffic arteries in the Washington
Metropolitan Area.
If implemented as GSA intends, the Prince George's and Montgomery
Counties consolidations would relocate about 1000 FDA employees out of
D.C. and would encourage associated development to occur in the
District's suburbs, rather than in the District itself. The White Oak
facility's decentralized location would discourage FDA's visitors and
employees from using Metrorail and would force nearly all employees to
drive to work. FDA's consolidations would therefore serve to weaken a
central city, rather than to strengthen it.
Your Subcommittee needs to take control of the FDA consolidation
process and to stop this wasteful type of planning. Appropriations
legislation should encourage the Secretary to consolidate FDA in a
compact facility that can fit into the District of Columbia's central
business area and is convenient to Metrorail.
It is not difficult to achieve such an economy of space. FDA's
major headquarters presently occupy an 18-story building (the Parklawn
Building in Rockville, MD). Further, the National Institutes of Health
constructed in 1980 a 13-story building at its Clinical Center in
Bethesda, MD, to house many of its clinical research laboratories. The
FDA consolidated facility can thus be entirely accommodated in several
high-rise buildings located close to each other in Washington, D.C.
GSA controls a large amount of underutilized federal space at the
Southeast Federal Center. This space is located next to the Navy Yard
Metrorail station in downtown Washington, D.C.
The Southeast Federal Center is only a mile from Capitol Building
and from the headquarters of the Department of Health and Human
Services in the Hubert H. Humphrey Building. It is thus an ideal site
for the FDA consolidation.
The Southeast Federal Center can easily accommodate the FDA
consolidation. GSA's plans for the Federal Center show that there is
more developable space available at the site than FDA requires for its
entire consolidation. No appropriated funds are presently available to
construct any federal facilities at this location, which is largely
vacant or occupied by obsolescent facilities.
In the National Capital Planning Commission's March, 1996, Plan for
Washington's Monumental Core, a proposal in the category of ``Economic
Development'' states: ``Assist the transformation of the Southeast
Federal Center and adjacent Navy Yard into a lively urban waterfront of
offices, restaurants, shops and marinas.''
An FDA office and laboratory facility at the Southeast Federal
Center would be fully consistent with this goal. The facility would
further help to compensate for the relocations of thousands of federal
employees from the District of Columbia to suburban sites in Maryland
and Virginia that have taken place in recent years. During the last two
decades, these relocations have contradicted Executive Order 12072 and
have greatly contributed to the decline of the District's economy.
Because of budgetary constraints and of FDA's uncertain future,
your Subcommittee should not appropriate a large amount of funding to
the Secretary for the FDA consolidation at this time. However, a small
appropriation is needed to encourage FDA and GSA to begin to plan for a
consolidation at the Southeast Federal Center or at another location in
the District of Columbia.
I therefore request that your Subcommittee initiate a fiscal year
1999 appropriation of $4,000,000 to FDA for the specific purpose of
studying the feasibility of constructing a single consolidated FDA
administrative and laboratory headquarters facility within half a mile
of a Metrorail station in the Washington Metropolitan Area. Legislative
or Committee Report language can direct or request the Secretary to
give first consideration to the Southeast Federal Center in Washington,
D.C., as the site for the consolidation.
Thank you.
______
Prepared Statements of Michael P. Kenny, Executive Officer, California
Air Resources Board; Barbara Patrick, Member, Board Supervisors of Kern
County and Member, California Air Resources Board; Manuel Cunha, Jr.,
President, Nisei Farmers League; Les Clark, Vice President, Independent
Oil Producers' Association; and Catherine H. Reheis, Managing
Coordinator, Western States Petroleum Association, on Behalf of the
California Industry and Government Coalition on PM-10/PM-2.5
Mr. Chairman and Members of the Subcommittee: On behalf of the
California Industry and Government Coalition on PM-10/PM-2.5, we are
pleased to submit this statement for the record in support of our
fiscal year 1999 funding request of $436,500 (one-half of the
historical baseline split between California and Washington) from
CSREES, for the California Regional PM-10/PM-2.5 Air Quality Study.
The San Joaquin Valley of California and surrounding regions exceed
both state and federal clean air standards for small particulate
matter, designated PM-10/PM-2.5. The 1990 federal Clean Air Act
Amendments require these areas to attain federal PM-10/PM-2.5 standards
by December 31, 2001. Attainment of these standards requires effective
and equitable distribution of pollution controls that cannot be
determined without a major study of this issue.
According to EPA and the California Air Resources Board, existing
research data show that air quality caused by the PM-10/PM-2.5 problem
has the potential to threaten the health of more than 3 million people
living in the region, reduce visibility, and impact negatively on the
quality of life. Unless the causes, effects and problems associated
with PM-10/PM-2.5 are better addressed and understood, many industries
will suffer due to production and transportation problems, diminishing
natural resources, and increasing costs of fighting a problem that begs
for a soundly researched solution.
PM-10/PM-2.5 problems stem from a variety of industry and other
sources, and they are a significant problem in the areas that are
characteristic of much of California. Typical PM-10/PM-2.5 sources are
dust stirred up by vehicles on unpaved roads, and dirt loosened and
carried by wind during cultivation of agricultural land. Soil erosion
through wind and other agents also leads to aggravation of PM-10/PM-2.5
air pollution problems.
The agriculture portion of this study will be developing specific
types of information, tools and techniques needed to develop an
inventory and the management practices that will most likely be part of
the control strategies. They are: (1) validate method or methods for
accurately measuring fugitive PM-10/PM-2.5 emission rates from an
individual site or operation; (2) a method to easily and quickly
estimate PM-10/PM-2.5 emissions; (3) an accurate inventory of fugitive
PM-10/PM-2.5 dust sources by individual farming operations; (4)
validated (field tested) best management practices; (5) a clear
understanding of significant factors that effect PM-10/PM-2.5
emissions; and (6) a workable, validated model or models for predicting
PM-10/PM-2.5 emission, based on operational parameters.
The primary focus of the short term objectives is on those soils,
practices, and conditions presumed to have the highest PM-10/PM-2.5
emissions. Priority for this work will be focused on the following
situations, practices, and crops within the study area.
Almond, Walnut and Fig Harvest: Preparation for harvest; Shaking
trees; Windrowing; Picking up nuts; and Ambient conditions before and
after.
Cotton Harvest: Harvesting--1st and 2nd picking; Shredding of
stalks; Stalk incorporation; and Ambient conditions before and after.
Dairy Industry: Dairy Lagoons and Livestock Corrals.
Fall/Spring Land Preparation: Deep tillage; Discing; Land planning;
Bed formation; Ambient conditions before and after.
Feedlots: Feedlot activities.
Grain Harvesting: Harvesting; Stubble incorporation; Discing;
Burning.
Land Leveling: Appropriate practices.
The importance of this study on PM-10/PM-2.5 is underscored by the
need for more information on how the federal Clean Air Act Amendments
standards can be met effectively by the business community, as well as
by agencies of federal, state and local government whose activities
contribute to the problem, and who are subject to the requirements of
Title V of the Clean Air Act. There is a void in our current
understanding of the amount and impact each source of PM-10/PM-2.5
actually contributes to the overall problem. Without a better
understanding and more information--which this study would provide--
industry and government will be unable to develop an effective
attainment plain and control measures.
Agriculture wants to be a part of the effort to solve this major
problem, but to do so, we need federal assistance to support research
and efforts to deal effectively with what is essentially an unfunded
federal mandate.
Agriculture and industry, in concert with the State of California
and local government entities, are attempting to do our part, and we
come to the appropriations process to request assistance in obtaining a
fair federal share of financial support for this important research
effort. In 1990, our Coalition joined forces to undertake a study
essential to the development of an effective attainment plan and
effective control measures for the San Joaquin Valley of California.
This unique cooperative partnership involving federal, state and local
government, as well as private industry, has raised more than $19
million to date to fund research and planning for a comprehensive PM-
10/PM-2.5 air quality study. Our cooperative effort on this issue
continues, and our hope is that private industry and federal, state and
local governments will be able to raise an additional $8 million over
the next two years to fund this important study.
To date, this study project has benefited from federal funding
provided through USDA's, DOT's, DOD's, EPA's, and Interior's budgets--a
total of $10.6 million in federal funding, including $436,500 from USDA
(one-half of CSREES amount provided for California and Washington) in
the last three fiscal years. State and industry funding has matched
this amount virtually dollar for dollar.
The UC Davis research into the contribution of agriculture to
airborne PM-10 in the San Joaquin Valley has produced a number of
interim results. Some of these results have already been incorporated
into the San Joaquin Valley Unified Air Pollution Control District's
planning, and additional research efforts have been planned in
consultation with district personnel.
The agricultural emissions research is critical to the district's
efforts to understand and control PM-10 in the valley. The San Joaquin
Valley is a serious non-attainment area for PM-10 and also experiences
high concentrations of PM-2.5. The district's strategies toward PM-10
emissions from agriculture focus on research to identify activities
that significantly contribute to the PM-10 problem, and then to develop
feasible methods of controlling emissions from those sources. Without
this information, the district could be demanded to control
agricultural sources in ways that may or may not be effective at
reducing PM-10. Effective control plans are those that actually reduce
PM-10 concentrations, so that there is some assurance that the cost of
implementing them is well-laced.
UC Davis research has produced much better emission factors for the
harvesting of cotton than were previously available, and has produced
the only available emission factors to date for harvesting almonds.
These emission factors were obtained under actual harvest conditions,
so should be representative of agricultural operations in the San
Joaquin Valley. UC Davis research has also investigated the emissions
generated form harvesting figs and walnuts, and the burning of raisin
trays. For raisin trays, the results indicate that the emissions are
not significant. For fig and walnut harvesting, the results also show
that the emissions are not highly significant. Moreover, actions taken
to reduce almond harvest emissions will be effective at controlling
emissions from fig and walnut harvesting, as these crops use the same
harvesting equipment.
UC Davis has initiated research into the emission of ammonia from
livestock facilities in the San Joaquin Valley, primarily dairies and
feedlots. Approximately half of all ammonia emissions in the San
Joaquin Valley is thought to come form animals. This research is
significant because ammonia combines with NO in the atmosphere to
produce fine particles in the PM-2.5 size range. Further, the ammonia
emissions are not well characterized for the livestock management
practices prevalent in the San Joaquin Valley, so new information is
needed. some preliminary results have been obtained, but they need to
be confirmed with additional measurements.
The currently available fugitive dust emission factors approved for
use by the U.S. EPA rely on the dry silt content of the soil, defined
as the fraction that passes through a 75 PM sieve. The emission factors
were developed empirically, and there is scientific disagreement over
their utility as a predictive tool. UC Davis research is exploring
other methods of defining the potential of a soil to emit PM-10 and has
developed laboratory procedures to measure an index of PM-10 emission
potential in a repeatable manner. Additional research is ongoing to
develop this as a useful tool.
The fugitive dust emissions UC Davis has measured from agricultural
operations so far has relied on physically collecting the dust from the
plumes on filters. UC Davis has developed a remote sensing lidar (light
detection and ranging) instrument to characterize the extent of a dust
plume fro afar. This instrument has been used successfully in the field
to collect information on the size and shape of dust plumes. Additional
research is ongoing to calibrate it and use it to quantitatively
measure the dust concentrations. The device will be particularly useful
under conditions when it is not possible to collect a valid sample on
filters.
During the coming year, UC Davis will focus on the following
research areas:
--Fugitive dust emission from land preparation activities. Land
preparation is common to nearly all agricultural crops in the
valley, but the emission factors from this activity is very
poorly defined in the current methods. There is tremendous
value in developing better emission factors from this activity.
--Controlled testing of almond harvesting. Almond harvesting is one
of the dustiest activities examined to date. This summer, UC
Davis plans to test several different harvesters on the same
orchard, including the latest harvester from each of the two
companies that produce them, as well as the most commonly used
harvester of each manufacturer.
--Initiate emissions testing of garlic harvesting. This crop is
expanding in the San Joaquin Valley, and is potentially very
dusty. A few pilot tests will provide information on how much
further this crop should be examined.
--Emissions from livestock management. UC Davis has conducted
preliminary testing of dust and ammonia emissions from dairies
and feedlots; additional research is needed to acquire a valid
database for analysis.
The support of the Department of Agriculture has been indispensable
to the completion of the work performed to date. Continued support for
this research is essential to assure that decisions made on behalf of
improved air quality are based on scientifically valid information, and
that the interests of agriculture are considered in the process.
For fiscal year 1999, our Coalition is seeking federal funding once
again through the U.S. Department of Agriculture to support
continuation of this vital study in California. In the budget for the
Cooperative State Research, Education, and Extension Service (CSREES),
we request $436,500, representing one-half of the $873,000 historical
baseline split between California and Washington in the past three
budget cycles.
The California Regional PM-10/PM-2.5 study will not only provide
vital information for a region identified as having particularly acute
PM-10/PM-2.5 problems, it will also serve as a model for other regions
of the country that are experiencing similar problems. The results of
this study will provide improved methods and tools for air quality
monitoring, emission estimations, and effective control strategies
nationwide. Consequently, the beneficial results of this research will
contribute to national policy as well.
The Coalition appreciates the Subcommittee's consideration of this
request for a fiscal year 1999 appropriation of $436,500 for U.S.D.A.
to support the California Regional Region PM-10/PM-2.5 Air Quality
Study.
______
Prepared Statement of David P. Holveck, President and Chief Executive
Officer, Centocor, Inc.
Mr. Chairman and Members of the Subcommittee, I am David P.
Holveck, President and Chief Executive Officer of Centocor, Inc., a
biotechnology company located in Malvern, Pennsylvania. Like other
biotech companies, most of our products are or will be regulated as
biological products by FDA's Center for Biologics Evaluation and
Research (CBER). CBER--and our emerging industry--face a crisis in
research funding. Action by this Committee can resolve this potential
crisis and insure informed regulation of biotechnology products, to the
benefit of the United States biotechnology industry, and to patient
care.
background
Mr. Chairman, as you know, late last year Congress enacted FDA
reform legislation \1\ that updated antiquated laws and practices
applicable to biologics, drugs and medical devices. An integral part of
this law was the renewal of the Prescription Drug User Fee Act (PDUFA)
\2\ under which the pharmaceutical and biotechnology industries pay
user fees with most applications submitted to FDA. These fees are paid
in exchange for increased numbers of scientific review staff and FDA's
agreement to meet specified performance goals in the drug review and
approval process.
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\1\ Food and Drug Administration Modernization Act of 1997 (Public
Law 105-115).
\2\ Prescription Drug User Fee Act of 1992 (Public Law 102-571).
---------------------------------------------------------------------------
The FDA reform law reauthorized the PDUFA program, with increased
performance goals. Under the first five years of PDUFA, the FDA used a
fraction of user fee funds to support research activities related to
the drug review process. However, as part of the five year extension of
PDUFA, use of user fee monies was restricted to information management,
personnel for faster reviews and meetings on investigational new drug
applications (as well as review activities themselves). User fee monies
may no longer be used to support CBER research activities, even though
these activities are an integral part of product regulation.
Compounding the problem is the fact that the overall CBER research
budget has declined significantly since fiscal year 1994. For the
reasons set forth below, many of us in the biotechnology community fear
that unless this Subcommittee takes action, a depleted research
capability will impede the agency's review and approval process and
threaten its mission to protect the public health.
While the Subcommittee has never specified appropriations that may
be spent by CBER for research, our best estimates are, that for the
fiscal year 1994, CBER's research budget was $18.4 million. This amount
declined to $6.9 million for fiscal year 1998. Reductions in user fee
monies for research activities of CBER will be $3.5 million in 1999 and
CBER's fiscal year 1999 research budget will decline to $4.5 million--a
little more than one-quarter of the fiscal year 1994 amount. Without
action by this Subcommittee the result will be ``reassignment'' of 79
full-time equivalent research positions, or approximately 154 biologics
center physicians and laboratory scientists, over the next three years
to other Federal agencies. CBER's research capability will be severely
impacted.
history of cber and its research activities
Historically, CBER has recognized the link between the conduct of
original research and appropriate regulation of biological products.
Until the early 1970's, what is now CBER was part of the National
Institutes of Health--indeed, CBER's headquarters remain on the NIH
campus. Since the turn of the century, CBER and its predecessors have
been involved in assuring the safety, purity and potency of biological
products such as vaccines and blood products. Research was an
indispensable component of these responsibilities, since often
standards for biological products could only be developed after gaining
an understanding of the products themselves. For over 90 years, CBER
has maintained a tradition that combines scientific research with
product review.
Mr. Chairman, today CBER also regulates products derived from new,
emerging technologies. CBER regulates AIDS drugs, gene therapy,
monoclonal antibodies and other products resulting from the genius of
biotechnology. In many cases, regulatory issues related to new and
emerging technologies are not initially well understood. Thus, the
agency must conduct research in biomedical areas to develop the
expertise necessary to address new technologies and issues, develop and
validate testing methodologies, and establish standards for new
biological products. Research is required to assess risks of new
therapies so that the agency, in concert with industry, can, reduce and
control such risks. Appropriate regulation of the biotechnology
industry, consistent with the FDA reform law, demands state of the art
knowledge of the science employed to develop our products.
CBER's research team includes both scientists who perform primarily
review of products and those who perform both research and review
(``researcher/reviewers''). Unlike other health-related agencies, such
as NIH or CDC, where the majority of the professional researchers
exclusively conduct research, in CBER all researchers are fully
integrated into the regulatory process. CBER's researchers/reviewers
participate in development of regulatory policy and the establishment
of methods and standards to which products can be compared. They review
investigational new drug applications (IND's) and biologics license
applications (BLA's), attend pre-IND, IND and BLA meetings with
investigators and manufacturers, carry out pre-license inspections, and
evaluate adverse drug reaction and risk assessment issues. In short,
they contribute their knowledge of complex scientific matters gained by
intramural research to the regulation of increasingly complex
biological and biotechnology products.
science board review of fda's intramural research program
Mr. Chairman, on two recent occasions, subcommittees of FDA's
outside Science Board have reviewed the fiscal status of FDA's research
budget, and expressed strong support for its strengthening, in order to
ensure informed regulation.
Subcommittee on FDA Research.--At the recommendation of FDA's
Deputy Commissioner of Operations in 1996, a Science Board Subcommittee
on FDA Research was convened and Chaired by David Korn, M.D., former
Dean of Stanford Medical School and currently Senior Vice President of
the Association of American Medical Colleges. The Subcommittee was
charged with determining how the FDA could ensure that the agency's
regulatory review and decision-making processes would continue, in an
era of extraordinary rapid scientific advancements, to be informed by
the very best and most current scientific information available.
The Subcommittee undertook a high-level review of the state of
intramural science in the FDA, including organization of the scientific
programs, their interactions with the extramural scientific community,
and the policies, procedures and standards that governed their conduct.
As part of its recommendations, the Subcommittee stated that:
. . . robust, high-quality programs of intramural research
are essential components of the FDA's science base and are
critical for supporting, in a scientifically sound and rigorous
fashion, the review and regulatory decisions made by the agency
in discharging its mission to promote and protect the public
health. The intimate proximity and interaction of cutting-edge
scientific research with review and regulatory activities is
more important today than ever before given the extraordinary
rapid pace of advancements in . . . biomedicine, materials
science, micro-electronics, information technology, and others.
. . . A strong and well managed intramural research program
provides the foundation for creating a climate of science and
scientific communication within the FDA that enhances the
ability of the agency to recruit and retain high quality
scientific staff [and] to address existing regulatory issues
and anticipate future problem. . . .
The majority of the Subcommittee rejected the arguments that the
scientific research needs of the FDA can be obtained from outside
sources in a more cost-effective manner that would meet criteria of
timeliness, competence and freedom from conflict of interest. Likewise
the Subcommittee rejected the notion that a strong program of
intramural scientific research is not necessary for the recruitment and
retention of high quality scientific staff The Subcommittee found that
``starving the agency's base of intramural scientific expertise must
inevitably compromise the quality of review and regulatory
activities.''
Subcommittee on CBER Review.--Last month, the Science Board's
Subcommittee on CBER Review, comprised of distinguished scientists from
academic centers, major pharmaceutical companies, the biotechnology
industry, research foundations and the NIH expressed great concern over
declines in research funding at CBER.\3\ The Committee determined that
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\3\ Science Board Subcommittee for the Center for Biologics
Evaluation and Research Review, Report to the Science Board to the Food
and Drug Administration, May 19, 1998.
. . . inadequate funding for CBER, particularly the
inadequate funding for laboratory research within CBER, would
risk potential damage to the health of the population of the
United States, but also the health of our economy, by affecting
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an industry that will expand in the 21st Century.
The Subcommittee conducted an exhaustive review of the research
capabilities of the various divisions and units within CBER. It pointed
out that historically, because of their nature, biological products
have been associated with adventitious (accidentally arising from an
external source) contaminants that have led to adverse reactions and
death. It stated that ``a credible emergency response by CBER to
adventitious agent problems associated with marketed biological
products, including blood and blood products, requires immediate
availability of a laboratory-based team of experts who understand both
the potential adventitious agents involved in the scientific,
manufacturing, control, and clinical aspects of the product.'' (p. 4)
The Subcommittee concluded as follows:
Thorough and timely review of the safety, efficacy, and
quality of a biological/product license application (BLA/PLA)
requires experts with appropriate experience at CBER, including
relevant laboratory techniques required to perform
characterization, manufacturing, and control of the product. In
a field of biotechnology, virtually every IND or BLA
application raises new policy issues which are identified and
addressed as part of the review process. It is incumbent upon
the CBER reviewer to assess the potential merits of new
technologies, to identify new risks or potential risks
associated with these technologies and to develop methods for
evaluating and controlling these risks.''
relationship between cber research and effective regulation
Intramural research has shortened development time of biological
products and served as the basis for product approval. Examples of the
importance of CBER's research to product development are numerous:
For many years, the whole cell pertussis (whooping cough) vaccine
was used to prevent pertussis in infants and young children in the
United States. While this vaccine was effective in preventing pertussis
in the U.S., it was associated with a number of adverse reactions.
While the most severe reactions were never positively linked to
vaccination with the whole cell pertussis vaccine, scores of lawsuits
were filed and it became clear that a safer pertussis vaccine was
desirable. Clinical trials to test the safety and efficacy of a new
generation of pertussis vaccines, known as acellular pertussis
vaccines, were completed last year. In July of this year, the first
acellular pertussis vaccine was licensed in the U.S. for infant use.
Research conducted at CBER shortened the development time for the
acellular pertussis vaccines, sped approval time, and resulted in
improved products.
Expeditious approval of recombinant Factor VIII (which promotes
blood coagulation) was facilitated by CBER research that provided a
well-calibrated reference preparation to measure the potency of these
materials, and that established the conditions for potency assays that
allowed comparison with plasma-derived products. CBER directed the
preparation and calibration of large amounts of a Factor VIII reference
standard that has received international recognition for its long-term
stability and quality. CBER also recently developed a Factor IX
standard that will speed approval of a recombinant Factor IX currently
under development. CBER recruited large donations of potential source
material from industry, assessed the biochemical and assay
characteristics of these materials in the CBER laboratory, and selected
one for further evaluation in an international collaborative study.
This study led to the acceptance of the FDA material by the European
Pharmacopoeia and WHO as the new international reference preparation
and working standard.
CBER research will lead to expeditious approval of safe and
effective DNA vaccines. These agents, which are based on new and
untested technology, are now being developed for preventing viral,
bacterial, and parasitic infections, as well as for treatments of
hepatic, colon and cervical cancer.
One of the ways that FDA has sped approval of breakthrough drugs is
through the development of clinical endpoints--laboratory measurements
that are reasonably likely to predict clinical benefit. Use of these
endpoints has resulted in early approval of several AIDS drugs--more
quickly in this country than in Europe or England. CBER research led to
development of the surrogate endpoint for protease inhibitors. In
collaboration with the developer of the drug, CBER's research was
crucial to the development of quantitative polymerase chain reaction,
which became the means by which the drug's contribution to a patient's
viral load is determined. The viral load was used as a surrogate
endpoint, rather than multi-year clinical trials to evaluate lone-term
survival, to determine efficacy of this important class of AIDS drug.
Each year the Food and Drug Administration determines the type, or
strains, of the influenza virus most likely to enter the United States
in the coming year. This determination is based on worldwide
surveillance of influenza isolates conducted by the Center for Disease
Control (CDC) in collaboration with the World Health Organization
(WHO). After the strains are chosen each year, CBER works closely with
influenza manufacturers to provide high growth reassortant influenza
viruses for use by vaccine manufacturers so that adequate vaccine
supplies can be made each year. This involves basic laboratory research
by molecular biologists and virologists at CBER. They also must provide
new reagents each year for standardization of strains used in the
vaccines produced by various manufacturers which supply the U.S.
market. CBER's research on high growth reassortants and standardization
of manufactured vaccines is critical for assuring that safe and
effective vaccines for adults and children are available in the fall of
each year. Without the support of basic science at CBER, the quality
and quantity of influenza vaccines would decrease with resultant excess
mortality from influenza each year.
Mr. Chairman, these examples--and scores of others--demonstrate the
fact that the CBER research program is an integral component of
biological product regulation. CBER research leads to establishment of
standards for biological products. It shortens development time for
products under investigation. It serves as a basis for FDA
decisionmaking on the safety and efficacy of biological products. And--
perhaps most importantly--CBER research protects the public health.
action requested
Mr. Chairman, we want to emphasize that we do not disagree with the
decision of Congress that PDUFA fees may no longer be used for research
related activities. Indeed it is entirely proper that PDUFA fees should
be dedicated to their original purpose--speeding the review of product-
specific submissions. However, we are concerned that the message that
research activities are essential to the broader statutory mission of
CBER and FDA to protect the public health may have fallen from view in
our collective interests to assure full and proper allocation of PDUFA
funds. Although FDA's research efforts are not devoted to the product
of a specific company, they are nevertheless critical to assuring
speedy access of safe and effective products to the market.
Mr. Chairman, in terms of appropriations action, we recommend that
the Committee specify amounts from appropriated funds that should be
dedicated to CBER research activities. These amounts should be no less
than the fiscal year 1998 amount plus inflation. We thus recommend that
a minimum of $7 million be specified for CBER research for fiscal year
1999. This will require an increase in the FDA budget of $2.5 million.
Beyond this immediate request are concerns about the need to assure
adequate funding for future research at CBER. In our view, the best way
to assure that any program received adequate funding is to clearly and
convincingly illustrate the value that the program delivers. When it
comes to research efforts at CBER, neither CBER staff nor we in
industry have made our best efforts to assure that the value of CBER's
research programs are documented and communicated. To that end, we urge
this committee consider requiring CBER to develop guidance for the
process by which research programs at CBER are authorized. CBER
supported research should be clearly distinct from academic or basic
research efforts in that it should be conducted in support of specific,
statutory, regulatory or mission-related purposes. In our view, it is
not the role of CBER to conduct research intended solely to contribute
to the general knowledge or the advancement of a specific field of
science. The research should be consistent with CBER's statutory
responsibilities, authority and with its mission. It is Centocor's
position that CBER's research activities should fit within one or more
of the following criteria in order for it to be authorized:
1. It should fulfill a specific need identified in support of
specific functions and responsibilities of the Center.
2. It should relate directly to a product category or technology
for which CBER has responsibility.
3. It should identify whether it relates specifically to issues of
safety, effectiveness or both. For example, many of the products under
CBER's jurisdiction raise unique issues related to the impact of
viruses and other adventitious agents on product safety. Also, some
materials regulated by CBER are not synthesized but are the product of
complex or undefined physiological processes. Process control and
validation may be of greater importance for these products than for
traditional synthetic drug products.
4. CBER should justify why the research must come from original,
laboratory-based research conducted by CBER staff. For example, CBER
should document the findings which support the conclusion that the
specific type of research is not already being done elsewhere within
the federal government or the public or private sectors or that the
results of such research would not be readily available or useful to
CBER.
Beyond these points, all research should be subject to active
management and oversight by CBER and FDA staff as well as open to
comment from regulated industry, academia and the general public. We
anticipate that this or another appropriate form of cataloging CBER's
important research activities will help CBER and the biotechnology
industry better communicate the value and importance of the research
work of CBER's scientific staff.
Once this action is taken, the committee will be able to evaluate
specific amounts that should be allocated for CBER research and whether
the recent recommendation of the Science Board Subcommittee that the
budget be restored to the fiscal year 1994 level is realistic.
Thank you for your attention to the important issue of appropriate
funding of CBER research. We are anxious to work with this Subcommittee
in a mutual effort to halt the decimation of CBER's research program,
while assuring that CBER research activities are relevant to its
statutory mission of reviewing and approving life-giving biotechnology
products.
______
Prepared Statement of Dennis Bier, M.D., Director, Children's Nutrition
Research Center
Mr. Chairman and members of the Subcommittee, thank you for your
continuing commitment to nutrition research, and most especially for
the much-needed funding increase which you provided to the Children's
Nutrition Research Center (CNRC) last year. Your foresight in funding
this program is more widely recognized each year as the importance of
nutrition research grows and the trend of scientific discoveries
continues to underscore the fact that good nutrition information is
vital to our hopes of controlling a large number of very serious, and
very expensive, diseases. As a physician, my own personal clinical
nutrition interest relates to the management of diabetes, and I
initially came into nutrition research because of its critical
importance to our efforts to control the complications of this serious
malady.
The CNRC was established in 1978 and operates under a cooperative
agreement between the Agricultural Research Service (ARS), Baylor
College of Medicine, and Texas Children's Hospital, a unique public/
private partnership between the ARS and two of the nation's leading
pediatric research institutions which also draws on the resources of
the world's largest medical center.
The CNRC has been, and continues to be, a world leader in nutrition
research. Since the Center is the best-equipped pediatric facility of
its kind in the world, we can undertake many research projects that no
other children's research laboratory can do. This is particularly
valuable in light of our rapidly-growing knowledge of the intimate
relationships linking an individual's genetic constitution (genotype),
lifestyle, and diet to that individual's ultimate health. We now know
that whether a person leads a long and productive life or is more
likely to suffer early disability or death from chronic disease is
determined in very large part by the interplay between that
individual's heredity, lifestyle choices, and what he or she chooses to
eat.
At least five of the ten leading causes of death--heart disease,
cancer, stroke, diabetes, and atherosclerosis--are diet-related, and
there is strong evidence that the contributions to the overall outcome
of these diseases begin in childhood. Dealing with these diseases by
preventing or delaying them through early dietary changes is a major
goal of our research. The potential cost savings to the government
through Medicare and Medicaid are enormous, not to mention the need
both to see to the nutritional adequacy and to provide the basic
scientific evidence for the USDA feeding programs which account for a
considerable part of your Subcommittee's budget allocation each year.
Through advances in genetics and molecular biology, we now have the
tools to aggressively investigate prevention of diet-related problems
such as obesity, high cholesterol, and certain types of cancer. If we
can identify a specific individual's risk factors in childhood, we
could then target our efforts to those at-risk individuals alone and
not expend scare funds on persons who are not at risk. Thus,
identifying the specific individuals at risk and preventing the
exposure to these risks in childhood will pay health dividends to
society for many decades while reducing costs in two major ways: first,
by not spending money needlessly on individuals without risk and,
secondly, by preventing disease, which is invariably cheaper than
treating the consequences of already established ailments in adulthood.
Similarly, non-monetary benefits are enhanced in two ways: first, by
allowing individuals not at risk to live a less restricted and,
presumably, less worrisome lifestyle and, secondly, by providing at-
risk individuals with a health maintenance environment whose benefits
are invariably greater and last longer than the shorter and more
limited benefits of treating already established adult diseases. These
goals are a major priority for our research program, and we are using
the additional funding which you provided last year to expand our
research program in this area of nutrient-gene interactions,
specifically to allow us to identify the genetic factors which place a
person at risk of nutritional diseases.
cnrc national research awards
The Children's Nutrition Research Center is dedicated to
investigating the food needs that ensure health in pregnant and nursing
women, and in children from conception through adolescence. The success
of your decision to support the CNRC over the years, and the quality of
research being done at the CNRC, is evidenced by the fact that CNRC
researchers won a total of five top national research honors during
this last year.
Dr. Buford Nichols, who is our Director Emeritus, was awarded the
1997 Nutrition Award from the American Academy of Pediatrics. The
Academy has always been a champion and forceful advocate of the
nutritional health of America's children and their Nutrition Award is
their single, highest honor in children's nutrition. Dr. Nichols has
made major strides in the last few years in advancing our understanding
of the gastrointestinal genes regulating carbohydrate digestion in
malnourished children. In some malnourished children, the body
essentially turns off certain digestive enzymes. As a result, the
children are unable to utilize food properly and they die even if,
during treatment, they are provided with what should be adequate food.
Dr. Nichols' lifelong work in this important area was the foundation
for the American Academy of Pediatrics Nutrition Award and, last year,
Dr. Nichols made important strides by describing for the first time the
complete gene structure of the principal human gastrointestinal enzyme
responsible for the digestion of starches in our diet.
Dr. Teresa Davis was chosen as the winner of the E.L.R. Stockstad
Award by the American Society for Nutritional Sciences, the nation's
largest scientific nutrition society. The award is given for
outstanding fundamental research in nutrition. Dr. Davis' research
focuses on determining the mechanisms by which nutrients, hormones, and
growth factors regulate the high rate of body protein accretion that
occurs during early postnatal life and is both necessary and
responsible for the rapid growth rate observed in healthy infants.
Dr. Peter Reeds has been awarded the 1998 Osborne and Mendel Award
from the American Society for Nutritional Sciences. Dr. Reeds was given
the award for his innovative applications of non-radioactive isotope
techniques to an inherently complex area of nutrient metabolism,
specifically, the intestinal and liver metabolism of amino acids
liberated during the consumption of dietary protein. In this work, Dr.
Reeds demonstrated the important role of dietary amino acids,
particularly the amino acid glutamate, in providing the metabolic fuel
source for gut energy metabolism and for the synthesis of glutathione,
the critical gut compound providing defense against oxidative stress
damage in the intestine. Oxidative stress reactions are important
contributors to the development of diseases such as cancer and are also
an underlying cause of aging.
And, if I may toot my own horn for a moment, I was elected to
membership in the Institute of Medicine of the National Academy of
Sciences, an award which is bestowed on only a select number of the
nation's scientists and physicians. I was selected for contributions to
the fields of nutrition and metabolism, and for my role in developing
the field of the study of human metabolism using stable, non-
radioactive isotopes. In addition, I won the National Institutes of
Health Excellence in Clinical Research Award for my lifelong career
work in clinical nutritional metabolism studies in NIH-funded General
Clinical Research Centers (GCRC), first as Associate Program Director
the GCRC at the University of California, San Francisco, then as
Program Director of the GCRC at St. Louis Children's Hospital,
Washington University School of Medicine, and currently as Program
Director of the GCRC at Texas Children's Hospital, Baylor College of
Medicine.
I want to thank the members of this Subcommittee for your support
for the CNRC over the years. You have made it possible for us to do the
research which has won these distinguished awards, and we want to share
with you the credit for these accomplishments.
examples of cnrc research
The CNRC is continuing to be a leader in the field of pediatric
nutrition. Some of the studies now underway include:
A study which is looking at the possible relationship between
attention-deficit/hyperactivity disorder (AD/HD) in children and DHA
(docosahexanoic acid), a fatty acid found in breast milk. DHA is
concentrated in the brain, is essential for normal brain growth, has
effects on brain cell membrane function, and is believed necessary for
overall proper functioning of the central nervous system. Some studies
have shown that children with AD/HD have lower levels of DHA in their
blood. We are conducting a study in which we are giving dietary
supplements of DHA, which is also found in fish oil, to determine its
impact on AD/HD behavior.
The potential benefits to society are enormous. Many children with
AD/MD continue to have problems in adulthood with employment, family
relationships, and anti-social behavior, and society ends up paying a
high price for these problems. If this simple dietary intervention has
an effect, then the benefits to society could be significant.
We are studying a possible link between fetal development and
coronary heart disease in adult life. We have found evidence that poor
fetal growth permanently alters cholesterol metabolism. As part of our
ongoing collaborative research and training efforts internationally,
our scientists studied the levels of HDL apolipoprotein A1, an
independent predictor of coronary heart disease, in 16 Jamaican
children whose mothers were not properly nourished during pregnancy.
HDL apolipoprotein A1 transports cholesterol from the peripheral
tissues back to the liver for excretion. High levels of HDL
apolipoprotein A1 usually means that a person has a good cholesterol
level. We found that the lower the birth weight, the lower the HDL
apolipoprotein A1 levels in these children. The fact that they have low
levels of HDL means their ability to transport cholesterol back to the
liver for excretion is impaired. This study was accepted by and
appeared in the prestigious international scientific journal, The
Lancet, and, when confirmed by additional expanded studies, we believe
this finding will enable pediatricians to use HDL apolipoprotein A1 as
a screening tool to determine those children who are at greater risk of
coronary heart disease later in life and allow parents to begin feeding
their vulnerable children a low cholesterol diet early on.
Our researchers have developed a new experimental approach that
will, for the first time, help directly measure beta-carotene
absorption from vegetables and determine the extent to which it is
converted to vitamin A in humans. Thanks to our greenhouse and stable
isotope facilities, we were able to grow spinach hydroponically in
order to label the beta carotene with stable isotopes. This technique
will allow us to assess beta-carotene absorption and metabolism from
individual plant foods and identify whether some foods are better
sources of vitamin A. This method will also give us the opportunity to
identify other factors that could improve beta carotene absorption,
such as processing, cooking techniques, or the amounts of oils that are
consumed with the food. We are cooperating with the USDA/ARS Human
Nutrition Research Center at Tufts University in Boston to do the first
human feeding studies.
This new method will provide useful information for intervention
and education programs that deal with vitamin A deficiency, which is a
major nutritional problem in the developing world, especially in areas
where a persons diet consists mainly of plant-derived foods.
Also, beta carotene is one of nature's most important natural anti-
oxidant compounds. Oxidative stress reactions are important
contributors to the development of cancer and heart disease, as well as
an underlying cause of aging. We believe that the CNRC plant
scientists' new approach, which promises to allow direct study of beta
carotene metabolism in humans, will play a significant role in research
toward a more comprehensive understanding of cancer, heart disease and
aging.
summary
The CNRC is a truly unique, world-class research program in a field
that is increasingly being recognized as critical to health maintenance
and to food production. Top-quality basic nutrition research is of
increasing importance, and the multi-disciplinary ARS human nutrition
research centers are uniquely well-suited to this task. Thanks to the
foresight of the Congress, the ARS human nutrition research program as
a whole is strategically well-placed to tackle today's critical
research issues. Congress expanded this network in the 1970's and has
provided needed research funding since then. Last year, to enhance our
research efforts, the ARS Human Nutrition Research Program presented
you with a unified, coordinated initiative for new areas of necessary
scientific investigation. You were kind enough to provide us with
additional funding, and we thank you for that.
These new directions are no less important this year. To accomplish
our aims, we need a significant budget increase, and you would get a
very good return on that investment if you choose to make it. I urge
the Subcommittee to make every effort to provide a substantially
greater level of funding for these ARS Human Nutrition Research Centers
this year. The research opportunities are great, and there are huge
potential rewards both in cost savings and in good health in this
critical area of research.
I would invite you, Mr. Chairman, and any members of your
Subcommittee to come and visit the CNRC. Our visitors can testify that
the program is much more impressive in person than I can make it in my
description. Thank you for the opportunity to submit this statement,
and thank you for your support.
______
Prepared Statement Dr. Melvin C. Ray, Mississippi State University,
Chair, Mississippi EPSCoR Committee, on behalf of the Coalition of
EPSCoR States
Mr. Chairman and Members of the Subcommittee, thank you for the
opportunity to submit this testimony on behalf of the Coalition of
EPSCoR States \1\ regarding the U.S. Department of Agriculture
Experimental Program to Stimulate Competitive Research (USDA EPSCoR).
USDA EPSCoR is extremely important to the state of Mississippi and to
our nation. I appreciate the opportunity to testify.
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\1\ Alabama, Arkansas, Idaho, Kansas, Kentucky, Louisiana, Maine,
Mississippi, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Puerto
Rico, South Carolina, South Dakota, Vermont, West Virginia, and
Wyoming.
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Mr. Chairman, let me begin by thanking you for your strong and
unwavering support of USDA EPSCoR. Your support has been absolutely
crucial in establishing and maintaining this important program. As you
know, Mr. Chairman, USDA EPSCoR is having a significant impact in
Mississippi, and those of us committed to improving Mississippi's
research and development capability deeply appreciate your continued
efforts. Thank you for all of your fine work representing Mississippi
in the United States Senate.
EPSCoR is a research and development program that was first
established in the National Science Foundation. EPSCoR works to improve
our country's science and technology capability by funding research
activities of talented researchers in states that have historically not
received significant federal R&D funding. USDA EPSCoR was established
in fiscal year 1992 with a goal of increasing the amount of
agricultural research at academic institutions within states that have
had limited success obtaining competitive funds from USDA.
Mr. Chairman, USDA EPSCoR is helping to improve the quality and
competitiveness of agriculture research in Mississippi. The amount of
USDA research funds received by Mississippi increased by more than 500
percent between 1990 and 1996, a clear indication that Mississippi
researchers are becoming more effective. The bulk of Mississippi's
funding increase since 1990 has been in the non-EPSCoR Standard
Research Grants program.
Important examples of Mississippi's research include such varied
studies as kenaf processing, which is a potential economic opportunity
for rural states; rapid detection of E coli, an important safety issue
that has been in the news recently; and disease mechanisms in channel
catfish, impacting a significant cash crop across the southern part of
the country. These projects and those they represent address important
issues not only to rural states, but to the rest of the nation. Because
of this important program, EPSCoR researchers are able to contribute to
our economy and our knowledge base.
USDA EPSCoR states are those whose funding ranks no higher than the
38th percentile of all states, based on a three year rolling average of
funding. For fiscal year 1998, the following states are eligible for
USDA EPSCoR: 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, and the Commonwealth of Puerto Rico. Let me stress
that EPSCoR relies on rigorous merit review in order to ensure high-
quality research.
USDA makes four types of competitive awards through USDA EPSCoR:
Research Career Enhancement Awards, Equipment Grants, Seed Grants, and
Strengthening Standard Research Project Awards. Proposals must be
related to the program priorities of the National Research Initiative
Competitive Grants Program, which address critical issues facing
agriculture today.
--Research Career Enhancement Awards help faculty enhance their
research capabilities by funding sabbatical leaves. Applicants
may not have received a NRICGP competitive research grant
within the past five years.
--Equipment Grants strengthen the research capacity of institutions
in USDA EPSCoR states. The principal investigator for this
grant is responsible for securing non-Federal matching funds.
--Seed Grants enable researchers to collect preliminary data in
preparation for applying for a standard research grant. Seed
Grant awards are limited to a total cost of $50,000 and are
non-renewable. Applicants must indicate how the research will
enhance future competitiveness in applying for standard
research grants.
--Strengthening Standard Research Project Awards fund standard
research projects of investigators who have not received a
NRICGP grant within the past five years.
USDA EPSCoR allows Mississippi and the other USDA EPSCoR States to
contribute more effectively to our nation's science and technology
capability, and provides our country with needed, high-quality, peer-
reviewed research. It allows all regions of the country to contribute
to our nation's science and technology capability while allowing
flexibility to meet regional research needs. Because EPSCoR awards are
matched with state funds, it is a sound investment of taxpayer dollars.
Mr. Chairman, this Subcommittee has for the past several years
directed USDA to set aside 10 percent of USDA NRICGP funds for USDA
EPSCoR. Those funds have provided significant opportunity and very real
success in Mississippi and in the other EPSCoR states. I request that,
as it has done in previous years, the Subcommittee direct USDA to set
aside 10 percent of its NRI competitive grant funds in fiscal year 1999
for an EPSCoR program. These funds will allow the EPSCoR states to
continue providing for the agricultural research needs of rural America
and of our nation.
I thank the subcommittee for the opportunity to submit this
testimony.
______
Prepared Statement of Dr. Robert G. Zimbelman, Chair, Coalition on
Funding Agricultural Research Missions
Mr. Chairman: The Coalition for Agricultural Research Missions
(CoFARM) consists of 20 professional scientific societies united in a
commitment to support fundamental and applied agricultural research.
CoFARM advocates agricultural investments in the USDA research budget
that will enhance the health and well being of all Americans and
increase U.S. competitiveness in expanding world markets.
Contributions of USDA-supported research to the biotechnology
revolution in this age of biology is leading to extraordinary new
advances in the plant, animal, microbial and nutritional sciences.
Basic studies in plant genetics and plant growth and development have
led to the ability of industry to regenerate transformed plant tissues.
This has enabled industry to develop transgenic plants containing
agronomically important genes. The plant biotechnology industry in the
U.S. has flourished with the help of basic plant research in this area
supported by the National Research Initiative.
Leaner meats and more nutritious plant-produced foods are resulting
from USDA-supported plant and animal research. More effective
protections from food-borne illnesses are being found through microbial
and food safety research supported by the Department. Economic studies
assist the Department in implementing more efficient practices.
With predictions of substantial increases in demand for safe and
nutritious food worldwide and the limitation of available land to farm,
the nation and world must rely on agricultural research to increase
food production on existing farmland. Support of this committee for
agricultural research sponsored by the NRI, Agricultural Research
Service, formula funds and Economic Research Service has been key to
assisting American farmers lead the world in agricultural production.
Stagnant research budget for agriculture exposes the nation and its
people to loss of leadership in agriculture--this dynamic sector that
contributes to national and world security; healthier lives and higher
disposable incomes for all Americans; a substantial, revenue-producing
surplus in trade of agricultural products; and gainful employment for
22 million Americans. We urge the Committee to increase support for the
NRI to $130 million as recommended by the President and encourage
increases of 7 percent for the Agricultural Research Service and for
the other areas of the fiscal year 1999 research budget for the
Department of Agriculture. Enclosed is the most recent annual brochure
of CoFARM with more information on the benefits of agricultural
research supported by the Department of Agriculture.
Thank you, Mr. Chairman.
______
Prepared Statement of the Coalition to Promote U.S. Agricultural
Exports
As members of the Coalition to Promote U.S. Agricultural Exports,
we commend the Chairman and members of the Subcommittee for their
interest and support of U.S. agriculture and express our appreciation
for this opportunity to share our views.
The Coalition to Promote U.S. Agricultural Exports is an ad hoc
coalition of over 80 organizations, representing farmers and ranchers,
cooperatives, small businesses, regional trade organizations and the
State Departments of Agriculture. We believe the U.S. must continue to
have in place policies and programs that help maintain the ability of
American agriculture to compete effectively in a global marketplace
still characterized by subsidized foreign competition.
This is especially true under the new Federal Agriculture
Improvement and Reform Act of 1996 (FAIR Act), which resulted in the
most sweeping reforms in farm policy in over 60 years. While achieving
significant budget savings, it reduces income support to producers over
7 years; eliminates acreage reduction programs; and provides increased
planting flexibility. More than ever, farm income and the economic well
being of American agriculture are now dependent on continued access to
foreign markets and maintaining and strengthening U.S. agricultural
exports.
Accordingly, we strongly urge that USDA's export programs be fully
funded and aggressively implemented. This includes maintaining funding
for USDA's Market Access Program (MAP) at $90 million as recommended in
the President's fiscal year 1999 budget; providing $30 million for the
Foreign Market Development (FMD) Cooperator Program; and ensuring
adequate funding for USDA's Foreign Agricultural Service (FAS) to help
meet critical export goals and objectives. Such action is essential to
America's overall trade strategy and economic interest.
Agriculture is our nation's most export dependent industry with
exports accounting for one third of U.S. production. In 1998, U.S.
agricultural exports are projected to reach $58.5 billion,
strengthening farm income, generating billions more in related economic
activity, broadening the tax base, and providing jobs for over one
million Americans. U.S. agricultural exports this past year also led to
an agricultural trade surplus of approximately $22 billion. Without
such exports, our nation's trade deficit would have been even worse.
American agriculture and American workers, however, continue to be
threatened by subsidized foreign competition. Recent trade agreements,
including NAFTA and the Uruguay Round Agreement on GATT, did not
eliminate the use of export subsidies or other forms of export
assistance. The European Union (EU), which maintains a huge advantage
over the U.S. in terms of export subsidies, last year announced a major
initiative to promote EU exports of meat, dairy, fruit, vegetables, and
wine into Japan--a significant U.S. market.
U.S. agricultural exports to Japan last year amounted to nearly $11
billion (down about $1 billion from the previous year), accounting for
19 percent of total U.S. agricultural exports. As many as 200,000
American jobs depend on continued exports to Japan. Clearly, any
further loss with regard to the Japanese market would have an adverse
impact on American agriculture and American workers.
This is but one example of the competition facing American
agriculture. Other countries are pursuing similar strategies. Again,
this underscores the importance of USDA's export programs, including
the Market Access Program (MAP) and FMD Cooperator Program. American
agriculture is the most competitive industry in the world, but it can
not and should not be expected to compete alone against the treasuries
of foreign governments.
Funding for USDA's Market Access Program (MAP) has already been
reduced by two thirds from its original authorized level. It now
represents only a fraction of what our competitors are spending. To
further reduce or eliminate funding for MAP in the face of increasing
subsidized foreign competition would put U.S. agriculture at a
substantial competitive disadvantage.
Further, it is important to note; USDA's Market Access Program has
been substantially reformed. The FAIR Act, for example, made permanent
the reforms contained in previous appropriations bills by specifically
targeting direct assistance to small businesses, farmer cooperatives,
and trade associations. In addition, the Act (1) continues the
requirement that the program be administered on a cost share basis; (2)
requires that funds be used only to promote American grown and produced
agricultural commodities and related products; (3) prohibits assistance
to foreign firms relating to foreign products; (4) maintains ongoing
review and certification of use of funds; and (5) provides for program
graduation.
By any measure, USDA's Market Access Program has been a tremendous
success and extremely cost effective. It demonstrates what can be
accomplished as a result of a true public private partnership. Since
the program began, U.S. agricultural exports have more than doubled and
value added exports have tripled. The number of jobs that depend on
U.S. agricultural exports has also more than doubled making it one of
the most successful job creating programs ever established.
For all these reasons, we again urge that USDA's export programs be
fully funded and aggressively implemented. As a nation, we can work to
export our products, or we can export our jobs. USDA's export programs
are a key part of an overall trade strategy that is pro growth, pro
trade and pro job.
______
Prepared Statement of Jack A. Barnett, Executive Director, Colorado
River Basin Salinity Control Forum
The Congress concluded that the Colorado River Basin Salinity
Control Program should be implemented in the most cost-effective way
and realizing that agricultural on-farm strategies were some of the
most cost-effective strategies authorized a program for the Department
of Agriculture. With the enactment of the Federal Agriculture
Improvement and Reform Act of 1996 (FAIRA), the Congress concluded that
the Salinity Control Program could be most effectively implemented as
one of the components of the EQIP program. Since the enactment of
FAIRA, the Salinity Control Program has not been funded at a level
adequate to ensure that water quality standards in the Colorado River,
with respect to total dissolved solids (salinity), can be honored, nor
is the funding sufficient to prevent salt loading from irrigated farms
from impacting the quality of water delivered to Mexico under a minute
of the International Boundary and Water Commission, the United States
and Mexico.
The problem rests with the Department of Agriculture concluding
that it should not designate any area of the county as a national
priority area at this time. The Salinity Control Program has been
subsumed into the EQIP program without giving recognition to the
requirement in the Colorado River Basin Salinity Control Act that the
Secretary of Agriculture carry out salinity control measures in the
Colorado River Basin. Further, the Administration has concluded that
the expenditure of EQIP funds shall be determined by initiatives
developed at the grassroots level. Under USDA directives, this means
that Upper Basin agricultural communities advance salinity control
proposals for the salinity control efforts. The efforts must be
implemented in the Upper Basin, as that is where the salt loading is
occurring. Water users hundreds of miles downstream are the
beneficiaries of this water quality improvement program.
Agriculturalists in the Upper Basin, however, see local benefits as
well as downstream benefits and have submitted cost-effective proposals
to the State Conservationists in Utah, Wyoming and Colorado. The
ranking criteria, however, prohibit the identification of downstream
benefits as a benefit that can be credited when proposals are being
evaluated.
If the Department of Agriculture believes that it is directed by
the Congress to implement the Salinity Control Program, then it is
incomprehensible that the program that is designed to provide
downstream benefits cannot receive credit in ranking criteria for the
accomplishment of the downstream benefits. The solution to the problem
is simple. Grassroots in the Colorado River Basin means at the state
level and at the seven Colorado River Basin states level. The states,
organized as the Salinity Control Forum, have adopted a program
approved by EPA. The Colorado River Basin Salinity Control Forum should
be recognized as the grassroots level for the Salinity Control Program
and the Forum should serve as the Technical Advisory Committee (local
work group) to Administration officials as to the need for and the
expenditure of funds for the Salinity Control Program. The Colorado
River Basin is covered by two NRCS regions and the program must be
coordinated at a high administration level. Numerous requests have gone
to the Department of Agriculture to make this designation, and the
response has been that there are not adequate funds in the EQIP program
to go beyond the initially adopted ``grassroots'' effort. Therefore,
the Forum is pleased with the Administration's statement that it
intends to spend $300,000,000 in fiscal year 1999 on the EQIP program.
The Basin states have cost sharing dollars available to participate
in on-farm salinity control efforts in the cost-sharing fashion
provided for by the Congress. The agricultural producers in the Upper
Basin are standing in line waiting for their applications to be
considered so that they might also cost share in the program. When all
of the cost sharing is tabulated, the federal cost of the program is
less than 50 percent. However, because of the structure of the EQIP
program and the associated authorized cost sharing, these funds cannot
be expended in this co-operative effort until federal funds are made
available.
The Forum urges that this committee support the statement of the
President when he indicated he intends to borrow $300,000,000 from the
Commodity Credit Corporation (CCC) in fiscal year 1999 for the EQIP
program. The Forum also requests that this Committee advise the
Administration that it would be most important if $12,000,000 of these
funds were designated for the Colorado River Basin Salinity Control
Program.
overview
The Colorado River Basin Salinity Control Program was authorized by
Congress in 1974. The Title I portion of the Colorado River Basin
Salinity Control Act responded to commitments that the United States
had made, through a minute of the International Boundary and Water
Commission, the United States and Mexico, with Mexico with respect to
the quality of water being delivered to Mexico below Imperial Dam.
Title II of the Act established a program to respond to salinity
control needs of Colorado River water users in the United States and to
comply with the mandates of the then newly legislated Clean Water Act.
Initially, the Secretary of the Interior and the Bureau of Reclamation
were given the lead federal role by the Congress. This testimony is in
support of funding for the Title II program.
After a decade of investigative and implementation efforts, the
Basin states concluded that the Salinity Control Act needed to be
amended. Congress revised the Act in 1984. That revision, while keeping
the Secretary of the Interior as lead coordinator for Colorado River
Basin salinity control efforts, also gave new salinity control
responsibilities to the Department of Agriculture, and to a sister
agency of the Bureau of Reclamation--the Bureau of Land Management.
Congress has charged the Administration with implementing the most
cost-effective program practicable (measured in dollars per ton of salt
removed). The Basin states are strongly supportive of that concept as
the Basin states consider cost sharing 30 percent of federal
expenditures up-front for the salinity control program, in addition to
proceeding to implement their own salinity control efforts in the
Colorado River Basin.
Since the Congressional mandates of nearly two decades ago, much
has been learned about the impact of salts in the Colorado River
system. The Bureau of Reclamation has recently completed studies on the
economic impact of these salts. Reclamation recognizes that the damages
to United States' water users alone may soon be approaching $1 billion
per year.
The Colorado River Basin Salinity Control Forum (Forum) is composed
of Gubernatorial appointees from Arizona, California, Colorado, Nevada,
New Mexico, Utah and Wyoming. The Forum has become the seven-state
coordinating body for interfacing with federal agencies and Congress to
support the implementation of a program necessary to control the
salinity of the river system. In close cooperation with the
Environmental Protection Agency (EPA) and under requirements of the
Clean Water Act, every three years the Forum prepares a formal report
analyzing the salinity of the Colorado River, anticipated future
salinity, and the program necessary to keep the salinities at or below
the levels measured in the river system in 1972.
In setting water quality standards for the Colorado River system,
the salinity levels measured at Imperial, and below Parker, and Hoover
Dams in 1972 have been identified as the numeric criteria. The plan
necessary for controlling salinity has been captioned the ``plan of
implementation.'' The 1996 Review of water quality standards includes
an updated plan of implementation. The level of appropriation requested
in this testimony is in keeping with the agreed to plan. If adequate
funds are not appropriated, state and federal agencies involved are in
agreement that the numeric criteria will be exceeded and damage from
the high salt levels in the water will be widespread and very
significant.
additional funding needs
The authorized cost sharing by the Basin states was at first
difficult to implement as attorneys for USDA concluded that the Basin
states were authorized by FAIRA to cost share in the effort, but the
Congress had not given USDA authority to receive the Basin states'
funds. After almost a year of exploring every possible solution as to
how the cost sharing was to occur, the states, in agreement with the
Bureau of Reclamation, with state officials in Utah, Colorado and
Wyoming and with NRCS State Conservationists in Utah, Colorado and
Wyoming, agreed upon a parallel program wherein the states' cost
sharing funds will be used. We are now in the second year of that
program and, at this moment in time, this solution to how cost sharing
can be implemented appears to be a good one.
With respect to the states' cost sharing funds, the Basin states
felt that it was most essential that a portion of the program be
associated with technical assistance and education activities in the
field. Without this necessary support, there is no advanced planning,
proposals are not well thought out, allegations in the proposals cannot
be verified, implementation of contracts cannot be observed, and the
most valuable partnering and education efforts cannot occur.
Recognizing these values, the parallel state cost sharing program
spends 40 percent of the funds available on these support activities.
Initially, it was acknowledged that the federal portion of the salinity
control program funded through EQIP was starved with respect to needed
technical assistance and education support. The Forum is encouraged
with the Administration's recent determination that 19 percent of the
EQIP funds will be used for technical assistance. The Forum urges this
Committee to encourage or direct the Department of Agriculture and the
NRCS to spend an adequate portion of the EQIP funds on technical
assistance and education. The Forum believes, however, that it would be
better for Congress to appropriate adequate funds for these support
activities rather than to have NRCS borrow these needed funds from the
CCC.
______
Prepared Statement of Gerald R. Zimmerman, Executive Director, Colorado
River Board of California
Your support and leadership are needed in securing adequate fiscal
year 1999 funding for the U.S. Department of Agriculture (USDA) with
respect to it's salinity on-farm program. This program in the past had
been carried out through the Colorado River Basin Salinity Control Act,
which was initially enacted by Congress in 1974, Section 303(c) of the
Clean Water Act of 1977, and now with the enactment of the Federal
Agricultural Improvement and Reform Act (FAIRA) in 1996, it is being
implemented through the Environmental Quality Incentive Program (EQIP)
as one of its program components. With the enactment of the FAIRA,
Congress concluded that the Salinity Control Program could be more
effectively implemented as one of the components of the EQIP program.
However, since its enactment, the Salinity Control Program has not been
funded at the levels adequate to ensure that water quality standards in
the Colorado River, with regards to salinity can be honored, nor is the
funding sufficient to prevent salt loading from irrigated farms from
impacting the quality of water consumed by water users along the River
and delivered to the Republic of Mexico as provided for in the treaty
with Mexico. It has been estimated through previous federal studies
that the Lower Basin States'(Arizona, California, and Nevada) Colorado
River water users are presently suffering economic damages estimated to
be in excess of $750 million per year due to the salts in the River
system. Most of that damage is occurring in California. The potential
impact of failing to maintain the plan of implementation for salinity
control in a timely manner would be to permit these damages in the
Lower Basin to exceed an estimated $1 billion annually by the year
2015.
The Colorado River Board of California (Colorado River Board) is
the state agency charged with protecting California's interests and
rights in the water and power resources of the Colorado River System.
In this capacity, California along with the other Basin States through
the Colorado River Basin Salinity Control Forum (Forum), the interstate
organization responsible for coordinating the Basin States' salinity
control efforts, established, in June 1975, numeric criteria for
salinity levels in the River to lessen the damages in the Lower Basin
States as well as meet the United States' treaty obligations to the
Republic of Mexico. The goal of the Colorado River salinity control
program is to maintain the flow-weighted average salinity at or below
the River's 1972 levels. To maintain these levels, the salinity control
program must remove 1.48 million tons of salt loading annually from the
River by year 2015. To date, only 621,000 tons of salt load reduction
has been achieved. In the Forum's last report entitled 1996 Review,
Water Quality Standards for Salinity, Colorado River System released in
June 1996, it found that additional salinity control measures were
necessary beginning in 1994 to meet the implementation plan that had
been adopted by the seven Colorado River Basin States and approved by
the Environmental Protection Agency. For the last three years, federal
appropriations for the USDA have not equaled the Forum's identified
funding levels for the USDA's portion of the program the Federal
Government has the responsibility to implement. In the Forum's report,
it identified a ``backlog'' of salinity control measures of over
418,000 tons annually. This is in addition to future controls designed
to lower the River's salt loading by 437,000 tons per year over the
next twenty years in order to meet the established salinity standards.
Very simply, there is a need for 45,000 tons of new salinity control
measures to be implemented each year until 2015. The Forum has
presented testimony to Congress recommending that the salinity control
efforts through EQIP be accelerated to continue to meet the numeric
criteria through 2015.
The President's proposed budget for fiscal year 1999 contains
funding of $300 million for implementation of EQIP, up $100 million
from the $200 million that has been offered the first two years of the
program. The Colorado River Board is pleased with the Administration's
statement that it intends to spend $300 million in fiscal year 1999 on
the EQIP program. In fact, the Colorado River Basin Salinity Control
Forum, at its meeting in Tucson, Arizona, during October 1997,
recommended a funding level for the USDA of $12.0 million for fiscal
year 1999 in order to maintain water quality consistent with the
established standards. The Colorado River Board supports that action by
the Forum. The salinity control program has proven to be a very cost
effective approach to help mitigate the impacts of higher salinity.
Continued federal funding of the program is essential.
In addition, the Colorado River Board recognizes that the federal
government has made significant commitments to the Republic of Mexico
and to the seven Colorado River Basin States with regard to the
delivery of quality water to Mexico. In order for those commitments to
be honored, it is essential that in fiscal year 1999 and in future
fiscal years, the Congress provide funds to the USDA to allow it to
continue providing technical support in the Basin for salinity control.
The Colorado River is, and will continue to be, a major and vital
water resource to the 17 million residents of southern California as
well as throughout the Lower Colorado River Basin. As stated earlier,
preservation of its quality through an effective salinity control
program will avoid the additional economic damages to users of Colorado
River water in California.
The Colorado River Board greatly appreciates your support of the
federal/state Colorado River Basin Salinity Control Program and again
asks for your assistance and leadership in securing adequate funding
for this program.
______
Prepared Statement of Dr. Michael Crow, Vice Provost, Columbia
University
Mr. Chairman, and Members of the Subcommittee, thank you for the
opportunity to submit a statement for inclusion in the hearing volume
for outside witnesses. My statement concerns USDA funding for accessing
and interacting with long range forecasting and modeling efforts in the
area of climate change. Specifically, I propose that USDA utilize
existing climate forecasting and predictive modeling expertise for:
(1) yield calculations (using seasonal-to-interannual temperature
and precipitation forecasts) in the world and domestic (U.S.) supply
and demand estimates: and
(2) stewardship of natural resources, in programs managed by USDA
that involve soil and water conservation and forestry management.
The value to the agricultural community of this approach has been
estimated at $4.5 billion in preventable losses. The fiscal year 1999
project costs for this initiative are $750,000.
the international research institute for climate prediction (iri)
Columbia University's Lamont-Doherty Earth Observatory (LDEO), in
conjunction with The Scripps Institution of Oceanography (SIO) of the
University of California at San Diego, has entered into a Cooperative
Agreement with NOAA to establish and manage the International Research
Institute for Climate Prediction (IRI). The IRI's mission is to provide
experimental climate forecast guidance on seasonal-to-interannual time
scales for use by affected communities around the world. Working with
an extensive network of domestic and international research and
applications centers worldwide, the IRI will provide the necessary
scientific institutional focus for a multi-national ``end-to-end''
prediction program. This ``end-to-end'' prediction program supports the
development and production of forecasts of changing physical conditions
(temperature and precipitation) on year-to-year time scales,
assessments of the regional consequences of those variations, and the
application of this information to support practical decision making in
critical sectors such as agriculture, water resources, fisheries,
emergency preparedness, and public heath and safety.
fiscal year 1998 activities
During the current fiscal year, the IRI will continue to develop
improved seasonal to interannual climate forecasts in partnership with
NOAA and other research elements of the Climate and Global Change
effort. Recently, NOAA issued an evaluation on the ENSO Rapid Response
Project, which compared the IRI net assessment precipitation forecasts
to actual observed precipitation. A copy was provided to this
Subcommittee's staff. Termed a ``Validation of October-November-
December Net Assessment Precipitation Forecasts'', NOAA compared the
graphics of the predictive models with the graphics of actual
precipitation for the following regions: Africa; Asia; Australia and
Indonesia; Europe; North America; and South America. The assessment
showed that in the ten models that were used for comparison to actual
events, the forecasts were accurate for nine of those models. The
models accurately predicted the following:
--Eastern Africa: normal precipitation;
--Southern Africa: below normal precipitation;
--Northeastern China: below normal precipitation;
--Southeastern China: above normal precipitation;
--Indonesia: below normal precipitation;
--Europe: above normal precipitation;
--North America; West Coast, Southwest, Southeast: above normal
precipitation;
--South America; Ecuador/Peru: above normal precipitation;
--South America; Argentina, Uruguay, Southeastern Brazil: above
normal rainfall;
--South America; Northern Continent: below normal rainfall.
The only model that failed to predict accurate forecasts occurred
for Queensland, Australia. The model failed to predict the rainfall
delivered by tropical storms and cyclones, which are extremely rare in
this region. In evaluating the model, IRI scientists attribute the
failure of the prediction to the fact that tropical storms and cyclones
cannot be resolved by the climate models currently used operationally.
We are eager to see the results from the next validation assessment. We
will transmit to you the NOAA evaluation as soon as it becomes
available, as we did with this evaluation.
The development of regional applications of climate modeling by
other institutions, currently in process as a function of fiscal year
1998 funding, will bring new data sources to the efforts of the IRI
when they become operational.
fiscal year 1999 activities
The fiscal year 1999 program level for the IRI (through Department
of Commerce funding) remains at the $5 million level we are receiving
in fiscal year 1998. IRI activities in fiscal year 1999, as planned
within the budget request, involve continued refinement of end-to-end
modeling and the incorporation of additional regional data and
modeling. The periodic evaluations of three month predictions versus
actual events provide near time feedback on the accuracy of IRI models
and permit corrections and adjustments to ongoing modeling efforts.
Since the IRI was initially funded by NOAA, Columbia and Scripps
have invested heavily in capital and research efforts. The ratio of
private to public investment has been on the order of 3 to 1. The
Fiscal Year 1998 Appropriations Act was the first year in which the
Congress fully funded NOAA's request for IRI funding. We realize that
the funding occurred concurrently with the biggest El Nino event in
over one hundred years.
potential benefits of improved forecasting and modeling
The more we are able to conduct improved modeling and forecasting
experiments, the better prepared we will be when the next big event
occurs. Studies have shown that with improved forecasting and advanced
warning, billions of dollars in savings can be achieved in several
economic sectors:
--Agriculture, fisheries and forestry: Annual losses, $15 billion.
Preventable losses, 30 percent, or $4.5 billion.
--Mining and manufacturing: annual losses, $1.5 billion. Preventable
losses, 5 percent or $75 million.
--Transportation: Annual losses, $1.2 billion. Preventable losses, 40
percent or $40 million.
--Communications: Annual losses, $334 million. Preventable losses, 8
percent or $26 million.
--Financial, insurance and real estate: Annual losses (above
premiums), $5.4 billion. Preventable losses, 40 percent or
$2.16 billion.
--Other (including wholesale and retail trade, services, farm and
non-farm residences, and government fixed capital): Annual
losses, $6.9 billion. Preventable losses, 40 percent or $2.6
billion.
--Total annual losses: $30.53 billion. Preventable losses, $10.01
billion.
Avoidance of losses in the $10 billion range, not to mention
reduced fatalities and injuries due to hazards from storms and floods,
dangers along the coast, and conditions of poor air quality, can be
achieved.
project proposal
USDA's Budget Request includes $410,000 for two staff years for
Modernization of Weather and Climate Data Acquisition. In reviewing the
detail of the request, and the responsibilities of the Chief Economist
for production of the monthly World Agricultural Supply and Demand
Estimates (WASDE), we know that current IRI predictive modeling would
greatly enhance USDA's efforts. On page 8g-4 of the Fiscal Year 1999
Budget Justifications for the World Agricultural Outlook board, the
following statement appears:
``Despite inadequate data from the National Weather Service, JAWF
analysts assembled data from alternate sources along the Gulf Coast and
in Southern Florida to assess the probable impact of a freeze episode
which occurred in mid-January.''
This type of analysis, forecasting for temperature and
precipitation, is what the IRI was designed to produce. The products of
the IRI, noted in the NOAA evaluation earlier in this statement, are
developed to assist governments and private concerns in the planning
decisions they make that are affected by climate related events.
In another context, USDA management of the Forest Service, though
not funded in this Bill, come directly from the secretary's Office. the
Secretary Of USDA relies on the weather and climate assessments of the
Chief Economists office in determining many of the activities that
might be affected by extreme or unusual climate phenomena.
Following the above rationale, coupled with the IRI's current
capability and the potential for growth in the natural resource
assessment sector, we recommend that USDA contract with the IRI for the
development of refined models that will produce long range and near
term climate for use in USDA's supply and demand estimates and in the
management decisions related to natural resource stewardship.
The development costs related to this refined modeling will total
$750,000 in the first year. The project is estimated for a three year
effort, which involves model development, assessment and validation,
and real-time experimental testing. At the end of the first year, USDA
would be provided predictive model information and forecasts that could
be used in conjunction with traditional, less sophisticated methods.
The potential benefit to the economy, local farmers and the environment
far outweighs the modest investment of $750,000.
The IRI is prepared and eager to embark on exactly this kind of
project with USDA. The Budget Justifications certainly speak to the
need for such expertise, and that expertise is available through the
IRI.
overarching iri goals
We are seeking to gain more quickly the capability for avoiding
losses similar to those listed on an earlier page. The IRI's core
function is prepared to move to a more mature stage. We could employ
more of an engineering approach to forecast system development. The
characteristics of this approach include more quantitative testing,
more precise figures of merit, and particularly a much more controlled
environment.
The IRI would develop the analog of a state-of-the-art wind tunnel
to aerodynamically design models with physical properties. The
infrastructure of this advanced approach involves computation: software
environment and computing power. The IRI seeks to develop and test
improved coupled ocean-atmosphere climate forecast system for El Nino
and La Nina events, thereby enhancing the ability to understand and
predict climate impacts on a higher resolution at the national scale in
the near-term future.
conclusion
Mr. Chairman, I recommend that the Committee provide $750,000 in
fiscal year 1999 for climate modeling and forecasting development
through the IRI for the purposes of (1) improved USDA capability and
accuracy in producing the World Agricultural Supply and Demand
Estimates; and (2) improved information for making decisions related to
management and stewardship of our nation's natural resources.
Thank you for the opportunity to present this statement for the
Committee's consideration in funding decisions you will make for the
fiscal year 1999 Agriculture Appropriations Act.
______
Prepared Statement of Susan G. Schram, Ph.D., Food and Agriculture
Program Coordinator, Deputy Director, Washington Operations, Consortium
for International Earth Science Information Network (CIESIN)
Mr. Chairman, thank you for the opportunity to submit testimony to
the Subcommittee. I would like to thank you and the Subcommittee for
your support for The USDA/CIESIN Global Change Data Assessment and
Integration Project, funded through the Agricultural Research Service
(ARS). I am pleased to have the opportunity to report the
accomplishments of the project over the past year, highlight the
importance of the continuation of the project, and, inform the
Subcommittee of some changes that will be taking place at CIESIN in
1998.
Mr. Chairman, it has been another successful year for the USDA/
CIESIN project. As you know, the focus of our work is to increase the
taxpayer's return on investment in years of agricultural research and
data collection. CIESIN's work in global environmental change related
to agriculture has provided the opportunity to document, rescue and use
more efficiently, the vast long-term data resources of the USDA and its
related field offices across the United States.
Specifically, the major objectives of our work are to:
(1) rescue and put to use valuable long-term scientific
agricultural and natural resources data that taxpayers have paid
millions of dollars to collect and that are at risk of being lost;
(2) provide state-of-the-art technical tools so that concerned
farmers, ranchers, and citizens can visualize alternatives and
participate in decision-making about the uses of our natural resources;
(3) provide cross-agency access to documentation on USDA's data
resources related to agriculture and global environmental change; and
(4) bring the latest developments in electronic information
technology to bear on challenges faced by USDA agencies.
Over the course of the project our work has helped address long-
term agricultural and natural resource issues in: New Mexico, Michigan,
Arizona, Colorado, Texas, Oregon, Alaska, Hawaii, Oklahoma and Idaho.
Through the support of the subcommittee and in cooperation with the
Agricultural Research Service, we have also been able to disseminate
our new technologies to assist other USDA agencies such as the Forest
Service and the Natural Resources Conservation Service.
Mr. Chairman, an important aspect of harnessing our scientific data
resources for improved use by the research community and the public is
to determine the location and condition of our long-term agricultural
and natural resource data assets needed for analysis of global
environmental change over time. We must assure that previous public
investments in scientific data collection are not squandered due to
retirement of veteran scientists, poor storage conditions, inadequate
documentation, or existence of the data in single, hard copy format.
CIESIN has continued its collaboration with the Physical Sciences
Lab (PSL) at New Mexico State University (NMSU) to address data rescue
needs. Our efforts have been devoted to salvaging data related to two
of the most valuable resources of the western United States--water and
grazinglands.
In previous years we have been able to complete data rescue
projects at the ARS Jornada Experimental Range and the Cibola National
Forest in New Mexico, and the Santa Rita Experimental Range in Arizona.
These projects transformed single hard copy data into digital data that
are now being put to use by researchers. Rescued data have been
incorporated with other digital data to provide an historic picture of
long-term changes in grazingland vegetation and to permit analysis of
the relationship between grazingland vegetation and climate variation.
This past year, data rescue efforts focused on rescuing hard-copy
animal weight and forage density data at the ARS Southern Plains
Experimental Range in Woodward, Oklahoma, and on digitizing aerial snow
cover photographs at the ARS Northwest Watershed Research Center in
Boise, Idaho. Following is a capsule summary of each of these projects:
Southern Plains Experimental Range.--Twenty years of steer and cow/
calf monthly weights and forage density data were transcribed from
ledgers to data sheets and keypunched into a data base format. These
data were then combined with climate data to provide a means of
performing statistical analysis over a twenty year period in the
southwestern United States (including the massive drought of the
1950's).
Northwest Watershed Research Center.--Snow cover information is
vital to the development of snow melt and runoff calculation used to
predict water availability in the high desert country of Idaho. This
information is presently contained in twelve years of individual 8 by
10 hard copy aerial photographs of snow cover on the Reynolds Creek
Watershed. Snow cover percentage is currently estimated by visual
examination of the photographs. During the 1997-1998 contract year
CIESIN will digitize these photographs. Digitizing will not only
provide the information in electronic format, but will also allow image
processing and pattern recognition software to be employed to give a
more accurate estimate of snow cover.
Looking forward to future data rescue projects, CIESIN is presently
working with the ARS Southwest Watershed Research Center in Tucson,
Arizona to evaluate the feasibility of extracting valuable long-term
precipitation, runoff, and sedimentation data from old magnetic tapes,
and applying these data to decision support systems to assist ranchers,
farmers, and municipalities in southern Arizona and New Mexico.
Since the beginning of the USDA/CIESIN Global Change Data
Assessment and Integration Project, CIESIN has been concerned with
improving the ways in which data and information are presented to
scientists, policymakers, and the public at large to facilitate
decision making about agricultural resources. CIESIN has performed
continuous research to stay abreast of the latest advances in data and
information visualization techniques and applications. Research
conducted in the past year focused on cutting edge visualization
techniques and agricultural applications.
CIESIN continues to advance knowledge in the area of giving a
spatial context to agricultural decision making. In the past year, the
Agricultural Research Service has been particularly excited about
CIESIN's work with the ARS Great Plains Systems Research Unit in Fort
Collins, Colorado to develop a means of displaying the results of the
Great Plains Framework for Agricultural Resource Management (GPFARM)
model.
CIESIN work provides GPFARM with geographic capabilities--we
provide a way for the farmer to see the model output (which is usually
displayed in numbers) in a much more easily understood map format.
Presently we are working with ARS scientists to implement the Farm
Spatial Data Management System (FSDMS). FSDMS will provide a geographic
interface for farm and/or ranch record keeping and trend analysis.
The FSDMS is a three level system, with each level providing
additional capability for spatial analysis and modeling. The three
levels are: Level 1--Farm Layout and Record Keeping; Level 2--Farm
Analysis; and Level 3--Farm Research.
Level 1 helps the farmer ``sketch'' farm layouts and fields, import
digital images such as scanned quad maps and aerial farm photos,
supplement field sketches with commentary data and photos, record weed
and pest infestation data with direct reference to the farm layout, and
analyze trends in weed and pest records through interactive query.
Level 2 assists the farmer in translating farm sketches to precise
geographic coordinates. This permits direct integration with Global
Positioning Systems yield monitors, soil sampling, and precision
chemical application. In addition, this allows the farmer to begin to
take advantage of federal data resources such as NRCS digital soils
maps, digital weather maps, and terrain maps. Level 2 provides the
interface to GPFARM and other farm simulation models, allowing for
direct benefit from federally funded research programs and model
development.
FSDMS Level 3 will provide a spatial interface for agricultural
research scientists to evaluate new models, develop enhanced simulation
techniques, and investigate prescriptive farm assistance through
artificial intelligence procedures. A detailed design for both Level 1
and Level 2 of the FSDMS system have been developed, as well as a
conceptual design for Level 3. In addition, a functional Level 1
prototype has been developed and has been distributed to local farm
consultants for review and feedback.
This year, CIESIN continued its work in global environmental change
data documentation across USDA agencies. CIESIN has developed new
metadata about global environmental change-related data sets across the
major USDA research agencies and continuously updated metadata
collected in previous years. This information is made accessible to
USDA and other researchers through the World Wide Web. The USDA/CIESIN
World Wide Web ``home page'' (http://www.ciesin.colostate.edu/USDA),
provides an integrated view of 750 USDA global change data sets, 160
models, and 173 GIS applications with electronic connections to a full
spectrum of information related to environmental change research
topics. Information about all of CIESIN's project deliverables to date
may also be found on the home page. Between September, 1997 and
January, 1998, there were over 14,000 ``hits'' on the USDA/CIESIN home
page.
The home page now connects USDA researchers, land-grant university
and other users with over 520 additional sources of agriculture and
natural resource data worldwide. CIESIN also serves as the official
provider of agricultural data entries, formatted appropriately, for
inclusion in the electronically-accessible NASA Global Change Master
Directory.
Finally, Mr. Chairman, I would like to inform you of some pending
changes at CIESIN. CIESIN is in the final stages of negotiating an
agreement to move its headquarters staff and operations to Columbia
University in New York. Under the proposed arrangement, CIESIN would
become a Center of the Columbia Earth Institute and be located at the
Lamont Doherty Earth Observatory campus in Palisades, NY. This new
arrangement will provide CIESIN with many new opportunities for
scientific and technical collaboration, and reduce its overall current
indirect cost structure, freeing more USDA/CIESIN project dollars for
research.
The transition and relocation are scheduled to occur on June 30,
1998. Plans call for me to remain in the CIESIN Washington office to
conduct project work and to perform federal liaison functions and for
the CIESIN Ft. Collins office to continue to be co-located with ARS.
Mr. Chairman, this project is an important part of the work of USDA
in preserving previous taxpayer investment in scientific data
collection, providing state of the art tools for sound agriculture and
natural resource decision making, and making scientific data and
information more readily available and more useful for the research
community, for federal, state and local policy makers and the public.
We are grateful for the opportunity to provide Subcommittee members
with an update on our activities and respectfully request your
continued support of this program.
______
Prepared Statement of E. Edward Kavanaugh, President, Cosmetic,
Toiletry, and Fragrance Association
introduction
The Cosmetic, Toiletry, and Fragrance Association (CTFA)
respectfully urges you to direct $5 million in increased appropriations
to the Food and Drug Administration's regulatory program for cosmetics
in the Center for Food Safety and Applied Nutrition (CFSAN) Office of
Cosmetics and Colors. This additional funding is essential to ensure
continuing confidence in the safety of personal care products.
We believe that this funding should be provided through increased
appropriations rather than through reallocation of existing resources
or through user fees. Although we feel very strongly about this, we
understand the difficult budget decisions facing the Subcommittee. If
an increase in appropriations is not possible at this time, we ask you
instead to earmark $5 million specifically for the regulatory program
for cosmetics within the CFSAN Office of Cosmetics and Colors.
additional appropriations are desperately needed
Without this funding, we firmly believe that the FDA will be hard
pressed to maintain a credible cosmetic regulatory program. In recent
months, the FDA's cosmetic regulatory program has sustained crippling
cuts:
--In January 1998, the agency announced that all 12 of its field
personnel assigned to cosmetics had been reassigned to food
programs. This necessitated the immediate cancellation of the
FDA's compliance programs for domestic and imported cosmetics.
--In March 1998, the remaining staff assigned to the program was
reduced from 27 to 15 full-time equivalents. These cuts
resulted in the suspension of the FDA Voluntary Cosmetic
Reporting Program, which for more than 25 years had provided
the agency and our industry with valuable information about the
ingredients used in cosmetic and personal care products. The
FDA has also indicated that, because of these cuts, it will
limit the number of cosmetic-related telephone inquiries it
takes from the public and the industry. Additionally,
laboratory studies of cosmetics will be significantly reduced
or suspended.
During discussions with the cosmetic industry about these
devastating program cutbacks, the agency raised the possibility of
further weakening the regulatory program for cosmetics by moving it
from CFSAN to the Center for Drug Evaluation and Research (CDER). We
believe that such a shift would be disruptive and counterproductive. It
is absolutely imperative that the program remain in CFSAN, where it has
functioned effectively for almost 30 years and where the expertise
exists.
With finite resources and a long list of responsibilities, the FDA
faces daunting budget decisions. Cosmetic products have a stellar
safety record and, according to FDA commissioners spanning more than
two decades, are the safest products the agency regulates. Therefore,
when the agency needs resources for other products or issues that
present a critical and immediate problem, such as food safety, there is
an understandable temptation to draw those resources away from the
regulatory program for cosmetics. We must not allow this to happen.
This ``rob Peter to pay Paul'' approach is, at best, a short-term
solution. It fails to recognize that by downgrading the cosmetic
regulatory program, the agency is sowing the seeds for future problems.
For one thing, it could unwittingly encourage unwarranted attacks on
the agency's ability to police the industry. In addition, it could
encourage entry into the market of product manufacturers that do not
maintain the current high standards of the industry. We know that
cosmetics are by far the least of the problems facing the agency today;
we want to keep it that way. To do that, we must have a strong FDA
regulatory program to stand behind the industry's commitment to
maintain its high standards of safety.
a strong cosmetic program is crucial to our industry and the public
An exhaustive discussion of the importance of a healthy FDA
cosmetic regulatory program is beyond the scope of this statement. We
must point out, however, that the American people rely on the FDA and
have every right to expect that the Congress will provide the agency
with the resources it needs to ensure the safety of the products it
regulates, including cosmetics.
CTFA members provide consumers with a wide choice of safe cosmetic
products, including such things as makeup preparations, shampoos,
deodorants, toothpastes, mouthwashes, perfumes, shaving creams, and
skin lotions. These products promote personal hygiene. They help people
look and feel their best, thereby increasing self assurance and self
esteem. Virtually every man, woman, and child in the United States uses
cosmetics every day. Due to the historic effectiveness of the FDA and
the voluntary safety programs undertaken by the cosmetic industry--
often with the agency's cooperation and participation--they do so
safely and with confidence. Failure to fund adequately the agency's
regulatory program for cosmetics will undercut a vital component of a
safety system that has served consumers well for decades.
Moreover, the continued economic well-being of the $25 billion
cosmetic industry depends on a strong FDA regulatory program. Our
industry relies on the FDA compliance function. Without compliance,
unscrupulous competitors can not only defraud the public, but undermine
legitimate industry as well. The cosmetic industry needs a level
playing field. We need to know what regulatory requirements apply. We
want to be certain that the FDA law and regulations will be enforced
consistently against all marketed products, whether imported or
produced domestically.
A strong FDA Office of Cosmetics and Colors exerts national
leadership, maintains appropriate standards to assure the safety and
proper labeling of cosmetics throughout the nation, and ensures that
Americans can enjoy a nationwide marketing system with adequate public
protection and uniform enforcement in every part of the country. If the
FDA's cosmetic program is diminished, the states may be encouraged to
ignore the agency and establish their own, potentially conflicting,
regulatory requirements for cosmetics. Such a patchwork of state
mandates could only confuse consumers and wreak havoc on our industry's
ability to operate in interstate commerce.
The FDA is currently recognized as the preeminent international
body in the field of cosmetic regulation. A visible and vigorous CFSAN
Office of Cosmetics and Colors is necessary to maintain this
international leadership and to move even more quickly toward the goal
of international harmonization, which the Congress established as an
FDA priority for cosmetics and other regulated products under Section
410 of the FDA Modernization Act of 1997.
the cosmetic regulatory program must remain in cfsan
The cosmetic industry believes that it is imperative for the FDA's
regulatory program for cosmetics to remain in CFSAN. Therefore, we are
asking the Subcommittee to ensure that any funding it provides to the
agency's regulatory program for cosmetics is specifically directed--and
firmly tied--to the CFSAN Office of Colors and Cosmetics. There is
simply no budgetary, policy, or management reason to move the program
from CFSAN to CDER.
No savings would result from transferring the cosmetic program. At
least the same levels of staffing and funding would be needed to
establish and maintain an effective cosmetic program at CDER as at
CFSAN. In fact, since the present CDER personnel are not knowledgeable
or experienced in cosmetics, even greater levels might be required were
the program shifted.
Moreover, maximum efficiency and effectiveness demand that the
cosmetic program be in a scientifically compatible environment.
Cosmetics and food share many more common scientific characteristics
than do cosmetics and drugs. Unlike drug ingredients, for example, food
and cosmetic ingredients are largely inert, are not intended to produce
a pharmacologic effect, are not the subject of therapeutic claims, and
are not investigated for their clinical benefit.
More than 3,400 functional cosmetic ingredients are also regulated
by the FDA's CFSAN as food additives or GRAS food substances. Food
flavors and cosmetic fragrances share the same natural sources and have
many substances in common. Color additives--which are a significant
component of most cosmetics--and food additives have been regulated by
the same scientists in CFSAN since enactment of the Color Additive
Amendments of 1960. Safety decisions regarding food ingredients and
cosmetic ingredients rely on the same scientific disciplines, which
differ from those regarding drug ingredients.
Some personal care products, such as deodorant/antiperspirants,
antidandruff shampoos, and dentifrice/fluoride toothpastes, do fall
into both the drug and cosmetic definitions of the Federal Food, Drug,
and Cosmetic Act. They are currently and appropriately handled by CDER,
in cooperation with CFSAN, as over-the-counter drugs. These products,
however, represent a small portion of cosmetic products and provide no
justification for transferring the vast bulk of cosmetics, which have
no pharmacologic properties, from CFSAN to CDER.
We are also convinced that the regulatory program for cosmetics
must remain at the Office level within CFSAN. A reduced program, buried
in the bowels of the FDA, would be unable to attract leaders or staff
with strong qualifications and national stature. Moreover, such a
reduction would send the unmistakable signal that the FDA is abandoning
this area and would virtually preclude a position of leadership either
nationally or internationally.
funding the regulatory program for cosmetics
We are seeking $5 million for the regulatory program for cosmetics
in the CFSAN Office of Cosmetics and Colors. Although it is difficult
to pinpoint an exact figure, we believe that this approximates the
amount that the FDA has been allocating annually to its regulatory
program for cosmetics. In this era of budgetary constraints, we are not
asking for new programs. We are merely asking for a level of stable
funding that will ensure the restoration and maintenance of a program
similar to the one that existed prior to the debilitating cuts recently
instituted by the agency.
CTFA believes it is essential to secure the $5 million through
additional appropriations rather than by drawing resources from other
FDA programs or by imposing user fees. If that is impossible, however,
we ask the Subcommittee instead to allocate $5 million to ensure that
there is a strong regulatory program for cosmetics in CFSAN.
We favor additional appropriations because we know that the FDA has
many important responsibilities, of which cosmetics is only one. We
believe that the agency needs appropriate levels of funding to do the
kind of job that the American people expect and deserve. Furthermore,
we believe that it is the responsibility of the Congress to ensure that
the FDA has the necessary resources to regulate cosmetics adequately.
We appreciate the fact that the Congress and this Subcommittee in
particular have consistently, and we believe correctly, rejected the
imposition of user fees to fund general government operations. Such
fees, in effect, would be a regressive tax on the products manufactured
by our industry.
Prescription drug user fees are used to speed up a specific
company's new drug applications. They are not used for general FDA
administrative or enforcement purposes. Having the cosmetic industry
pay user fees to finance the FDA's inspection and enforcement
activities is an entirely different matter. Instead of directly
resulting in faster approval of new prescription drug products for a
company that pays the user fee, the user fees here would be used to
fund the agency's broad public health responsibilities for the entire
cosmetic industry. This would raise serious public policy concerns.
summary
The cosmetic industry urges the members of the Subcommittee to
provide $5 million in increased appropriations for the FDA regulatory
program for cosmetics in the CFSAN Office of Cosmetics and Colors. If
increased appropriations are not possible, we ask that you instead
reallocate and expressly earmark $5 million for the regulatory program
for cosmetics in the CFSAN Office of Cosmetics and Colors.
We are grateful for this opportunity to express our views on the
vital importance of adequate funding for this program. Thank you for
your consideration.
______
Prepared Statement of Samuel F. Minor, Chairman, Council for
Agriculture Research, Extension, and Teaching (CARET)
Thank you Mr. Chairman. I appreciate the opportunity to provide
testimony today in support of the Land-Grant System.
My name is Sam Minor, Chairman of the Council for Agricultural
Research, Extension, and Teaching, commonly called CARET. CARET is a
national focal group of lay support persons formed a number of years
ago for the expressed purpose of enhancing national support and
understanding of the important role played by the land-grant colleges
in the food and agriculture systems as well as their role in enhancing
the quality of life for all citizens of the nation.
I take part in this activity with a great amount of pride and
commitment, because I know first hand of the important role played by
our land-grant institutions.
As a dairy farmer, retail market, and on the farm restaurant owner/
operator I have experienced the beneficial results of agricultural
research and extension in our own business enterprise. This was
particularly true when we, some 22 years ago, started our business from
scratch on a hillside farm located some 25 miles south of Pittsburgh,
Pennsylvania with nothing more than a good wife, five small children,
and a few saved dollars.
I do know first hand of the value of our Land-Grant Colleges such
as Penn State to the individual farm family. Nearly everything that has
transpired on this farm from the cropping program, to the calf raising,
to the artificial breeding, to the milking and business management has
been substantially based on the research and extension work from our
land-grant university. This same statement can be said about many or
the hundreds of thousands of farm families across this country.
Agricultural research and education has been the basis of much of the
development and growth that has allowed American agriculture to be the
envy of the world.
As a retailer of milk and other dairy products and farm fresh
produce in our retail market and as a restaurant operator, we also have
a great appreciation of the importance of food quality and food safety.
The research and educational work that is being done in these two areas
is also greatly recognized for the importance that this plays in our
operation.
As Secretary of Agriculture, Dan Glickman, recently said,
``Seventy-five percent of the progress that has been made in
agriculture productivity and competitiveness since the second World War
has been a direct result of the public contribution to agriculture
research.'' Now is not the time to allow other countries to assume this
lead in agricultural productivity and development.
It has been the federally supported programs of research,
extension, and teaching that have provided the scientific basis to
allow 1.8 million U. S. farms, such as ours in southwestern
Pennsylvania, to produce a record in excess of $200 billion of food and
fiber. A record of nearly $60 billion of this productivity in 1996 went
to the export market, allowing for a nearly $30 billion of positive
contribution to the balance of trade. Although agriculture exports were
down some this past year, they still had a very positive influence on
narrowing the U. S. trade margin while contributing significantly to
feeding and clothing a growing world wide population.
This is an important time to talk about agriculture research and
education. We are increasingly aware of the fiscal restraints and the
changing role of the federal government in the conduct of our
agriculture businesses. Agriculture has demonstrated that it will rely
less upon the commodity support programs but will compete even more
effectively in the world wide marketplace. Agriculture research and the
implementation of these research findings has been a major factor in
preparing for this transition. As a result of these past efforts, we
will have an agriculture system that is even more competitive in the
global economy.
As a result of this research and education work, we will continue
to have an agriculture industry that is the envy of the world. This is
an industry that combines food and agriculture and their related
industries to provide almost 20 percent of the jobs in this country and
accounts for 16 percent of our gross national product. Yet, the
consuming public spends less of their disposal income, just over 10
percent, for their food needs than any other country in the entire
world. These are numbers that are familiar to all of us. Yet they are
just as significant today.
Now, as we enter a new era in agriculture and the role that
government plays in agriculture, we believe that the need for an
agriculture that is based on research and science is greater than it
has ever been before.
We are, for many reasons, in a very rapidly changing agriculture.
Some call it an industrialization of agriculture. We are seeing a
consolidation of our agriculture enterprises. We are seeing a rapid
implementation of new emerging technologies. Information, of all kinds,
that enhances the ability to make more rapid and more correct decisions
is increasingly available. New plant and animal species, varieties, and
characteristics are emerging from the rapid advancement of the
biotechnological sciences. These changes and this advancement has come
about, to a great extent, because of the past investment in agriculture
research and education, much of it form public sources.
As we consider this transition in the framework of new work that is
now being done and the new scientific advancements that are just on the
threshold of disclosure, one has to think that our opportunities are
greater today than they have ever been in the past. It will, however,
take dollars to bring these opportunities to fruition. It will be a
continuation and expansion of the federal, state, local, and private
partnership that can best provide these dollars critically needed for
this work. Your decisions in the coming months to increase the federal
outlay for agricultural research can provide some much needed
leadership for this effort. The federal funds are the heart of this
partnership.
Specifically, the federally-supported programs in cooperation with
our state land-grant colleges and universities are crucial for us to
retain and expand the U. S. competitive edge in the world wide
marketplace. Specifically federal funding for agriculture research
requires a balanced portfolio of base funds, special grants and
competitive grants.
This testimony is principally to request support for the fiscal
year 1999 budget recommendation of the NASULGC Board on Agriculture of
$910.3 million, an increase of 8.4 percent over the current year
appropriation. This request is for the federal portion of the funding
for research, extension, and higher education and federal
administration that is, in turn, leveraged up to five times at the
individual state and local level. While this is large amount of money,
it is truly quite moderate in relation to the total federal
appropriation to research or even in relation to the total agriculture
appropriations.
Mr. Chairman, I especially want to emphasize the importance of the
request for the small increase in the amount appropriated for the base
programs for research and extension. This highly successful state/
federal base program partnership has provided critically needed stable
on-going research. These funds are essential for leveraging external
resources. As you are aware, these base fund levels have been eroding
for a number of years. It is very critical that this trend be reversed.
Base program funding is unmatched as a vehicle to foster multi-year
programs essential to the science of agriculture. Measured rates of
return on this investment range from 30 to 50 percent, depending on
location and commodity. Again, I sincerely request that you begin to
restore these very critical base program funds.
As I am finalizing this prepared testimony, I am aware that
Congress is right now preparing to finalize the reauthorization of the
Research and Science portion (Title VIII) of the Farm Bill. We in CARET
and the entire land-grant system are appreciative of the opportunity to
have participated in this process. We are especially glad to know of
the recognition that has been given to the addition of substantial new
funding for agricultural research. We trust that everything possible
will be done to assure that these new research monies will be included
in the final form of the Title VIII reauthorization. We also trust the
House and Senate appropriators will join in supporting this newly-
authorized Congressional support for agricultural research, if enacted
into law, without penalizing agricultural research through
discretionary funding.
The Council on Agricultural Research, Extension, and Teaching is
very pleased to speak on behalf of the land-grant university system
This land-grant partnership, these seventy-five universities working in
close cooperation with the USDA Cooperative State Research, Education,
and Extension Service, is a very important and very strong
relationship. This is a partnership that undergirds successful
agriculture in the United States and is the envy of the entire world.
This is a partnership that our CARET organization believes should be
financially supported to the fullest possible extent at both the
federal and at the state levels. We ask that you give this request your
fullest possible consideration this year.
As an individual farmer and a member of the agriculture community,
I am very proud of what this federal, state, and local partnership has
provided to us. At the same time, agriculture research and education
must be an important part of our long-term agricultural policy. We must
strengthen our financial commitment to assure that these basic programs
of the land-grant system will be prepared to meet the emerging need of
the food and fiber sector. We in agriculture and the country as a whole
want to be prepared to take full advantage of the further opening of
global markets, greater deregulation of the commodity programs, and the
promise of scientific breakthroughs. We also want to be prepared to
address important environmental and food safety issues. These all
provide unprecedented opportunity to put science and education to work
in support of mankind.
Thank you for the opportunity to provide this testimony.
______
Prepared Statement of Sara Amundson, Doris Day Animal League
introduction
The Doris Day Animal League, on behalf of its 370,000 members and
supporters, is a national, animal protection organization. We
appreciate this opportunity to submit testimony supporting our
respectful request for a specific appropriation for the Office of
Cosmetics and Colors in the Center for Food Safety and Applied
Nutrition at the Food and Drug Administration.
background
The Office of Colors and Cosmetics (OCC) is the primary department
with regulatory authority for administering the cosmetics program at
the FDA. Due to increased responsibility for regulation of food at the
Agency, funding for the OCC has been shifted to meet new mandates. A
significant portion of the estimated $5 million annual appropriation
for the OCC is being absorbed, leaving the least regulated product
under FDA open to safety concerns for consumers. The lack of commitment
to the OCC has manifested itself in the following ways:
--Staff for the OCC was cut by 50 percent, from 27 to 15 full-time
employees in March 1998.
--The Voluntary Cosmetic Reporting Program, a resource for consumers
and industry, has been discontinued. This program provided
information on the ingredients used in cosmetics and other
personal care products for many years.
--All assessments of in vitro, or non-animal test methods, to
substantiate the safety of products have been discontinued. The
FDA's authority on this issue of great concern to many
Americans will be seriously undermined, as Europe progresses
towards its legislative mandate to end animal tests for safety
studies of cosmetics.
Under Section 410 of the FDA Modernization Act of 1997, the Agency
was charged with actively pursuing international harmonization of
regulations for the products under their purview. The European Union
has already passed a Directive to replace animal tests for safety
assessments of cosmetics with non-animal alternative methods. In order
to comply with the European Union when the full Directive is
implemented, it is crucial that the OCC continue to move toward
harmonization of United States regulations with Europe.
With members of industry backing changes in testing methods that
can be more accurate, faster and ultimately less expensive, it is
important to meet the current mandate to internationally harmonize
regulations. The FDA must ensure all of industry and consumers benefit
by consideration of these testing methods.
The FDA, in an era of budget cuts and shifting priorities, has
striven to meet other mandates by absorbing a significant portion of
the OCC's budget into other programs. However, by further cuts in a
program already compromised by previous budget constraints the
consumers may be negatively-impacted.
The Doris Day Animal League urges an additional appropriation of $5
million for the OCC, as a stable level of funding for this existing
program, to ensure uninterrupted cosmetics regulation. If the
additional appropriation is not possible, we ask that Senate
Agriculture Appropriations earmark $5 million from the existing FDA
budget.
Thank you for this opportunity for the Doris Day Animal League to
express the concerns of our constituents. We appreciate your
consideration of our request.
______
Prepared Statement of William K. Crispin, Executive Director,
Everglades Restoration Oversight Group
We should most deeply appreciate your thoughtful consideration of
this testimony that we are submitting on behalf of the Everglades
Restoration Oversight Group (EROG). I have attached a curriculum vitae
and a statement of disclosure concerning federal grants.
EROG, and its organizations respectively, thank the Senate
Appropriations Committee for its leadership in appropriating funds to
enable the Agricultural Research Service, USDA, to establish one
hydrologist at the Subtropical Horticulture Research Station in Miami,
Florida. The ARS has recruited an excellent hydrologist, Dr. Reza
Savabi, to establish this program. Dr. Savabi will focus on developing
a farm-scale model of the movement of water under and over agricultural
fields in relation to water levels in the canal system. These water
levels are being raised as part of the effort to restore the
functioning of natural ecosystems in the national parks and in coastal
waters. There is great concern that ecosystem restoration must be
carried out in a manner that maintains or enhances the existing water
supply and flood control features of the Central and South Florida
Project (C&SF).
It is very clear that the science base has not been established to
adequately guide the restoration program. Thus we are alarmed that the
US Army Corps of Engineers and the US Department of Interior have
placed the South Florida Restoration effort on a very fast track.
In the southernmost part of the Florida peninsula, the restoration
effort is being implemented through the C-111 Basin Project and the
Modified Water Deliveries Project. There is great concern that these
Projects will have a negative impact on agriculture and on rural
communities. We believe that the long-term objectives of the Ecosystem
Restoration thrust can be met only if: the water management scheme is
placed on a solid scientific footing; and, sustainable agricultural
practices are developed in a way that facilitates the economic
viability of agriculture, as well as good land and water stewardship.
Unfortunately, the focus of hydrological study to date has been
within the boundaries of Everglades National Park. The Park employs
more than a dozen hydrologists for this work. By contrast, until the
ARS recently stationed Dr. Savabi in south Miami, only very limited
hydrological studies were conducted that pertain to the agricultural
areas and rural communities. Nevertheless, the University of Florida
established an Hydrological Task Force which issued a report in 1997
titled ``Water Management Issues Affecting the C-111 Basin, Dade
County, Florida''. This report found that the documents produced by the
US Army Corps of Engineers and the South Florida Water Management
District concerning studies relevant to ecosystem restoration in south
Florida to be ``inconsistent, both internally and with other published
reports''. Moreover, the University found many deficiencies both in the
models which serve as the basis for planning and in the operating
guidelines of the canal system.
In addition, in 1996 the University of Florida developed a
Comprehensive 5-Year Crop Research and Extension Plan of Work that
addresses technologies, which need to be developed, to make agriculture
more robust and economically sustainable, and to make agriculture a
better partner in ecosystem restoration. The University of Florida is
addressing these needs, but the University is not able to assign
additional faculty to accelerate this vitally important effort.
Therefore, the University's efforts need to be augmented by a strongly-
focused effort by the Agricultural Research Service.
We recommend that the Congress provide the support needed by the
ARS USDA to develop a strong Everglades Agro-Hydrology Research
Laboratory in south Miami, Florida. This Laboratory would address needs
from Lake Okeechobee to the Florida Keys. The Laboratory would
establish a coordinated multidisciplinary team of scientists to conduct
cooperative research on water management issues and on sustainable
agricultural production systems for this region. At least three
additional scientist positions must be added. The positions should be
as follows:
(1) Research Hydrologist. This position has been established
recently. It will integrate the science information bases in a
systematic manner to produce hydrologic models for planning and
practical water management.
(2) Research Soil Physicist/Engineer to produce the hydraulics
science base that characterizes the physical systems of soil, surface
and subsurface water flow and transport of agricultural chemicals,
salts, etc.
(3) Research Soil Chemist to develop the agrochemical science base
needed to enable growers to provide sufficient crop fertility while
guarding against environmental risks.
(4) Research Horticulturist to provide leadership in developing
Best Management practices and in creating improved production
technologies.
We request that the Congress appropriate an additional $900.000 per
year to the Agricultural Research Service for a cooperative research
program on agrohydrology and sustainable agriculture in south Florida.
______
Prepared Statement of Gary Jackson, Director, and Richard Castelnuovo,
Attorney, National Farm*A*Syst/Home*A*Syst Office
Thank you for the opportunity to submit a written statement to the
Subcommittee on the issue of appropriations for agricultural research,
education and economics. From our perspective as part of a national
office coordinating a network of state Farm*A*Syst/Home*A*Syst
programs, we are in a unique position to provide valuable information
on the benefits of an action-oriented approach to education that
results in voluntary actions that effectively respond to water quality
concerns. At the outset, we would like to acknowledge the support of
the National Association of State Universities and Land Grant Colleges
and in particular the Cooperative Extension Services in Michigan, New
Mexico, New York and Wisconsin.
Through increased support for programs such as Farm*A*Syst/
Home*A*Syst, the federal government can effectively address important
environmental concerns in ways acceptable to farmers, ranchers and
other landowners. Few dispute the growing importance of these groups in
tackling significant environmental issues such as non-point source
pollution and safe drinking water. The disagreement comes when the
discussion turns to issues of cost and approach. Too often government
responds to the environmental problem of the moment by creating a new
initiative. Rarely is this approach more cost-effective than making
better use of programs that are proven performers. Nor does it
necessarily result in programs that fit the needs of targeted
audiences. In the case of Farm*A*Syst/Home*A*Syst, an incremental
investment in this unique voluntary program would generate considerable
benefits, building on a program awarded a 1997 USDA Group Honor Award
for Excellence ``for outstanding leadership in building cooperative,
interagency partnerships that encourage farmers, ranchers, and home
owners to take voluntary action to prevent or reduce environmental
pollution.''
Farm*A*Syst/Home*A*Syst is not another federally-directed program.
It is locally-controlled by individual state teams who draw strength
and focus from national coordination and unprecedented levels of
cooperation among government agencies, universities and the private
sector. This special arrangement is vital to building a broad-based
commitment to voluntary action while providing familiar sources of
support that enable individual landowners to improve management of
their property. At the federal level, CSREES has joined NRCS and U.S.
EPA to support a national office that provides assistance and guidance
to a network of Farm*A*Syst programs in nearly every state (including
Alaska, Arkansas, Iowa, Kentucky, Mississippi, Missouri, Montana,
Pennsylvania, Vermont, Washington, West Virginia, and Wisconsin) and
newly-developed Home*A*Syst programs in 30 states. National
coordination enables these state programs to respond as a system to
pollution concerns and provides structure to conduct program
evaluations that demonstrate impacts. Nonetheless, this framework is
sufficiently flexible to permit states to tailor Farm*A*Syst/
Home*A*Syst programs so they effectively address local concerns.
State endorsements of Farm*A*Syst/Home*A*Syst reveal how states
take advantage of this flexibility. Dr. Jimmy Bonner, Mississippi
Extension Farm*A*Syst Program Coordinator, explains how the program
creates opportunities to work with the private sector:
The Delta Council, an organization of Mississippi Delta
farmers, was looking for a way that its members could show they
were doing the right thing environmentally. In Farm*A*Syst, the
group saw a program that suited its needs. The Council wants to
adapt Farm*A*Syst to address specific environmental concerns in
the heavily row-cropped Mississippi Delta. We are ready to help
with modification to develop materials emphasizing soil and
water conservation, pesticide management, wildlife management,
solid waste management and other areas to complement the
existing Farm*A*Syst model. If all goes as planned, farmers
will start using the materials this year.
Meg Burgett, Alaska Cooperative Extension, knows firsthand the
value and impact of the program:
We are working closely with the Alaska Department of
Environmental Conservation (ADEC) to integrate this program
with their statewide Wellhead Protection and Groundwater
Protection Programs to achieve maximum use of the materials.
Alaska has approximately 85,000 households that get their
drinking water from privately owned water wells. In addition,
there are approximately 1700 Class A and B community water
systems, most of which have privately-owned land in close
proximity. Although ADEC is charged with the protection of
drinking water for Alaskans, their role is not to regulate
these private holdings. Educational outreach to the private
landowners is the most effective method of reducing the risk of
pollution to our drinking water supplies. Use of the
Home*A*Syst materials developed for Alaska will enable
landowners to assess pollution problems and risks on their
property and empower them to take voluntary actions to prevent
pollution using the best available scientifically-based
recommendations.
Bob Broz, Missouri State Coordinator observes, ``Like a lot of
states, Missouri can benefit from pollution prevention. Agriculture is
often overlooked in this effort. Farm*A*Syst offers an action-oriented
approach that farmers feel comfortable using to take voluntary action
to prevent pollution on their property.''
Karen M. Blyler, Coordinator for Washington Home*A*Syst (a
comprehensive program that reaches farmers as well as homeowners),
provides insights concerning the tremendous growth of the state
program:
In a little over four years, Washington's highly successful
Home*A*Syst program has been used in over 17 counties and in a
wide array of educational projects. Initially proposed as a
``Wellhead Assessment and Protection Pilot'' for farmers,
ranchers and rural residents, Home*A*Syst has evolved to meet
other water quality needs, including source water protection
and safeguarding private drinking wells. In many areas,
Home*A*Syst has become the educational tool of choice because
it is both voluntary and confidential.
KY*A*Syst State Coordinator, Roger Rhodes, points to the program's
value in satisfying an ``innovative piece of legislation'' that
requires all Kentucky agricultural landowners of 10 acres or more to
complete a water quality plan that covers 59 best management practices:
``KY*A*Syst is the most effective way to accurately assess farmstead
pollution risks related to petroleum tanks, septic systems, and
pesticide storage. It will result in more complete and thorough state
water quality plans.''
State Coordinator Les Lanyon believes that Pennsylvania Farm*A*Syst
enables farmers to take a positive approach to protect shared resources
through pollution prevention:
I tend to work with small dairy farmers (40-50 cow
operations) who are under intense economic pressure.
Farm*A*Syst is a voluntary program that can focus on the
positive. It lets folks who are doing a good job know that they
are on the right track. Also it reveals opportunities for
improvement on individual farms.
These experiences have been replicated in state after state. To
develop and deliver the program, each state has assembled teams that
have successfully linked agency officials at different levels of
government, agricultural and environmental regulators, and educators
and technicians in cooperative enterprises to address common
environmental concerns. In states such as Washington and Arkansas, for
example, local staff from CSREES and NRCS are actively involved as
agency partners, together with officials from U.S. EPA and Soil and
Water Conservation Districts.
These partnerships improve the effectiveness of programs such as
NRCS's Environmental Quality Incentives Program (EQIP) by providing
action-oriented education. Funded by an educational grant under EQIP, a
Wisconsin team of Extension agents and others plan to use Farm*A*Syst
with small dairy farmers, contractors and milk machine installation
technicians in Outagamie, Shawano and Waupaca Counties to improve
milkhouse waste treatment systems. On the western edge of the state, in
Buffalo and Grant Counties, interagency teams are using EQIP funds to
deliver Farm*A*Syst in two watersheds to reduce soil erosion and other
environmental problems related to agriculture. Through the EQIP program
in Missouri, producers will be eligible to receive a $100 payment for
conducting Farm*A*Syst assessments and adopting management practices to
reduce pollution risks.
Dr. Jimmy Bonner provides this example of partnerships from
Mississippi:
A Farm*A*Syst pilot project involving dairy farmers in
Mississippi's Tangipahoa Watershed developed into a two-state,
multi-agency initiative, including NRCS, RC& D, Farm Services
Agency, Mississippi Soil and Water Conservation Commission,
Mississippi State Health Department and the Mississippi
Department of Environmental Quality, as well as Louisiana
agencies. With a strong partnership between agriculture, the
environment and local producers, there were many opportunities
to help producers test their drinking water, install and
renovate animal waste lagoons and improve animal waste
management practices. In addition, a special waste pesticides
collection was held in the watershed resulting in the proper
disposal of more than 6,000 pounds of waste pesticides. This
special effort was part of a larger state-wide collection of
over 600,000 pounds of waste from 1994-1997.
Ties to the private sector have strengthened state teams. Tyson
Foods has turned to Farm*A*Syst to improve management of its animal
production operations in Arkansas. According to John Gunsaulis,
Nutrient and Land Manager for Tyson Foods, ``Farm*A*Syst is a tool that
allows farmers to identify any potential area of environmental concern
and plan actions that need to be taken.'' In eight out of the 29 states
where Farm*A*Syst/Home*A*Syst is in the advanced stages of development,
state Farm Bureaus are actively involved. WaterSafe (West Virginia's
version of Farm*A*Syst) is extending its outreach capacity by using an
800 number provided by the state Farm Bureau. The Iowa State Farm
Bureau is assuming a leadership role in launching a major initiative to
refine Farm*A*Syst materials for Iowa and deliver the program in a
priority watershed. Missouri has pioneered a successful training effort
that introduces real estate brokers to Farm*A*Syst and Home*A*Syst and
has started sharing this model with other states such as Washington.
Through mini-grants, Montana will enable about 10 counties to explore
``something different'' in their delivery of Home*A*Syst, according to
state coordinator Mike Vogel. This will create new opportunities to
work with insurance agents, home inspectors, local health departments,
bankers, home builder associations and Welcome Wagon in their efforts
to deliver the program.
Farm Cooperatives were a vital link in a Wisconsin project working
with petroleum marketers to reach new audiences with Farm*A*Syst and
other pollution prevention materials relating to petroleum storage.
``The materials were professionally done; very well put together,''
according to Dean Hanley, energy department manager, Danco Prairie FS
Co-op. In the words of Tom Van Arsdall, Vice President of Environment,
National Council of Farmer Cooperatives:
[N]ow farmers are turning increasingly to cooperatives for
assistance in the face of growing environmental pressures.
That's why we are excited about the Farm*A*Syst program. It
provides an opportunity for the agricultural community to pull
together and help farmers pursue voluntary, cost-effective
solutions when responding to environmental challenges.
States are applying Farm*A*Syst/Home*A*Syst to tackle their
toughest environmental problems through voluntary action. Since every
state needs help protecting private drinking water wells, Farm*A*Syst/
Home*A*Syst stands out as the only national program that provides
information and technical assistance that can help 23 million private
well owners protect the quality of their drinking water. In Sevier
County, Arkansas, Farm*A*Syst assessments were the first step in
detecting and closing abandoned wells, a major pathway for pollution
that threatens drinking water. County officials mobilized highway crews
to close nearly 70 wells, saving an estimated $250 per closed well. In
Whatcom County, Washington, Extension teamed with the state department
of health and local agencies to train operators of small water supply
systems in the delivery of the program. By working with private
landowners to assess pollution risks, these operators were able to
minimize contamination threats to recharge zones for public drinking
water wells, while helping rural landowners protect their private
wells.
State programs have the potential to involve and motivate a wide
range of audiences. In addition to state-specific materials developed
for farmers and ranchers, they have access to specialized education
tools to reach under-served groups with practical information about
pollution prevention. They can build on successful pilot projects that
tested simplified assessment materials with Native Americans in
Washington and Wisconsin, Spanish-language materials with landowners in
two states and newly-developed Home*A*Syst materials with non-farm
homeowners in Alaska, Montana, Washington and other states.
Increased funding can substantially improve state and local
capacity to provide pollution prevention assistance to individual
landowners, as the performance of Michigan Farm*A*Syst/Home*A*Syst
shows. With a boost in funding, this state program was able to conduct
more than 6,500 Farm*A*Syst assessments; more than 150 Field*A*Syst
assessments; and more than 12,500 Home*A*Syst assessments. Reaching
more people is important but changing behavior is the test of
effectiveness.
Farm*A*Syst/Home*A*Syst results in voluntary actions to prevent
pollution. Clearly, a key element in this process is landowners'
acceptance and use of the program, as information provided by Karen
Blyler illustrates. But this alone cannot explain improvements in
management. Changes result from a system of education, self-assessment
and action planning in which landowners are active partners in making
improvements. Easy-to-use worksheets provide a simple and inexpensive
way for individual landowners to evaluate pollution risks on their
property and serve as the essential first step in formulating plans to
prevent pollution. Farm*A*Syst worksheets initially covered farmstead
pollution risks, such as well condition, petroleum tanks, chemical
storage and animal waste, but have been expanded to include field
activities such as nutrient and pest management. These materials are
effective and useful because they organize complex regulatory
requirements, technical information and recommended management
practices into a system that non-experts can apply to their property to
prevent pollution.
Using the process of self-assessment, landowners learn firsthand
the consequences of pollution to their home. They are motivated to
improve management to safeguard the health of their land and families,
avoid environmental liability and cleanups and satisfy the concerns of
lenders and property buyers. Based on state surveys, it is estimated
that two of every three participants make or intend to make low-cost
changes immediately, with higher-cost actions planned for the future.
According to a detailed benefit-cost study of 134 Louisiana
farmers, Farm*A*Syst/Home*A*Syst is an extremely cost-effective program
with long-reaching economic and non-economic (educational) benefits.
Drawing on the results of this two-year study, Farm*A*Syst produces
benefits-over-costs ranging from at least $2.4 million to more than $15
million. This range is calculated using three methodological approaches
(averting expenditures, avoided costs, contingent valuation) and is
based on an estimated 10-year implementation period.
Nearly one in three Louisiana participating farmers had made--or
planned to make--66 individual changes in their farming practices ``due
to information provided by the Farm*A*Syst materials,'' changes that
should prevent pollution to groundwater. These farmers voluntarily
invested a total of $91,437 (approximately $682 per farmer) to make
these changes. While these actions included low or no-cost changes in
management, 18 percent of the changes involved construction costs over
$500, 12 percent involved the plugging of old wells and the drilling of
new wells and 12 percent involved the removal or replacement of
underground petroleum storage tanks. Since petroleum storage and well
water contamination were two of the most frequently reported high risks
on Louisiana farms, these changes will have direct and significant
impact in preventing pollution. In addition, the study revealed
multiple non-economic benefits including positive changes in knowledge,
attitude, perception and awareness of the pollution risks associated
with farming practices.
Results from less comprehensive studies in Alabama, Arkansas,
Kentucky, Maine, Missouri and Washington state confirm the findings in
Louisiana. In an Arkansas ``Emphasis'' project involving four counties
(Sevier, Benton, Howard and Washington), 85 percent of the 330
participants responded to a follow-up survey by saying they had taken
more than 190 voluntary actions. In Washington, 500 evaluations
revealed that participation helped 75 percent of the respondents
identify a high-risk activity or practice and motivated over 75 percent
to make at least one change in 1-3 years to reduce pollution risks. In
addition, these surveys consistently reveal user satisfaction with
Farm*A*Syst. Users overwhelmingly report that the program is useful,
informative, and easy to understand.
From these specific study results, it is not difficult to draw
important conclusions about the nationwide impact of the program. There
are many states that should have greater benefits than Louisiana since
more people have participated in the program. As previously noted,
Michigan alone has reached 19,000 landowners. Using conservative
estimates, it is safe to assume that 80,000 assessments have been
conducted nationwide. Based on the findings in the Louisiana study, it
is estimated that Farm*A*Syst/Home*A*Syst activities have generated
more than $50 million in pollution prevention investments.
The value of Farm*A*Syst/Home*A*Syst cannot be measured simply in
end results. The program demonstrates how Land Grant Colleges and
CSREES can play leading roles in pollution prevention for farmers,
ranchers and homeowners. In the tradition of Extension programs with
strong links to research, Farm*A*Syst/Home*A*Syst can stimulate
relevant inter-disciplinary research related to pollution prevention
and organize research findings into educational programming that
directly benefits landowners. During July 1997 hearings of the House
Subcommittee on Forestry, Resource Conservation, and Research, Dr. Bob
Robinson, CSREES Administrator, singled out Farm*A*Syst/Home*A*Syst as
one of two efforts that bridged the gap between research and applied
programs, ``Another notable example of a decision aid to help farmers
is Farm*A*Syst, which is used to assess farms and farmsteads for
potential pollution problems.'' This is a model for environmental
programming that enables landowners to take voluntary action based on
research-based recommendations. For farmers and ranchers, it offers an
acceptable approach to responsibly manage their land without losing
their competitive edge in the marketplace. For non-farmers, it offers a
way to make significant contributions to protecting drinking water and
preventing non-point source pollution.
DISCLOSURE OF FEDERAL FUNDING FOR NATIONAL FARM*A*SYST/HOME*A*SYST OFFICE (FISCAL YEARS 1998 AND 1997)
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 Funds received Other Forthcoming
----------------------------------------------------------------------------------------------------------------
USDA/CSREES..................................................... $209,017 .............. ..............
U.S. EPA........................................................ 25,000 .............. $100,000
USDA/NRCS....................................................... 80,000 $84,450 ..............
-----------------------------------------------
Total..................................................... .............. .............. 498,467
----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------
Fiscal year 1997 Funds received Other
------------------------------------------------------------------------
USDA/CSREES............................. $197,977 ..............
U.S. EPA................................ 50,000 ..............
U.S. EPA Pesticide Environmental 29,910 ..............
Stewardship Program....................
USDA/NRCS............................... 80,000 $84,450
-------------------------------
Total............................. .............. 442,337
------------------------------------------------------------------------
______
Prepared Statement of Ralph G. Yount, Ph.D., President, Federation of
American Societies for Experimental Biology (FASEB)
I am Ralph Yount, professor of biochemistry at Washington State
University. I am a basic scientist who works on the mechanism of muscle
contraction. I serve this year as the President of the Federation of
American Societies for Experimental Biology, usually referred to as
FASEB. Founded in 1912, FASEB is the largest organization of life
scientists in the United States with a combined membership of more than
52,000 researchers. Our members include scientists involved in human as
well as animal nutrition research. These scientists hold positions in
virtually every public and private institution engaged in nutrition-
related research in the United States, as well as in industrial and
biotechnology enterprises conducting nutrition and food related
research.
FASEB believes, as we believe this committee does, that research
sponsored by the Department of Agriculture conducted at universities
throughout the United States generates new knowledge that ensures an
affordable, abundant and wholesome supply of food and fiber, and
promotes the competitive position of U.S. agriculture in the global
marketplace. The growth of our global population and the threat of
food-borne pathogens require improvements in agriculture and food
safety, as well as advances in nutrition and reduction of environmental
pollution.
As the leading agency in support of research on human nutrition and
food safety, plant pathogenesis and control, and on plant genomic
projects benefiting mankind, the USDA is the primary support of basic
and applied research through its Research, Education, Extension budget.
This budget supports the Cooperative State Research, Education, and
Extension Service (CSREES) whose mission is to advance research,
extension, and higher education in food and agricultural sciences and
in related fields.
The National Research Initiative Competitive Grants Program, a
CSREES program, funds competitive extramural research projects at
public and private universities and colleges. Research proposals are
merit-reviewed by panels of experts, and those attaining the best
scores are funded. The NRICGP is the largest national competitive
research grant program in the USDA.
FASEB's recommendations for the USDA focus principally on the
NRICGP. Some examples of the program's recent accomplishments are:
--Calcium homeostasis and bone turnover in adult women.--Studies show
that healthy adult women consuming either low- or high-protein
diets exhibited calcium and bone metabolism abnormalities, not
observed in those on a medium-protein diet. Impaired intestinal
calcium absorption combined with reduced bone turnover may
result in diminished calcium incorporated into bone. These
abnormalities could lead to decreased bone mass and/or
increased risk of fracture. The studies suggest that in
evaluating the recommended daily allowances (RDA's) for
protein, the impact on calcium homeostasis and bone turnover be
considered.
--Enterohemorrhagic Escherichia coli (E. coli).--Strains of E. coli
are associated with disease in humans and animals. E. coli
O157:H7 is the predominant strain associated with food-borne
human infection and death. Most infectious outbreaks of this
form of E. coli have been associated with eating beef products;
studies have shown that diets fed to cattle and sheep influence
the shedding of E. coli O157:H from the gastrointestinal tract.
Further research demonstrates that E. coli O157:H can survive
in fecal matter in the environment for up to a year. Outbreaks
of this strain have also been associated with drinking
contaminated apple cider, and studies are underway to develop
processes to eliminate it from cider without compromising the
flavor.
--Anti-shattering gene in grain.--Scientists have identified a gene
that eliminates ``shattering,'' or seed loss, of mature grain
crops. Cloning this gene will contribute directly to long-range
improvement in U.S. agriculture by reducing seed losses during
grain harvests. It will also help to accelerate
commercialization of new crops, providing a wider range of
options to agricultural producers by reducing both genetic and
environmental vulnerability of the U.S. food production system.
These are but three samples of agricultural research that mark the
high quality productivity and achievement found in the competitive and
merit-reviewed research programs of the NRICGP. As you can see, these
research projects affect our basic health, our food supply and our
reliance on the safety of the food supply. Many other significant
achievements of NRICGP are not widely known to, or appreciated by, the
public that finances them. It is important that the USDA continue to
expand its efforts in publicizing research accomplishments and to
remind investigators to acknowledge USDA support when reporting their
findings to Congress and the public.
recommendations
NRICGP.--The NRICGP's competitive and highly productive merit-
reviewed research program is vital to the future of U.S. agriculture.
Unfortunately, only 24 percent of applications submitted under this
program can currently be funded. It is in my role as President of FASEB
that I write in support of an increase in funding for USDA's National
Research Initiative Competitive Grants Program from $97 million to $130
million. This is the same level requested in the President's budget.
National Needs Initiatives (NNI).--The NNI, the Graduate Fellowship
Program of the Higher Education Office, and other USDA programs
contribute to the USDA's training mission. The NNI is crucial for the
recruitment, preparation, and training of the next generation of
scientists. Therefore, FASEB specifically recommends that NNI funding
be increased to $4 million in fiscal year 1999. FASEB also believes
that an external review of the NNI would provide useful program
guidance and ensure effective use of the funds in providing graduate
training.
Expanding USDA Office of Competitive Grants.--FASEB endorses
efforts to expand the use of outside review to improve the research
programs at USDA, and further recommends that new funding initiatives
be administered by the USDA Competitive Grants and Awards Management
Unit of CSREES. This would establish a solid, consistent merit-review
process for these programs.
Animal Welfare Act.--Reasonable safeguards on the sale of animals
protect the public and allow the legitimate use of animals in research.
USDA's Animal and Plant Health Inspection Service (APHIS) is charged by
Congress with enforcement of the Animal Welfare Act (AWA). We recommend
that Congress provide the APHIS with adequate funding for enforcement
of the Animal Welfare Act in fiscal year 1999 so that it can continue
to ensure compliance with the AWA.
Mr. Chairman, these are FASEB's recommendations as you and the
Committee begin the task of deciding how best to allocate funding for
the Department of Agriculture, including the research programs of the
NRICGP. We have also made other policy recommendations in our formal
report of the Funding Consensus Conference for fiscal year 1999,
distributed earlier to members of this subcommittee, which we hope you
will review carefully.
In conclusion Mr. Chairman, we believe this is an opportunity to
expand our country's historic effort to improve America's health
through nutrition using all the tools of research scientists.
Agricultural research is the key to the improvements in agriculture
required to feed the world, reduce environmental pollution, increase
food safety and improve nutrition.
______
Prepared Statement of the City of Gainesville, FL
sweetwater branch/paynes prairie stormwater project
On behalf of the City of Gainesville, Florida I appreciate the
opportunity to present this written testimony to you today. The City of
Gainesville is seeking federal funds in the fiscal year 1999
Agriculture Appropriations bull, in order to assist our efforts to
protect the Floridian aquifer from stormwater runoff. In particular, we
are hopeful that the Subcommittee will provide the City with $2 million
through the Fund for Rural America.
In Gainesville, the Sweetwater Branch basin contains approximately
1,710 acres and is located in the southeast central portion of the
City. The outfall from this basin discharges into Paynes Prairie, a
state owned preserve and park system, which eventually flows into the
Alachua Sink, a natural sink hole that drains directly into the
Floridian Aquifer. This Aquifer provides the majority of drinking water
to Florida's a residents and has a direct impact on Florida Everglades.
The Sweetwater Branch drainage basin contains urban, commercial,
industrial, and residential area stormwater runoff. Because the branch
runs through some of the oldest portions of Gainesville, most
stormwater runoff is directly discharged into the Branch with very
little flooding attenuation or pollution loading reduction. The runoff
has the potential to affect threatened and endangered wildlife such as
the Bald Eagle, the Woodstork, the Florida Sandhill Crane, and the
Southeastern American Kestrel. In addition, many domestic water wells
are used to obtain water from surficial and intermediate aquifers in
the area. In summary, the situation has created a concern amongst
environmentalists, business leaders, and concerned citizens throughout
the region that Paynes Prairie and Floridian aquifer are being
compromised.
With this in mind, the City of Gainesville, Alachua County, St.
Johns River Water Management District, Florida Department of
Environmental Protection and local citizens are all seeking a
comprehensive ecosystem management solution to the problem of
stormwater runoff from downtown entering Sweetwater Branch, Paynes
Prairie, and the Alachua Sink. The project devised by these groups
would reduce or eliminate the sediment, debris, nutrients and general
pollutants currently being discharged. Current projections are that the
project would consist of the following three components:
--the purchase of undeveloped property in the vicinity of State Road
331 and Sweetwater Branch;
--the construction of maintainable sediment and debris removal
systems; and
--the construction of maintainable nutrient removal systems.
An in-depth engineering analysis of the creek system, property
topography, associated wetlands, and other pertinent factors is needed
to determine the optimum and appropriate scope of property purchase and
facilities construction. The City is prepared to pay some of the cost
for this analysis, but we are simply unable to bear the entire burden.
As a result, we request that the Subcommittee appropriate $2 million to
assist their efforts. Once the project construction is complete,
Gainesville Stormwater Management Utility, a public utility, would
provide the required annual maintenance for the facility and no federal
maintenance funds would be needed.
This is a critical and much needed project for the City of
Gainesville, as well as the entire State of Florida, and we
respectfully ask the Subcommittee for its consideration of the
Sweetwater Branch/Paynes Prairie Stormwater Project.
______
Prepared Statement of John DeMott, President, Dade Chapter, Florida
Nurserymen and Growers Association
We should most deeply appreciate your thoughtful consideration of
this testimony which we are submitting on behalf of the Tropical Fruit
Growers of South Florida, Inc. and the Miami-Dade County Chapter of the
Florida Nurserymen & Growers Association, Inc. Each of us has attached
a curriculum vitae and a statement of disclosure concerning federal
grants.
We request that the House Committee on Appropriations effectively
address two very important issues, namely (1) to re-establish a program
to introduce tropical plant material, to improve this germplasm and to
disseminate it throughout the United States as appropriate, and (2)
establish a R&D program to combat harmful exotic organisms (initially
focusing on Diaprepes) that threaten both agriculture and natural
ecosystems in south Florida.
re-establish program to introduce, improve and disseminate tropical
plant materials
The introduction of tropical plant material began with the
establishment of the Spanish and English colonies on this continent. In
1790 Thomas Jefferson wrote: ``The greatest service that can be
rendered to any country is to add a useful plant to its culture''. In
order to provide effective institutional leadership for this vital
activity the Congress assigned responsibility for it to the U.S.
Department of Agriculture through the Organic Act of 1862 that created
the Department. In order to implement this mandate on the mainland the
USDA established a number of plant introduction stations. However only
one of these plant introduction stations is essentially frost-free and
suitable for conducting the needed R&D on tropical plants, i.e. the
Subtropical Horticulture Research Station, Miami, Florida.
We are very grateful that the Congress prevented the Agricultural
Research Service from closing the Subtropical Horticulture Research
Station. Unfortunately the ARS no longer employs any of the
horticulturists who previously had introduced tropical plant material
from abroad, and improved and disseminated it. The corresponding
resources were redirected by ARS during the attempted close-out process
to other programs. Thus there is a need for an annually recurring
appropriation of $900,000 to assemble a team of three scientists plus
technicians, field laborers, etc. needed to re-establish the program of
introducing, improving and disseminating ornamental, tropical fruit and
vegetable materials.
The production of horticultural crops in the southern United States
is under severe pressure from NAFTA. Additional developments are in the
offing that will increase such pressures including the development of
additional free-trade agreements with Latin America and other tropical
and subtropical countries and the inevitable democratization of Cuba.
Thus American producers can remain competitive only if they employ
superior technology including better quality and higher yielding
varieties of tropical fruit, vegetable and ornamental crops.
The proposed budget increase request would restore three scientists
years of horticultural research effort. This effort would be focused on
the introduction of frost-sensitive plant material, its improvement and
its dissemination to other US scientists and industry associations.
This along with the plant molecular geneticist would provide a core of
four scientist years of effort devoted to the development of sorely
needed improved tropical fruit, vegetable and ornamental crops. At
$300,000 per scientist year of effort, the total annually recurring
request is $900,000.
The Positions would be as follows:
1. Field Research Leader (Research Horticulturist), one full time
technician (BS or MS), two field hands and one secretary. The Research
Leader would plan and carry out plant explorations and exchanges,
establish plantings, make appropriate crosses and selections, and
oversee the work of the entire Unit.
2. Research Horticulturist/Outreach Specialist, one full time
technician (BS or MS) and 2 field hands. This specialist would
undertake crop improvement research, develop methods of culturing new
plants, organize and conduct field days and other educational events,
propagate and disseminate improved plant materials to research
institutions and to industry associations.
3. Research Horticulturist/Curator of Living Collections, one full
time technician (BS or MS) and two field hands and one clerk typist.
This horticulturist would be responsible for assembling core
collections of living plants, developing methods of cryopreservation
and other methods of storage of living materials, development of
traditional and in vitro methods of propagation, and the preparation
and maintenance of herbarium specimens of significant plant materials.
Also this individual would work cooperatively with the Research
Geneticist to ``finger-print'' plant materials, and to develop
pathogen-free materials for dissemination.
We request that the Congress appropriate $900,000 recurring
annually to the Agricultural Research Service to re-establish the above
program on tropical plant material.
establish a r&d program to combat harmful exotic organisms that
threaten both agriculture and natural ecosystems in south florida with
initial emphasis on diaprepes
With the great increase in travel, trade and influx of refugees
into south Florida in the last three decades the frequency of
introduction of harmful exotic organisms has increased to an alarming
level. This is of great national concern because many of these pests,
diseases, weeds, snails, fish, etc. threaten the fundamental character
of National Parks and Preserves, spread to other parts of the United
States and impose an enormous burden on agricultural production and
marketing in the affected States.
In recent years south Florida served as the gateway to the entry of
the devastating whitefly (Bemisia argentifolli), the insidious melon
thrips, Thrips palm), sixteen whitefly-transmitted gemini viruses,
which cause Bean Golden Mosaic disease, the most recent being the
tomato yellow leaf curl virus. The latter appeared in Homestead in July
1997, has spread to the major tomato growing areas, and is causing
severe losses. Also several scale insects and mealybugs have arrived
recently, and they are extremely damaging to the nursery trade and to
homeowners.
In past decades a number of very harmful organisms penetrated our
quarantines. One of these is the West Indian Sugarcane Rootstock Borer
Weevil, Diaprepes abbreviates. This insect, a native of the Caribbean
and Latin America, has been found in central Florida for several
decades. Losses in citrus production by this exotic pest are estimated
at cat $72 million per year. In 1996 this pest was found in Miami-Dade
County, and it is causing damage to fruit, vegetable and ornamentals
crops which already exceed $1 million per year.
Not surprisingly conditions for the pest are considerably more
favorable in southern Florida than in Central Florida. In south Florida
the subtropical climate allows this pest to reproduce and develop year
round, and its native host plants occur in abundance.
Florida Division of Plant Industry and University of Florida
scientists have collated the pests host records. These show that
Diaprepes attacks 270 species of plants belonging to 157 genera in 59
plant families. Plants that have been shown to support the entire life
cycle from egg through adult to egg include Citrus sp., peanut,
sorghum, guinea corn, corn, Surinam cherry, dragon tree, sweet potato
and sugarcane. Larvae have been shown to feed on 40 plant species in 20
plant families. Host plant associations of concern to Miami-Dade County
residents include mango, Brazilian pepper, Dahoon holly, Chinese holly,
Burford holly, Scheffiera, silver trumpet tree (Tabebuia aurea), Geiger
tree, gumbo limbo, black olive, silver buttonwood, black sapote,
persimmon, live oak, avocado, acacia, orchid tree, Royal poinciana,
Lima bean, bush beans, tamarind, Dracaena rainbow, day-lily crepe-
myrtle, cotton, okra, neem, mahogany, banana, Simpson's stopper, guava,
Areca palm, Phoenix palms, passion fruit, mangrove, loquat, citrus,
carrotwood, longan, caimito, sapodilla, tobacco, eggplant, potato and
lignum-vitae.
Host suitability seems to vary with locality. In Miami-Dade County
carrotwood appears to be a preferred host, but near Vero Beach
carrotwood tends to escape infestation. In Puerto Rico Diaprepes
attacks sweetpotato but ignores it in Florida.
As you know, for about 20 years the Congress has appropriated about
$400,000 per year to the Agricultural Research Service. These funds
support research in central Florida that is conducted by the
Agricultural Research Service and by the University of Florida.
However no funds are ever provided by ARS for research on this
problem in south Florida. The Miami-Dade Chapter of the Florida Nursery
and Growers Association has been providing $20,000 per year to the
University of Florida to conduct research on this problem as it affects
the ornamentals industry in Miami-Dade County. However this level of
funding is not sufficient to mount an effort that is in any way
commensurate to the magnitude and urgency of the need. As you may know,
only limited amounts of the technologies developed against this pest in
central Florida have proven to be suitable for use in southern Florida.
We request that the Congress appropriate $300,000 per year to the
Agricultural Research Service for a cooperative research program on
Diaprepes in south Florida. Only after satisfactory means are available
to cope with this pest should any of the funds be diverted to research
and development on other pest problems affecting southern Florida.
______
Prepared Statement of Dr. Raymond E. Bye, Jr., Associate Vice President
for Research, Florida State University
Thank you, Mr. Chairman, and the Members of the Subcommittee, for
this opportunity to submit testimony. I would like to take a moment to
acquaint you with Florida State University. Located in the state
capital of Tallahassee, we have been a university since 1947; prior to
that, we had a long and proud history as a seminary, a college, and a
women's college. While widely known for our athletics teams, we have a
rapidly emerging reputation as one of the Nation's top public
universities. Having been designated as a Carnegie Research I
University several years ago, Florida State University currently
exceeds $100 million per year in research expenditures. With no
agricultural or medical school, few institutions can boast of that kind
of success. We are strong in both the sciences and the arts. We have
high quality students; we rank in the top 25 among U.S. colleges and
universities in attracting National Merit Scholars. Our scientists and
engineers do excellent research, and they work closely with industry to
commercialize those results. Florida State ranks seventh this year
among all U.S. universities in royalties collected from its patents and
licenses. In short, Florida State University is an exciting and rapidly
changing institution.
The Florida State University appreciates the support this Committee
has provided for agricultural research in the past, and asks for your
support for the President's budget proposals to increase funding for
research, particularly for basic research performed at universities. A
strong national research enterprise requires a balanced portfolio
across the many scientific and engineering disciplines. We have seen,
time and again, how research developments in one field can
revolutionize work in others. Breakthroughs in biotechnology can lead
to new and improved crops and higher crop yields. There are many
examples of research investments paying very practical dividends to all
of our citizens.
Mr. Chairman, let me describe an important project that we are
continuing this year involving agriculture and new ways to look at
climate prediction. It is a major collaborative program, which focuses
on climate variability in the State of Florida and the Southeast (SE)
United States. Objectives include developing new applications and usage
for climate data. The consortium draws upon the expertise of scientists
at FSU (climate analyses and coupled ocean-atmosphere prediction
models), the University of Miami (climate analyses and economic value
of forecasts), and the University of Florida (agriculture) to quantify
climate variability (e.g., the El Nino phenomena) for the SE and to
explore the potential value and practical application of climate
forecasts in agricultural decisions. Based upon these analyses, farmers
will be able to make better-informed planting decisions well in advance
of each season.
During the initial phase of this effort, the FSU team described
qualitatively the impact of El Nino (and the other extreme, La Nina) on
temperature and precipitation patterns across the SE. Additionally,
they found a geographic shift in tornadic activity associated with El
Nino events. A new climate forecast system was created to provide
predictions of seasonal temperatures and precipitation with longer lead
times and improved skill in the testing phase. Improvements are due
partly to the linking of ocean and atmosphere data in the forecast
system. Our colleagues at the University of Florida have identified
several crops in Florida which are vulnerable to shifts in weather
patterns associated with El Nino and La Nina. Such information will be
economically valuable in farming decisions.
Continuing this collaborative work, we hope to estimate the
economic advantages that can be achieved by incorporating climate
forecast information into farming management systems and eventually
work with sector representatives in developing guidance products for
the agricultural community.
We are seeking funding for this effort through USDA's Fund for
Rural America. To make truly worthwhile breakthroughs in improving
efficiencies and allowing for better and more economical decisions,
farmers must have the best thinking and access to the newest approaches
available. This utilization of climate data for agricultural purposes
should be an example of supporting the best ideas through the Fund for
Rural America. Our request of $600,000 for two years will pay
substantial returns to the American farmer and to the public. Thank you
for your support.
______
Prepared Statement of the Friends of Agricultural Research--Beltsville,
Inc.
Mr. Chairman, and Members of the Subcommittee, thank you for the
opportunity to present this statement in support of funding for
agricultural research. We are requesting your support for programs of
the Agricultural Research Service (ARS) and its world renowned
Beltsville Agricultural Research Center (BARC) in Maryland.
The Friends of Agricultural Research--Beltsville (FAR-B) is a
private non-profit corporation dedicated to supporting and promoting
agricultural research, especially the ARS research programs at
Beltsville. FAR-B provides supplementary private funds for both
research and education programs. The Friends co-sponsor symposia and
conferences on topics of current scientific interest. Funds are
provided to co-host important international scientists who visit
Beltsville each year in order to discuss cooperative programs and
exchange scientific information. This public/private partnership
promotes excellence, helps to ensure that useful new BARC technology is
put into practice, and is supportive of the mission of the Agency.
The agricultural enterprise with asset of over $900 billion is one
of the major sectors of the U.S. economy. Employment in the food and
fiber sector generates 23 million jobs, representing about 18 percent
of the civilian jobs in the U.S. economy. The demand for food and fiber
products annually generates almost $1 trillion in Gross Domestic
Product, about 16 percent of the Nation's GDP. U.S. exports of
agricultural products rose to $60 billion in 1996. Of the 11 major U.S.
industrial sectors, agriculture generated the largest trade surplus of
$27.5 billion in 1996.
The outstanding performance of the agricultural industry and the
unprecedented gains in agricultural productivity over this century can
be attributed in large measure to the dynamic research and development
system in this Nation. Agricultural scientists and engineers have
contributed a continuing stream of new knowledge, technological
innovations, and new products to undergird the U.S. agricultural
enterprise. Public investments in agricultural research have been
critical to these gains. Economic studies show that such investments
yield substantial returns on the order of 30 to 40 percent. These are
sound investments. Future support for agricultural research will be
critical to the economic prosperity of our Nation and the well-being of
society.
The Agricultural Research Service is the principal inhouse research
agency of the U.S. Department of Agriculture. It has a lead role in
solving high-priority problems of broad national significance. The
Beltsville Agricultural Research Center is one of the major research
facilities within ARS; it is among the largest and most diversified
agricultural research complexes in the world.
beltsville
The Beltsville Agricultural Research Center was established in
Maryland in 1910. It has a long and distinguished history of
outstanding contributions to scientific discovery. Although it is most
popularly known for developing the Small White Beltsville turkey which
graces consumers' tables each Thanksgiving, BARC's contributions are
much more extensive and profound. Beltsville scientists identified and
supplied plant breeding centers around the world with disease-resistant
wheat that ultimately led to the Green Revolution. Genetic concepts
that became the foundation for modern plant and animal breeding were
developed at BARC. Beltsville discovered the photoreceptor that
regulates the growth and development of plants. A BARC scientist
discovered an entirely new class of viruslike pathogens--viroids--which
opened new avenues to understanding and controlling diseases of plants,
animals, and humans. The first naturally occurring beneficial fungus
approved by the Environmental Protection Agency for the biocontrol of
plant diseases was developed at Beltsville. Chemists and entomologists
have pioneered the discovery and synthesis of a number of attractants
(pheromones) essential for trapping and surveying insect populations
for integrated pest management programs. Human nutrition scientists at
Beltsville demonstrated that decreasing animal fat and increasing the
proportion of fat from vegetable sources significantly reduces blood
pressure, thus reducing the risk of cardiovascular disease.
Beltsville is a comprehensive research center with a wide variety
of disciplines addressing diverse programs of great breath and scope.
The ARS staff at Beltsville totals about 1,500, including over 300
scientists. Programs are designed to systematically address the highest
priority concerns of the Department, including food safety and human
nutrition, natural resources and environmental quality, emerging
diseases and exotic pests, genetic resources, climate change,
integrated pest management, and sustainable farming systems. Research
ranges from very basic experiments in plant and animal molecular
genetics, physiology and chemistry to applied research in new
instrumentation, germplasm databases and integrated systems.
The Beltsville complex is the repository for a number of unique
national scientific assets. Among these are important research
collections: the National Fungus Collection, the National Parasite
Collection, the USDA Nematode Collection, and other outstanding
collections of insects, seeds, nitrogen-fixing bacteria, and plants.
These collections are essential in identifying and assigning names to
specimens and organisms, a crucial first step to reliable research and
to effective control measures, especially for alien pests. The
Beltsville Human Nutrition Center is home to the National Nutrient Data
Bank, i.e., the database of the nutrient content of foods which is the
foundation for food consumption tables throughout the world. The Center
also has a staff responsible for the National Food Consumption Survey
and the Continuing Survey of Food Intakes by Individuals, unique in
understanding long-term dietary trends in the U.S. population. The
world renowned National Agricultural Library is also located on the
grounds of BARC.
modernization of facilities
A General Accounting Office Report a few years ago found widespread
problems with aging Federal research facilities around the country. The
findings indicated that a massive overhaul of these facilities,
especially those built over 50 years ago, was needed.
Modernization of the facilities at Beltsville began in 1988. A
systematic plan was developed to guide the modernization. USDA, the
Office of Management and Budget, this Committee, and the Congress have
been generous in providing annual support to upgrade and modernize
BARC. House of Representatives Report No. 99-211 included the following
language: ``The Committee will expect to be kept fully advised as the
Department works to restore and upgrade the Beltsville Agricultural
Research Center.'' (p. 31)
Significant progress has been made in improving the facilities at
Beltsville. Six major buildings have been modernized; a greenhouse
complex has been renovated; a new dairy facility and composting
research facility have been completed; and a new waste water treatment
plant is now in operation. The infrastructure, including water lines
and electrical service have been significantly upgraded.
The highest priority at Beltsville is funding to upgrade the
facilities for the Beltsville Human Nutrition Research Center (BHNRC).
Human nutrition research is a high priority within ARS and the
Department. The link between diet and health is intriguing. Important
breakthroughs have been made during this century. Many debilitating
diseases such as pellagra, pernicious anemia, rickets, and scurvy have
been eliminated as a result of research in human nutrition. The focus
now has shifted from prevention of nutrient deficiencies to health
maintenance and reduced risks of chronic illnesses, such as coronary
heart disease, cancer, and diabetes.
The Beltsville Human Nutrition Research Center is the first of six
such centers established in ARS. BHNRC programs focus on nutrient
composition, nutritional quality, nutritional requirements, nutrient
interactions, energy metabolism, and dietary strategies to delay the
onset of nutrition-related chronic diseases. The National Food
Consumption Survey also is an essential part of this program. For over
30 years, BHNRC scientists have had an uninterrupted input into the
establishment of the Federal government's Recommended Daily Allowance
(RDA) for dietary intake by the U.S. population. The broad indepth
scientific knowledge base at Beltsville plays a vital role in the
creation of these highly regarded guidelines for enhanced public
health. The Beltsville staff has close associations with the National
Institutes of Health, especially the National Heart, Lung, and Blood
Institute, and the National Cancer Institute.
The ARS budget proposes a number of thrusts that would complement
the BHNRC projects. Among these are proposals to upgrade the National
Nutrient Data Bank that is so important to understanding the food
choices necessary for a healthy diet. Also, support for research on
nutrient-gene interactions, with special emphasis on the role of
phytonutrients, is proposed.
The human nutrition research facilities at Beltsville are among the
oldest in the Department and are, thus, in the greatest need of
overhaul. This Committee provided funding for the planning and design
of new BHNRC facilities. The design is underway; funding is needed to
complete construction in a timely manner. Costs for the new facility in
fiscal year 1999 are estimated at $17 million for construction.
The proposed budget includes funding in the amount of $2.5 million,
primarily for a new poultry production facility. The purpose of this
facility is to brood and grow turkey toms and hens, and provide breeder
space for different strains of turkeys with a view toward healthier and
more efficient production of a commodity destined for human
consumption. This proposal is consistent with the long-range plan for
upgrading the Beltsville complex.
other current and emerging issues
A wide range of important issues confronts American agriculture and
is of concern to the public. Two are of particular interest.
Pfisteria outbreaks in the Mid-Atlantic coastal tributaries and
estuaries have become a major issue. Recent incidents in the Chesapeake
Bay tributaries have focused public attention on the potential role of
agricultural nutrients in the degradation of the waters. ARS scientists
at Beltsville are working with colleagues at the Federal and State
levels to develop management practices that farmers could adopt to
reduce the movement of nutrients and pathogens to surface and ground
water. A nitrogen soil test has been developed to help minimize
excessive applications of nitrogen. New sustainable cropping systems
which reduce nutrient and pesticide leaching and surface loss by runoff
are being evaluated. Improved methods for handling, composting, and
disposing of manure from farms are being developed. And, remote sensing
technology is being investigated as a cost-effective may of monitoring
changes in the natural ecosystems over time and across large geographic
areas. Approval of the fiscal year 1999 budget proposals would allow a
stronger research program in this critical area.
Food safety and quality are of paramount importance to the public.
Despite the fact that the U.S. food supply is the safest in the world,
thousands of Americans are stricken annually by illnesses caused by the
food they consume. Consumers need to be assured of the safety of their
food supply to prevent disruptions of normal healthy eating patterns.
Beltsville scientists are widely involved in food safety research. New
and improved analytical procedures for detecting antibiotic residues in
meat and milk were developed at BARC. Industry, the Food and Drug
Administration, and USDA's Food Safety and Inspection Service are now
using these methods. BARC engineers are developing sensors and imaging
technology for rapid inspection of poultry carcasses online during
processing. Diagnostic tests and fundamental information on livestock
parasites of human health significance are being researched, especially
zoonotic diseases such as trichinosis, toxoplasmosis, and
cryptosporidisis. In recent years, increased attention is being given
to the safety of fresh fruits and vegetables, which are so essential to
a healthy diet. The Beltsville Symposium in Agricultural Research in
May 1998 will bring together leading world experts to review the most
recent advances in the science related to the safety and quality of
fresh fruits and vegetables. The proposed budget would give a boost to
this initiative.
Mr. Chairman, FAR-B thanks you and the Committee for your interest,
leadership, and generous support of ARS and the Beltsville Agricultural
Research Center. We recognize that finding funds for Federal
agricultural research programs and facilities is a difficult challenge
no matter how important the work is to the health, safety, prosperity,
and well being of the Nation. This Committee has met that challenge
over the years, and we encourage your continued efforts. We look
forward to working with you in any way you may desire to serve the
interests of American agriculture.
______
Prepared Statement of Larry Bohlen, D.C. Issues Coordinator, Friends of
the Earth
support for fda consolidation at an urban, metro accessible site
Friends of the Earth is taking an increasing interest in protecting
the urban core and inner suburbs of cities across America. Existing
communities are worthy of protection. In addition, making sure that
existing communities are safe and economically viable places to live is
one of the surest ways to protect undeveloped farms and forests from
falling to haphazard sprawl development.
Moves of Federal jobs outside the D.C. beltway are detrimental to
the health of the District and the inner suburbs of D.C. A currently
proposed move of the Food and Drug Administration to White Oak,
Maryland would threaten the economic viability of areas inside the
Beltway.
To address these issues, we propose that you:
(1) Initiate a study of consolidating the FDA within a half mile of
a Metro-accessible site, such as the Southeast Federal Center in the
District of Columbia. We suggest that at least $4 million be
appropriated in fiscal year 1999 to conduct such a study.
(2) Observe federal Executive Order 13006 directing the location of
federal facilities in urban centers.
Consolidation of the FDA at the Southeast Federal Center has
several advantages:
--it is adjacent to the Navy Yard Metro;
--it is only one mile from the Dept. Of Health and Human Services,
FDA's parent agency;
--it is owned by the federal government and controlled by GSA;
--it has more than adequate floor space for FDA's site plan and is
currently underutilized;
--the Southeast Federal Center site has no funds appropriated for its
redevelopment; and
--it is in an area of D.C. urgently in need of revitalization.
In comparison, siting of the FDA in White Oak, Maryland, as
proposed, has several disadvantages:
--it is 3 miles from the nearest Metro station and has very limited
bus service;
--it is in a low-density sprawling neighborhood outside the
Washington beltway, not in an urban center as directed by
Executive Order 13006;
--it is 10 miles from other FDA facilities that would not consolidate
in White Oak, raising the question of just what kind of
benefits is consolidation bringing; and
--it would involve development of undeveloped wooded areas near a
stream on the White Oak site whereas the Southeast Federal
Center is already paved.
Your consideration of this matter is greatly appreciated.
______
Prepared Statement of R. Lawrence Coughlin, President, Friends of the
National Arboretum
Mr. Chairman and Members of the Subcommittee, as President of
Friends of the U.S. National Arboretum (FONA), I am grateful for this
opportunity to present testimony in support of FONA's request for
additional funding of $300,000 in fiscal year 1999 for the Gardens Unit
of your U.S. National Arboretum.
This funding is urgently needed to strengthen the Gardens Unit in
anticipation of the new master plan for the National Arboretum which is
being prepared under contract with the renowned landscape architectural
firm of Environmental Planning & Design.
The Gardens Unit is presently the most understaffed of all of the
National Arboretum's Units. Yet it is central to the purpose of the
National Arboretum. There has been a continued loss of permanent staff
positions in the Gardens Unit and an increase in temporary staff in
order to conform to imposed budget limitations. At the same time, new
facilities have been added with public and private support including
The National Bonsai and Penjing Museum and the National Grove of State
Trees, educational outreach has been increased and greater levels of
public visitation have occurred.
An addition of $300,000 to the Gardens Unit in fiscal year 1999
would provide four urgently needed new staff positions and, most
important, allow stabilization of the staffing base in the Unit. It is
currently experiencing a high turnover level because it cannot offer
permanent positions to technically qualified and trained people.
Attached as Exhibit I is a more detailed description requested by FONA
and prepared by National Arboretum staff.
Mr. Chairman, FONA has been working with your National Arboretum
staff, the Agricultural Research Service and the Department of
Agriculture on a new Master Plan for the National Arboretum. FONA's
objective has been to modernize the Arboretum into the millennium, to
adapt it to 21st century technology and to make it a horticultural
educational attraction in accordance with its Congressional mandate and
worthy of the term ``National Arboretum.''
In its initial review, Environmental Planning and Design found that
the National Arboretum was an outstanding pure research facility but
was not very user friendly. Visitors sought more plant and gardening
information. In short, from a visitor standpoint the National Arboretum
is more a very nice park than an arboretum, and it is not adequately
fulfilling its Congressionally mandated mission as a premier facility
for horticultural education.
The new Master Plan is moving forward and will address such current
practical needs as a new entrance, improved traffic flow and better
facilities for visitor parking. Hopefully the vision will also identify
educational needs such as an orientation center, automated train tours,
and interactive exhibits in the display gardens. Your National
Arboretum should be a horticultural education attraction in Washington
that excites interest in earth sciences.
Mr. Chairman, the $100,000 provided to the Arboretum in fiscal year
1998 for the Integrated Pest Management Program (IPM) has added a
permanent technician and a second non-permanent technician to the
Arboretum's highly successful IPM program. This stabilization of staff
has allowed the National Arboretum to increase research and transfer
knowledge to the landscape industry and the public as well as create
partnerships with Federal, local and private institutions.
Your Subcommittee should be proud that thanks to your support the
National Arboretum is serving as a model for IPM in the urban
landscape. It is also part of a major effort to reduce nutrient loading
in the Anacostia River and the Chesapeake Bay.
The National Arboretum's request for $300,000 for the Gardens Unit
in fiscal year 1999 is also consistent with last year's unfunded
request to expand germplasm acquisition and maintenance. The Gardens
Unit is responsible for the maintenance of extensive germplasm of
species and cultivars of trees and shrubs from throughout the world.
Expanding the germplasm collection improves the overall care of
existing plants.
Mr. Chairman, FONA is most appreciative of your efforts and those
of your Subcommittee on behalf of your National Arboretum. As always,
FONA looks forward to working with you on behalf of horticultural
research and education.
[exhibit i]
gardens unit program concerns
The work of the Gardens Unit is very labor intensive and highly
visible. The Unit staff are responsible for maintaining the display
gardens, collections, and natural areas on the U.S. National
Arboretum's 444-acre District of Columbia campus. With visitation
increasing each year, greater numbers of customers are reaping benefits
from the display gardens and collections. While the Gardens Unit
welcomes this increased interest, it must be recognized that this
escalates the pressure on the Unit to not only maintain the current
level of quality and service, but also to meet ever higher standard for
garden display and information retrieval.
gardens unit staffing priorities
Priority 1
The responsibility of running the horticultural activities at the
greenhouse area is currently shared among the curators, gardeners,
researchers, and facilities managers. The effort could become more
efficient if a single person was added to the staff to assume
responsibility for the day-to-day operations of the greenhouse complex.
Efforts are currently underway to document the needs for the daily
running of the facility. This adjustment was recommended by the team of
outside reviewers who undertook a 5-year review of the Gardens Unit
Program in February 1997. ($50,000)
Priority 2
The Arboretum possesses a distinctive collection of Asian plant
material which is an important source of germplasm for research and an
integral part of the USNA's educational programming. Though the
collection was once under the jurisdiction of a single curator,
monetary constraints compelled the Unit to reassign this area to a
curator with many other responsibilities. If the Asian area is to
remain an integral and viable part of the Arboretum's research and
educational programs, it is essential that additional funds be obtained
for a full-time curator to oversee this significant collection.
Preliminary data from the ongoing USNA Visitor Study indicates that the
Asian Collections is the third most visited display area on the grounds
(after the Bonsai Museum and the Herb Garden.) This is significant
because the collection is located at the furthest point on the grounds
from where visitors obtain information when entering the USNA. This
action was recommended by the team of outside reviewers who undertook a
5-year review of the Gardens Unit Program in February 1997. ($60,000)
Priority 3
The expansion of the Bonsai Museum provides an opportunity to
generate a range of new programs for both occasional visitors as well
as the serious bonsai scholar. The Education and Visitors Services Unit
is doing all that it can to meet this need. Still, it is imperative
that a museum specialist with expertise in the garden art of Bonsai be
hired to develop and implement programming in this unique facility. The
priceless value of this collection requires that the Museum be staffed
seven days a week, which requires additional staff to cover the weekend
hours, which also coincide with the highest levels of visitation.
Preliminary data from the ongoing USNA Visitor Study indicates that the
Museum is the most frequently visited area on the grounds. ($50,000)
Priority 4
The Plant Record Office, while funded by the Gardens Unit, serves
all Units of the Arboretum. The Office provides leadership in the
implementation, operation, and expansion of the accessioning, labeling,
mapping, and documentation activities of the living plant collections.
It also develops and maintains the Arboretum's computerized database of
plant holdings. Concerted effort is being made to input the backlog of
record data in the database. An increased effort would enable the
generation of computerized reports which would serve as tools to the
managers of the living collections. In addition, mapping of the gardens
and collections is an essential aspect of the Gardens Unit mission, yet
this cannot be done with current staff. ($35,000)
Priority 5
The stabilization of the staffing base is a great concern of the
Gardens Unit. At present time, six of the nine gardener positions
(Agricultural Science Research Technicians) are held by temporary
employees. Regular turnover of personnel severely limits the
effectiveness of garden and collection care and curtails program
development from year to year. It diverts curatorial attention from
legitimate collection concerns to personnel matters as an inordinate
amount of time is spent in the recruiting/hiring process and in
retraining new gardeners. At a minimum, each garden and program area
should have at least one permanent gardener position to assure
continuity of care in the collections. This would require providing
additional base funding to convert five of the six temporary positions
to permanent positions. ($25,000)
Additionally, the Gardens Unit's need for administrative and
facilities programmatic support services (i.e., computer support and
engineering and construction support services) have exceeded the Unit's
available funding. An additional $50,000 is required to fund these
needs. Finally, all programmatic increases are assessed to fund Agency
administrative and support initiatives. This amounts to $30,000.
Summary of Funding Needs
Greenhouse Manager............................................ $50,000
Asian Curator................................................. 60,000
Bonsai Museum Assistant....................................... 50,000
Plant Records Assistant....................................... 35,000
Permanent Gardeners........................................... 25,000
--------------------------------------------------------------
____________________________________________________
Subtotal................................................ 220,000
Garden Unit Support Services.................................. 50,000
Agency Support Services....................................... 30,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 300,000
Total is based on projected personnel costs over the next 5 years.
______
Prepared Statement of Father William L. George, S.J. and Father T.
Byron Collins, S.J., Assistants to the President, Georgetown University
Mr. Chairman and Members of the Committee: We are Father William L.
George, S.J. and Father T. Byron Collins, S.J., Assistants to the
President of Georgetown University, the Reverend Leo J. O'Donovan, S.J.
We appreciate the opportunity to submit this testimony to the
Subcommittee on the development of the Natural Medications Research
Consortium Program.
natural medications research consortium (nmrc)
The Senate Committee on Agriculture, Nutrition and Forestry and the
Appropriations Subcommittee on Agriculture, Rural Development and
Related Agencies have expressed interest in the development of new farm
products to improve the health of the citizens of the United States. We
are requesting an appropriation of $6 million for fiscal year 1999 for
a consortium of the University of Mississippi, Georgetown University
and the McKennan Health Systems in Sioux Falls, SD.
For centuries humans have utilized the products of nature to
maintain health and treat disease. Many of the earliest known herbal
remedies and other natural products are still used today and are
becoming an ever more important part of the treatment of patients with
illnesses. It is estimated that for these products today, Americans
spend over $14 billion, and it is a rapidly increasing portion of the
$60 billion spent on all medications. Until recently, none of these
treatments had been evaluated using rigorous modern testing methods to
determine their safety or efficacy. Basic questions of stability and
reproducibility of the content of the various formulations have made it
difficult to assess the potential medical value of these products. The
lack of patent protection for these products has been a disincentive
for the pharmaceutical industry to assume a leadership role in this
potentially valuable field of research. Although the National
Institutes of Health has established an Institute for Alternative
Medicines, it has only been able to support a few clinical trials.
Concern about the safety of these products is appropriate considering
the previous deaths and serious side effects observed with products
such as ma huang, which contains the cardiac stimulant ephedrine,
comfrey tea, which causes liver damage, and tryptophan, which had a
contaminant that caused serious muscle damage and deaths.
In order to protect and serve the public, there is a critical need
for the creation of a consortium with the resources and expertise in
three major areas represented by the members of the consortium. They
are; cultivating the herbs and plants that contain potential remedies
by the University of Mississippi, analysis, evaluation and clinical
testing by Georgetown University, and the optimal clinical resources
necessary to evaluate these products in humans offered by McKennan
Health System in South Dakota.
An important component of such an evaluation is the ready access to
enroll patient populations that have the biologic, racial and ethnic
diversity truly representative of the American population. Georgetown
University and the University of Mississippi have expertise required to
perform the needed product formulation and testing of these natural
products. McKennan Health Systems in Sioux Falls, SD has the expertise
in Native American natural product remedies and a clinical program
essential for access to the diversity of populations needed for such
clinical trials. The results would be made available to the Department
of Agriculture to assist in the development of new crops and the public
for more informed use of these natural products. We are requesting
appropriation of $6 million for fiscal year 1999 to conduct a
demonstration program for the testing and scientific evaluation of
treatments from natural products.
______
Prepared Statement of the Grocery Manufacturers of America
GMA appreciates the opportunity to submit testimony on the
President's fiscal year 1999 budget with regards to proposed food user
fees and the food safety initiative. GMA is the world's largest
association of food, beverage and consumer brand companies. With U.S.
sales of more than $430 billion, GMA members employ more than 2.5
million workers in all 50 states. The organization applies legal,
scientific and political expertise from its member companies to vital
food and public policy issues affecting the industry. Led by a board of
44 Chief Executive Officers, GMA speaks for food and consumer brand
manufacturers at the state, federal and international levels on
legislative and regulatory issues. The association also leads efforts
to increase productivity and efficiency in the food industry.
user fees
GMA opposes the President's fiscal year 1999 user fee proposals on
the food industry for the following reasons:
1. User fees imposed on the food industry are bad public policy.
User fees, by definition, are intended to reimburse agencies for
specific private benefits they provide to identifiable companies. The
availability of a safe, plentiful, and affordable food supply, however,
benefits the public generally. Consequently, regulatory activities such
as post-market surveillance and inspection should be paid by public
funds and not user fees. As Congress itself has repeatedly pointed out
in previous years, these regulatory activities are designed to protect
the public health and should not be funded by new taxes on the
regulated industries.
2. User fees are essentially a regressive tax on food products.
Imposition of user fees, in effect, would constitute an inappropriate
tax on products essential to the health and well-being of the American
public. Although user fees would be paid by food companies, the
ultimate cost would be born by consumers.
3. FDA principally regulates food by taking regulatory action
against adulterated and misbranded products, and is largely dedicated
to enforcement activities which benefit the public at large. These
activities are properly funded out of general revenues.
4. Unlike new drugs, food manufacturers may change product formulas
frequently, thus creating ``new'' products all the time. A user fee for
food products would therefore be a virtual impossibility.
5. The only type of food product for which any form of FDA
premarket approval is required is for individual food additives. An
average of one petition is filed every year for a new direct food
additive.
background
In 1947, Congress actually enacted a user fee for meat inspection,
which was subsequently repealed the following year because of public
outcry that government programs should be funded by public dollars. In
1971, the General Accounting Office published a report recommending
that fees be imposed for new drug applications. FDA opposed user fees
at that time, on the grounds that regulation benefits the entire public
and not just individual companies. Although Congress and FDA
subsequently have debated the merits of user fees, the notion of
imposing user fees to finance FDA regulation of food products had never
been proposed by the Administration until only a few years ago.
GMA has always supported a strong, focused and effective FDA. In
the last few years, Congress has enacted legislation giving FDA new
authority in areas such as nutrition labeling, prescription drugs,
medical devices and generic drugs, adding to the agency's already broad
mandate. Unfortunately, additional adequate resources have not been
provided.
Shifting the costs of these programs to the regulated industry,
however, is not in the public interest and would constitute an
inappropriate and regressive tax on the food industry ultimately borne
by consumers. In practical effect, these user fees proposed in the
fiscal year 1999 budget would constitute a federal sales tax on food
products, which would ultimately be passed on to the consumer.
User fees by definition are intended to reimburse agencies for the
particular benefits they provide to regulated companies. The courts
have already determined the definition of a user fee. More than two
decades ago, the Supreme Court held that the imposition of user fees on
regulated companies for benefits enjoyed by the general public is
nothing more than a tax on industry (National Cable Television
Association v. United States, 415 U.S. 336, 340-341 (1974).
the president's food safety initiative
GMA applauds the Clinton Administration's efforts to enhance the
nation's food safety system. We have always supported adequate funding
for FDA, USDA and other food safety agencies. We are pleased to see an
emphasis on food safety education, risk assessment and research.
Without proper research behind inspections, there is a risk that
regulators won't be able to keep pace with the science involved in food
safety decisions for today's food manufacturing processes. An effective
and credible science-based standards and inspection system combined
with food manufacturers' own safety assessment programs, will provide
consumers with the greatest assurance that their food is safe.
Unfortunately, the fiscal year 1999's proposed user fees will only
leave vital FDA functions starved for resources.
conclusion
In conclusion, GMA opposes any efforts to extend the user fee
concept to the food industry. As we've written in letters to Members of
this Committee, GMA remains committed to a strong FDA and USDA.
Congress should, however, provide funding to meet its statutory
commitments to protect the public health. Although GMA appreciates the
efforts of the Administration to provide targeted funding for food
safety efforts, food safety is a fundamental regulatory/enforcement
mission of FDA and it benefits the public at large, not individual food
manufacturers. Congress has repeatedly rejected the idea of new taxes
disguised as user fees and we ask them to do so again.
______
Prepared Statement of the Health Industry Manufacturers Association
introduction and summary
This testimony is submitted on behalf of the Health Industry
Manufacturers Association (HIMA) and the more than 800 manufacturers we
represent. HIMA is the largest medical technology trade association in
the world. Our members manufacture nearly 90 percent of the $55 billion
of health care technology products purchased annually in the United
States and more than 50 percent of the $130 billion purchased annually
around the world. We welcome the opportunity to comment on issues
surrounding FDA's funding for the next fiscal year.
We wish to highlight several key issues:
--Enactment of landmark legislation--the ``Food and Drug
Modernization Act of 1997'' (the ``Act'')--has created
opportunities as well as challenges affecting resources for the
Agency.
--Implementation of the Act will be a key priority for both the
Agency and the industry this year and next. Additional
activities necessitated by implementation may strain Agency
resources.
--We continue to advocate stable funding for the Agency. We believe
that all Agency programs should be held harmless from any
funding reductions. New important initiatives such as tobacco
regulation and food safety should carry with them additional
funding appropriate to carry out the intent of Congress and not
dilute other important functions of the Agency.
--We applaud the efforts of the Subcommittee to hold FDA to a greater
standard of accountability for allocation of resources within
the Agency. We urge continuation of efforts to ensure that
taxpayer dollars are spent wisely and fairly.
--Finally, we believe the Administration's user fee proposal for the
medical device program masks dangerous cuts in FDA's budget
authority that could undermine the efforts of Agency personnel
to perform their essential functions of protecting and
promoting the public health. We strongly oppose user fees for
the medical device industry.
fda performance and the ``modernization act of 1997''
Last fall, the Congress achieved a remarkable milestone in the
history of regulation of the device industry: it enacted the ``Food and
Drug Modernization Act of 1997.'' An enormous amount of bipartisan
effort went into passage of this legislation, much of which was
presaged by activities encouraged by members of this Subcommittee for
years. Without the leadership exercised by this Subcommittee in
conjunction with the Senate Labor and Human Resources Committee, this
legislation may have never seen the light of day. We thank you for your
efforts.
The victory ultimately rests with those patients who stand to
benefit from the wonders of modern medical technology. The efforts of
this Congress have helped to assure a promising future for continued
innovation directly targeted to improving patient health and saving
lives. As the new law makes explicitly clear, FDA's mission is to
``promote the public health by promptly and efficiently reviewing
clinical research and taking appropriate action on the marketing of
regulated products in a timely manner.'' (Public Law 105-115, Section
406)
In enacting the new law, Congress recognized that the Agency was
simply taking too much time to review products. Overwhelming evidence
was presented that painted a bleak picture of patients being deprived
of access to life-saving, life-enhancing medical products, Americans
traveling overseas for medical procedures, U.S. companies relocating
their research and development and clinical trial arms outside of the
country, and the threat of increasing losses of our scientific
infrastructure. With the new legislation, Congress has signaled the
beginning of a new era in the regulation of medical devices--one marked
by (1) reduced regulatory burden, (2) increased efficiency, and (3)
greater focus on the patient.
We know too well, however, that simply enacting a law does not
translate into an immediate fix. Implementation of the new law will not
happen overnight; nor will it happen without the expenditure of Agency
staff time and resources to carry out the intent of Congress. And, our
concern is that all the gains we achieved with enactment of this new
legislation will be for naught without thoughtful implementation by the
Agency, informed by industry where appropriate, and overseen by the
Congress that created the law.
From an appropriations perspective, the new law contains both
resource-saving and resource-consuming provisions. The former include
concepts such as exempting lower risk devices from the product
clearance process (510(k)) and relying more heavily on the use of
national and international consensus standards to provide a more
uniform and predictable review process. The latter include new
requirements for interactive meetings between industry and the FDA to
enable earlier agreements on what is needed to get a product onto the
market; another involves the review, analysis, and the potential
recognition of a portion of approximately 30,000 national and
international consensus standards applicable to the medical device
industry. If FDA is to become a standards-based organization, as it has
avowed, it must devote resources to this initiative.
While we expect the Agency to expend resources to prepare guidance
documents, internal operating procedures, regulations, and other
implementing documents, we are also concerned that resources may be
redirected away from primary review functions thus resulting in
increased review times, negating all of our hard-fought gains.
That being said, however, we have been pleased with the recent
enhanced performance of the Center for Devices and Radiological Health.
Even before the enactment of FDAMA, the center aggressively sought to
dig itself out of the mounds of backlogged 510(k)'s and PMA's of
several years ago through a series of effective management initiatives.
Their efforts have paid off. The time to review 510(k)'s has
substantially improved, and PMA's are being reviewed in a more timely
manner as well. One indicator that the climate for innovation has
improved is that the number of PMA's filed has increased from 39 in
fiscal year 1995 to 63 in fiscal year 1997.
The leadership and management initiatives so apparent at the center
today are reflections of what the manufacturing sector of our economy
has undergone in order to regain America's competitive edge and make us
the most productive country in the world. It is only fitting that our
government should embrace the same disciplines so key to successful
companies. As we said in our testimony last year, ``We believe the
record shows that entrepreneurial thinking and innovative management
are the commodities the Agency needs and that improvement in
performance are more a question of intent than of increased
appropriations.''
Consequently, for the past several years, we have supported level
funding for the Agency on the basis that Agency management improvements
can substitute for increased staff and resources. However, now the
center is faced with a potentially devastating reduction in funding--
one that we strongly oppose.
At this point, let me state how difficult it is to sort out the
labyrinthian budget documents to ascertain actual levels of funding,
particularly for the review functions of the center. We applaud your
efforts to hold the Food and Drug Administration to higher standards of
accountability for the allocation within the Agency of taxpayer
dollars. The directive in last year's conference report requiring ``a
detailed operating plan for fiscal year 1998 . . . no later than 30
days after enactment of this Appropriations Act'' was an important step
in making sense out of the financial management of this key government
function.
We were dismayed by the FDA operating plan for fiscal year 1998. It
was untimely and hardly responsive to the level of detail required by
the appropriators. We support your continued efforts to spur greater
accountability and responsiveness from FDA.
Our understanding of the President's budget documents is that the
level of direct appropriations (not inclusive of user fees) for
``Device and radiological products'' was $147 million in fiscal year
1997, is estimated at $142 million in fiscal year 1998, and is proposed
to be $103 million in fiscal year 1999. In addition, the fiscal year
1999 budget proposes $39 million in ``non-additive'' user fees--user
fees intended to substitute for, not add to, Agency appropriations
(unlike the Prescription Drug User Fee Program which was structured to
collect fees on top of appropriations in order to enhance Agency
performance).
We are very concerned about this situation. While the fiscal year
1998 reduction appears arbitrary and unnecessary, the fiscal year 1999
proposed budget level could devastate the device program at FDA. This
is at least the fourth year the Administration has proposed user fees
for the device industry. We urge you, as you have in the past, to rule
out user fees for the device industry.
It is important to note that the Administration's proposal to
reduce the level of funding to $142 million for fiscal year 1998 from
the fiscal year 1997 level of $147 million represents a reduction of
3.4 percent. The $103 million level proposed for fiscal year 1999
represents a reduction of 26.5 percent from fiscal year 1997 funding.
In CDRH, where the bulk of the budget is for salaries, reductions of
the type being proposed necessarily mean sizable reductions in staff
positions.
While we have every confidence that the leadership of CDRH will
continue to find ways to work smarter and more efficiently--especially
with the new tools provided in FDAMA, there is a limit to how many
staff positions can be reduced without consequences. Core functions
required to be performed by law within specific statutory time frames
and in accordance with clear Congressional intent may not be doable
with a ``skeleton'' staff. Such a result would be especially ironic
considering that one of the main ``drivers'' of FDAMA was a desire on
the part of legislators to reduce review times to speed up the delivery
of important new technology to patients.
If we look at the recent appropriations levels for the entire FDA,
the amount of taxpayer dollars funding salaries and expenses for the
Agency--without user fees--is as follows: Fiscal year 1997--
$819,971,000; fiscal year 1998--$857,501,000. The fiscal year 1998
direct appropriation level represents a 4.57 percent increase over the
fiscal year 1997 level. During that same time, the device program
suffered a reduction of 3.4 percent. While we understand Congressional
interest in funding new initiatives such as tobacco and food safety, we
also believe it is important for there to be sufficient appropriations
to ensure the performance of statutorily mandated functions. If tobacco
regulation and food safety are priorities, Congress should provide
separate funding for those initiatives, not require the Agency to
reduce funding for functions that are required by law.
Accordingly, we urge the Subcommittee to enact an appropriations
level for fiscal year 1999 that will provide device program funding at
the fiscal year 1997 level of $147 million.
summary of funding recommendations
This Subcommittee has done an excellent job over the years in
encouraging the Agency to adopt administrative reforms. And, your
support was key to the enactment of FDAMA last year. But we cannot rest
on our laurels. In the spirit of continuing improvements to this key
federal regulatory program--so important to the public health--we offer
the following specific suggestions for funding levels and report
language as you consider the details of the Administration's fiscal
year 1999 budget.
Soundly reject the Administration's medical device user fee proposal
and send a strong signal that deep cuts in the Agency's budget
authority for medical devices are unacceptable
We also urge the Subcommittee to include language in its report
expressing concern over the continued efforts of the Administration to
include user fees in its budget proposals year after year.
Ensure level funding for the medical device program in fiscal year 1999
so that it has adequate resources to do the important functions
mandated by law.
We are concerned that the device program is shouldering
disproportionate cuts vis a vis the rest of the Agency. While ``belt-
tightening'' is appropriate across the board, singling out the device
program for more than its fair share is unfair and could negatively
affect patient health. The size of the reduction being proposed by the
Administration translates into drastic staffing cuts and a concomitant
increase in review times. We do not believe anyone wants to see the
devastating scene of several years ago repeat itself. Patients will
suffer if funding is not kept level for the device program.
Accordingly, we request that funding for the device program be level-
funded at the fiscal year 1997 level of $147 million.
Ensure that any reductions in FDA funding are not made in activities
central to the Agency's primary mission--such as device reviews
and activities to protect patient safety
In this age of smaller government and balanced budgets, it is
important that the Agency focus on core activities mandated by statute
and not spend precious resources on activities that may be interesting
and helpful but not essential to the requirements of the law.
Redeployment of resources--especially from the educational, scientific,
and research arenas--should be encouraged by the Subcommittee. We
recommend report language that urges the Agency to examine the
allocation of resources and ensure that appropriate staff are assigned
to product reviews and activities to protect patient safety. Goals to
be achieved should include retaining the performance levels in the
510(k) product review area and improving review times for PMA's. In
addition, sufficient staff should be allocated to implementation of
FDAMA.
Urge the Agency to implement FDAMA in a timely manner consistent with
Congressional intent and continue its ``re-engineering''
initiatives
The Agency has demonstrated a remarkable capacity to creatively
step in new directions to improve the product review process. With re-
engineering initiatives such as revival of the Product Development
Protocol and the ``New 510(k) Paradigm'' together with the significant
new tools provided in FDAMA, the Agency is indeed being ``modernized.''
Thus far, CDRH has produced timely documents to implement the new law
and has given the device industry every indication that it fully
intends to continue effective implementation. Such efforts should be
recognized and encouraged.
We also wish to point out that, recently, the Agency has decided to
diminish its collaborative efforts with industry to address FDAMA and
other policy issues. This is an unfortunate decision. As the Agency
develops documents that affect industry, it should be informed
throughout the process by practical considerations that only industry
is in a position to present. Constructive collaboration with industry,
with the Agency--of course--retaining final authority, is always a more
efficient, less time-consuming model that generally results in a better
product. We urge the Subcommittee to encourage such a model.
The consistent message from this Subcommittee--which has been
heeded by the Agency--is to focus its efforts, use management tools,
reassess core functions--in order to improve performance. This message
should continue to be reinforced with FDA and expanded to include a
message to work with industry to develop appropriate guidance and other
documents.
Continue efforts to ensure that FDA's operating plan is consistent with
Congressional intent and improve the financial accountability
of the Agency to Congress
As mentioned earlier, we applaud the efforts of this Subcommittee
to mandate greater accountability to Congress for allocation and use of
taxpayer funds. The recent experience with the request for and
submission of the fiscal year 1998 operating plan lays the groundwork
for further review and analysis of Agency allocation of resources. We
support your efforts and urge that they continue into the next fiscal
year.
conclusion
In conclusion, Mr. Chairman, we believe the Agency is poised at the
brink of a new era--one marked by increased efficiency, reduced
regulatory burden, creative initiatives--with the ultimate winners
being the patients that benefit from medical device technology. Success
can only be achieved, however, with continued attention from you and
your Subcommittee to ensure that (1) an appropriate level of funding--
preferably level funding based on the fiscal year 1997 amount--is
provided for the medical device program, and (2) those funds are
intelligently spent to carry out the health protection and promotion
purposes of the Federal Food, Drug, and Cosmetic Act--as most recently
amended so wisely by the Food and Drug Modernization Act of 1997.
Thank you for the opportunity to present our views.
______
Prepared Statement of the Humane Society of the United States (HSUS)
sustainable agriculture programs
Public interest in sustainable agriculture farming systems
continues to grow. The HSUS supports these cost-effective yet
environment-friendly systems which also improve the welfare of animals.
We join the Campaign for Sustainable Agriculture in requesting funding
for the Sustainable Agriculture Research and Education (SARE) program.
SARE is a competitive grants program that funds high-quality, farmer-
involved research and education on economic, agronomic, and
environmental aspects of sustainable agriculture farming systems. We
join the Campaign in requesting an increase of $2 million for fiscal
year 1999 to $10 million for the SARE program.
agricultural technology and transfer for rural areas (attra)
The HSUS strongly supports funding for ATTRA at the level of $2
million for fiscal year 1999. Since 1989, the caseload has more than
tripled but has received the same level funding for years. It serves
the entire nation with specialists who provide farmers and others with
sustainable agriculture information, research results, and information
based on practical experience. There is no other source of readily
available information covering such a wide scope of sustainable
agriculture topics. The funding level requested for fiscal year 1999,
an increase of $700,000 over fiscal year 1998, will allow ATTRA to
continue to perform this important function.
organic food production act
For the seventh year in a row, the organic industry has continually
grown in sales, with reasons for purchase ranging from environmental
and health concerns to that of enhanced animal health and well-being.
Adopting consistent national standards for organic products is very
important, and now is a crucial time for the national organic program
to begin full implementation. This program is on the verge of becoming
extremely beneficial to consumers and producers alike. More staff hours
are needed to manage comments on the proposed rule, to get the final
rule out, enable implementation of the program and facilitate
dissemination of program information. The HSUS requests funding of $1
million with at least $250,000 going to offset the cost of the first
round of accreditation.
animal welfare information center
The Animal Welfare Information Center (AWIC) of the National
Agricultural Library (NAL) was started as a Congressional mandate in
the 1985 Farm Bill. By law, AWIC's main missions are to provide
information that can be used for: (1) training researchers about more
humane animal care and use and (2) improving methods of animal
experimentation that can reduce or replace animal use or minimize pain
or distress to animals.
As part of the NAL, AWIC also provides information to the public.
There are several thousand users of its services, including
researchers, technicians, veterinarians, IACUC members, exhibitors,
dealers, Federal agencies, educators, students, and others. Due to the
great success of the AWIC program in the U.S., it is being duplicated
in other countries, with farm animal welfare information included in
those services.
AWIC is currently operating on a staff of only 4 full-time and 2
part-time individuals. Since it's inception, AWIC has never received an
increase in their funding. We support the USDA's request to expand the
mission of AWIC to include a comprehensive collection of information on
the well-being of farm animals and to develop an inventory of and
disseminate fact sheets and other materials on farm animal well-being
issues. It is imperative that AWIC's funding be increased to accomplish
these important functions recommended by the USDA.
packers and stockyards administration
We support the USDA's fiscal year 1999 request for an increase of
$1,600,000 to focus on packer competition and industry structure. This
funding will support the Secretary's Advisory Committee on Agricultural
Concentration recommendations that include appropriating sufficient
resources to aggressively enforce the Packers and Stockyards Act.
The HSUS also supports an increase of $0.8 million for poultry
compliance requested by the Secretary's Advisory Committee on
Agricultural Concentration. We are concerned that contract poultry
growers have the ability to bargain with integrators and be protected
from unfair and discriminatory practices and that the Secretary be
provided the same administrative enforcement authority over poultry
that currently exists for red meat.
The HSUS also supports an increase of $0.8 million for monitoring
and analyzing packer competitive practices and the implications of
structural changes and behavioral practices in the meat packing
industry. GIPSA expects to increase their investigations of livestock
markets from 1,800 in 1998 to 1,950 in 1999. The requested increase
will enable GIPSA to adhere to the recommendations of the Secretary's
Advisory Committee on Agricultural Concentration.
animal well-being research
Living conditions for farm animals which provide for their health
and well-being are increasingly recognized as an important component of
food quality, and are also of increasing concern to the public.
Research into understanding what is required to provide for the well-
being of these animals is needed to help address these concerns.
However, funding of such research is virtually nonexistent in the U.S.
We request that $29.5 million be appropriated to the Animals division
of NRI with at least 50 percent of the funding allocated specifically
for well-being research, thereby achieving a greatly needed balance
between animal health and animal well-being research.
wildlife services
Wildlife Services continues to be one of the most controversial
programs in the Department of Agriculture. Its Western region in
particular remains focused on killing wildlife, rather than solving the
damage wildlife sometimes causes.
Most of the federal WS appropriations are allocated to the Western
region, where the vast majority is spent killing coyotes. Although the
results of scientific research have shown that control of coyote
populations, as opposed to individual offending animals, is futile and
even counterproductive in stopping damage, this remains the primary
approach used by WS employees. By way of example, WS still relies
heavily on preventive aerial gunning, in which a coyote population in
an area to be used for livestock grazing is targeted, and all animals
destroyed, before livestock are even moved to the area. This is
precisely the kind of non-selective and unnecessary destruction of
wildlife that has earned WS its nefarious reputation.
The HSUS believes that WS must change its Western program to one
that helps livestock producers, rather than one that just kills
wildlife. By teaching livestock producers and property managers how to
prevent or reduce wildlife-caused problems themselves, the cost of this
program would be substantially reduced, while its effectiveness would
markedly increase. Only when initial efforts to prevent or reduce the
problem fail would lethal control, under this approach, be conducted by
the government with federal funding.
A similar program of shared responsibility has very effectively
reduced wildlife-caused damage in Kansas, Missouri and other states for
a fraction of the federal share of WS' budget in most Western states.
The HSUS recommends, therefore, that the Subcommittee direct APHIS/WS
to undertake a shift in focus from direct control services to
education/self-help. Lethal control would be provided by the government
only as a last resort. With such a change, operational funding needs
would be reduced by $10 million. We strongly urge the Subcommittee to
reduce the fiscal year 1999 budget of WS in this manner.
In addition, we urge that WS be directed to spend 90 percent of
fiscal year 1999 funds allocated to WS research on the identification
and development of non-lethal, non-injurious control methods.
animal welfare act
The HSUS requests a significant increase in funding for the
enforcement of the Animal Welfare Act (AWA). For more than 30 years,
the AWA has failed to provide protection to animals in breeding
facilities for the commercial pet trade, or to animals amassed by Class
B ``random source'' dealers for sale to research facilities. The lack
of sufficient funding in this area--which has hovered at about $9
million for years--has exacerbated the gross inadequacies that
characterize AWA enforcement.
Facilities that house animals covered under the AWA are not
inspected to a sufficiently frequent and random degree. Currently there
are 71 inspectors covering 10,366 sites of licensed facilities,
including 2,506 registered research facilities that house laboratory
animals. Violations documented by inspectors must be swiftly responded
to and acted upon in a definitive manner, in order to encourage
compliance by all facilities in the field. The load placed upon the
current inspection staff does not allow such response and action.
Increased funding for additional inspectors and an expanded inspection
program would therefore improve overall conditions of all facilities.
The HSUS also suggests modifications to the operation of Animal
Care that could increase government revenues. These suggestions
include:
--An increase in the fees for dealers, since fees for dealers have
remained stagnant for many years.
--The elimination of ``random source'' Class B dealers, whom APHIS
regulatory staff spends a significant portion of their time
trying to monitor and investigate. Although these dealers are a
small percentage of the total number of licensees, a
disproportionate amount of time must be spent dealing with this
group of chronic AWA violators.
--The imposition of strict penalties and collection of fines for all
documented violations of the Act, including failure to be
present or to allow for the inspection of facilities.
Frequently, fines go uncollected or inspectors are denied
access to facilities to verify whether licensees have complied
with the AWA. Repeated unsuccessful visits and uncollected
fines cost the USDA/APHIS hundreds of thousands of dollars.
The HSUS supports current efforts to strengthen USDA regulations
covering large-scale commercial breeding facilities. The commercial pet
breeding trade is plagued by chronic, serious violations of the AWA,
and USDA-licensed facilities must be brought into compliance
immediately or eliminated if compliance with the Act cannot be
achieved.
market access program
The HSUS request that no monies under this program be allotted to
the Mink Export Development Council or any other mink industry
cooperative. From 1989 to 1995, more than $13 million in federal funds
were handed over to the Mink Export Development Council. Despite this
large commitment of funds, which were used primarily for fashion shows
overseas, the value of mink exports declined by 33 percent and U.S.
production dropped by more than half (Source: Fur Age Weekly). In
addition, mink fur is purely a luxury item for which animals are
subjected to extreme cruelty. In the last Congress, an overwhelming
majority of the Congress agreed that the mink industry should not
receive a government subsidy under this program. In light of these
facts, we urge that the Congress continue to bar funding to the Mink
Export Development Council.
the horse protection act
The HSUS supports the full appropriation of funds as authorized by
law under the Horse Protection Act. The authorization limit for the
enforcement of the Act has been frozen at $500,000 since the enactment
of the law in 1970. In addition to the devaluing effects of inflation,
the actual appropriation has been drastically cut in recent years. USDA
only received $353,000 for the Horse Protection Act program in fiscal
year 1998, and only about $260,000 of that money was available for
enforcement purposes.
The HSUS requests that $500,000 be appropriated for the next budget
year. This amount represents the absolute minimum expenditure necessary
to carry out the provisions of the Act. It is essential to insure the
proper training of USDA enforcement personnel in the use of
thermovision and other diagnostic techniques employed to detect the
illegal soring of gaited horses. It will also support some needed
research. The full appropriation will enable USDA staff to attend a
representative number of target horse shows (approximately 10 percent)
and it will help to improve the training and oversight of non-
governmental enforcement personnel (known as Designated Qualified
Persons or DQP's.)
The HSUS also wishes to go on record as stating that the Tennessee
Walking Horse industry has demonstrated that they are clearly incapable
of effective self-regulation as envisioned by the 1976 amendments to
the Act. Industry inspectors consistently report fewer than half the
number of violations cited when USDA personnel are in attendance. Also,
an increasing number of walking horse shows have no inspection programs
whatsoever. We urge prompt and full implementation of the strategic
plan.
commercial transportation of equines for slaughter
The promulgation of regulations concerning the humane and safe
transport and treatment of horses shipped to slaughter within the U.S.
are provided for under a provision of the farm bill passed in 1996. We
support full development and implementation of thorough regulations to
remedy the mistreatment and inhumane conditions horses transported to
slaughter currently endure.
Our two year investigation and subsequent research confirmed that
there are several areas of serious concern regarding how these horses
are treated and transported on these long distance trips to one of the
eight slaughter plants. These areas include, but are not limited to,
the shipment of seriously injured, late-term pregnant mares, foals, and
ill or incapacitated horses. In addition there are serious deficiencies
regarding the duration of deprivation of water, food and rest during
transport, the inappropriate interior height, design, and use of many
livestock vehicles, the lack of segregation of horses by size, and the
lack of segregation of fractious horses and stallions from others, as
well as adequate protection from the elements. We are also concerned
about the lack of any record keeping by which to establish ownership or
track these animals. We urge full funding be appropriated for
implementation of these regulations and specifically request $425,000,
which is close to the amount requested by USDA. We urge that the money
allocated include adequate funding for USDA FSIS inspectors to enforce
these regulations.
______
Prepared Statement of R. Max Peterson, Executive Vice President,
International Association of Fish and Wildlife Agencies
The International Association of Fish and Wildlife Agencies was
founded in 1902 as a quasi-governmental organization of public agencies
charged with the protection and management of North America's fish and
wildlife resources. The Association's governmental members include the
fish and wildlife agencies of the states, provinces, and federal
governments of the U.S., Canada, and Mexico. All 50 states are members.
The Association has been a key organization in promoting sound resource
management and strengthening federal, state, and private cooperation in
protecting and managing fish and wildlife and their habitats in the
public interest.
natural resource conservation service (nrcs)
The Natural Resource Conservation Service has immense
responsibilities for implementing the conservation provisions of the
1985 Food Security Act (FSA), the 1990 Food, Agriculture, Conservation
and Trade (FACT) Act, and the Federal Agricultural Improvement and
Reform (FAIR) Act of 1996.
Technical assistance
The USDA publication ``Geography of Hope'' identifies that the need
for general conservation technical assistance for America's private
landowner will continue to increase to 2002 and beyond. The Association
supports the $38 million increase in conservation operations. This will
be used for: updating and refining the NRI; providing incentive
payments to state NRCS offices that leverage local funds; and hiring
non-federal watershed coordinators.
The Association supports the President's fiscal year 1999 request
for an additional $1.9 million for updating and digitizing soil surveys
and training field staff to improve technical assistance to users of
soil survey data. These items are included in the Conservation
Operations budget request and the Association strongly supports a $752
million budget for this program.
In addition to increasing general (non-programmatic) technical
assistance, increased technical assistance funds are needed to
implement increasingly popular provisions of the 1996 FAIR Act. The
budget for the Wetlands Reserve Program (WRP), the Conservation Farm
Option (CFO), Wildlife Habitat Incentives Program (WHIP), and the
Farmland Protection Program (FPP) all include the customary 19 percent
to 20 percent for technical assistance. The Association strongly
supports this level of funding provided to ensure maximum agriculture
and natural resource benefits will accrue from these programs. Notably
absent from the list of programs providing adequate levels of technical
assistance is the Environmental Quality Incentives Program (EQIP). The
1998 budget provides the customary 19 percent level for technical
assistance while the proposed 1999 budget raises EQIP from $200 million
to $300 million which the Association applauds. It lowers however the
percentage for technical assistance to 10 percent, a net loss of $8
million but a functional loss of $27 million since EQIP is increased
from $200 million to $300 million. Some Programs (CRP, WRP, CFO and
FPP) have a technical assistance cap set by Section 11 of the CCC
Charter Act at the 1995 spending level. No such constraint exists on
EQIP. The Association therefore strongly urges the restoration of the
customary 19 percent for technical assistance on EQIP.
State Technical Committees (STC).--The 1990 FACT Act required that
State Technical Committees (STC) be established to facilitate
interagency cooperation and coordination of technical guidelines for
the conservation programs. Further, the USDA 1995 Reorganization Act
specifically exempted the STC from the Federal Advisory Committee Act
(FACA). The 1996 FAIR Act further added additional members to the STC.
Federal-State coordination is an ongoing normal function which is
required with or without a formal State Technical Committee. We commend
the strong efforts of NRCS that has ensured the establishment of the
State Technical Committees in each State with representation from the
respective State fish and wildlife agency.
Wetland Determination.--We believe the need for wetland
determination, certification, and mapping is great and urge NRCS to
proceed as soon as possible, under the guidance of the FAIR Act of
1996. The Association urges expeditious completion of the wetland
determinations required to implement the Swampbuster provisions of the
1985 FSA, 1990 FACT Act, and the 1996 FAIR Act as well as the FAIR Act
directed interagency cooperation, whereby NRCS assumed responsibility
for wetland designation for Section 404 (Clean Water Act) purposes on
farmland, including tree farms, rangelands, native pasture, and other
private lands used to produce or support the production of livestock.
The Association and individual states wish to continue to work with
NRCS to help achieve these goals.
Public Law 566.--The Association generally supports the $49 million
request for small watershed (Public Law 566) projects. That support is
based upon continued emphasis on updated watershed planning and
management. Such efforts could utilize and expand upon existing Public
Law 566 plans examined in light of present day issues of wetland
protection, water quality enhancement and fish and wildlife habitat.
The greatest potential for these programs is for land treatment
measures that retain the water on the land, improve infiltration,
improve water quantity and quality, and provide fish and wildlife
habitat. Structural and non-structural land treatment activities
require state and local matching funds and are therefore leveraged to
provide greater conservation benefits for each federal dollar spent
while promoting valuable partnerships among states, local agencies, and
other organizations.
National Buffer Initiative.--NRCS has implemented the initiative in
cooperation with industry and other partners. The Association is
pleased to be a sponsor of this innovative approach. The National
Academy of Sciences has found that buffer strips can reduce off-field
pollution by 70 percent, thus also contributing to meeting non-point
source remediation goals under the Clean Water Act. NRCS has committed
special emphasis and a major effort to use the strip practices covered
by the continuous CRP sign-up in a more targeted fashion. Unlike the
large or whole field CRP retirements, buffer strips will require
extensive outreach plus the much more attractive rental rate now
available. The Association supports the allocation of increased funds
specifically for outreach to increase participation in the various
buffer strip practices.
Forest Incentive Program (FIP).--The Forest Incentive Programs
(FIP) has multiple resource values for fish, forests, wildlife, clean
water and erosion control. The Association opposes the NRCS proposed
intention to drop FIP funding and strongly recommends that the fiscal
year 1998 level of $6.325 million be continued.
Capped Program.--The Wetlands Reserve Program (WRP), Wildlife
Habitat Incentives Program (WHIP), Farmland Protection Program and the
Conservation Farm Option (CFO) have all reached or are near authorized
acreage or appropriation caps. The Association continues to recognize
and support the benefits to our natural resources from these programs.
We believe that due to the over-whelming success, customer's acceptance
and public benefits of this program, they should be re-authorized and
funded at least at the 1998 level through 2002.
farm service agency (fsa)
An adequately funded budget for the FSA is essential to implement
those conservation related programs and provisions under FSA
administration and/or in cooperation with NRCS as a result of passage
of the Federal Agricultural Improvement and Reform (FAIR) Act of 1996.
The Association strongly advocates that the budget include sufficient
personnel funding to service a very active program.
FSA programs have tremendous quantifiable impacts on natural
resources, and yield substantial public as well as private benefits.
Building on the provisions of the 1985 FSA, the 1990 FACT Act, and the
1996 FAIR Act, the Association wants to ensure that each program
accomplishes the broadest possible range of natural resource
objectives, and encourages close cooperation between FSA, NRCS and the
State Technical Committees in implementing the 1996 FAIR Act.
Flood Risk Reduction Program.--We believe this program has great
potential to mesh with the Army Corp of Engineers Rivers Ecosystem
Restoration and Flood Hazard Mitigation Project which is a part of the
President's Clean Water Initiative. We urge FSA to prepare regulations
and budget for implementation and make every effort to ensure that
language used in its easements and agreements provide a streamlined
basis for appropriate administration and are user-friendly.
Conservation Reserve Program.--The continued administration of CRP
under the guidelines of the 1996 FAIR Act is a very significant and
valuable commitment of USDA and the FSA. The Association applauds FSA
efforts to fund and extend CRP contracts for the multiple benefits that
accrue to the public as well as the landowner. The Association is
especially pleased to note the commitment to reach as soon as practical
and maintain the authorized 36 million acres in CRP. The Association
provides special thanks to FSA for the continuous CRP sign-up of high
value environmental practices and urges a special effort to advertise
and increase landowner participation.
The commitment of FSA to provide high wildlife benefits in CRP
contracts was most obvious in the 15th and 16th sign-up. The
Association applauds FSA in those efforts with their special emphasis
on native grass species and enlightened pine planting and management
strategies for maximum wildlife benefits.
wildlife services, animal and plant health inspection service (aphis)
The President's budget for the APHIS Wildlife Services (WS)
Operations is $26.05 million, a net reduction of $2.436 million from
fiscal year 1998. For Methods Development, the proposed amount is
$9.681 million, a $543,000 decrease from fiscal year 1998. The
Association is discouraged that the Administration continues to
overlook the importance of the leadership role the WS program has in
the area of wildlife damage management and recommends that Congress
restore these funds.
WS, a unit of APHIS, has the federal responsibility for controlling
wildlife damage to agriculture, aquaculture, forest, range and other
natural resources; controlling damage to property, and for protecting
public health and safety through control of wildlife-borne diseases and
wildlife hazards at airports. Its control activities are based on the
principles of wildlife management and integrated damage management and
are carried out cooperatively with state fish and wildlife agencies.
Most APHIS operational work is cost shared between the federal WS
program, state and county governments, agricultural producers, and
other cooperators.
The cooperation and support of the agricultural community are
essential to maintaining wildlife populations because much of the
Nation's wildlife exists on private, agricultural lands. A progressive
wildlife damage control program which reduces the adverse impact of
wildlife populations is necessary to maintain the support of the
agricultural community and to counter increasing pressures for
indemnity due to wildlife damage.
The Association works closely with WS on numerous issues critical
to the state fish and wildlife agencies such as the recent agreement
between the United States and the European Community to identify and
develop more humane traps for taking furbearing animals. The
Association is disappointed that $450,000 was not included in the
President's fiscal year 1999 budget for the important work of
developing and testing more humane traps. Without necessary funding for
trap testing, the United States will not be able to keep its agreement
with the European Community. The Association strongly urges Congress to
add $450,000 in the US budget for this very critical wildlife
management, economic and trade issue.
The Association recommends that Congress make $700,000 available in
fiscal year 1999 to allow WS to continue implementation of their new
Management Information Reporting system. The implementation will occur
over a 5-year period at a total cost of between $6-8 million. The
current system is outdated, uses obsolete hardware, and is limited in
the amount of data collected. The new system will allow WS to provide
specific information on resources protected, damage levels, trend
information, cooperator employed methods, and data on measurements and
outcomes now required by the Government Performance and Results Act.
The President's budget also directs implementation of a cost-share
arrangement requiring states and other cooperators to pay at least 50
percent of the program cost in each state. Problems involving wildlife
damage are unpredictable and extremely varied. The Association strongly
objects to such a rigid cost-share arrangement and urges Congress to
maintain maximum flexibility for cost sharing.
With the success of the recent wolf reintroductions in Yellowstone
and the resulting expansion of their range, the reintroduction of the
Mexican wolf in Arizona, and the natural dispersion of wolves into new
areas in Minnesota, Wisconsin, and Michigan, the agency's present
funding level to deal with wolf problems is inadequate. As wolf
populations continue to increase, so do wolf conflicts and requests
from the public for assistance. The Association recommends that
Congress provide an additional $275,000 to WS for fiscal year 1999 to
deal with the increasing workload related to resolving wolf conflicts
in order to facilitate this important recovery effort.
A significant problem exists with regard to brucellosis which
affects domestic livestock and other animals and is present in elk and
bison in the Greater Yellowstone area. ASPHIS has a key role in working
to resolve issues related to this problem. We strongly urge that
funding be included in the Service's budget to meet the needs in
veterinary services, research, and operational funding for the
quarantine facility to allow the Service to meet its responsibilities
in resolving this issue.
We commend Congress for recognizing the need to relocate the WS
research facility from Denver to Ft. Collins, Colorado. However, the
Association urges the Congress to finish what it has begun and provide
the necessary $20.5 million to complete this $37.7 million state-of-
the-art facility. The future of an effective wildlife damage management
program depends on the identification and development of more effective
and socially acceptable control methods. The only source of new methods
is through research.
The Association is pleased with the accomplishments of the Berryman
Institute at Utah State University in Logan, Utah. However, the
activities have seemed to reach a plateau, and we would like to see the
Institute enhance its capabilities to conduct social science research,
expand continuing education programs, and start a new high-quality
scientific journal for wildlife damage management that would be
patterned after other established journals. To reach these new goals,
the Association supports an increase of the funding to the Berryman
Institute by an additional $236,000.
cooperative state research, education and extension service (csrees)
The Association recognizes that the research and educational
programs of the CSREES and its Land Grant Partners effect relevant
positive changes in attitudes and implementation of new technologies by
private landowners, managers, community decisionmakers, and the public.
This results in significant benefits to individuals and to the Nation
through building and sustaining a more viable and productive natural
resource base and a competitive and profitable agriculture. Since over
two-thirds of our lands, approximately 1.35 billion acres, are
controlled by over 10 million private landowners and managers, it is
most appropriate that the CSREES Land Grant System, with its grass
roots credibility and delivery system, be adequately funded to
translate and deliver research-based educational programs and new
technologies to help the Nation's private landowners and managers move
towards a more sustainable society. However, we are disappointed that
the President's fiscal year 1999 budget reflects very little emphasis
on natural resources research and education directed toward helping
these clientele.
The Association recommends that the fiscal year 1999 budget for
CSREES should be redirected to accomplish the following goals:
The Association recommends that the Renewable Resources Extension
Act be funded at a minimum level of $9.5 million in fiscal year 1999.
The RREA funds, which are apportioned to State Extension Services,
effectively leverage cooperating partnerships at an average of about
four to one, with a focus on the development and dissemination of
useful and practical educational programs to private landowners (rural
and urban) and continuing education of professionals. The increase to
$9.5 million would enable the Extension System to accomplish the goals
and objectives outlined in the 1991-1995 Report to Congress. The need
for RREA educational programs is greater today than ever because of the
fragmentation of ownerships, the resultant increase in small farm
numbers, the diversity of landowners needing assistance, and the
increasing environmental concerns of society about land use. It is
important to note that RREA has been reauthorized through 2002. It was
originally authorized at $15 million annually; however, even though it
has been proven to be effective in leveraging cooperative state and
local funding, it has never been funded at that level. An increase to
$9.5 million would enable the Extension Service to expand its
capability to assist over 500,000 private landowners annually to
improve decision-making and management on an additional 35 million
acres while increasing productivity and revenue by $200 million.
The Association recommends that Smith-Lever 3(b)&(c) base program
funding be increased by 9 percent to a level of $280,950,770 with an
appropriate portion of this increase targeted to Extension's Natural
Resource and Environmental Management programs (NREM). The President's
fiscal year 1999 budget requests a reduction of $10,740,000 funding for
Smith-Lever 3(b)&(c) funds from the fiscal year 1998 level. The
Association appreciates that Smith-Lever 3(b)&(c) base programs provide
``Block Grant'' type funds for land grant universities to provide
essential educational outreach based on local needs assessment. This
will enable NREM programs to develop the critical mass of expertise at
the state and local levels to redirect and leverage limited funding to
address critical existing and emerging natural resource and
environmental issues that are directly affecting small landowners and
farmers in both rural and urban communities nationwide. The nation is
rapidly becoming a suburban society and these new landowners are ripe
for education at the urban and rural interface. Expanding Extension
programs in natural resource education on such issues as forest health,
wetlands, endangered species, and human/wildlife interactions, as well
as to strengthen its programs in urban and community forestry and
environmental education is essential to address natural resource issues
that are relevant to the sustainability of these critical resources.
Such an increase, targeted appropriately, would help producers better
understand and implement the changes in the 1996 Farm Bill Conservation
Provisions. Moreover, we are concerned that appropriate positions in
the Natural Resources and Environment Unit have not been retained to
provide needed national leadership for critical interdisciplinary
resources such as range management.
The Association encourages continued close cooperation between
State CES and the State Fish and Wildlife agencies, as well as other
appropriate state and federal agencies and conservation organizations.
Extension 4-H Youth natural resource programs and projects continue to
increase with over 1,350,000 youngsters presently enrolled from both
urban and rural communities across the Nation. Increased Smith-Lever
funds targeted appropriately will enable CSREES to carry out its
environmental education and NREM National Strategic Plan obligations
nationwide.
The Association recommends restoration of the Rangeland Research
Grants $500,000 budget for fiscal year 1999. The Association is
disappointed that the practical and applied problems addressed by the
Rangeland Research Grants (RRG) program were zeroed out in the
President's 1998 budget and totally ignored in this fiscal year 1999
budget. The elimination of the only federal competitive grants program
for rangelands has serious implications for wildlife, watersheds, and
other natural resources. Modest appropriations for RRG in the past have
supported some of the most important rangeland research conducted over
the past decade, and wildlife issues on rangelands will present some of
the more critical rangeland research problems over the next decade.
This would help increase the interdisciplinary capacity of research and
educational programs to help landowners better manage their land.
The Association recommends that an appropriate portion of the Pest
Management budget should be dedicated to educational programs for
prevention and control of vertebrate pests in urban and rural
communities and to address invasive exotic species and noxious weed
problems on rangelands. The Association notes that a combined total
increase of almost $15.5 million has been recommended in the
President's budget for Pest Management and related research and
extension programs over and above increases received in fiscal year
1998. The Association strongly supports this increased commitment of
funds. Vertebrate pests and invasive species have been identified in
many states as posing the most significant problems, now and in the
future, that agricultural and related crop producers and private
landowners face. This targeting of Pest Management funds for research
and educational programs would advance the knowledge and capability of
landowners to reduce significant losses to vertebrate pests and
invasive species.
The Association recommends that the Hatch and McIntire-Stennis
funds be restored to fiscal year 1998 levels and, if necessary,
redirected from the substantial $32,800,000 proposed increase in NRI
funding. The Association is pleased that the Administration proposes a
$9.5 million increase in basic research identified under the National
Research Initiative as Natural Resources and the Environment; however,
what is proposed under this ``Area of Special Emphasis'' clearly does
not address critical natural resource research needs that the Natural
Resource Community and the public are vitally concerned about. The
Association is alarmed at the significant reduction in both the Hatch
Act and Mclntire-Stennis research programs of over $15.5 million. Both
of these research programs, conducted by Land Grant University partners
and other educational institutions, are crucial to addressing natural
resource and environmental issues critical to agriculture and natural
resource sustainability now and in the future.
______
Prepared Statement of Luie Fass, International Seafood
Mr. Chairman, I appreciate the opportunity to submit this statement
for the record.
I am submitting this statement to you to request the Committee's
assistance on a legislative matter that will assist the commercial
fishing and seafood industry in Virginia and other portions of the
Atlantic coast. The issue involves the inclusion of seafood products
within the current export credit assistance programs administered by
the Foreign Agricultural Service (FAS) of USDA.
Senator Ted Stevens authored an amendment in 1990 that authorized
seafood as a commodity that could be financed through USDA's GSM
(General Sales Manager) credit programs. Seafood has been financed
infrequently in recent years through this mechanism. I understand that
it is a discretionary decision on which commodities to include in each
year's program.
The Asian financial troubles have caused a tremendous reduction in
seafood exports, which for some U.S. commercial fishermen is their main
source of revenue. As you may know, the Department of Commerce has
imposed restrictive quotas on popular fishery species to the extent
that the industry will expire without the export market. The exported
seafood consists of species (skate) and products (shark fins and tails)
for which there is no domestic demand, but for which there is a viable
and strong Asian market.
I represent a number of commercial fishermen and seafood processors
and exporters who are in the same position: We are no longer able to
export seafood products to Asia because the Asian importers cannot
obtain credit to finance their operations. If the FAS program were to
include seafood as a product on the approved list for this year, the
U.S. export of seafood could resume.
We ask that in your fiscal year 1999 Appropriations action you
instruct the Department of Agriculture to include seafood and seafood
products on the approved list for the FAS-GSM export financing
programs.
Thank you again for the opportunity to present this statement for
the record.
______
Prepared Statement of the Intertribal Agriculture Council
The Intertribal Agriculture Council (IAC) is an organization of
dues paying member Tribes who together control over 80 percent of the
54 million acres held in trust by the United States for Indian people.
Founded by 84 tribes in 1987 to promote improvement in Native American
and Alaskan Native agriculture, IAC is governed by a Board of Directors
elected by the Tribes from each of the twelve regions of Indian Country
reflecting the diverse character of Indian agriculture. We appreciate
the opportunity to provide written testimony on the Department of the
Agriculture budget request for fiscal year 1999.
For the past eight years, the IAC has repeatedly submitted written
comments and oral testimony which attacked the USDA budget request and
pointed out areas where we felt there were significant deficiencies
reflecting poor priorities for existing budget dollars. We have
repeatedly sought increased funding for the Extension Indian
Reservation Program authorized at $8 million but funded at only $1.6
million. We have sought to increase direct farm lending in Farm Service
Agency (formerly Farmers Home Administration) as critically necessary
to our people who are unable to obtain bank loans due to jurisdictional
and land ownership issues. We have sought improved participation in the
new conservation programs collectively lumped under the Environmental
Quality Incentives Program, and we have sought improved prioritization
of the elements of the 1990 Fact Act collectively called Title 2501.
In this year we have the uncommon pleasure of not attacking the
Department's budget request but applauding the revised priorities for
existing budget dollars. The recent USDA undertakings in both civil
rights and small farms issues have included direct participation by the
actual targeted users of USDA programs. USDA should be commended for
listening and making adjustments in priorities as reflected in this
budget request.
The areas of primary budget concern for the membership of the
Intertribal Agriculture Council are listed below.
cooperative extension service
Cooperative Extension Service Agents serve in the critical role of
community liaison to all USDA and Land Grant University Agriculture
Programs, supervise youth activities such as 4-H, and coordinate
education and training programs. Until 1990, Indian reservations were
excluded from this service. For the past several years the Intertribal
Agriculture Council has worked with the Department of Agriculture to
enhance Indian participation in Extension Service programs as a
cornerstone to improving USDA/Indian relations.
The Extension Indian Reservation Program (EIRP) is authorized in
Section 1677 of the 1990 FACT Act, and spearheads the IAC efforts at
improving USDA involvement with American Indian communities. We in the
IAC are proud of our participation in the effort to establish this
critical Reservation Extension Agent program and are thankful that the
department recommends increasing funding for this successful and cost
effective program. The program started with the authorization and an
appropriation of one million dollars in the 1991 budget. As a result of
that authorization and appropriation, the Cooperative Extension
Service, working in concert with Indian Tribes and State Extension
Directors, implemented a program which in its first year resulted in
the establishment of 13 fully operational Reservation Extension
Projects with a total staff of 34, half of which were American Indians.
In addition, each dollar of Federal seed money attracted $0.37 in
Tribal Government support, and $0.41 in State Government support.
States and Tribes hired nine individuals, in addition to the extension
personnel, to assist in these projects. In that first year, during the
start-up phase of this new program, the Extension Service received more
than 75 proposals submitted jointly by cooperating States and Tribes to
provide Extension services to the Indian communities. These cooperative
proposals totaled more than 16 million dollars, for which only 1
million was available.
Congress recognized the value of this program and increased its
funding by $500,000 in fiscal year 1992, and another $250,000 in fiscal
year 1993. Since then, and despite great support among the Department,
Congress and Indian leaders, the budget situation has prevented
continuing expansion toward the full performance goal estimated at $8
million. Increasing costs, CSREES overhead costs and budget rescissions
have caused the already tiny program to cut back repeatedly in recent
years, with the cuts resulting in fewer programs and smaller budgets
for the remaining Extension Agents. Since 1994 the program has had to
reduce from a high point of 34 on-reservation projects to the current
level of only 26 programs. Even so, and without a national program
leader or other oversight, 26 extension programs are providing valuable
and formerly unavailable services to Indian Communities in 20 states
from Florida to Alaska, including especially the valuable 4-H programs
for our next generation.
Funding requested by the Tribes and States for continuing the
existing 26 projects at minimum levels was $1,872,600 in 1998. Only
$1.6 million was available, resulting in an average shortfall of
$11,000 for each on-site project, a reduction of over 17 percent below
established need levels. The proposed funding level of $5 million in
fiscal year 1999 will provide adequate funding to meet the needs of the
existing projects and expansion to include another 26 or so
reservations in this valuable Federal/State/Tribal cooperative effort.
Although below full-performance levels, the proposed increase is a
reasoned approach to build upon past success without overburdening the
system within fiscal year constraints. We strongly support this
initiative of the USDA.
farm service agency, farm loan programs
The decision of the USDA to ask for budget levels which reflect the
full authorized level of Direct Farm Ownership Loans at $85 million and
Direct Farm Operating Loans at $500 million will be of great service to
millions of American farmers and ranchers who, for a number of reasons,
are unable to obtain direct bank financing. This is especially
important for American Indian farmers and ranchers on Indian
reservation lands because private sector commercial banks are
frequently unwilling or unable to make loans using Indian trust
property as collateral. However, these issues are not a factor in
direct federal lending programs.
It has taken great courage for the Farm Service Agency to seek the
full appropriation, in part because the published past performance of
FmHA Direct Loans has been poor. However, it must be pointed out that
the reported deficiencies cannot be compared directly with similar data
for commercial banks or other lenders. There are two reasons for this
discrepancy. First, the reported delinquency rate is cumulative,
including all delinquent loans dating from the origination of the
program, while excluding all past loans which performed fully and were
paid off--a commercial financial institution would dispose of non-
performing loans on a yearly basis, reporting at most the three current
years. Second, the direct loan program was used in the late 1970's and
early 1980's as an instrument of federal efforts to mitigate the high
inflation and recession affecting the country during that period. Fully
three quarters of the direct loan deficiencies are ``Economic
Emergency'' loans made during this period to provide an infusion of
federal dollars to rural communities through increased lending to
farmers. These loans have not been made since 1984, so 75 percent of
the delinquencies are more than 15 years old and result from federally-
sponsored emergency efforts at economic recovery, not from poor
borrower or agency performance.
Given the strength and historical contribution of the direct
lending programs to America's agriculture base, we strong support the
USDA's request to fully fund these critical programs.
indian land acquisition program
The Indian Land Acquisition Program is listed under Farm Service
Agency, Farm Loan Programs. It was created by Congress as a first
effort at finding solutions to the jurisdictional and managerial crises
facing Indian reservations which result from fractionated land-heirship
and checker-boarded land-ownership patterns. This program has provided
Tribes with the ability to purchase allotted lands within their
jurisdictional area to consolidate ownership and management functions.
Congress raised the authorization for the Indian Land Acquisition
program from $2 million to $8 million in the 1990 FACT Act. In recent
years, the Department has funded this program at one million dollars,
and reports limited activity. However, we are told by our member Tribes
that FSA State officials have repeatedly turned away Tribal applicants
by stating that no funds are available. Actually, the funding level has
been so low that in many years a single loan to a single Tribe has
taken the entire appropriation. Turning away potential applicants and
operating a program in which a single loan may require the entire
appropriation explains the low activity level.
The proposed 1999 budget again requests less than $0.5 million in
budget authority for this important source of land consolidation
assistance. We are requesting that Congress direct the Department to
utilize the full authorization of $8 million for the purpose for which
it was intended, the solution of long-standing land-ownership problems
on Indian reservations. Since the Farm Service Agency has resources
extending well into the billions of dollars we are not requesting an
additional appropriation. We are requesting that the Committee and the
Congress mandate that $8 million of the total budget in Farm Loan
Programs be earmarked specifically for the Indian Land Acquisition
Program as authorized in the 1990 FACT Act.
outreach for socially disadvantaged farmers and ranchers
A widely based coalition of minority, rural and American Indian
organizations sought the support of Congress for the development of an
improved outreach and service delivery system for disadvantaged
agricultural producers. Section 2501 of the FACT Act is the result.
This section contains specific direction in developing the program and
lists Tribally Controlled Community Colleges among organizations
eligible to participate in USDA education and outreach programs.
Improved education of our people has long been the over-riding
priority for our Tribes. This relatively simple and straight forward
section of the FACT Act finally recognizes this priority. For the first
time since the passage of that authorizing legislation, the Department
has included a full authorization budget request to implement this
important outreach program for Americans everywhere. We strongly
support this move by the Department to finally implement this
Congressionally-mandated program.
environmental quality incentives program
The combination of the various conservation programs previously
administered by the USDA into the newly created Environmental Quality
Incentives Program (EQIP) through the 1996 FAIR ACT has required some
adjustment at the local and regional level during the implementation
phase. Initially, most reservation lands were excluded from the special
emphasis areas, largely due to a lack of Indian participation on the
various state committees which set-up the original implementation
plans. However, in several states with large Indian landownership and
populations, including Arizona, Colorado, Montana and Nevada, the NRCS
has placed special emphasis on the historically unmet needs of Indian
reservation lands. Coupled with national office adjustments to include
Indian lands, NRCS is making major progress in bringing its important
conservation programs and expertise to previously underserved
populations.
The response of the agriculture and landowner community to the
opportunities presented to improve long term conservation through the
EQIP program has stretched the ability of this program to accomplish
its identified task. For this reason, and in specific response to the
inclusion of Indian owned lands in the EQIP programs, we strong support
the USDA's request to expand the program by $100 million, nationwide.
The Board of Directors of the Intertribal Agriculture Council, on
behalf of our member Tribal governments, are grateful for the
opportunity to submit written comments on these issues of importance to
the Indian Agriculture community. We believe the USDA's decision to
request reprioritizing its existing appropriation levels through the
budget process is an excellent example of a federal agency which
listened and acted upon its own special task force recommendations. The
proposed budget will more directly meet the actual needs of America's
farmers and ranchers than any budget in recent years, and will help
solve serious problems affecting rural communities throughout America.
______
Prepared Statement of Dr. Kenneth E. Quickel, Jr., President, Joslin
Diabetes Center
Mr. Chairman and Members of the Subcommittee, we at the Joslin
Diabetes Center in Boston appreciate the opportunity to provide a
statement for the record about an innovative and cost-effective project
of potential benefit to rural Americans throughout the country.
diabetes
The facts about diabetes among Americans are these:
--Sixteen million people have diabetes:
--Diabetes is much more prevalent among some growing minority
populations:
--The prevalence of diabetes is increasing 7 percent each year;
--Diabetes is the leading cause of blindness among working-aged
Americans;
--Diabetes and complications from diabetes are among the five leading
causes of death in the United States; and
--Half of those who have diabetes are not yet aware they have
diabetes, which may first become known only when serious
complications arise.
joslin diabetes center
Joslin Diabetes Center, since 1898, has been the world's leader in
the study of diabetes and in providing care for individuals with
diabetes. With a staff of over 400 and an annual budget of $41 million,
Joslin's clinical arm handled 65,000 patient visits in 1997. Joslin
investigators contributed 108 original papers to the scientific
literature in 1996. Joslin is affiliated with the Harvard Medical
School and has trained over 900 diabetes specialists now practicing
medicine and conducting research in 40 countries around the world.
Joslin has established thirteen Affiliated Centers across the U.S.
in which Joslin physicians and staff train medical personnel in
hospitals and clinics in the techniques Joslin employs for diabetes
detection, prevention, and care. These thirteen Centers handled an
additional 85,000 patient visits in 1997.
project proposal
We propose a two-state demonstration project that will institute
pilot programs of diabetes detection, prevention and care at a very
modest cost. The objectives involve a training and technology transfer
exercise of Joslin's expertise utilizing proven Telemedicine
technologies, and an education and information program that utilizes
the existing Extension Service system. We believe that the project
should be at least two years in duration in order to place the
equipment and train the personnel and access a sufficient proportion of
the population to develop a viable model for application in other
locations. The initial year of the project, fiscal year 1999, will cost
an estimated $950,000. Second-year funding will be considerably less.
The two objectives of the project are (1) Screening for diabetes
and diabetic eye disease among rural patient populations in Washington
and Hawaii, using an innovative technology and low light camera; and
(2) providing existing, extensive information on diabetes prevention
and care for dissemination in the states of Washington and Hawaii.
We have begun a similar project with the Departments of Defense and
Veterans Affairs for the current fiscal year. We are linked with TATRC,
the Telemedicine & Advanced Technology Research Center at Fort
Dietrick, Maryland. We have learned a great deal about providing
training and technology to Federal agencies, and feel confident that
the proposal we are advancing in this testimony can be accomplished by
non-medically trained personnel.
The proposal involves two components that we have worked years to
develop, refine, and operationalize through our research and clinical
applications: The Joslin Vision Network (JVN) and the Information and
Education component.
joslin vision network (jvn)
JVN provides the technology platform for accessing all diabetic
patients into a program of high quality eye and diabetes care. The JVN
utilizes a low light, non-invasive imaging of the retina. A technician,
not medically trained, can be trained to use the camera to acquire
retinal images in less than 30 minutes. The camera--it can be carried
by one person and transported by automobile--can transmit the readings
by telephone or satellite communications to a distant reading center to
be interpreted by experts. The resulting retinal images are transmitted
to regional centers of excellence for diagnosis and treatment plans.
The process provides rural residents who may have or be prone to the
development of diabetes access to diagnostic techniques and
sophisticated equipment normally found only in urban settings where
patient volume and traffic demand and can afford such highly
specialized technology.
information and education component
Joslin has developed a comprehensive and extensive body of
educational, informational and self-training (for those with diabetes)
materials that are used with patients and those who have been found to
be at risk for diabetes. These materials can be distributed to the
population at large to educate and inform citizens of the warning signs
and symptoms of diabetes. Many of the research findings that have
practical, everyday applications to the sixteen million Americans who
have diabetes are not known simply because the educational
infrastructure is not in place. This brings me to why we are proposing
this project for application within the Department of Agriculture. The
Extension Service, the educational arm of USDA, provides millions of
Americans valuable information that extends far beyond farming and soil
conservation practices. The Extension Service has always been an active
component of community life through such programs as the 4-H clubs and
Home Economics activities. The Expanded Food and Nutrition Education
Program seeks to improve nutritional intake through better educated
consumers. Joslin's information and educational materials are the next
step in the Extension Service mission of improved nutrition and better
health. Joslin proposes to make available to the Extension Service in
Washington and Hawaii materials that can be disseminated through
Extension Service mailings, public awareness campaigns and other
community activities that will result in a better educated public on
the nature of and dangers of diabetes.
costs
We have prepared a preliminary budget to carry out this project in
the two states of Hawaii and Washington. We selected these two states
because Joslin has Affiliated Centers in each: Straub Clinic and
Hospital in Honolulu and Swedish Hospital in Seattle. This will help
keep costs at a moderate level and allow sufficient on-site monitoring
on a regular basis.
We have estimated the costs to be $950,000 for the first year:
$475,000 per state. The per state costs are comprised of the following:
$260,000 for equipment and $215,000 for Joslin costs associated with
travel, training, and monitoring for each state in the first year. The
equipment costs are one-time, nonrecurring expenditures that will
result in lower second year costs. The equipment and the right to use
the equipment become USDA's for continued use in these two states, or
they can opt for a regional use of the equipment as the positive
results of the project become proven.
Mr. Chairman, that concludes my brief statement. Thank you for this
opportunity to place Joslin's statement in the hearing record for
consideration by Members of the Subcommittee.
______
Prepared Statement of Quon Y. Kwan, D. Crim.
appropriation for the study of fda consolidation
I am a resident of Rockville, Maryland. Although I am Secretary and
Transportation Chairman for the Manor Lake Civic Association, I am
writing as a private individual. I am currently employed as a senior
environmental scientist for Energetics, Inc., a contractor for the U.S.
Department of Energy, Assistant Secretary for Environment, Safety and
Health. Neither my company nor I have received or will be receiving any
contracts or grants from the Food and Drug Administration (FDA).
My interest in the FDA consolidation stems from my involvement as
Vice-President for Action Committee for Transit (Montgomery County) for
the past and current years. Again, my views do not represent the
official position of Action Committee for Transit. I was opposed to the
siting of the consolidated FDA campus at exurban Clarksburg primarily
because of the lack of supporting infrastructure (especially, access to
transit) and the commuting hardship posed on low-income and minority
workers. My other reasons for opposing the Clarksburg site included the
adverse impact in furthering sprawl development and the further
deterioration on the inner city and urban areas. As you are well aware,
the FDA abandoned Clarksburg as a potential site due to public outcry.
The FDA now seems to be focusing on the former Naval Surface
Weapons Center at White Oak as a site for its consolidated campus.
White Oak is also a poor choice for a number of similar reasons. My
primary objection is the inadequacy of public transportation serving
the White Oak site. Although it has bus service, workers would be using
Metrobus service (route K6) and Ride-On service (route 22) to/from
White Oak in the counterflow direction (AM northbound and PM southbound
on New Hampshire Avenue). The frequency of counterflow bus service (on
either route) is every 30 minutes even during rush hours. In my
comments on the draft and final environmental impact statement for the
proposed FDA consolidation at White Oak, I noted that such frequency of
bus service is wholly inadequate to accommodate even 10 percent of the
6697 employees that would work at the site. The FDA misled the public
by listing 19 bus routes and 4 rail lines that serve the study area,
when in fact only the two aforementioned bus routes were within
reasonable walking distance (\1/4\ mile of the site. The closest rail
station is the Silver Spring stations for the Metrorail Red Line and
MARC Brunswick Line, which is three miles away. I noted that the no-
action alternative (i.e., to keep the FDA at its existing locations)
was better because the dispersed FDA sites are located near Metrorail
stations and have far better access to public transportation than White
Oak.
My second primary objection to the White Oak site is its location
in the residential suburbs. The FDA consolidated campus does not belong
in a residential suburb but in the inner city or central business
district. President Jimmy Carter signed an Executive Order 12072,
``Strengthening the Nation's Cities,'' which is codified by the General
Service Administration into the Federal Property Management Regulations
at 41 CFR 101-19.002. This Order calls for Federal agencies to site
their facilities and utilize space in such a way as to strengthen the
nation's cities. This Order has been upheld in Federal courts (rf City
of Reading, PA v. Austin [816 F.Supp. 351 (E.D. Pa. 1993)]). Why does
this Order make good sense? Abandoning the inner city for the suburbs
causes deterioration of the inner city and exacerbates sprawl
development in the suburbs. This in turn has the unintended adverse
effect of furthering division between socio-economic classes and
between races, with of course, the low-income and minorities--the less
mobile--remaining in the inner city and the more affluent and majority
white--the more mobile--fleeing to the suburbs. When Federal agencies
as well as private sector businesses take flight from the inner city to
the suburbs, they create a prodigious redistribution of wealth. The
inner city loses its tax base and becomes enveloped in a downward
spiraling cycle of decreasing job growth and abandoned buildings
accompanied by increasing alienation, poverty, and crime. On the other
hand, the suburbs grow in their tax base and become enveloped in an
upward spiraling cycle of increasing job growth and construction but
accompanied by cookie-cutter gated communities and sterile industrial
parks that exclude ``undesirables'' and oppose diversity. We need
cities because we need identifiable, physical centers of commerce and
culture. We need cities because they provide diversity; places that
thrive with diversity breed new ideas for exchange, growth, and
prosperity. Cities--not suburbs--are where the poor can rub elbows with
the rich, the blacks with the whites, the humble with the powerful, and
the public with the government. These are the places where Federal
agencies belong--inner cities and central business districts--not in
the exurbs or suburbs. Cities are vital for democracy. The Federal
government should set the example and take the lead in strengthening
the inner cities.
As an alternative to the White Oak site, the FDA should be
consolidated at a site in the city, Washington, D.C. (consistent with
Executive Order 12072), and preferably near a Metrorail station. There
are several sites that would fit this criterion. One is at the
Southeast Federal Center, which is adjacent to the Navy Yard Metrorail
Station and is no more than about a mile from the Hubert H. Humphrey
building, headquarters of the Department of Health and Human Services,
the department to which FDA belongs. The other advantages of the
Southeast Federal Center are that it is already owned by the Federal
government (General Services Administration) and it has adequate floor
space to meet FDA's needs. Furthermore, the Southeast Federal Center is
located in an economically depressed area of the District of Columbia
that is in urgent need of revitalization. As you are quite aware, D.C.
has lost many employers, including Federal agencies, and the President
has directed his cabinet secretaries in March 1997 to not contribute to
the economic decline of D.C. by not allowing any more Federal agencies
to abandon D.C. Moreover, the National Capital Planning Commission's
Plan for Washington's Monumental Core (March 1996) under the subject of
economic development proposes that the Southeast Federal Center and
adjacent Navy Yard be transformed into a lively urban water front of
offices, restaurants, shops, and marinas.
In conclusion, it would behoove the Subcommittee to appropriate an
amount of approximately $5 million for studying the feasibility of
consolidating the FDA administrative and laboratory facilities at the
Southeast Federal Center site.
______
Prepared Statement of Helen Hooper, Director of Public Policy, Land
Trust Alliance
On behalf of the more than 1,100 land trusts across the country,
the Land Trust Alliance (LTA) would like to submit this statement as
testimony for the record on the fiscal year 1999 appropriations for the
conservation programs of the U.S. Department of Agriculture.
Land trusts are independent grassroots organizations dedicated to
protecting land and the quality of life in their communities through
private, voluntary action. Working within a cooperative, incentive-
based strategy, these groups have helped save more than 4 million acres
of wetlands and wildlife habitat, productive farm and forest lands, and
other significant resources.
funding requests
(1) Support the President's fiscal year 1999 request for the
following programs that help interested private landowners conserve
their farmland:
--Environmental Quality Improvement Program (EQIP)
--Wildlife Habitat Improvement Program (WHIP)
--Wetlands Reserve Program (WRP)
--Conservation Reserve Program (CRP)
--Conservation Farm Option Program (CFO)
(2) Include funding for the National Natural Resources Conservation
Foundation created under the 1996 Farm Bill.
(3) Support the reauthorization of the Farmland Protection Program.
environmental quality improvement program (eqip)
LTA supports the administration's request of $300 million for EQIP
from the Commodity Credit Corporation. This voluntary conservation
program provides technical, financial, and educational assistance to
farmers and ranchers for environmental land management measures that
address serious threats to soil, waters, and other natural resources.
EQIP promotes locally-led conservation by encouraging interested
citizens to determine program focus in their communities. EQIP has
generated a great deal of support among farmers, ranchers, local
conservation officials, and other residents.
wildlife habitat improvement program (whip)
LTA supports the administration's request of $20 million for WHIP
from the Commodity Credit Corporation. This voluntary program provides
technical and financial assistance to farmers to improve wildlife
habitat on their land. WHIP funds often complement the activities of
other USDA programs such as the Conservation Reserve Program or the
Wetlands Reserve Program, increasing the overall effectiveness of the
USDA's conservation efforts.
wetlands reserve program (wrp)
LTA supports the administration's estimated request of $123.7
million for WRP from the Commodity Credit Corporation and urges the
committee to not institute any new acreage caps or restrictions in
fiscal year 1999. The administration's estimate would be used to enroll
164,214 new acres in the program. WRP is a program with a proven track
record of successfully restoring farmed, converted, or other degraded
wetlands on current or former agricultural land. LTA would like to
stress the importance of permanent WRP conservation easements. A
perpetual agreement is the best way to ensure that the efforts of the
USDA and the landowner, as well as the taxpayers' investment, are not
wasted by future actions that may degrade the wetland area that was
restored with WRP funds.
conservation reserve program (crp)
LTA supports the administration's estimated request of $1.694
billion for CRP from the Commodity Credit Corporation and urges the
committee to not institute any new acreage caps or restrictions in
fiscal year 1999. CRP conserves precious top soil and promotes water
quality by paying farmers to retire highly erodible lands from crop
production for 10 to 15 years and providing cost-share funds to convert
these areas to perennial vegetation. The program enjoys a tremendous
level of support among the farmers it is tailored to, as demonstrated
by the overwhelming response to the USDA's latest sign-up period.
conservation farm option program (cfo)
LTA supports the administration's request of $25 million for CFO
program from the Commodity Credit Corporation. This voluntary pilot
program provides producers of wheat, feed grains, cotton, and rice with
a one-time consolidated payment if they agree to implement farm
management plans that address the conservation of soil, water, and
related resources, water quality, wetlands, and wildlife habitat on
their farmland.
national natural resources conservation foundation
LTA strongly supports including $1 million in fiscal year 1999 for
start-up funds for the Foundation as authorized under the 1996 Farm
Bill. Congress authorized this foundation to serve a role for the
USDA's Natural Resources Conservation Service similar to that served by
the National Fish and Wildlife Foundation for the U.S. Fish and
Wildlife Service. This nongovernmental, charitable non-profit
organization would raise private funds and accept gifts of real
property to promote public-private partnerships, conduct educational
and demonstration projects, and encourage innovative solutions to the
conservation of natural resources on private agricultural lands.
Unfortunately, to date no funds have been appropriated to the
Foundation.
farmland protection program (fpp)
LTA supports the reauthorization of the Farmland Protection
Program. This program, created under the 1996 Farm Bill, helps farmers
keep their land in agricultural production by supporting the
acquisition of conservation easements or other interests in farmland
that is subject to substantial development pressure. In the program's
first full year of operation it successfully conserved over 9,000 acres
of threatened farmland in 10 states across the country. A much greater
volume of farmland is expected to be enrolled in fiscal year 1998.
After fiscal year 1998, all authorized FPP funding will have been
consumed, but the need for the program will continue to increase. We
ask that you support legislation to reauthorize this valuable program
that helps keep threatened farmland in production.
We greatly appreciate your past and future support of USDA's
conservation programs. We hope that you will keep in mind the views of
LTA and the 1,100 volunteer citizen conservation organizations that
make up the nation's private land trust movement as you make your
funding decisions for the coming fiscal year.
______
Prepared Statement of Gary A. Glenn, President, Massachusetts
Foundation for Excellence in Marine and Polymer Sciences
Mr. Chairman, and Members of the Subcommittee, thank you for the
opportunity to submit a statement for inclusion in outside witness
hearings. My statement concerns USDA funding for research on new
biological methods for treatment of liquid wastes in rural America. On
behalf of research partners in Mississippi, Alaska, and Hawaii, I
request that USDA fund construction and testing of ``living machines''
in fiscal year 1999 at a level of $3.15 million.
living machines
Living machines are ecologically engineered systems for treating
various kinds of wastes, especially waters. Living machines have been
tested and proven effective in urban and industrial settings, and in
particular locations. Living machines are ideal for small and localized
applications such as are found in rural areas.
There is a need to test living machines in real-world settings.
Data from specific rural demonstration sites will be collected and
distributed so that large numbers of applications can take place. This
data will enable local officials to confidently decide on adoption of
living machine use for wastewater and other treatments, including reuse
of waters.
need for geographical diversity
Living machines rely on plants and animals to purify wastewater;
most of the plants used in a particular living machine are locally
obtained. Living machine systems are therefore geographically and
climatically specific. There is an urgent need to test and demonstrate
living machines under regional conditions, where multiple applications
exist. Specific locations in the United States where living machines
have never before been tested or demonstrated include the following:
rural Deep South, northern coastal, and sub-tropical.
selection of demonstration sites
In response to recommendations from program designers and
ecological scientists, the following sites appear to be ideal for
demonstration purposes:
Northern Coastal.--The region around Kodiak, Alaska is climatically
similar to thousands of miles of sparsely population coastline in
California, Oregon, Washington and Alaska. It is planned that a
demonstration living machine will be installed in Kodiak, which will
show how ecological technology can be adapted to rural areas in Alaska
and elsewhere.
Southern.--Rural Mississippi, especially in the northern and
eastern parts of the state, offers excellent opportunities for
demonstration of living machine technology for rural areas, in part
because of current economic transformations in the region, and in part
because of new public concerns over appropriate levels of wastewater
treatment and regulation. This location can serve as a central
geographical demonstration site for many applications throughout the
South.
Sub-tropical.--A living machine application is needed for sub-
tropical and island areas, so a living machine will be constructed and
operated in Hawaii as a demonstration for the state of Hawaii as well
as for many other applications in United States territories such as
Guam, Samoa, and Puerto Rico, and for Pacific Island usages such as the
Northern Marianas.
construction and operation of living machines
So that data collected from the demonstration sites identified in
this description can conform to accepted standards of scientific and
engineering specifications, the design and construction engineering
tasks will be carried out under the management of the organization that
has previously funded and supervised living machine research, the
Foundation for Excellence in Marine and Polymer Sciences. This
Foundation has more than 10 years experience with living machine
technology, and has previously managed urban area applications. The
Foundation will work directly with host institutions in each of the
geographical locations identified in this testimony, who will actually
carry out the research needed to confirm the parameters for living
machine utilization.
financial considerations
A total of $3.15 million is requested for fiscal year 1999, which
will cover design, construction and operations costs for living
machines in Alaska, Mississippi, and Hawaii.
______
Prepared Statement of the Metropolitan Water District of Southern
California
The Metropolitan Water District of Southern California (MWD)
appreciates the opportunity to submit testimony regarding the U.S.
Department of Agriculture's (USDA) fiscal year 1999 budget, for the
Hearing on Agriculture, Rural Development, Food and Drug Administration
and Related Agencies Appropriations. MWD is a public agency created in
1928 to meet supplemental water demands of those people living in what
is now portions of a six-county region of southern California. Today,
the region served by MWD includes nearly 16 million people living on
the coastal plain between Ventura and the Mexican border. It is an area
larger than the State of Connecticut and, if it were a separate nation,
would rank in the top ten economies of the world.
Included in our region are more than 225 cities and unincorporated
areas in the counties of Los Angeles, Orange, San Diego, Riverside, San
Bernardino, and Ventura. We provide more than half the water consumed
in our 5,200-square-mile service area. MWD's water supplies come from
the Colorado River via the district's Colorado River Aqueduct and from
northern California via the State Water Project's California Aqueduct.
introduction
MWD continues to favor USDA implementation of conservation
programs, and is especially encouraged by the new actions identified in
the recently released Clean Water Action Plan. The Clean Water Action
Plan fosters integration of efforts by USDA, the U.S. Environmental
Agency, and other Federal agencies to improve water quality. MWD firmly
believes that inter-agency coordination along with cooperative
conservation programs, that are incentive-based and facilitate the
development of partnerships are critical to addressing natural
resources concerns, such as water quality degradation, wetlands loss
and wildlife habitat destruction. It is vital that Congress provide
USDA with the funding necessary to successfully carry out its
commitment to natural resources conservation.
Our testimony focuses on USDA's conservation programs that are of
major importance to MWD. In particular, MWD urges your full support for
funding for USDA's Environmental Quality Incentives Program (EQIP).
Full funding for this program is essential for achieving Colorado River
Basin salinity control objectives through the implementation of
salinity control measures as part of EQIP. In addition, MWD requests
your full support for the Wildlife Habitat Incentives Program,
Conservation Reserve Program, Wetlands Reserve Program, Integrated Pest
Management and related programs, and the Water and Waste Disposal Loans
and Grants program. Sufficient federal funding for these USDA programs
is necessary to achieve wildlife habitat restoration and source water
quality protection objectives in the Colorado River Basin and in
California's Sacramento/San Joaquin Bay-Delta (Bay-Delta) estuary.
environmental quality incentives program
The Environmental Quality Incentives Program provides cost-sharing
and incentive payments, technical assistance and educational assistance
to farmers and ranchers for the implementation of structural practices
(e.g., animal waste management facilities, filterstrips) and land
management practices (e.g., nutrient management, grazing management)
that address the most serious threats to soil, water and related
natural resources. EQIP is to be carried out in a manner that maximizes
environmental benefits per dollar expended. This assistance is focused
in conservation priority areas identified by the Natural Resources
Conservation Service's State Conservationists, in conjunction with
state technical committees and Farm Service Agency personnel. MWD does
have some concern with respect to this aspect of EQIP. Beginning with
the first full year of EQIP funding in 1997, USDA's participation in
the Salinity Control Program has significantly diminished. The
mechanism by which funding has been allocated by USDA to date
inherently overlooks projects for which benefits are interstate and
international in nature. Clearly, Colorado River salinity control has
benefits that are not merely local in nature, but continue downstream
and EQIP as it is currently administered by USDA does not address
national priorities. MWD supports the recommendation of the Colorado
River Basin Salinity Control Forum as a way to remedy this situation.
In Public Law 104-127, Congress amended the Colorado River Basin
Salinity Control Act to direct the Secretary of Agriculture to carry
out salinity control measures in the Colorado River Basin as part of
EQIP. Sufficient federal funding for implementation of EQIP is critical
in order to achieve Colorado River Basin salinity control objectives as
well as source water quality protection and ecosystem restoration
objectives in the Bay-Delta estuary and watersheds tributary to the
Bay-Delta.
The Colorado River Basin Salinity Control Forum (Forum), the
interstate organization responsible for coordinating the Basin states'
salinity control efforts, issued its 1996 Review, Water Quality
Standards for Salinity, Colorado River System (1996 Review) in June of
1996. The 1996 Review found that additional salinity control was
necessary with normal water supply conditions beginning in 1994 to meet
the numeric criteria in the water quality standards adopted by the
seven Colorado River Basin states and the U.S. Environmental Protection
Agency. For the last four years (1994-97), funding for USDA's salinity
control program has not equaled the Forum-identified funding need for
the portion of the program the Federal Government has the
responsibility to implement. It is essential that implementation of
Colorado River Basin salinity control efforts through EQIP be
accelerated to permit the numeric criteria to be met again under
average annual long-term water supply conditions, making up the
shortfall. The Basin states and farmers stand ready to pay their share
of the implementation costs of EQIP.
The President's proposed fiscal year 1999 budget contains funding
of $300 million for implementation of EQIP. MWD supports this level of
EQIP funding which is also consistent with the USDA actions called for
under the Clean Water Action Plan. The Forum has determined that
allocation of $12 million in EQIP funds in fiscal year 1999 is needed
for on-farm measures to control Colorado River salinity. This level of
funding is necessary to meet the salinity control activities schedule
to maintain the state adopted and federally approved water quality
standards. MWD urges you and your Subcommittee to support full funding
for EQIP as requested in the President's fiscal year 1999 budget for
USDA, with the specific allocation to the Salinity Control Program. MWD
also recommends that the Colorado River Basin be designated as a
national priority area for salinity control.
wildlife habitat incentives program
Wildlife Habitat Incentives Program (WHIP) is a voluntary program,
providing technical assistance and cost-sharing, to help landowners
develop habitat on their properties that will support wetland wildlife,
upland wildlife, threatened and endangered species, fisheries, and
other types of wildlife. WHIP offers an opportunity to encourage
development of improved wildlife habitat on eligible lands by providing
assistance to landowners who wish to integrate wildlife considerations
into the overall management of their operations.
WHIP cost-sharing assistance could be utilized to support ongoing
interim conservation efforts both in the Bay-Delta estuary and for the
Lower Colorado River Multi-Species Conservation Program. The CALFED
Bay-Delta Program is a cooperative effort among state and federal
agencies and the public to develop a long-term, comprehensive solution
to ecosystem and water supply problems in the Bay-Delta. One of the
main objectives of the CALFED Bay-Delta Program is to improve and
increase aquatic, wetland and riparian habitats so that they can
support sustainable populations of wildlife species, by implementing a
system-wide ecosystem restoration approach. WHIP could benefit this
program by providing cost-share assistance for the development of
wildlife habitat on private lands in the Bay-Delta watershed.
The Lower Colorado River Multi-Species Conservation Program (LCR
MSCP) is a broad-based partnership of state, federal and private
entities in Arizona, California, and Nevada. Participants include
water, hydroelectric power and wildlife resource management agencies,
Tribal governments, and environmental organizations with interests in
the Lower Colorado River. The LCR MSCP is focusing on the conservation
of over 100 threatened, endangered and sensitive species and their
habitats. WHIP would allow the combination of federal cost-sharing
dollars and voluntary agricultural land-use practices to enhance
habitat for listed and sensitive species of interest in the Lower
Colorado River. This could be a valuable vehicle for gaining further
agricultural support for conservation efforts and the goals of the LCR
MSCP.
The President's budget requests $20 million for WHIP for fiscal
year 1999. MWD recommends that you and your Subcommittee support WHIP
at the level requested in the President's fiscal year 1999 budget for
USDA.
conservation reserve program
Continued support for the Conservation Reserve Program (CRP) is
necessary in order to build on the past successes of this USDA
conservation program. Under the CRP, incentive payments are provided to
producers to remove highly erodible and other environmentally sensitive
land from production. This program helps protect the quality of
drinking water supplies and facilitates ecosystem restoration efforts
by reducing soil erosion, improving water quality, protecting wildlife
habitats, and achieving other natural resource conservation measures.
The National Buffer Initiative program will further maximize
environmental benefits per dollar expended, and we are supportive of
this effort.
Enrollment of eligible agricultural lands that are located in the
Bay-Delta estuary and tributary watersheds in the CRP, could provide
water quality improvement benefits for this important source of
drinking water. We note, however, that the method which determines the
rental rate for CRP enrollments effectively precludes the enrollment of
much irrigated agriculture land and land with high value crops. As a
result, states in the arid west do not benefit from the CRP in
proportion to their contribution to agricultural production. While MWD
urges you and your Subcommittee to support the President's budget
request for the CRP of $1,718 billion for fiscal year 1999, we also
strongly request that you review the method for rental rate
determination We understand that one of the key actions under the Clean
Water Action Plan is to review and increase, where appropriate, the
incentives available for conservation buffers. Such review should also
be undertaken for the CRP overall.
wetlands reserve program
The Wetlands Reserve Program (WRP), first authorized in 1990, is a
voluntary program providing incentives to landowners for the
restoration and protection of wetlands with long-term or permanent
easements. Wetlands restoration provides important water quality
improvement and wildlife habitat restoration benefits that are
important to the Bay-Delta estuary. MWD urges you and your Subcommittee
to support appropriation of $124 million for the WRP in fiscal year
1999, as requested in the President's budget. Full support for the WRP
is necessary to achieve the Administration's goal of enrolling an
additional 164,000 acres into the program currently, for a cumulative
enrollment of approximately 825,000 acres by the end of 1999 and
975,000 acres by the end of calendar year 2000.
integrated pest management and related programs
The USDA's Integrated Pest Management (IPM) Initiative provides for
the research and development of IPM practices and the coordinated
implementation of IPM programs at the local level. The development and
application of proven IPM practices offers the potential to reduce
reliance on chemical pest controls and minimize the adverse water
quality effects of pesticide use. Implementation of IPM programs could
provide source water quality protection benefits in both the Bay-Delta
estuary and the Colorado River Basin. The President's fiscal year 1998
budget includes funding for a variety of research and assistance
programs contributing to the overall objectives of the IPM Initiative.
MWD urges your full support for the $267 million included in the
President's fiscal year 1999 budget for IPM and related programs.
water and waste disposal loans and grants
The President's fiscal year 1999 budget includes funding for a
number of USDA programs that provide loan, grant and technical
assistance to rural communities. Of particular interest to MWD is the
Water and Waste Disposal Program. This program provides loans and
grants to small rural communities for water infrastructure projects, in
order to assist those communities with drinking water quality and
supply problems and help them achieve compliance with federal drinking
water standards. MWD requests you and your Subcommittee to support the
President's request of $1.339 billion for fiscal year 1999 for water
and waste disposal loans and grants.
conclusion
Thank you for your consideration of our testimony. We believe our
comments emphasize the importance of continued funding for USDA's
agricultural conservation programs. The USDA's conservation programs
are critical for achieving Colorado River Basin salinity control
objectives, as well as broader wildlife habitat restoration and source
water quality protection objectives in the Colorado River Basin and the
Bay-Delta estuary.
______
Prepared Statement of Rudy K. Rice, President, National Association of
Conservation Districts
The National Association of Conservation Districts is a nonprofit,
nongovernment organization that represents the nation's 2,950
conservation districts and more than 16,000 men and women who serve on
their governing boards. Established under state law, conservation
districts are local units of state government charged with carrying out
programs for the protection and management of natural resources at the
local level. Conservation districts work with nearly two-and-half
million cooperating landowners and operators each year and provide
assistance in managing and protecting nearly 70 percent of the private
land in the contiguous United States.
For more than sixty years, conservation districts and state
conservation agencies have worked in close partnership with U.S.
Department of Agriculture agencies to provide technical and financial
assistance to help farmers, ranchers and other landowners and operators
protect and enhance our land and water resources. This partnership has
been carried out primarily with the Natural Resources Conservation
Service (NRCS), but has also involved other agencies such as the Farm
Service Agency, the Forest service and the Extension Service. The
partnership bonds NRCS with local conservation districts and state
conservation agencies and is recognized as an efficient and effective
system for delivering conservation assistance to the nation's private
landowners and operators.
The ``Federal Agriculture Improvement and Reform Act of 1996'' (the
Farm Bill) strengthened USDA's conservation mission by expanding
existing conservation programs and creating several new initiatives
that significantly broaden the scope of the department's natural
resource management responsibilities. It also reinforced Congress'
commitment to building voluntary, locally driven conservation
partnerships among private landowners and operators and the local,
state and federal agencies that serve them. The Farm Bill programs,
along with other USDA conservation programs, operate in tandem with
myriad state and local conservation programs to address the nation's
most serious natural resource problems.
NRCS's Conservation Technical Assistance Program, delivered through
local conservation districts to cooperators and other land users, is
the nation's foremost private lands pollution prevention program. It
provides landowners and operators with much needed help in planning and
applying conservation treatments to control erosion and improve the
quantity and quality of soil resources; improve and conserve water;
enhance fish and wildlife habitat; conserve energy; improve woodland,
pasture and range conditions; and protect and enhance wetlands. Many
federal and state agencies also rely upon the technical expertise
unique to NRCS to carry out other conservation programs that complement
the NRCS effort not only in the agricultural areas, but in rural,
suburban and urban communities as well.
Conservation districts believe that the federal government must
provide a base level of technical assistance funding to maintain its
commitment to support locally led conservation initiatives that
complement federal efforts to ensure a safe and productive environment.
A federal technical presence such as NRCS is vital to ensuring that
sound technical standards are maintained in our nation's conservation
programs. It is also critical in the actual implementation of needed
conservation practices.
This NRCS technical presence, along with federal cost-share
programs, leverages a tremendous investment in conservation by state
and local governments. State and local governments contribute nearly $1
billion in personnel and cost-share funding each year to support
conservation programs carried out by the partnership. This is roughly
equal to NRCS's annual budget and does not include the volunteer time
of district officials. Many states are also working to increase this
support, but depend on the federal government to provide its fair
share.
In developing funding recommendations for specific agencies and
programs, we recognize our own responsibilities to contribute a fair
share of resources. Our recommendations on federal funding are based on
information from our members, discussions with program managers and
estimates based on workloads mandated by federal, state and local
program authorities. Our recommendations are stated, in part as
responses to selected items in the President's proposed budget for
NRCS, as well as recommendations for selected other agency programs.
The Clinton Administration's fiscal year 1999 budget proposal
includes $742.231 million for NRCS Conservation Operations (CO). It
also includes several proposals that would make fundamental changes in
the way NRCS delivers conservation services through conservation
districts and state conservation agencies.
The President proposes $579.110 Million for America's Private Land
Conservation (APLC), the Administration's new designation for
Conservation Technical Assistance. Conservation technical assistance is
the cornerstone of most NRCS programs, supporting activities such as
the Farm Bill, as well as other programs to address state and local
program priorities. The highest priority of the conservation
partnership remains that of meeting the planning and technical
assistance needs of farmers, ranchers and other land managers.
Conservation districts recommend $580 million for Conservation
Technical Assistance for fiscal 1999.
The President's proposal includes $20 million for ``Competitive
Partnership Grants'' to locally based institutions, including watershed
councils, cooperatives, etc., to enhance institutional capacity. In
particular, it advocates hiring non-federal watershed coordinators
(350) to develop watershed partnerships. It makes no mention of
conservation districts, which are the legal entities established under
state law for the specific purpose of coordinating and carrying out
natural resource management programs. Every district in the nation has
a Mutual Agreement with the Secretary of Agriculture that documents its
unique working relationship with USDA. Further, each district also has
a Cooperative Working Agreement with NRCS that outlines how
conservation assistance will be delivered cooperatively to local
landowners and operators.
This partnership delivery system should continue to be used for
delivering conservation technical assistance on private lands. We
strongly recommend that any such grants be channeled through
conservation districts rather than putting in place an unneeded new
delivery mechanism that would duplicate the current conservation
district program delivery system.
The President's proposal also includes $20 million for ``Incentives
to States'' to encourage them to increase their contributions to
conservation programs. Of this amount, $10 million would be awarded to
states to use for geographic information system and digital photo
purchases. Conservation districts support the ``Incentives to States''
concept, but it should not result in a decrease in funding for NRCS
technical assistance.
Under the President's proposal, NRCS would collect $10 million in
user fees for providing certain technical assistance and data services
to its clients. While we could support such fees for services and
products provided to other federal agencies, conservation districts
oppose NRCS's charging user fees for assistance and services provided
to the agency's traditional clients and non-federal partners. We
believe the imposition of fees for services would discourage landowners
from seeking assistance and decrease the application of needed
conservation practices. It is important to point out that this $10
million is embedded in the President's proposal as an offset and should
be restored when funding the CO account.
The budget proposes $70.983 million for a new ``Water Resources
Assistance'' line item and would decrease the Watershed Protection and
Flood Prevention account by $52 million from the fiscal year 1998
appropriated level. This would effectively transfer the technical
assistance funding from the watershed program account to the new line
item under CO. Conservation districts oppose shifting technical
assistance out of the Watershed and Flood Prevention Operations
account. We believe that action would be the first step toward
dismantling this important program and that Public Law 566 funds would
likely disappear in future budget proposals.
We believe it is critical for NRCS to continue providing technical
assistance for the more than 500 watershed projects established under
Public Law 566, the authorizing legislation for the Watershed and Flood
Prevention Operations program. Many of the projects, which have created
an $8.5 billion infrastructure, are nearing the end of their evaluated
lives. Approximately 5,000 of the floodwater retarding structures are
30 years old and many are in need of repair, rehabilitation,
replacement or decommissioning. Project sponsors need design and
construction assistance, as well as technical assistance for
rehabilitating, upgrading or decommissioning aging structures. In order
to address these needs, NACD recommends funding Watershed & Flood
Prevention Operations at $120 million in fiscal year 1999, with at
least $60 million of that amount directed to technical assistance.
Conservation districts are concerned over references in the
President's proposal to focus NRCS activities on setting standards and
providing certification, rather than directly implementing most
activities. We believe this would exacerbate the trend toward targeting
NRCS assistance to federal priorities while shifting more natural
resource management responsibilities to state and local governments
without providing adequate resources to address non-federal priorities.
Conservation districts oppose this shift since conservation programs
provide significant public benefits with responsibility shared at all
levels of government.
The President's proposal requests no funding for the Forestry
Incentives Program (FIP) because it ``promotes timber production on
private lands and is incompatible with the agency (NRCS) strategic
plan, which is focused on water quality and habitat goals.'' Congress
transferred FIP from the Farm Service Agency to NRCS as part of a major
program restructuring in the Federal Agricultural Improvement and
Reform Act of 1996 in recognition of NRCS as the Department's private
lands management agency. Its technical assistance is used primarily to
assist America's farmers in production agriculture as are other USDA
cost-share programs. USDA recognizes private lands forestry as a
farming activity, and the Internal Revenue Service treats forestry
cost-share payments as such. Conservation districts urge Congress to
fund the Forestry Incentives Program at $10 million for fiscal year
1999.
Through the Resource Conservation and Development Program (RC&D),
NRCS provides needed assistance to rural communities. Resource
management and rural development initiatives undertaken by local RC&D's
help revitalize economically disadvantaged rural areas. The President's
budget proposes funding the RC&D Program at $34.377 million, the same
level as for fiscal year 1998. Conservation districts support
increasing RC&D funding to $40 million in fiscal year 1999 to fulfill
outstanding applications for new RC&D areas. New funding should be
directed towards expansion of the current RC&D program to meet locally
identified needs.
The President's budget proposes enrolling 165,000 acres in the WRP
during fiscal year 1999, to be funded through the Commodity Credit
Corporation (CCC). Of the $127 million, roughly $11 million would be
available for technical assistance. Conservation districts recommend
funding the WRP at $163.597 million in 1999, which would allow for
enrolling approximately 220,000 acres. At least $24 million of this
amount should be available for technical assistance.
The Environmental Quality Incentives Program (EQIP), which replaced
most existing USDA conservation cost-share programs in 1996, is a
broad, multi-purpose national conservation financial incentives
program. It is premised on local leadership and a voluntary, incentive-
based approach. Conservation districts support using the locally led
conservation paradigm, with leadership by conservation districts, as
the model for carrying out EQIP and all USDA natural resource
conservation programs.
The President's budget requests an additional $100 million per year
($300 million total per year) to support implementation of the recently
unveiled Clean Water Action Plan: Restoring and Protecting America's
Waters. This increase was also cited in the USDA CRAT report for
outreach to socially disadvantaged producers. Conservation districts
strongly support increasing EQIP funding to $300 million for fiscal
year 1999. We also urge Congress to direct that, of this amount, at
least $57 million must be used to provide adequate technical assistance
to implement the program. Our long-range target is to increase EQIP
funding to $500 million per year by 2004.
The President's proposed budget seeks $1.7 billion for CRP in
fiscal year 1999 to bring enrollment up to 34 million acres--the
current level is 28 million acres. In order to build upon the
environmental investment and benefits from the CRP, conservation
districts support achieving and maintaining full enrollment of 36.4
million acres in the CRP.
other recommendations not included in the president's budget
Grants to Districts
The buying power of federal budgets has declined dramatically
during the past ten years resulting in a decline in the number of NRCS
employees at the field level. In addition to the decline in numbers,
the federal work force has been redirected to focus efforts at targeted
areas at the expense of local problems that affect national
conservation priorities. Many conservation districts have offset this
part of this decline by adding district employees financed with state
and local funds. Much of the state and local funding is being diverted
to help implement federal natural resource programs, often at the
expense of local conservation priorities.
To help meet these ever-increasing demands being placed on the
conservation partnership, NACD recommends that $100 million be budgeted
through the NRCS Conservation Operations account for direct grants to
conservation districts. This is one of conservation districts' highest
legislative priorities in 1998. This action would help NRCS offset some
of the costs of carrying out federal conservation programs and enhance
conservation districts' ability to address national conservation
concerns and priorities at the community level. We fully expect that
state and local governments will step in and provide matching funds
under grants program.
Private Grazing Lands
The capacity of the nation's rangeland to satisfy values and
produce commodities is threatened or, in some cases, may have been lost
nearly 60 percent of the nation's rangeland because of one or more
resource problems such as brush, weeds and water or wind erosion. The
amount of rangeland in a deteriorating trend increased from 15 to 22
percent since 1992 and nearly half of our permanent pastureland needs
treatment to sustain or enhance resource values and production. In many
cases, technical assistance to help landowners and land managers
develop and implement improved grazing management is all that is needed
to solve resource problems and improve or maintain grazing land health.
Preventing degradation before it occurs is extremely important on
grazing lands because, once damaged, the cost of restoring these lands
can exceed its economic value.
Section 386 of the 1996 Farm Bill authorized the Secretary of
Agriculture to establish a voluntary program to provide technical,
educational, and related assistance to owners and managers of private
grazing land. The program, to be carried out through local conservation
districts, will help landowners address resource problems that cannot
be solved easily by individual efforts without technical and financial
assistance. To help meet this need, NACD recommends that the
Conservation of Private Grazing Lands Program be funded at $20 million
as a new line item in the NRCS budget.
funding for cooperative state research, education and extension service
Several Extension programs represent critical components are
significant in USDA's natural resource management delivery system. For
example, the Renewable Resources Extension Act provides educational
assistance to help private landowners manage their lands to meet
commodity demands and needs. At the same time it provides many public
values associated with the forests and rangelands of our nation
Research also remains one of the keys to the continued vitality of
agriculture and effective management of the nation's resource base.
U.S. competitiveness in world markets is contingent an aggressive
research and development program for agricultural conservation and
production techniques. We also recognize that conservation,
environmental quality and production research needs vary across the
United States. America's conservation districts support maintaining
strong research programs in NRCS, the Agricultural Research Service,
the Cooperative State Research, Education and Extension Service and
other agencies as needed.
Attached to this statement is NACD's fiscal year 1999 Agriculture
Appropriations Funding Resolution for Selected Programs Funded by the
House and Senate Agriculture Appropriations Subcommittees. Conservation
districts' fiscal year 1999 funding proposals will begin to build a
deeper commitment to land and water stewardship in America. We have
also cast an eye toward the future by forecasting the investment we
will need to make five years from now to protect our resource base.
Recognizing that currently we spend less than two percent of the
federal budget on resource protection, we recommend doubling the
overall funding for NRCS conservation programs by the year 2004.
We appreciate the opportunity to share our recommendations with the
subcommittee.
______
Prepared Statement of Mary Carlson, President, National Association of
Farmers' Market Nutrition Programs
On behalf of the 30-state membership of the NAFMNP, I am writing to
urge your support for an appropriation of $15 million to permit
continued expansion of the WIC Farmers' Market Nutrition Program (FMNP)
in fiscal year 1999. We greatly appreciate the leadership you have
provided in the past on behalf of this small but valuable program, and
we can assure you that strong interest exists across the country for
its further growth.
Thirty-five states and Indian Tribal Organizations (ITO's) have met
the challenge of the Subcommittee's endorsement of a substantially
increased funding level for the FMNP in fiscal year 1998--a 73 percent
increase from $6.75 million to $12 million. Collectively, FMNP
participating states and ITO's, including five new states--Alaska,
Arkansas, Florida, Georgia, and Mississippi--requested over $12.2
million in federal funds for this year's program.
However, even with the higher funding level and broadened
participation by WIC recipients and farmers, only an estimated 15
percent of the nation's nearly 7.5 million WIC participants and less
than 50 percent of its farmers' markets will be able to participate in
the FMNP in 1998. The Administration's proposed funding goal of $15
million, we believe, will allow for a reasonable and measured expansion
toward the goal of making the program available nationwide.
The Administration's budget request would also shift the source of
FMNP funding from the WIC Program account to the Commodity Assistance
Program account. We believe this is a positive step that would provide
fiscal security for the FMNP and allow funds to flow to state
agriculture, health, and other FMNP agencies in a more timely fashion
to assure proper program planning and operations. Under current
appropriations language, funds can be made available for the FMNP only
if USDA certifies they are ``not needed to maintain current WIC
caseload levels.'' This has resulted in chronic uncertainty on the part
of farmers, farmers' markets, WIC families, and state and local
agencies regarding the FMNP's year-to-year existence. Moreover, the
program's contingent status can delay USDA's FMNP funding decisions
until late Spring--as occurred in 1997--making it difficult for
participating states to effectively plan their programs and fully
utilize their allocation requests. Because the proposed decoupling of
WIC and FMNP funding streams would be mutually advantageous for the
FMNP and for WIC, we ask that you support it.
The FMNP is of critical importance to over 8,000 small farmers, who
redeemed more than $9 million in FMNP coupons in fiscal year 1996, for
the more than 1,200 participating farmers' markets, many in
disadvantaged urban and rural communities, and for the nearly 1.1
million low-income women and children participants who now have
increased access to high quality, locally grown fresh fruits and
vegetables. As a result of the FMNP, 88 percent of the participating
farmers increased their sales of fresh produce and 43 percent increased
their production. In addition, 71 percent of the WIC participants
increased fruit and vegetable consumption due to the FMNP, with 82
percent indicating they plan to eat more fresh produce year-round as
well. These are surely impressive results from a small program with an
annual federal benefit level of no more than $20 per WIC participant!
Thank you again for your past support of the FMNP. We hope you will
support our request to expand and secure the FMNP so that its success
in improving maternal and child nutrition--and fostering agricultural
and rural economic development--can be broadened again in 1999.
______
Prepared Statement of Dr. Albert Vogt, President, National Association
of Professional Forestry Schools and Colleges (NAPFSC)
The National Association of Professional Forestry Schools and
Colleges (NAPFSC) represents the 67 universities that conduct the
Nation's research, teaching, and extension programs in forestry and
related areas of environmental and natural resource management. We
appreciate this opportunity to comment on the three programs
administered by CSREES which greatly enhance the abilities of our
member institutions to effectively address forest and natural resource
issues facing our nation: the McIntire-Stennis Cooperative Forestry
Research Program (McIntire-Stennis), the Renewable Resources Extension
Act (RREA), and the National Research Initiative (NRI). All three of
these programs have stimulated the development of vital partnerships
involving universities, federal agencies, non-governmental
organizations and private industry.
NAPFSC submits the observation to the Committee that we are rapidly
approaching a crisis situation in the nation in terms of the need for
more university forestry research and extension.
the case for enhanced forestry research funding
The forests and other renewal natural resources of this country are
primary contributors to the economic health of the nation; are
reservoirs of biodiversity important to the well-being of our citizens;
are significant to the maintenance of environmental quality of our
atmosphere, water, and soil resources and provide diverse recreational
and spiritual renewal opportunities for a growing population.
Tremendous strains are being placed upon the nation's private
forest lands by the combination of increasing demands for forest
products coupled with dramatic changes in timber policies concerning
our national forests. Because of the changes in federal forest policy,
private forest lands in the United States are now being harvested at
rates not seen since the beginning of the 20th century.
Non-industrial private forest (NIPF) landowners provide a large
array of goods and services throughout the country. Their contribution
to market goods may actually be proportionately the largest in the
West, where the public lands already provide great amounts of public
recreation and amenity values. In the East, NIPF's are projected to
increase their timber harvests almost 30 percent from the 1986 levels
until 2010. Hardwood timber harvests on NIPF lands in the South are
actually projected to increase more than 60 percent from 1986 to 2010.
These spectacular increases will require large investments, higher
prices, enhanced public educational programs--and hopefully much more
regeneration and intensive timber management--at a scale never before
realized on NIPF lands in the U.S.
The country's nine million private timberland owners control nearly
two-thirds of all timberland in the country. And it has been to the
universities, with strong support from CSREES, that landowners
traditionally look for new information about managing their lands. The
combination of research conducted by the forestry schools, combined
with the dissemination of that research through the cooperative
extension network, has never been more essential.
Until recently, wood and wood fiber demands have been met in
significant part from federal lands. The changes in federal forest
timber harvesting policy means the bulk of supply requirements has
shifted to privately owned forest lands. To meet this challenge,
research priorities must be adjusted to better address the needs of
private landowners, and to specifically enhance the productivity of
such lands through economically efficient and environmentally sound
means. Increased fiber imports are not a viable option as the Nation
cannot afford the trade imbalance, loss of jobs, or the importing of
potentially serious plant, animal, and human diseases and pests. These
challenges, however, can be met by the university community through the
building of integrated research and extension programs assisted by
McIntire-Stennis, RREA, and NRI.
The non-industrial private landowners are not prepared to practice
sustained forest management so critical to the health of our
environment and economy. Enhanced forestry research and extension
activities at the nation's universities are needed now! Although the
McIntire-Stennis, RREA, NRI and Fund for Rural America programs address
these concerns, there is need to increase funding for these programs
within CSREES.
NAPFSC is very concerned about the three percent reduction proposed
in President Clinton's fiscal year 1999 budget for the McIntire-Stennis
forestry program. That is the wrong direction in light of the important
challenges requiring enhanced forest resource research and extension.
While much of the President's budget calls for increases in federal
research and development funding, agriculture and forestry research
were targeted for decreases. We believe that reducing the McIntire-
Stennis program to the proposed level of $19,882,000 is unwise and
short-sighted. The National Association of State Universities and Land-
Grant Colleges (NASULGC) has recommended a McIntire-Stennis funding
level of $21,665,000. We also support funding at least at this level.
For more than 25 years, McIntire-Stennis funds have been a critical
part of University-based forestry research. McIntire-Stennis funds
leverage significant additional state and private support and assure
long-term forest resource research, graduate training, and outreach
across the country. Each dollar in federal appropriations has been
leveraged by a factor of nearly five in non-federal dollars in support
of research programs having state, regional, and national significance.
importance of forestry research and extension
Research has improved the understanding of (1) the biology of
forest organisms; (2) the structure and function of forest ecosystems;
(3) human-forest interactions; (4) wood as a renewable raw material;
(5) economics, environmental policy, and business management related to
the forest industry; and (6) international trade, competition, and
cooperation. McIntire-Stennis programs have advanced our knowledge of
the forest ecosystem including the basic chemical, physical, and
biological forces that influence forest health and productivity. At the
same time, they have expanded the marketing horizons for
environmentally friendly and renewable wood and fiber-based products.
Very recent work has examined the economic and ecological benefits of
combining agricultural and forestry practices into integrated land-use
systems termed ``agroforestry.'' Furthermore, these programs have
significantly aided the development of new forest management systems
for multiple-uses including timber, water, wildlife, grazing,
recreation, and aesthetic purposes. The following two projects are
recent examples of the benefits of McIntire-Stennis funding:
--Agroforestry--the practice of grazing cattle, growing agronomic
crops and growing trees on the same land can help landowners
earn a higher return per acre from their land while seeing
environmental benefits (such as less erosion). One Coastal
Plain study showed returns per acre from grazing were
approximately $9 per acre, but when trees were added to the
land, timber profits were more than $80 per acre. To make the
most out of alley cropping (where cattle can graze in and
around the trees) producers need legumes and grasses that
perform well under shade. University of Missouri scientists
have identified appropriate species.
--North Carolina State University's Forest Nutrition Cooperative
discovered that present levels of pine productivity are more
than 50 percent below the biologic and economic potential in
the southeastern United States, that poor nutrition and not
water is the principal factor that limits pine production,
defined nutrient requirements for a desired level of
production, and developed silvicultural systems that include
fertilization. Thanks to these research results, fertilization
of loblolly pine plantations has increased from 100,000 acres
in 1989 to over a million acres in 1997. The increased wood
production due to fertilization in 1997 alone will exceed four
million cords over the next eight years.
The Renewable Resources Extension Act (RREA) provides funds for
technology transfer and technical assistance to ensure that the
benefits of forestry research are made available to private timberland
owners and forest industries through CSREES. NASULGC has recommended
funding RREA at a level of $4 million for fiscal year 1999. President
Clinton recommended a funding level of $3,192,000 in his fiscal year
1999 budget. We urge the Committee to support the NASULGC request.
RREA funds have created programs and provided expertise that
benefit private timberland owners and the timber industry throughout
the country. For example:
--In Arkansas, over $5 million has been estimated to have been earned
or saved by timberland owners and the forest products industry
because of RREA educational programs.
--In Virginia, 98 percent of the 341 landowners who participated in
ecosystem management field days indicated that they would use
ecosystem management practices to improve their own land. Those
landowners collectively own 68,000 acres.
Similar stories can be found in all 50 states. It is vital that
Congress continue proper funding for this important program for
distributing the knowledge gained through our research institutions to
the private landowners.
Lastly, we urge your support of the Competitive Grants Program
administered under the National Research Initiative of the USDA. Peer
competition for grants is at the heart of the university system and
this program has become very important to natural resource scientists
working within NAPFSC institutions. Research funds from NRI enable
NAPFSC institutions to build upon the base provided by McIntire-
Stennis. President Clinton's budget calls for a funding level of $130
million for fiscal year 1999, a level also recommended by NASULGC, and
we urge your Subcommittee to fund the program at the requested level.
The House and Senate Agriculture Committees recently completed work
on the reauthorization of the Research Title of the Farm Bill. Both
committees called for increased programs and activities for forestry
research to address the increasing challenges facing the non-industrial
private forests. The Senate bill encourages the Forest Service to
allocate a greater share of its future research budget for
collaborative research conducted by the land-grant universities, and
urges the development of new cooperative programs between CSREES, the
Forest Service and the land-grant universities. The House bill also
directs the USDA to focus more attention and resources on efforts to
increase the productivity of non-industrial private forest lands.
We are delighted that the authorizing committees have recognized
the importance of expanding forestry research. However, the current and
proposed levels of McIntire-Stennis and RREA funding are well below
their authorized levels of one-half the Forest Service research budget
(McIntire-Stennis) and $15 million (RREA) respectively. Congressional
action to increase these two important sources of federal support to
universities toward their authorized levels would enable universities
to address the expanded research and educational needs for privately
owned forest lands.
who benefits?
Forestry research provides many direct and indirect benefits to
society by increasing forest productivity, improving forest health, and
providing diverse employment opportunities--all while enhancing
environmental quality and improving environmental protection. Forests
contribute substantially to the economic well-being of the United
States. Forestry related employment constitutes a large sector of our
work force, including manufacturing, research, and recreation. Forest
product companies alone employed 1,580,000 people in 1988, representing
8.5 percent of the Nation's manufacturing work force. Many of these
benefits accrue in rural areas of the United States where economic and
social viability remain a widespread concern. Private timber landowners
depend on the generation of critical forestry research information and
its accessibility through extension to support and improve the wide
range of public and private benefits arising from their investments.
Society as a whole benefits from the improved recreational
opportunities and amenity values provided by healthy forests. By
increasing our understanding of forest ecosystems, the forestry
research-extension partnership also improves our ability to protect the
environmental amenities associated with forest lands, including the
protection of biodiversity and the improvement of water and air
quality.
The past, present, and future success of forestry research and
extension activities arising from the NAPFSC member institutions
results from a unique partnership involving federal, state, and private
cooperators. Much of the funding of forestry and forest products
research comes from the private industrial sector. However, such
funding is commonly allocated for research within the companies
themselves and is typically focused on near-product development where
the benefits of investments are readily captured. Federal agencies have
concentrated on large-scale national issues while state funding has
emphasized applied problems and state-specific opportunities.
University research in contrast, with the assistance of federal, state
and private support, has been able to address a broad array of applied
problems related to technology development and fundamental biophysical
and socioeconomic issues and problems that cross ownership, state,
region, and national boundaries. Schools and colleges with programs in
forestry, forest products, and natural resources have the expertise in-
house to address a broad range of problems and opportunities related to
the forest resource and its utilization.
We encourage continued federal participation in this partnership
with NAPFSC institutions through McIntire-Stennis, RREA, and NRI. We
respectfully urge you to fund the McIntire-Stennis Cooperative Forestry
Research Program, the Renewable Resources Extension Act, and the
National Research Initiative at the levels requested by NASULGC for
fiscal year 1999 and respectfully suggest increasing McIntire-Stennis
and RREA to their maximum authorized funding levels.
______
Prepared Statement of the National Association of State Foresters
Thank you for the opportunity to present this testimony regarding
the Agriculture Appropriations bill. We thank the Subcommittee for
their support of our priorities in recent years, and we will need your
help this year to correct yet another serious mistake on the part of
the Administration in requesting the elimination of the Forestry
Incentives Program. We are also supporting several other programs which
are designed to ensure future timber supplies and improve the
management of the Nation's non-Federal Forests.
As you know, these forests make up over 70 percent of the country's
forested land base, and non-industrial private forests account for well
over half of the Nation's timber supply. As you are also no doubt
aware, the level of harvest from Federal lands has dropped
precipitously in recent years, while demand for wood fiber has not.
Several programs within this bill are critical to ensuring that the
shift of demand to these non-industrial private lands doesn't impair
their ability to produce forest resources sustainably over the long-
term.
Most critically, programs such as the Forestry Incentives Program
(FIP) are needed more now than ever. With its clear focus on
reforestation, it is capable of helping keep large acreages of land in
continuous forest cover, ensuring long-term timber supplies while
protecting soil productivity and enhancing water quality. We strongly
oppose the Administration's request to eliminate the Forestry
Incentives Program and reject their rationale that the program is not
compatible with the Natural Resources Conservation Service's strategic
plan. Keeping lands forested, and assisting landowners in overcoming
these serious obstacles to reforestation, most certainly will help NRCS
meet its objectives of protecting watersheds and soils. We also note
that Congress specifically reauthorized FIP during the 1996 Farm Bill,
and the NRCS has a statutory responsibility to carry out the program.
We also note a great deal of concern amongst State Foresters over
the NRCS administration of the FIP program. While the State Forestry
delivery mechanism remains fundamentally sound, we are concerned that
NRCS is not committed to making the program a success. We would
encourage the USDA to re-evaluate the transfer of this program from the
Farm Services Agency to NRCS, and to consider either returning the
program to the FSA or transferring it to the Forest Service.
In fiscal year 1997, FIP helped plant trees on over 141,000 acres,
and performed timber stand improvement on more than 22,000 acres. The
program has been under-funded at around $6 million for the past several
fiscal years. NASF opposes the Administration's request to eliminate
the program and urges you to fund it at $10 million, its historic
level.
We are happy to see that the Administration has requested renewed
funding for the Renewable Resources Extension Act program (RREA), and
we applaud the action of this subcommittee in restoring that program in
spite of the Administration's request to eliminate it last year. NASF
strongly supports this program, which we believe can help reach
landowners, loggers, and foresters with sound advice that can help
improve the productivity and management of the Nation's non-Federal
Forests.
A particularly important function of this program is funding the
Logger Education to Advance Professionalism (LEAP) program. While
professional resource managers are involved in only a relatively small
percentage of timber sales, loggers are involved in every timber sale,
and it is critical that we reach as many of them as possible to ensure
that these sales are conducted in an environmentally sensitive manner.
NASF is pleased that the Administration has included funding for
this program in their fiscal year 1999 request. However, we urge the
Subcommittee to fund the program at its full authorization level of $7
million, above the continuing level suggested by the Administration.
NASF is also pleased to offer support for the Resource Conservation
and Development program at slightly higher than the continuing level
proposed by the Administration. This program has enormous potential to
help develop sustainable business opportunities that can take advantage
of underutilized forest resources.
NASF would also like to submit the following recommendations for
forestry-related research programs that are funded through this
appropriations bill:
Cooperative Forestry (McIntire-Stennis) Research.--This program
supports forestry and wood fiber related research conducted by the
Nation's public universities. University-based research is an important
and growing part of the collaborative research effort involving
Federal, State, and industry scientists. It is critical to the creation
of new technologies that will increase the efficiency and productivity
of forest management on all forest ownerships. McIntire-Stennis
Research funds are granted directly to public colleges and universities
on a matching basis. This program has provided an important foundation
of funding for research that has not been supported through other
means. NASF recommends increasing McIntire-Stennis Research to $25
million, to reflect the high priority we place on forest research that
will help us meet fiber demands in a sustainable fashion.
National Research Initiative.--This competitive grants program
funds research on key problems of national and regional importance in
biological and environmental sciences. The NRI awards grants on a
matching basis to university researchers using modern biological,
environmental, and engineering sciences to address critical problems in
agriculture and forestry. NASF strongly supports at least 20 percent of
the NRI funds being dedicated to natural and renewable resources
research.
Figures for NASF's Budget Recommendations are listed below. Thank
you for considering our requests.
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------
1998 enacted 1999 admin. 1999 NASF
----------------------------------------------------------------------------------------------------------------
NRCS Conservation Programs:
Forestry incentives......................................... 6.000 .............. 10.000
RC&D Program................................................ 34.377 34.377 35.000
CSREES Forestry Related Programs:
RREA........................................................ 3.400 3.400 7.000
Mc-Stennis Coop. Res........................................ 21.000 20.000 25.000
NRI......................................................... 105.700 130.000 115.000
----------------------------------------------------------------------------------------------------------------
______
Prepared Statement of Charles G. Scalet, President, National
Association of University Fisheries and Wildlife Programs, South Dakota
State University
The National Association of University Fisheries and Wildlife
Programs (NAUFWP) submits this statement on the proposed fiscal year
1999 budget for the Cooperative State Research, Education, and
Extension Service (CSREES), U.S. Department of Agriculture.
Members of NAUFWP include 53 Universities. We seek to enhance
public understanding of the needs for improving natural resource
management and to advance the science and practice of sustainable uses
and management of the resource base. Our efforts focus on cooperative
work with partners and customers to advance research, education, and
extension to benefit people and communities throughout the country.
This service and outreach are among the most time-tested, successful,
community-based conservation efforts in the U.S.
These proven research, educational, and extension programs of the
CSREES and its Land Grant University partners initiate relevant,
positive changes in attitudes, and stimulate constructive actions to
implement new technologies and sound approaches and practices by
private landowners, resource managers, community decision-makers, and
other members of the public. Accumulated experiences show that
investments of funds and time yield significant benefits to individuals
and to the states and nation by building and sustaining a more viable
and productive natural resource base and a competitive and profitable
agriculture industry.
The pressing challenge is to have the CSREES/Land Grant University
System, with its grass roots credibility and delivery system, reach
more of the approximately 10 million private landowners and managers
who control more than two-thirds of the U.S. lands, or approximately
1.35 billion acres. Regrettably, the proposed fiscal year 1999 budget
for CSREES is far less than adequate to help private landowners and
managers move forward in achieving sustainable uses of the resource
base. More emphasis on proper uses of natural resources is needed to
achieve a more sustainable society, thereby avoiding costly restoration
efforts.
In view of these shortcomings, NAUFWP strongly recommends that the
following five adjustments be made in the proposed fiscal year 1999
budget.
1. That the Renewable Resources Extension Act (RREA) be funded at a
minimum of $9.5 million in fiscal year 1999. This level of funding (1)
is less than the $15 million authorized level, and (2) is essential to
enable the Cooperative Extension Service system to accomplish the goals
and objectives set forth in the mid-1990's Report To Congress. Needs
for RREA educational programs continue to mount as land holdings become
more fragmented, more landowners need information, and concerns of
society grow for managing natural resources on a sound basis to enhance
water quality, fisheries, wildlife, and human health, while sustaining
the productive capacity of the resource base. Among the resource
management needs is outreach of information to ensure continuation of
the flow of goods and services from the 490 million acres of nonfederal
forests owned by millions of nonindustrial private forestland owners.
Responses to these accumulating needs are supported by state and local
partners who contribute an average of $4.00 to each RREA $1.00.
Making $9.5 million available would permit the Cooperative
Extension Service to expand its outreach services to assist more than
500,000 private owners to improve their decisions and management on an
additional 35 million acres, while increasing productivity and revenue
by an estimated $200 million.
2. That Smith-Lever 3(b)&(c) base program funds be increased to
$280,950,770 (+9 percent), with at least one-third of this increase
targeted to Extension's Natural Resource and Environmental Management
(NREM) programs. This adjustment in the proposed fiscal year 1999
budget is needed to provide more adequate ``block grant'' funds for
Land Grant Universities to extend essential educational outreach based
on assessments of local needs. An increase in these funds is required
to develop the critical level of NREM staff services at state and local
levels to focus and leverage limited funds to address critical natural
resources situations that involve farmers and small landowners in both
rural and urban communities nationwide.
Among pressing needs for Extension's attention and services are a
host of natural resource management challenges and public issues,
including forest health, wetlands maintenance and restoration, water
quality, endangered species, and people/wildlife interactions. More
adequate Extension responses to these topics and others have been
called for in the 1990 FACT Act, as well as in various Farm Acts.
Continued close cooperation among the State Cooperative Extension
Service, State Fish and Wildlife Agencies, and other appropriate state
and federal agencies, conservation organizations, and local people is
critical to build responses to pressing needs in managing natural
resources on a sustainable basis. One cooperative effort, the Extension
4-H Youth Natural Resources program and its many projects, continues to
attract participants, with more than 1,350,000 young people from both
urban and rural communities presently enrolled. Additional Smith-Lever
funds targeted appropriately would enable CSREES to respond to more of
its goals and responsibilities, especially those in the NREM National
Strategic Plan.
3. That $500,000 be restored to the fiscal year 1999 budget for
Rangeland Research Grants. Elimination of the only federal competitive
grants program for rangelands, as proposed in the fiscal year 1999
budget, has serious adverse implications for watersheds, water quality,
fisheries, wildlife, and other natural resources. Restoration of funds,
as recommended, is necessary to focus some needed practical attention
on the more than half of the U.S. land area in rangeland. Modest
appropriations for Rangeland Research Grants prior to fiscal year 1998
supported some of the most important rangeland studies and services
carried out in the past decade. Many additional situations requiring
evaluation and technical services deserve immediate attention.
4. That at least 25 percent of the total increase in funds for Pest
Management be directed to technical services and educational outreach
programs to prevent damages and control vertebrates, such as deer and
other animals, in urban and rural communities, and to address invasive
exotic species and noxious weed problems on rangelands and elsewhere.
This focus on vertebrates and invasive species in pest situations has
been identified by private landowners, including agricultural
producers. Merely increasing funds for pest management would provide no
assurance that the most pressing problems are addressed. Targeting a
percentage of the Pest Management funds for vertebrate and invasive
species would help ensure that research and educational programs
advance the knowledge and capability of landowners and managers to
prevent and reduce losses in situations involving these species. These
programs require strengthening to restore, manage, and sustain the
biological integrity of the U.S. natural resource base upon which our
agricultural and natural resource economies depend.
5. That the Hatch and McIntire-Stennis funds be restored to at
least fiscal year 1998 levels by adding $15,677,000 to the proposed
fiscal year 1999 budget. Both of these research programs, conducted
through Land Grant University partners and other educational
institutions, are essential to address natural resource situations and
issues important in achieving sustainability in agriculture and other
uses of the resource base.
We are pleased that the Administration has proposed a $9.5 million
increase for natural resources and the environment studies through the
National Research Initiative (NRI) Competitive Grants. However, what is
proposed to be done under this ``Area of Special Emphasis'' does not
address critical natural resource research needs of deep concern to the
natural resource community and the public. In view of this mismatch,
and if necessary, redirect funds from the total increase for NRI to
fund the Hatch and McIntire-Stennis programs at fiscal year 1998
levels.
summary
Based on considerations outlined above and to strengthen community-
based conservation and management of natural resources, the National
Association of University Fisheries and Wildlife Programs recommends
the following for the CSREES fiscal year 1999 budget.
1. Fund the Renewable Resources Extension Act at least at $9.5
million;
2. Increase funding for the Smith-Lever 3(b) and (c) base program
by 9 percent ($23,197,770);
3. Restore $500,000 for Rangeland Research Grants;
4. Designate at least 25 percent of the total increase in funds for
Pest Management for prevention and control of damages by vertebrates
and invasive species; and
5. Restore Hatch and McIntire-Stennis funds at least to fiscal year
1998 levels.
These funding levels would help in responding to current public
needs and legal responsibilities, and assist in carrying out programs
more effectively. NAUFWP respectfully requests that the Appropriations
Committee approve these adjusted figures.
______
Prepared Statements of the Association of American Veterinary Medical
Colleges and the National Association of State Universities and Land
Grant Colleges
This testimony represents the concerns of both the Association of
American Veterinary Medical Colleges (AAVMC) and the NASULGC Board on
Veterinary Medicine.
The AAVMC coordinates the affairs of the 27 U.S. veterinary medical
colleges, the four Canadian colleges of veterinary medicine,
departments of veterinary science and comparative medicine and the
animal medical centers. In addition, the Association fosters the
membership's teaching, research and service missions both nationally
and internationally. The principal goal of the AAVMC is improving the
quality of life for both humans and animals. The AAVMC realizes this
goal by addressing the needs of both consumers and the producers of
food and fiber, as well as the needs of all animal owners.
The Board on Veterinary Medicine is a component of the Commission
on Food, Agriculture, and Renewable Resources within the National
Association of State Universities and Land Grant Colleges. Membership
on the Board on Veterinary Medicine is comprised of colleges of
veterinary medicine located at land-grant institutions. This includes
25 of the 27 United States Colleges of Veterinary Medicine. Heads of
departments of veterinary science, comparative medicine, or
pathobiology in NASULGC member institutions also are members of the
Board on Veterinary Medicine. The purpose of this board is to address
the concerns of animal health and disease, animal welfare, public
health and regulatory medicine, zoonotic diseases, environmental
issues, public policy related to the use of animals and products for
the benefit of animals, public policy related to funding of higher
education, and other issues as identified by any of veterinary
medicine's diverse constituencies.
Within the AAVMC and the Board on Veterinary Medicine, we believe
that these comments will highlight and support priorities set forth by
the advisory board, particularly those dealing with environmental
stewardship, emerging animal issues, national agricultural genome
research, food safety research, and education and outreach. We also
believe that many of the implied goals of the priorities can be met
through a number of initiatives that will be discussed later.
Food safety is an issue of paramount importance, not because it is
currently a popular political topic, but because it affects each and
every person in this room and in this nation. In terms of food safety,
everyone is a stakeholder, the grower, the producer, the packer and
finally the consumer. While in many cases food safety concerns are
traced to improper handling by the consumer, we can and should do more
to assist farmers and ranchers produce food that minimizes food borne
illness at the consumer level. We need to develop a body of knowledge
from applied on-farm research that will prepare producers, extension
specialists, and veterinarians to be better ``applied practitioners''
of food safety for on-farm interventions. These on-farm interventions
are important to all stakeholders and especially to veterinarians,
extension specialists, and the producer themselves.
Another major theme that should be considered is the development of
integrated solutions to problems of air and water quality. Solutions
can come from multidisciplinary research in Veterinary Medicine, Animal
Science, and Environmental Science. The integration of these fields
will allow for many types of possible breakthroughs that will benefit
all agricultural stakeholders, both producers and consumers. This type
of research program should include species specific issues allowing a
focusing on the uniqueness of production and pathogens to that
individual species.
At this time we will briefly mention four proposals by the AAVMC
and the BOVM that will address the priorities of major importance to
us.
First, a major new programmatic thrust is needed in animal health
and disease, under section 1433 contained within Title VIII of the
Federal Agriculture Improvement and Reform Act of 1996. This new
programmatic effort, will be to insure the production of healthy
animals for a healthy food supply. We are calling this initiative
animal health to healthy humans. Due to the increasing realization that
biological systems are ultimately linked in some form or fashion, it is
timely to approach problems in a multi-disciplinary manner. The causes
of and the methods to control food borne illness have become
perspicuous examples of this fact. The agricultural industry is going
to increasingly be asked to step up and shoulder responsibility for the
food safety aspects of public health. Therefore a national commitment
by Congress, funded through the Department of Agriculture, dedicated to
the continual goal of identification, control, and elimination of food
borne illness is a moral if not an economic must for those involved in
production agriculture. The establishment of a new animal health to
healthy humans initiative that is continuously funded under animal
health and disease research base funding is indicated. The described
new initiative should be established with the addition of five million
in new funding awarded to Section 1433, which is the continuing Animal
Health and Disease Research Program, with yearly increases over a three
year period up to a sustained 15 million dollar level.
Base funding that supports ongoing research efforts into the
ecosystem of infectious agents, such as Salmonella and E. coli O157:H7,
that pose a serious hazard to human health via contamination of food
stocks, is needed. In addition, improvement of on-farm and
environmental knowledge of these known pathogens and understanding the
methodologies to control these food borne pathogens will become
increasingly important to protect U.S. export markets. The increase
funding initiative for Animal Health and Disease will facilitate the
gaining of an improved understanding of microbial ecology as it relates
to the contamination of food supplies. With the information derived
from this newly focused animal health to healthy human research effort,
a foundation of knowledge will be in place to support new training
programs, both at the professional and graduate levels, so that
adequate numbers of people with backgrounds working with HACCP systems,
ISO-9000 standards, and Sanitary/Phytosanitary Standards. The
fundamental knowledge as well as the programs creating experts in food
safety intervention methodologies are in high demand and sorely needed
for U.S. agriculture. The creation of a new animal health initiative in
the form of ongoing national core funding is warranted considering the
global marketplace.
Our second proposal is to develop on-farm pre-harvest food safety
systems for each of the five major animal product commodities,
including eggs, poultry, dairy, beef, and swine. We recommend that this
initiative be funded by a $25 million-dollar increase in the National
Research Initiative (NRI), on a sustained basis, split between the two
mission areas of animal systems and natural resources and the
environment. This new emphasis in the NRI should dedicate at least $2
million for work in each described animal commodity area. Collaborative
studies need to be carried out with a variety of experts and
disciplines studying on-farm systems to develop strategies for
understanding the ecology of pathogens and avoiding contamination of
animals and animal products before they leave the farm gate.
Information gained in the study of microbial ecology will assist in the
development of HACCP procedures or other on farm intervention
procedures that result in risk identification and assessment, and risk
management of pathogens in each commodity area. This type of
collaborative research that encompasses multi-disciplinary approaches
to problem solving is increasingly necessary. It is important to
realize the problem solving capabilities that can be derived from
integrative biology approaches. Therefore, funds are needed to support
ecosystem studies by veterinarians, animal scientists, and
environmental scientists. Development of sustainable systems for
intensive food animal production that result in minimal impact on the
quality of air and water and result in a safe food supply are the
goals. We are concerned that the draft research priorities do not
adequately address the need for on-farm, pre-harvest research and
application of knowledge at this stage of animal production
Thirdly, we recommend that we protect our domestic food supply and
prevent non-tariff trade barriers to our export markets by using
knowledge generated by research on foreign animal diseases and new and
reemerging diseases. Funds required for this type of research could
flow intramurally as well as extramurally through ARS and CSREES.
Considering the global economy and increasing recognition that foreign
animal diseases may not be so foreign, it is paramount that we ready
ourselves for challenges that may threaten entire domestic animal
agricultural sectors, whether they be a real epidemiological problem or
just politically based. On the export side, the General Accounting
Office (GAO) has recently cited a USDA survey estimating up to $5
billion in legitimate US agricultural exports have been prohibited
because of non-tariff trade barriers.\1\ One of the best ways to
prepare ourselves for issues of a sanitary or phytosanitary nature,
whether they be import or export, is via knowledge. This nation's
research mission can and should advance this knowledge. An increased
awareness represented by specific funding of research into foreign
animal disease, as well as those diseases that qualify as new and
reemerging, is fundamental in order to protect markets and maintain a
favorable balance of trade for this nation's agriculture. Our medical
colleagues that work only on one species, the physicians, have
recognized for years there is no such thing as exotic or foreign
disease in human medicine. All human ailments fall on to a single list
with various levels of concern attached to them because anyone of those
ailments can end up in the middle of this country with one airplane
ride. This is becoming the case for our animal agriculturists.
Remember, the days of our animal agriculture isolation are quickly
disappearing. Therefore research funding directed toward understanding
and preparation for new and emerging animal disease threats is not only
warranted, it is a proper use of public funds and should be considered
a form of national defense.
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\1\ GAO Report/NSIAD-98-32, Agricultural Exports, January 1998. pp.
9.
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Proposal number four is a recommendation to determine the food
safety impact of various animal production management strategies so
that sustainable practices with the lowest possible risk to consumers
will be widely used. The Fund for Rural America would be a logical
avenue of funding for this type of applied learning research. Research
is needed that fairly evaluates various production techniques for
effects on human health, such as animal feeding of low level
antimicrobial agents and the development of antimicrobial resistance.
Furthermore, research that may elucidate the need for cultural and
management modifications to traditional animal production systems will
potentially be more widely accepted if publicly funded on a national
level. We include under this proposal those genomic studies that would
enable rapid identification of microbes through molecular
fingerprinting. This is an example of collaborative efforts at the
applied level. Development of molecular fingerprinting strategies for
microbe identification would be an essential element to management
systems for livestock, and natural resources and the environment. This
type of knowledge is paramount if pathogenic organisms, including
Salmonella and E. coli O157:H7, are to be controlled or even eliminated
in the human food supply.
In conclusion, we would like to thank the Subcommittee for giving
the AAVMC and the BOVM this opportunity to discuss stakeholder issues
in this forum. We hope that our comments will be helpful to you in
prioritizing research initiatives within the USDA.
______
Prepared Statement of Dr. James H. Mortensen, Associate Dean, Resident
Instruction, Pennsylvania State University, on behalf of the Academic
Programs Committee on Organization and Policy (ACOP)
Mr. Chairman, members and staff of the subcommittee, I appreciate
the opportunity to address the important issue of science education in
the United States and the 1999 budget for USDA. Few issues are of more
importance to the well being of our country and the future of our food
and agriculture system.
Over the last several years, three White House reports and three
presidential administrations have called for more emphasis by federal
agencies on undergraduate education and K-through-twelve science
education. In 1992, the Federal Coordinating Council for Science,
Engineering, and Technology (FCCSET) recommended that federal agencies
should examine the impact of federal research support on university
undergraduate and graduate education and identify strategies to ensure
against unintentional degradation of the educational mission and
excellence of the research-intensive universities. In the same year,
the President's Council of Advisors on Science and Technology (PCAST)
recommended that federal agencies should ensure that their programs
encourage universities to reemphasize education rather than discourage
them. President Clinton called for increased emphasis on education at
all levels in his 1997 State of the Union message and placed even
greater emphasis on education in his 1998 State of the Union address.
Federal agency involvement with higher education is especially
critical to American agriculture. The great size of the American food
and agricultural system and its very favorable competitive position in
the world economy is due in large measure to our ability to substitute
scientific knowledge for natural resources and labor. Theodore Schultz,
using agriculture as his model, won the Nobel Prize in economics for
demonstrating that the return on human capital was much higher than the
return on physical capital.
The Board on Agriculture Budget Committee of the National
Association of State Universities and Land-Grant Colleges carefully
constructed a list of priorities for funding of USDA programs in
research, education and extension. Preeminent again in this list is the
Higher Education Challenge Grants Program administered by the Science
and Education Resources Development unit of the Cooperative State
Research, Education, and Extension Service.
--This program is a matching program, generating dollar-for-dollar
non-federal funds, thereby doubling the federal investment.
--It is a highly competitive program, assuring only the most
appropriate, highest quality projects will receive funding.
--It supports innovative and model projects that can and are
transferred to other campuses throughout the system.
--It promotes partnerships among universities and colleges as well as
with private industry.
--It promotes faculty development in order to be better able to serve
student educational needs in the biological and social science
area.
--The program allows us to enrich curricula to meet needs of
potential scientists,technicians, and future informed non-
science citizens.
A multitude of outstanding examples of successful Challenge Grants
can be cited, however, noting but two illustrates the innovative nature
and important role these grants play in our agriculture and natural
resource system.
New Mexico State University.--Improving Undergraduate Science
Education in Horticulture and Agriculture Education.
Iowa State University.--Web-Based Education: Creating Authentic
Learning Environments in Agriculture.
Present funding for this Higher Education Challenge Grants Program
is $4.35 million. The Academic Programs Section and the Board on
Agriculture Budget Committee of NASULGC recommend funding for fiscal
year 1999 of $7.0 million This increase will allow the agency to award
more and larger grants which will encourage cooperative grant proposals
from participating schools. The percentage of submitted proposals
funded in the life of this program is about 20 percent. This year, the
number of proposals submitted has increased from 117 to 171, indicating
the tremendous need for the increased funding.
The Challenge Grants Program is the cornerstone of the higher
education effort of the USDA. This program complements and enhances the
successful efforts of the 1890 Capacity Building Program and the new
programs for the 1994 land-grant institutions.
The very successful Institution Capacity Building Grants Program
for 1890 Institutions strengthens the linkages among historically
minority institutions and other colleges and universities, the U. S.
Department of Agriculture, and private industry. This program is
presently funded at $9.2 million. The Academic Programs Section and the
Board on Agriculture Budget Committee recommended fiscal year 1999
funding at $10 million. Building and enhancing the capacity of the 1890
institutions to educate undergraduates in agriculture and natural
resources provides a sound base from which these institutions can
enrich their programs through the Higher Education Challenge Grants
Program. Similarly, the 1994 land-grant institutions are building and
enlarging their capacity to educate Native American students in
agriculture and natural resources, primarily through the 1994 Education
Equity Grants Program and the interest from the Native American
Endowment Fund. In addition, the 1994 land-grant institutions have
authorization for a $1.7 million Capacity Building Grants Program to
further develop their educational capacity and encourage cooperation
with 1862 and 1890 institutions. These programs, aimed at substantially
improving educational efforts of the 1994 institutions, many of which
are only 20 years old and all with a scarce resource base, complement
perfectly the Higher Education Challenge Grants Program. The Higher
Education Challenge Grants build upon the educational foundation
provided by the 1994 Education Equity Program, Endowment, and Capacity
Building Programs. The Academic Programs Section and the Board on
Agriculture 1998 Budget Committee recommends full funding for all of
these necessary programs.
The Hispanic Education Partnership Grants Program is a highly
competitive program that helps bring educational opportunity and
innovation to institutions and is heartily endorsed by the Academic
Programs Section. Projects such as that funded at Miami Dade Community
College to create a Food and Beverage Export curriculum in conjunction
with the Caribbean Basin Agriculture Trade Association, the World Trade
Center, the Miami Free Zone and other partners is an example of the
liaisons created to serve our students. The partnership between Rancho
Santiago College, California Polytechnic State University, and the
United Agribusiness League to promote diversity in Food Systems
Education is also an example of public/private cooperation to better
serve students in agriculture. The Academic Programs Section and the
Board on Agriculture Budget Committee recommends funding at $2.5
million.
Another cornerstone of this educational effort is the Multicultural
Scholars Program. This program allows institutions to encourage a
variety of educationally outstanding minority students to enter the
field of agriculture and natural resources. Again, it further extends
the cooperation between 1862, 1890, and 1994 land-grant institutions.
Presently, the program is funded at $1 million, with funds carried over
to allow for a $2 million program every other year. We recommend
continued funding for this important program.
The Graduate Training Fellowships is the only federal program
targeted specifically to the recruitment and education of pre-doctoral
students for critical food and agricultural science positions in areas
identified as having a shortage of expertise. The Academic Programs
Section and the Board on Agriculture Budget Committee recommend funding
at $4 million.
The above-mentioned programs have been extensively reviewed by the
USDA-land-grant partnership members and have received a high priority
ranking by both the Academic Programs Section and the Board on
Agriculture of the National Association of State Universities and Land-
Grant Colleges.
We appreciate the opportunity to submit this testimony and
encourage your positive response to these prioritized requests.
______
Prepared Statement of Dr. James J. Zuiches, Chair, National Association
of State Universities and Land Grant Colleges
Mr. Chairman, I am James J. Zuiches, Dean of the College of
Agriculture and Home Economics at Washington State University, and
Chair of the National Association of State Universities and Land-Grant
Colleges' fiscal year 1999 Budget Committee. I represent the 75
universities that work in close cooperation and partnership with the
USDA Cooperative State Research, Education, and Extension Service.
These universities comprise the State Agricultural Experiment Stations,
Cooperative Extension, and Academic Programs of the land-grant
universities, representing the 1862, 1890, Tribal Colleges, and
Hispanic-serving institutions. We employ over 24,000 professional staff
who directly affect over 40 million Americans annually through our
Cooperative Extension Service, educate more than 100,000 students in
colleges of agriculture and life sciences, and conduct research
projects central to the Nation's interests in food, agriculture,
natural resources, and the environment.
My colleagues and I appreciate the support that the land-grant
university system has received from this Subcommittee in the past; and
I expect that the continued investment in agricultural research,
extension, and education programs will continue to benefit both farmers
and consumers.
Our programs are designed, in cooperation with USDA and the
constituencies who support our programs from the state, county, and
private sector.
Our goal is to maintain a strong American agriculture. Through
research and education, we support the U.S. food, fiber, and
environmental system.
Unfortunately, the research and development funding for agriculture
has eroded in the last decade. The funding for Agricultural Research
and Extension programs, the lifeblood of our food supply system has
shrunk by 8 percent in constant dollars. The President's proposal for
USDA for fiscal year 1999 continues this deterioration of funding for
agricultural research and extension. Comparatively, the research and
development for space exploration, the environment, basic science
research, and health research has increased in constant dollars from 23
to 58 percent over the last ten years.
NASULGC is requesting an 8 percent overall increase in support of
research and education for the food system.
base funds--formula funds: the core support of the system
Federal funds, appropriated as Hatch, McIntire-Stennis, Animal
Health, Smith-Lever (3b and c), Evans-Allen (1890) and 1890 Colleges
and Tuskegee Extension are critical base funding of the partnership.
These funds leverage state, county, and grant funds, and support the
faculty and staff to address urgent problems facing agriculture and
consumers.
NASULGC is specifically requesting a 5.7 percent increase in base
funds to invest in long-term food security, global competitiveness, and
environmental quality. Our request contrasts sharply with the
President's budget request for fiscal year 1999. Unfortunately, the
President's request proposed reductions in Hatch, Smith-Lever, and
McIntire-Stennis, and no increases in other areas. These base funds
have eroded by 16 percent in the last decade. Secretary Glickman's
recent analysis confirms this erosion. Yet, these are the funds that
leverage over $4.00 of state, county, and private sector money for
every dollar of federal funds. Without this critical funding to conduct
research on everything from pest management to controlled atmosphere
storage, we are putting the world's most abundant and safe food supply
at risk to new diseases, new pests, and less efficient storage and
handling techniques. We are also putting at risk our competitiveness in
international markets.
The investment in agricultural research and extension through these
mechanisms, has resulted in the cheapest and safest food supply on the
planet. When compared with our discretionary income, Americans spend
only 11 percent of our disposable income on food. This is the result of
research and extension for a food system which enables the consumer
dollar and the welfare families' food stamps to purchase inexpensive,
safe, and nutritious food. This is a food system that creates jobs,
competes worldwide and conserves its natural resource base.
accomplishments of agricultural research and extension
The scientists and educators involved in agricultural research and
extension have contributed to the expansion of food exports and the
creation of new jobs, both on- and off-farm. Specific examples include
the opening of the Japanese market for U.S. beef and apples. In Brazil,
imported apples are now accepted from the United States. Seed crops are
sold worldwide because the United States farmers' ability to meet seed
health standards of countries.
Every year, millions of individuals are affected by food-borne
diseases. The research conducted at land-grant universities has
contributed to the development of the Hazard Analysis and Critical
Control Point System (HACCP). Recent federal regulations require meat
and seafood processors to use HACCP to identify processing points where
bacterial contamination is likely to occur and can be prevented. Land-
grant university faculty are helping food processors, producers, and
handlers to implement HACCP programs.
A specific example of food contamination that was solved by
Washington State University occurred in 1997 when over 90 cases of
salmonella thypherium DT-104 were experienced in Yakima Valley. The
median age of cases was 4 years old and 91 percent of the illness
occurred in the Hispanic community. We discovered the cause was
homemade soft cheese made from unpasteurized milk. Developing an
alternative recipe and communicating it to the Hispanic community
through volunteers resulted in a 90 percent reduction in salmonella
infections. Support from federal Smith-Lever and EFNEP funds, state and
county funds, and the private sector made this food safety success
story possible.
The challenge to agriculture is also to reduce and eliminate waste
and protect the air, soil, and water quality on which agriculture
depends. Collecting and disposing properly of unwanted pesticides and
their containers, managing wood waste, composting, and wastes of
agricultural by-products, as well as bio-solids, have all contributed
to reduced costs to cities, consumers, and farmers. These efforts have
also helped protect the environment from improper disposal of wastes.
These success stories are a result of the ongoing research funded
through the base programs.
national research initiative competitive grants (nri)
NASULGC supports the continued and expanded funding for the NRI.
Special emphasis will be given to plant, animal, and microbial genomics
and food safety in support of the President's initiatives and consumer
demands. The food genomics effort, or agricultural genomics more
generally, would complement funding by the National Science Foundation,
NIH, and the Department of Energy. This food genomics program would
focus on understanding the genes responsible for economically important
traits in plants, animals, and microbes that are essential to
agriculture. The program would also support preservation of diverse
germplasm necessary to meet changing environmental and market needs
while insuring biodiversity. Our specific request is to raise the NRI
from $97.2 million to $130 million by expanding the funding for each of
the program areas and adding the agriculture (food) genomics program.
Priorities for Higher Education in USDA.--Funding science education
in food, agriculture, and natural resources is essential to attracting
students from diverse backgrounds. These programs in higher education,
in particular the institutional challenge grants, build the curriculum
and local instructional capacity. Other programs provide student
scholarships. We are requesting an increase for priorities for higher
education to $27.65 million. I have attached the specific budget
requests for each program area.
The NASULGC community supports the President's budget request to
address the USDA Civil Rights action team recommendations. These
programs strengthen research, education, and extension assistance to
minority and limited resource populations.
Targeted priority areas.--Major national priorities in food safety,
pest management, water quality, and sustainable agriculture are joint
research and extension efforts. Research investigates and discovers
ways to improve the food production system and protect agriculture's
natural resource base. Extension programs increase consumer awareness
and understanding of national priorities. Other areas that deserve
continued support include farm safety education to reduce farm
accidents and deaths; managing risk issues in a changing agriculture;
studying global change and soil quality; supporting rural development
and economic development; and assisting children, youth, and families
at risk.
The crux of successful agriculture is going to be the management of
pests, whether diseases, weeds, or insects. Increased support for
integrated pest management (IPM) and pesticide clearance (IR-4) is
essential. The pest control strategies will also support the re-
registration process for use of pesticides on minor crops and the
registration of safer and more environmentally compatible pesticides.
The successful re-registration or registration of new pesticides are
necessary to meet the requirements of the Food Quality Protection Act.
The pest management alternatives and expert IPM decision support
systems programs continue to identify lists of crops/pests/control
combinations where only one or limited number of controlled options are
available. Finally, the pesticide applicator training program educates
growers, commercial applicators, and home owners about IPM practices.
Other on-going programs.--USDA's research and extension efforts on
rangeland issues, aquaculture, renewable resources, supplemental and
alternative crops, tropical and subtropical agriculture reflect the
diversity of agriculture in the United States. Communicating these
programs also requires support from the agricultural telecommunication
system, called A*DEC at $900,000. The Expanded Food and Nutrition
Education Program (EFNEP) is essential nutrition education program used
in all 56 states and territories. EFNEP continues to be a vital and
necessary way to teach low-income families about diet, nutrition, and
financial decisions concerning food and health.
Finally, the federal administration category includes development
of a new management information system to increase accountability and
assessment efforts.
I have submitted the detailed request for fiscal year 1999 in each
of these areas for your consideration.
The leaders of agricultural research and extension are extremely
proud of the role that we have played in keeping agriculture
competitive worldwide, in protecting the environment, and in combating
food-borne illnesses. As I indicated in my opening comments, the USDA
and Agricultural Research and Extension system, in partnership with the
land-grant universities, is the heart of the U.S. food system. Our
budget request recognizes the continued concerns of the public and
agriculture to remain competitive and successful. Base funding,
competitive funding, and targeted programs represent multiple vehicles
to achieve the goals of a successful agriculture that keeps our
nation's food system productive, safe, and competitive.
Thank you for this opportunity to communicate our concerns and
needs. Thank you for your consideration of our request.
______
Prepared Statement of Dr. Thomas L. Payne, Director, Agricultural
Research and Development Center, Ohio State University, on Behalf of
the Experiment Station Committee on Organization and Policy (ESCOP)
Mr. Chairman, members of the committee, we, The State Agricultural
Experiment Station System, representing fifty-nine State and
Territorial Experiment Stations, sixty-three Schools and Colleges of
Forestry, seventeen 1890 Land-Grant Institutions and Tuskegee
University, twenty-seven Colleges of Veterinary Medicine and forty-two
Schools and Colleges of Home Economics, need your help! Our research
programs are vital to our nation's agriculture, and yet federal support
of those programs has declined 16 percent in real dollars over the past
decade. Now, in the Executive Budget for fiscal year 1999, our base
programs a slated for more reduction. I can't understand this. Our
research programs are one of the best investment money can buy.
Estimates range from $1.30 to $1.60 in return benefits for every dollar
invested in our research. We need your help to re-instate the
reductions and provide needed increases. (Please refer to research
budget details in the NASULGC fiscal year 1999 Budget included in the
testimony of Dr. James Zuiches, Chair, Board on Agriculture Budget
Committee).
Our fiscal year 1999 budget request was developed through a
partnership with our stakeholders, federal research partners and our
Extension partners. The budget focuses on our responsibilities as the
state partners to assist and support the food and fiber systems of our
nation. These systems face challenges unparalleled in our nation's
history. The realities of NAFTA and GATT coupled with proposed changes
in farm programs are creating an environment of revolutionary, not
evolutionary, change in American agriculture. The products of research,
including new and innovative technologies, are needed more than ever
before. These research products must reduce economic and environmental
risks, improve competitiveness in the international marketplace,
develop ways to add value to raw agricultural products, maintain and
enhance a safe and nutritious food supply, and increase that food
supply to meet the demands of our ever-increasing human population
around the world.
The fiscal year 1999 request for research focuses on the following
critical areas targeted for increases:
--Base Programs;
--National Research Initiative;
--Food Safety;
--Pest Management Control Strategies: Pest Management Alternatives
(IPM)/Biological Control, Minor Crop Pest Mgt.-IR-4;
--Soil Quality Initiative;
--Water Quality Initiative;
--Sustainable Agriculture; and
--Small Farms Initiative.
Base Programs.--Our budget request includes a 5.7 percent increase
in base programs. It is our number one priority! Base programs form the
foundation on which all of our research efforts are built. The base
programs, by analogy, are the fire departments and trucks of research
standing ready for immediate response to agricultural needs at the
state, regional and national levels. We support the need for
competitive grants programs, but such programs do not provide support
for immediate response. We are able to respond quickly to the crises of
disease and pest threats to our crops, for example, because of the
infrastructure available through base program funding. The crops would
be gone if before we could respond if our scientists had to write a
grant proposal, wait for the review and eventual funding. These
programs are very important!
This priority has broad-based support from the customers of the
system, and the research conducted under these programs undergoes
review by scientists and administrators. And very importantly, the
research priorities are determined based on input from customers at the
local, state and national level.
National Research Initiative.--Our budget shows a significant
increase for the National Research Initiative. It continues to be a
high priority as we ask for your support in reaching the authorization
level of funding. The program is the vital competitive of federal
research support for agriculture. Included in the program is the new
initiative for Agriculture (Food Genomics). The Food Genome program
will support research to identify and develop a functional
understanding of genes responsible for economically important traits in
plants, animals, and microbes of importance to agriculture. Knowledge
of genome organization and gene function is critical to ensuring future
genetic improvement of agriculturally important genes. The program also
will support preservation of diverse germplasm important to meeting the
changing environment and market needs while ensuring biodiversity. It
is essential for this to be funded if our nation is to continue to
maintain its lead and global competitiveness in the development of
biotechnology in agriculture.
Food Safety Initiative.--Our budget request reflects the need for
increased research on food safety. Research shows that 90 to 95 percent
of foodborne illnesses can be prevented by proper food handling and
preparation. Yet each year in the United States, food-borne illnesses
affect some 33 million people. Most susceptible are the young, and the
old and people with compromised immune systems. The cost of health care
associated with these illnesses ranges from $2.9 billion to $6.7
billion. The USDA/Land-Grant partnership is providing a holistic,
``field-to-fork'' approach to reducing food-borne illness.
Pest Management Control.--We request increases in the Pest
Management Control Strategies categories to support the USDA IPM
initiative that has as its goal farmer implemented IPM methods on 75
percent of total crop acreage by the year 2000. These programs identify
the Land-Grant university system, both research and extension, as major
entities in the development and implementation of this program. IPM
places emphasis at the regional and local levels with major involvement
of producers and private industry to set the priorities for research
and technology transfer.
Soil Quality Initiative.--We request support for a new research
initiative on Soil Quality. This initiative is proposed in support of
efforts toward whole farm and ecosystem level planning. Understanding
of the role of soil in forest, range, and pasture, crop and wetland
ecosystems is critical in the development of management plans on these
lands. Currently, resources are not available to conduct the needed
research.
Water Quality Initiative.--This national initiative addresses the
major research and educational concerns relating to water quality and
management. Sufficient high-quality water is often taken for granted,
yet recent threats to its stability profoundly affect the future of
agriculture, the economy, and the health of our population. Research
programs examine the roles of forestry and agriculture as suppliers,
users, polluters, and recyclers of both surface and ground water.
Scientists are developing methods to restore contaminated aquifers and
prevent additional contamination. Using research information, extension
specialists provide educational programs and demonstrations on water
quality and management options for soils, pesticides, nutrients, and
animal wastes that will provide safe drinking water supplies. Resources
are used to increase Extension's educational programs in 74 hydrologic
zones and 16 demonstration sites in a coordinated multi-agency effort
at the state and national level.
Sustainable Agriculture Initiative.--This program relates to and
complements food safety, integrated pest management, water quality and
other environmentally-related activities, and rural development.
Sustainable agriculture is a systems framework of technologies,
practices, and procedures that provides for continuing productivity.
Sustainable agriculture systems are site-specific and require skillful
management. Sustainable practices that are effective will be based on
all factors that affect a specific site, such as soil type and
fertility, cropping history, microclimate conditions, surrounding
vegetation and pest pressures. The goal for sustainable agriculture is
to develop systems that are economically sound, socially acceptable,
and environmentally benign.
Small Farms Initiative.--Also in our budget is a request for
funding to initiate an integrated small farm research and education
program to address the resource constraints experienced by small farm
producers and those of diverse ethnic and racial origin. The new
program is designed to help these producers to operate their farms more
efficiently and in an environmentally sound manner.
Our budget was developed with our USDA partners and reflects
recommendations of a system-wide joint planning effort. The research
planning process, leading to the development of the research budget,
involved more than 200 ``Customer Input Groups'' including commodity
and farm organizations, professional and scientific societies,
institutes, foundations and councils (both public and private), and
policy makers. Research partners included USDA/Cooperative State
Research, Extension, and Education Service, USDA/Agricultural Research
Service, and Schools and Colleges of Veterinary Medicine, Forestry, and
Home Economics.
The Federal/State partnership through the combination of research
programs in this budget proposal, when coupled with state and non-
federal support, continues to provide the flexibility to address a wide
array of issues and has resulted in the high rate of return on public
investment in agricultural research ranging from 30 to 65 percent.
These data are based on independent studies of return on investment in
agricultural research and development. Research programs of the
Agricultural Experiment Station System perform approximately 68 percent
of all public funded agricultural research in support of the $600
billion agricultural industry. The federal investment represented in
this budget is leveraged by approximately $1.5 billion in state and
non-federal funds.
Thank you for the opportunity to provide this testimony on behalf
of the Board on Agriculture of the National Association of State
Universities and Land-Grant Colleges. The 109 year partnership of state
and federal research, along with the support of Congress, will continue
to meet the challenges of the future and create opportunities for
agriculture. I strongly encourage you to consider and adopt this budget
recommendation. Your continued support is appreciated and we are
committed to continue playing a major role in sustaining a strong
agriculture for the benefit of all citizens of this country and people
of the world.
______
Prepared Statement of Richard D. Wootton, Associate Dean and Associate
Director, Cooperative Extension Service at Kansas State University, on
Behalf of the Extension Committee on Organization and Policy (ECOP)
Mr. Chairman, I am Richard D. Wootton, associate dean and director
of the Cooperative Extension Service at Kansas State University. I
present this statement as the chair of the fiscal year 1999 Budget
Committee of Cooperative Extension System and its leadership throughout
our Nation.
The Cooperative Extension System has a rather extensive and
intensive process for program priority setting; the budget represented
in this statement has been through this same scrutiny. Our budget
development committee is comprised of representatives from all regions
of the country, as well as representation from our citizen advisory
committee, the Council on Agricultural Research, Extension and Teaching
(CARET). Each line item in this budget was carefully examined. We have
focused on issues which require a solid research base and applied
education. We have strengthened our resolve and commitment not only to
agriculture, but to the entire food and fiber system while maintaining
strong programs in family, youth and community issues.
Considering the fiscal climate in which we make this budget
presentation, we have limited our requests for increases to a few key
critical areas. However, based on the fiscal problems in many states,
reductions in the Extension budget at the federal level are not apt to
be offset by state, county or private funding partners. These partners
now provide over seventy percent of the Extension System's annual
budget across the nation. Thus, each federal dollar is very important
because it leverages several more dollars from state, local, and
private sources and serves as the ``glue'' of this unique partnership.
base programs
Smith-Lever 3(b)(c).--The highest priority for the Cooperative
Extension System is a 5.7 percent increase in the funding for base
programs. We are requesting a funding level of $283.8 million or $15.3
over fiscal year 1998. Base program funds, along with matching state
and local funds, provide the nucleus for maintaining the scientific and
community-based network which is critical to the implementation of the
base programs and the national initiatives. This increase will help to
maintain a strong base for Extension programming across the country and
provide the important funding to undergird the national initiatives,
such as Integrated Pest Management, Food Safety and Quality, and Youth
and Families at Risk.
The network of faculty and staff of 74 land-grant universities
represents an intellectual resource unmatched by any other country of
the world. No other national education system has the capabilities of
reaching citizens in some 3,150 counties in the United States. In
addition, nearly three million trained volunteers work with the
Cooperative Extension System in areas such as health, nutrition,
gardening, financial planning and youth development.
1890 Colleges and Tuskegee University.--The requested 5.7 percent
increase in base funding for these institutions is also a top priority.
These institutions maintain base programs geared to the needs of
culturally diverse audiences, especially those limited in resources.
Funds provided these institutions have helped them prioritize highly
essential educational initiatives focused on families, community
leadership, small scale farms and youth programs. These programs are
designed to address new directions for what has become a large audience
of people at risk and generally out of the mainstream of society. This
5.7 percent increase for the 1890's would enhance programming
capabilities in key areas.
national priority initiatives
Significant increases are requested for three currently funded
national priority initiative programs: Water Quality, Food Safety and
Quality, and Integrated Pesticide Management.
Water Quality.--We are requesting a $2.0 million increase for the
Water Quality initiative to focus specifically on assisting farmers,
ranchers and homeowners identifying environmental risks and taking
voluntary action to prevent pollution. The increased funding would be
used to expand a proven program called Farm*A*Syst/Home*A*Syst that
helps people conduct pollution prevention assessments on their property
and take appropriate voluntary action. These assessments involve well
water protection, agricultural compliance assistance, livestock waste
management, and related factors that can impact environmental
surroundings. This program is conducted in coordination with a number
of other state and federal agencies with responsibilities for water
quality and other environmental issues.
Integrated Pest Management.--We request that funding be increased
for Integrated Pest Management (IPM) from $10.783 million to $15.0
million. Pesticide use in agriculture, as well as in urban America,
continues to be a major public issue. IPM programs set the stage for
innovative crop protection programs that meet economic and
environmental needs. Additional resources are needed if the goal of
establishing effective IPM practices on 75 percent of the crop land is
to be achieved by the year 2000. The increase will address this concern
and supports the Department of Agriculture's initiative.
Food Safety.--A safe food supply is of utmost importance to
consumers as well as food producers, processors and distributors.
Public concern about food contamination has escalated during the last
decade. Even so, information about the causes and prevention of food-
borne illnesses is still very limited. Furthermore, much of the current
knowledge is inadequately applied and practiced. Extension education
programs focus on protecting the safety of food from production to
consumption. These programs assist food producers and processors, food
service establishments and consumers in understanding safe production,
handling and preparation practices. The HACCP (Hazard Analysis Critical
Control Point) model is used as the primary basis for these educational
programs. We are proposing $7.365 million for fiscal year 1999; the
fiscal year 1998 appropriation was $2.365 million.
Reservation Extension Agents.--The support of Congress to assist
with the placement of Extension agents on the Indian Reservations as a
collaborative effort between the Tribal Councils and the State
Cooperative Extension Services is going very well. The limiting factor
is the number of agents does not meet the tremendous demand for this
expertise on each of the Reservations. Thus, in accord with a plan
jointly developed by representatives of the Tribal Councils and State
Extension Services it was determined an appropriation of $5.0 million,
which is $3.0 million more than the current appropriated amount, was a
realistic fiscal need. These monies are awarded on a competitive basis.
Extension Services at the 1994 Institution.--This program is in its
second year of operations and progressing well. The initial
appropriation of $2.0 million in fiscal year 1998 has been allocated
and being put to use in a very high need education arena. The 29 Native
American Institutions of higher education are targeting agriculture,
forestry, human nutrition and health, and economic development. A $1.5
million increase is requested for fiscal year 1999 to build on the base
Extension staffing at these 29 Native American Institutions, which is
being done in full collaboration with the State Cooperative Extension
Services.
Other National Priority Programs we are requesting a very modest
increases are:
Children, Youth and Families at Risk.--The Extension System uses
preventive educational programs to help youth and families become
healthy, productive, financially secure, and responsible members of
their community. Extension has built linkages and networks with many
agencies that provide services to children and families. Currently, 49
states and six territories conduct Youth-at-Risk programs. The federal
Youth-at-Risk appropriation of $9.55 million leverages an additional
$40 million and captures the support of nearly 37,000 volunteers for
its programs. We request that the $9.55 million appropriation be
increased to $10.0 million, so this important work of salvaging and
rebuilding human capital may reach more youth and families.
1890 Facilities.--The annual amount of funding for this facilities
program has been level or declining each of the past several years. The
facility needs at the 1890 institutions still needs considerable
attention for renovation and new construction to fully capitalize on
the partnership between the USDA and these Historically Black Colleges
and Universities. Thus, an increase of about $4.5 million above the
fiscal year 1998 appropriation is requested.
Renewable Resources.--We request that the Renewable Resources
Extension Act funding be increased from the current level of $3.214
million to $3.3 million. Public forests and rangelands now emphasis
production of non-commodity values and commodity production has
decreased. Concurrently, federal requirements for environmental
protection on private lands have increased (Endangered Species Act,
Wetlands Protection). Private landowners are, therefore, challenged to
provide both increased commodity output to meet the nation's needs and
increased environmental protection. Intensive management of non-
industrial private forests for greater profitability, commodity
resource output and environmental protection will be enhanced by this
expanded educational effort. The impact on currently declining rural
communities will be positive.
new program initiatives
Funding is requested for two new program initiatives: Pesticide
Application Training and Managing Change in Agriculture:
Pesticide Applicator Training.--The funding for this program is a
collaborative effort between the Department of Agriculture and the
Environmental Protection Agency. Each is requesting $1.5 million to
support, in part, the training the users of restricted use pesticides
so they can be certified users. This is a very demanding program
because of the number of people that require training each to become
certified or recertified. The participants needing this training are
growers, commercial applicators and homeowners. The total cost of
operating this program exceeds $9.0 million a year. Thus, other state
and local public funds and private funds are heavily committed.
Managing Change in Agriculture.--This program addresses how the
Cooperative Extension System can assist the U.S. agricultural sector in
managing in a dramatically changing global and domestic economic and
environmental policy environment. These changes include public concerns
and expectations for production and processing of safe food at
reasonable prices, while protecting the environment; rapid
technological advances; accelerated industrialization of agriculture;
globalization of markets; and declining governmental ``safety nets.''
Within the agricultural sector, the forces of change are causing
significant shifts in how business is done. These include: structural
integration of input suppliers, producers and processors through
increased use of contracts, alliances and other linkages; more product
specificity driven by consumer tastes and preferences, and
technological advances in the distribution and retailing of food and
fiber products; and the rise of a new class of entrepreneurs who focus
on the assembly and distribution of inputs and products without being
centrally involved in the production processes.
The Cooperative Extension System, in concert with the agricultural
private sector, will provide the leadership for the initiative. Funding
will be sought from three sources; $2.0 million through your committee,
Mr. Chairman, with matching funds from the state government and private
sector. This will leverage the initiative into a $6.0 million plus
program.
specified programs
We are recommending level funding at the fiscal year 1998 level for
the following budget items:
Sustainable Agriculture................................. $2,365,000
EFNEP................................................... 58,695,000
Rural Development Centers............................... 908,000
Pesticide Impact Assessment............................. 3,313,000
Farm Safety/Agribility.................................. 2,855,000
Agricultural Telecommunications......................... 900,000
Mr. Chairman and Members of the Committee, the Cooperative
Extension System is mindful of the significant economic, technological,
and societal changes happening in our nation. Thus, we have redirected
programs to better serve the needs of agriculture and rural America, to
address directly the growing needs of children and families facing
difficult situations, and to help communities work for a better future.
We are focused on issues of national importance, identified at the
grass roots level. We very much appreciate your past support and urge
your continued support to keep our base programs strong and to continue
to invest in initiatives of national importance.
We thank you for the opportunity to present this statement about
our fiscal year 1999 budget needs.
______
Prepared Statement of Dr. Richard L. Guthrie, Associate Dean and
Director, International Programs in Agriculture, Auburn University, on
Behalf of the International Committee on Organization and Policy (ICOP)
I am the Associate Dean and Director of International Programs in
Agriculture at Auburn University. I am also the current the chair of
the International Committee on Organization and Policy. I testify here
in support of the fiscal year 1999 Agriculture Appropriations. Our
committee is particularly interested in several programs, including the
Markets, Trade & Rural Development program under the National Research
Initiative (NRI) and the National Needs Competitive Grants program
under Higher Education.
These programs will contribute significantly to an increased U.S.
capacity to compete in the global economy. The GATT, NAFTA and other
international free trade agreements are designed to increase trade and
investment flows between nations. I submit that they provide a
compelling rationale for these programs.
As we all know, the world has witnessed radical transformations in
recent decades. Mass communication technologies, transportation
networks and the disappearance of major ideological cleavages in the
world have led to greater interdependence in the world economy. The
globalization of markets for agricultural products has been a major
consequence of them.
The failure of centrally planned economies has increased the
significance of market economies of the West. These economies,
including ours, now form a global system through which agricultural
products are increasingly moving. Furthermore, the nature of these
products is rapidly changing from raw materials to value added
products.
We currently export over thirty percent of our agricultural output.
This represents a very significant contribution to the U.S. balance of
payments. Furthermore, our agribusiness interests consider these
markets to be critical to their future. The health of the U.S. food
system, including the farm sector, will depend in large measure on how
well we compete in overseas markets. Alabama farmers, food industries
and consumers are increasingly aware of the significance of these
trends. They are increasingly asking our universities to respond to the
challenges represented by them. They are demanding from us the
knowledge base and training that will help make them better
participants. Our College of Agriculture at Auburn University has made
globalization of its programs a priority objective.
Free trade agreements imply that production efficiencies, adding
value to export products, and increasing the ability of our
agribusinesses to participate effectively in international markets will
be major determinants of successful competition. We need to strengthen
science and technology and human capital development in ways which
strengthen these factors. These investments must be part and parcel of
the research, extension and higher education agenda.
Land grant universities, as partners with the U.S. Department of
Agriculture, have been major contributors to the incredible success of
our food system. Teaching, research and outreach products have ensured
a steady flow of quality human capital and technology to this sector.
However, the genius of the land grant university system, namely its
focus on state constituencies, has greatly limited its scope of
activity to their immediate, everyday concerns. Media and
transportation dimensions of the technological revolution experienced
by us now require that we give greater attention to broadening its
focus to global markets.
The National Research Initiative and the National Needs Competitive
Grants programs are designed to help us expand our capacity to increase
production and marketing efficiencies, and to extend them to users in
the food system. The Globalizing Agricultural Science and Education
Program for America (GASEPA) agenda, which is sponsored by our
Committee, focuses specifically on how to harness available land grant
university resources, including those to be provided through the NRI
and the National Needs Competitive Grants, to increase our capacity to
compete in these global markets. I would like to end my formal
presentation by briefly reviewing the major components of the GASEPA
agenda.
Under the GASEPA agenda, U.S. land grant universities will work
with various agencies of the U.S. Department of Agriculture to jointly
internationalize our staff and programs. We will seek ways to use
existing program funds to promote these outcomes.
The GASEPA agenda also proposes to provide sustainable, core
funding to initiate and to strengthen globally relevant and useful
agricultural teaching, research and outreach programs at land-grant and
other qualifying institutions. Specific objectives are:
--Enhancing global competitiveness of U.S. agriculture through human
resource development;
--Development and dissemination of information about market, trade
and business opportunities;
--Mutually beneficial collaborative global partnerships;
--Promoting trade through global economic development; and
--Promoting global environmental quality and stewardship of natural
resources.
Access to these funds will be through a competitive grants
framework, administered by an agency of the U.S. Department of
Agriculture. This framework will ensure that quality standards are
maintained and that program activities are integrated with those of
other related initiatives.
Examples of types of activities that will be supported under the
GASEPA agenda are those which will: increase the international content
of teaching programs; provide university faculty and staff with cross-
cultural, professional experiences in areas related to their expertise;
increase the ability of faculty and staff to adapt agricultural
technologies developed overseas for use in the U.S.; increase faculty,
staff and student ability to support the marketing of U.S. agricultural
products and services overseas; help U.S. agribusinesses identify
overseas opportunities; and provide students in agriculture and related
fields with study and work experiences related to international
competitiveness.
The GASEPA agenda will enable U.S. land-grant colleges to extend
instructional, technology and marketing outputs to clientele, including
students and agribusinesses, in ways which will increase the
competitiveness of U.S. agribusinesses in global markets. We are eager
to serve our public. We are eager to address global issues that will
become increasingly important to our future national prosperity.
Thank you.
______
Prepared Statement of Dr. McArthur Floyd, Research Director, Alabama
A&M University, on Behalf of the 1890 Research Directors
Senator Thad Cochran, Chairman, and distinguished members of the
Committee, The Association of Research Directors (ARD) strongly
supports the budget recommendations for fiscal year 1999 submitted by
the Budget Committee, Board on Agriculture, NASULGC. The top priorities
recommended by the NASULGC for fiscal year 1999 are to strengthen the
base programs for research, extension and higher education, and to
sustain current high-priority initiatives and to mount a few new
programs in much needed critical research areas. A modest increase of
5.4 percent in base funds for research is being requested. These
programs represent the long-term commitment of Land-Grant Universities
to maintain a stable research base including personnel and facilities
in the food and fiber and agricultural and environmental sciences, and
natural resources.
1890 Evans-Allen Research Program ($29,316,000)
We strongly support the recommendation for an increase of 5.4
percent in base funds for the Evans-Allen Program for the 1890
institutions in fiscal year 1999. These funds provide the primary and
principal support to conduct basic and applied research to ensure a
safe, economical and adequate food supply, promote a sustainable
environment, conserve the natural resource base, and contribute to the
improvement of the socio-economic well being and overall quality of
life of diverse rural and urban populations. These funds also
contribute to the development of professional expertise (especially,
minority persons) in the food and agricultural sciences through focused
programs.
1890 Capacity Building Grants Program ($10,000,000)
We strongly support the recommendations for funding the 1890
Capacity Building Grants Program at $10,000,000 in fiscal year 1999.
This program is critical in enhancing teaching and research programs at
the 1890 Land-Grant Colleges and Universities and in advancing
partnerships with industry, USDA agencies and other institutions of
higher education. This is a highly competitive program which helps to
build greater capacity in research and teaching in food and
agricultural sciences at these Institutions.
1890 Research and Extension Facilities Grants Programs ($12,000,000)
We strongly support the 1890 Extension and Research Facilities
Grants Program at a funding level of $12,000,000. The facilities
program enables the 1890 Institutions to develop state-of-the-art
facilities and acquire needed equipment for scientific research and
outreach for training of students.
Rural Economic and Social Development--1890 ($2,000,000)
We also strongly support the initiative for 1890 Institutions on
Rural Economic and Social Development at $2,000,000 in fiscal year 1999
which is included in the Small Farm initiative for $4,000,000. Over 55
percent of the rural poor 97 percent of the rural black poor live in
the South. Targeted research is needed that will specifically address
the disadvantaged and underserved communities and families in the
following areas: barriers to family and community development;
incentives for new linkages and partnerships; infrastructure needs;
business and job opportunities; enhanced development of human capital
and leadership; use of natural resources for community development; and
new markets for agricultural products.
Mr. Chairman, on behalf of the ARD, I wish to express our thanks to
you and the distinguished members of the Committee for this opportunity
to submit this testimony.
______
Prepared Statement of Teresa Maurer, Project Manager, National Center
for Appropriate Technology (NCAT)
Summary: I am offering testimony today in support of USDA's
proposed $2 million appropriation for the ATTRA program.
Full text of testimony: Farmers, ranchers, agricultural information
providers and other members of the agricultural community continue to
seek greater and more convenient access to information on sustainable
agriculture production and marketing practices. Since its inception as
a unique public-private partnership in 1987, the ATTRA (Appropriate
Technology Transfer for Rural Areas) program has responded to more than
118,000 requests for information from callers across the U.S. The
program is funded through Rural Business-Cooperative Service (RBS) and
is operated by the National Center for Appropriate Technology (NCAT).
NCAT is a private, nonprofit organization, which provides information
and technical assistance in the areas of sustainable agriculture,
energy conservation, and resource-efficient housing. The USDA budget
requests $2 million for the ATTRA program for fiscal year 1999, which
we urge you to support.
Through a national toll-free telephone line, ATTRA receives
requests and then provides written or electronic delivery of unique
combinations of diverse sustainable agriculture resources. In answer to
questions posed by a variety of farmers, ranchers, information
providers, extensionists, state and federal agency staff and others,
ATTRA synthesizes and summarizes innovative practices and research
results. User requests cover a wide range of topics, including crop,
livestock and horticultural practices, and may include aspects of
production, soil fertility, pest management, enterprise additions, etc.
In addition to preparing materials on frequently requested topics,
staff also research specialized questions from producers. Responses
draw from studies, publications and experiences spanning the spectrum
of hundreds of sources including: (a) individual, innovative farmers,
extensionists and researchers from a national network that we have
developed (b) grassroots organizations (c) specialized sustainable
agriculture publications (d) electronic communications (e) funded
research and education from a variety of agencies and programs inside
and outside USDA. Much of this information is not readily available
from a single source, so ATTRA helps link and provide keys to this
information in a timely way. ATTRA also seeks to extend the reach of
SARE, NAL, Integrated Farming Systems and Cooperative Extension, who
often refer their clients to the ATTRA program.
ATTRA was initially authorized in the 1985 Farm Bill and was first
funded in 1987. Compared with request levels around 4,000 per year
(fiscal year 1989), program staff now respond to 18,000-22,000 requests
annually. ATTRA has been level funded at $1.3 million for the last 7
years. We have seen increased interest particularly in: marketing
methods for sustainably produced crops and animals (including organic
production), pest management options, and farmer-generated, experience-
based information. Our callers are more frequently seeking electronic
or other round the clock access to ATTRA's resources and training
materials.
Improved efficiency in request handling helped to meet a portion of
the demand, but request volume continues to outstrip the gains made.
While a Website was opened in fall, 1997, and increases some of ATTRA's
capabilities, it also requires specialized skills to maintain, reformat
or develop suitable new materials for that outreach method. Because
many rural callers, and especially small and minority farmers, still
have limited electronic access, ATTRA will remain committed to
providing information on paper to caller's mailboxes or by using other
technologies or outreach which does not require the caller to have
expensive equipment or specialized computer knowledge. The recent
report of the USDA National Commission on Small Farms (A Time to Act,
January, 1998): (1) recognized the special value and accessibility of
the ATTRA program, and (2) recommended a role for ATTRA in providing
feedback to USDA on research and education needs of small farmers, and
(3) recommended an annual funding level of $3 million.
However, at the present time, we ask support for the proposed USDA
funding level of $2 million. It is the minimum required to meet demand
for additional diversity and access for ATTRA's services. It would
support a very modest staffing increase which we project would give us
the capability to respond more effectively to an increased variety of
topics and service requests. The Website has already enhanced exposure
to ATTRA's work, with thousands of visits in the few months since it
opened in September, 1997. However it will also clearly require more
specialized attention to respond effectively to the requests and
feedback that the Website is generating, both in calls and electronic
responses. The program has also been severely understaffed for the last
4 years in the areas of: agronomy, pest management, marketing, general
technical writing, and computer and information management support
services. Questions that we receive now, compared to early years of the
program, include more sophisticated questions from farmers and require
a greater range and depth of expertise.
A small portion of the proposed increase would allow completion of
upgrading in phone, addition of voice mail, and computer hardware and
software. This would result in more diverse access for callers varying
from those with no computer resources to educators and extensionists
who may have both the computer access and ability to multiply ATTRA's
information. It would also allow better organization and access to
thousands of materials (include many collected nowhere else nationally)
in ATTRA's resource center and response archives.
The program offers callers from across the US a unique, cost-free,
1-stop access point to information about ways to farm with innovative
techniques and technologies that combine environmental and economic
benefits. With recent changes in farm legislation, farmers want
information on more diverse options for what they produce, how they
produce it, and how they can add value and market their products.
Farmers also continue to look for practices that help them keep more of
their farming income by reducing production costs. The written
materials provided by ATTRA's 25 staff members meet those informational
needs and bring choices right to the mailbox or computer, which can
help them make their own important farming and economic decisions.
We are convinced that ATTRA provides a national service that is
very valuable to broadening the acceptance of more sustainable and
profitable approaches to agriculture. We appreciate the past support
that Congress has provided, which enables this unique service to
continue to provide information that helps farmers with the many
choices they face. We urge you to continue to support this work at the
USDA proposed level of $2 million, and we pledge to continue to improve
the efficiency of the program, as well as the quality and usefulness of
information we offer to farmers.
______
Prepared Statement of Margaret S. Maizel, Principal Investigator,
National Center for Resource Innovations
As ever, we appreciate this opportunity to provide testimony to the
Senate Appropriations Subcommittee on Agriculture and Related Agencies.
The National Center for Resource Innovations (NCRI) was established
in 1990 through a joint private/federal initiative in an appropriation
to USDA's Cooperative State Research, Extension and Education Service
(CSREES). The consortium now includes seven sites (including one added
this year at the Southwest Indian Polytechnic Institute, Albuquerque,
NM) and an administrative office in Rosslyn, Virginia. Each site in the
consortium contributes unique expertise to this national program. NCRI
capabilities include integration of large data sets in a Geographic
Information Systems (GIS) framework from the national level down to the
farm field as well as weather analysis, land use planning, resource
management at state and local levels, and support for public and
private policy development.
the mission of ncri
The mission of NCRI is to provide collaborative and innovative
transfer of geographic information systems technologies to support
local government and other public policy development and decision
making.
ncri funding history, matching funds and cost effectiveness
In the past, NCRI has consistently requested $1.8 million annually
for minimum program operations. 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; fiscal year 1994,
$1,011,000; fiscal year 1995, $877,000; fiscal year 1996, $939,000;
fiscal years 1997 and 1998, $844,000.
NCRI has matched federal funds or had to reduce program objectives.
The total non-federal support generated for fiscal years 1990 to 1998
was in excess of $5,500,000. The total federal appropriated amounts for
the same period were $8,600,000. In fiscal year 1997, NCRI prepared at
the request of Congressman Joe Skeen, a cost-benefit study. Results
showed that for every federal dollar invested, $7.40 in benefits
through innovative projects was realized.
ncri site expertise and accomplishments
The advantage of the consortium of seven regional centers that
makes up NCRI is that each site has unique expertise and shares
technical support with other sites. In this way, projects are
strengthened through shared resources and the experience needed to
build complex and comprehensive information systems. Site-to-site
technology transfer and networking build NCRI's overall capabilities,
aids in problem solving and facilitates consistency.
joint activities (seven sites)
All of the NCRI sites plan to engage in two major activities this
year: a Distance Learning Program at the Southwest Indian Polytechnic
Institute site April, 7th and a Resources Technology Fair on Capitol
Hill on April 21 in the House Science Committee Room. Congressmen and
Senators are being invited to act as sponsors for the fair, which will
include exhibits by the seven NCRI sites as well as by federal agencies
and private sector companies who have been partners in technology
implementation with NCRI sites.
NCRI-Great Lakes, University of Wisconsin-Madison, Madison, Wisconsin
The NCRI-Great Lakes project site is located at the Land
Information and Computer Graphics Facility (LICGF) in the College of
Agriculture at the University of Wisconsin. The Facility was instituted
in 1993 to function as a research, teaching, and outreach resource in
land and geographic information systems (LIS/GIS). Researchers at LICGF
explore uses of LIS/GIS for local and regional land and resource
planning to support social, economic, and environmental decision making
processes.
During 1998 and 1999, NCRI-Great Lakes has established the
following objectives:
--Conduct seminars for the Wisconsin Land Council to develop citizen-
based land use planning and the use of Land Information Systems
to facilitate such efforts.
--Work with rural governments to develop reliable and cost-effective
access to LIS/GIS technology to address locally defined land-
use and watershed management problems.
--Accelerate the use of GIS technology by governments with coastal
zone jurisdictions.
--Update existing data to prepare the state of Wisconsin for the 2000
Census and subsequent redistricting.
NCRI-Chesapeake, Inc., Rosslyn, Virginia
NCRI-Chesapeake builds cooperative integrated information systems
``from the nation to the neighborhood'' with federal and state
agencies, universities and others to provide new information for better
decision-making. These systems focus first, on the farm, productivity
and the farmers in their own very specific neighborhoods as related to
natural systems and their socio-economic position in the landscape.
NCRI-Chesapeake has established the following goals for 1998-1999:
--Conduct continuing research in the Northeast States, and in the
Delmarva Peninsula in particular, of impacts of animal manure
on water quality, evaluation of agro-ecoindices, and assessment
of watershed priorities.
--Conduct expanded studies in North Carolina, the Washington-
Baltimore metropolitan area, and other urban areas of the
country regarding the impact of urban sprawl on ecosystems.
--Determine the effects of future land use planning on economic and
agricultural resources, potential impacts on other natural
resources.
NCRI-Northwest Central, Washington University, Ellensburg, Washington
NCRI-NW continues to concentrate on the local and regional resource
issues of the Yakima Valley and eastern Washington. These issues
include irrigation of agricultural lands, county planning needs, Native
American interests, and the management of inter-mixed public and
private lands. The site works in close cooperation with the faculty and
staff of Central Washington University as well as the GIS lab.
NCRI-NW plans for 1998-1999 include:
--Work with the Natural Resources Conservation Service to speed the
delivery of digital soils maps to GIS users, precision farmers,
and others.
--Cooperate with USGS to complete digital hypsography (contour lines)
for the state.
--Continued assistance to the Kittitas Reclamation District for data
development and data exchange.
NCRI-South West, University of Arkansas, Fayetteville, Arkansas
NCRI-SW has been based at the University of Arkansas at
Fayetteville since its inception in May of 1990. Through university
support and hardware and software grants, the program has a fully
equipped research, training, and outreach facility capable of
demonstrating a wide range of software for geographic information
systems, remote sensing, spatial statistics, and database management.
In the fall of 1994, expansion of Center facilities was completed to
include five state-of-the-art teaching and research laboratories, ten
offices, and a library/reading room. A variety of advanced computer
equipment now facilitates the center's teaching, outreach, and
cooperative project capabilities. NCRI-SW continues to focus on
technology transfer through training, the development of statewide GIS
databases and representative projects demonstrating the cost benefits
and efficiency of GIS technology.
NCRI-South West has proposed the following objectives among those
to be achieved in 1998-1999:
--Provide technical support to the Arkansas Land Records Modemization
Board as well as serving as a member of the Board.
--Participate with a consortium of private and public sector partners
to initiate the Seamless Warehouse of Arkansas Geodata (SWAG)
so that users will be able to access any selected area of the
state with the data provided over the net in OGC Simple
Features Format.
--In conjunction with the Natural Resources Conservation Service,
develop a web accessible ``County Soil Survey'' that will
provide information comparable to the traditional county soils
survey publication.
NCRI-North Central, University of North Dakota, Grand Forks, North
Dakota
NCRI-NC's interdisciplinary research and technology transfer
programs are located and supported at the University of North Dakota
Regional Weather Information Center. From this facility, NCRI-NC is
linked to the UND Aerospace Scientific Computing Center which houses a
CRAY 190. The resource issues in the region are related to the
enhancement and protection of farming and ranching, which are principal
contributors to the region's economy. The work performed by NCRI-NC and
the Regional Weather Information Center has resulted in their being
recognized by the Ford Foundation as a semifinalist in the 1995
Innovations in American Government Awards Program.
During 1998 and 1999, NCRI-NC has set the following objectives:
--Provide decision support to precision agriculture and other forms
of farm management by providing GPS data and implementing a
farm specific rainfall model derived from Doppler radar.
--Participate in flood recovery of the city of Grand Forks by
providing technical assistance in the development of the
combined Grand Forks City GIS system.
--Participate in the North Dakota Weather Network program.
NCRI-South East, South Georgia Regional Development Center, Valdosta,
Georgia
NCRI-SE's program is an integral component of the South Georgia
Regional Development Center--a regional agency that supports local
governments across ten counties. NCRI-SE's primary objective is to
encourage the use of geographic information for ecologically
responsible decisionmaking in this primarily rural region. ``Real
world'' presentations by NCRI-SE using actual local geographic data
have proven to be an effective method of demonstrating the value of
GIS. This, coupled with the experience gained by NCRI-SE personnel from
implementing GIS for local governments, has proven invaluable to
government managers in the South East region. NCRI-SE also provides
direct technical and Hands on. advice and training for any regional
entities working in the GIS realm.
NCRI-SE's goals include:
--Demonstrate the value of GIS to local governments using information
that applies directly to their own situations, using the
existing regional database and GIS applications built by NCRI-
SE.
--Provide leadership in the GIS development process by promoting
local government cooperative agreements in order to increase
involvement and defray costs, and to promote standards that
allow simple transfer of GIS data among state, local and
federal agencies.
--Continue to refine data and databases for regional wetlands.
NCRI-Native Americans, Southwest Indian Polytechnic Institute,
Albuquerque, New Mexico
NCRI-SIPI is the newest of the NCRI sites, having been added in
1997. SIPI is a National Indian Community College, funded by the
federal government. Nearly 50 percent of all American Indians live
within a 500-mile radius of the school. SIPI's overall objective is to
provide technology transfer through distance education in conjunction
with the development of precision farming on the SIPI campus and on
Indian reservation lands in New Mexico and southern Colorado.
For fiscal year 1999, SIPI has the following objectives:
--Undertake a pilot project to develop GIS curricula with the
Southern Ute Tribe using distance learning telecommunications.
--Develop and begin the implementation of a precision farming
demonstration project to be used as part of the GlS/GPS-
Precision Agriculture technology transfer curriculum.
--Offer GIS and GPS training/short courses locally for tribal
personnel.
conclusion
The current level of funding for NCRI (fiscal year 1998) is
$844,000. We request that the level of funding through USDA/CSREES be
restored to $1.2 million for fiscal year 1999. This provides uniform
funding levels for all seven NCRI sites, and allows NCRI-Native
Americans American (SIPI) to join the NCRI consortium as a fully funded
project site.
The NCRI Consortium appreciates this opportunity to provide
testimony to the Senate Appropriations Subcommittee on Agriculture,
Forestry, Nutrition and Related Agencies.
______
Prepared Statement of Gordon Miller, President, National Commodity
Supplemental Food Program (CSFP) Association
Mr. Chairman and Subcommittee members, I am Gordon Miller,
President of the National Commodity Supplemental Food Program (CSFP)
Association. The Association of State and Local CSFP operators has
worked diligently with the Department of Agriculture Food and Consumer
Service to insure a quality supplemental nutrition assistance commodity
food package program for mothers, infants, children and elderly men and
women. The program, which was authorized in 1969, serves 400,000
individuals monthly in 19 states and the District of Columbia.
During fiscal year 1997 there were two significant steps forward:
--Revision of the food package to provide more nutrients and cheese
with a budget-neutral effect on funding.
--A new Regulation for a combined caseload for Mothers, Children and
Seniors which will give local and state agencies a better
opportunity to fully use assigned caseload.
The President's budget for fiscal year 1999 requests $96 Million
for CSFP. We ask that your subcommittee recommend $105 Million so that
the CSFP may provide for:
--New states who already have approved state plans but no funds.
--Additional mothers, children and seniors on waiting lists in
existing programs.
Again, Mr. Chairman and Subcommittee members, the National CSFP
Association wants to thank the Subcommittee for its past support. It is
our signal you recognize that CSFP is the most cost-efficient,
nutritionally designed food package program of the food and Nutrition
Service. The program uses foods purchased with wholesale dollars or
donated foods, requires low administrative funds stretched by many
volunteer labor hours and facilities, and reaches the most vulnerable
mothers, children and seniors who otherwise would not receive nutrition
assistance.
______
Prepared Statement of W. Ron Allen, President, National Congress of
American Indians
introduction
Good morning Chairman Cochran, Vice-Chairman Bumpers and
distinguished members of the Appropriations Subcommittee on
Agriculture. Thank you for the opportunity to present testimony
regarding the President's budget request for fiscal year 1999 Indian
programs and services. My name is W. Ron Allen. I am President of the
National Congress of American Indians (``NCAI''), the oldest, largest
and most representative Indian advocacy organization in the nation, and
Chairman of the Jamestown S'Klallam Tribe located in Washington State.
The National Congress of American Indians was organized in 1944 in
response to termination and assimilation policies and legislation
promulgated by the federal government which proved to be devastating to
Indian Nations and Indian people throughout the country. NCAI remains
dedicated to advocating aggressively on behalf of the interests of our
230 member tribes on a myriad of issues including the critical issue of
adequate funding for Indian programs.
the president's fiscal year 1999 budget request
Department of Agriculture
In 1996, Congress passed and the President signed into law the
Federal Agriculture Improvement and Reform Act of 1996 (FAIR) (Public
Law 104-127). This law provides new mandates for the Department of
Agriculture's Rural Development Mission on infrastructure, housing, and
business needs in remote areas. FAIR also recognizes the needs of
tribal governments for capital and infrastructure and authorizes a 3
percent set-aside for tribal infrastructure, housing, and related rural
development projects.
Mr. Chairman, as you well know, Indian country is very poor with
the great majority of tribal communities characterized by severe
unemployment, high poverty rates, ill-health, poor nutrition, and sub-
standard housing. The availability and condition of reservation
physical infrastructure is similarly lagging behind non-Indian
communities. Indian communities lack roads and highways, electricity,
potable water and other utilities, and most other physical
infrastructure and this, in turn, serves as a strong disincentive to
employers and investors who demand basic infrastructure prior to making
investment commitments.
As a direct result, Indian people are suffering because they lack
these basic necessities and also because the lack of infrastructure
keeps reservations economies mired in poverty and hopelessness. The
tribal set-aside in the FAIR Act could unlock critical resources to
being the long-term rebuilding of sustainable tribal homelands.
In fiscal year 1999, the Administration proposes to give tribes
more flexibility in how they use Department of Agriculture's rural
development grants and loans for business and critical infrastructure
businesses, a proposal NCAI fully supports. The fiscal year 1999 budget
proposes $715 million for the Rural Community Advancement Program from
which the set-aside to tribes is approximately $21.45 million. Securing
adequate appropriations for these programs is the key to their success
in Indian country. NCAI urges this subcommittee to ensure that these
funds are appropriated.
conclusion
Mr. Chairman, we urge the Congress to fulfill its fiduciary duty to
American Indians and Alaska Native people and to uphold the trust
responsibility as well as preserve the Government-to-Government
relationship, which includes the fulfillment of health, education and
welfare needs of all Indian tribes in the United States. This
responsibility should never be compromised or diminished because of any
Congressional agenda or party platform promises. Tribes throughout the
nation relinquished their lands as well as their rights to liberty and
property in exchange for these on-going services as well as this trust
responsibility. The President's fiscal year 1999 budget is a positive
step towards acknowledging the fiduciary duty owed to tribes.
We ask that the Congress consider the funding levels in the
President's budget as the minimum funding levels required by Congress
to maintain these services and the federal trust responsibility. The
consensus of Indian country is that the federal government's budgetary
process has failed to provide for effective services and minimum to
raise the living standards of Indian communities consistent with non-
lndian communities. In order for federal government to reasonably
expect tribal government to truly achieve the self-determination, self-
governance and self-sufficiency goals mutually identified by the
federal government and the tribal governments will not be achieved
unless meaningful increases are provided for Indian programs and
services.
Mr. Chairman, this concludes my statement. Thank you for allowing
me to present for the record, on behalf of our member tribes, the
National Congress of American Indians' initial comments regarding the
President's fiscal year 1999 budget.
______
Prepared Statement of Russell C. Notar, President and CEO, National
Cooperative Business Association
Mr. Chairman, members of the committee, we appreciate the
opportunity to present testimony as you prepare to consider
appropriations for the Department of Agriculture for fiscal year 1999.
I would like to discuss the Grants for Rural Cooperative Development
program and the centers for cooperative development that receive
funding from that program; and I intend to offer some strong arguments
for increasing funding for the Grants program.
The National Cooperative Business Association (NCBA) is proud of
its role in assisting the creation of a network of rural cooperative
development centers across the country. We know that Congress is
equally as proud of its role in fostering a cooperative development
support network throughout rural America. Congress and this
Administration recognize the vital role that cooperatives play in
providing economic opportunity to rural Americans.
The program I am referring to was originally authorized by section
2347 of the 1990 farm bill as a program of Grants for Technology
Transfer and Cooperative Development. In fiscal year 1993, this
committee began to provide funding for the program, and report language
over the years has indicated your strong support for the concept of
using this funding for the purpose of creating a network of centers for
rural cooperative development.
NCBA's members, along with other supporters of cooperatives around
the nation, joined together as the National Rural Cooperative
Development Task Force to advocate for support for a national network
of centers and to develop the linkages among the centers and between
the centers and local partners to sustain the network's development.
NCBA also launched the CLUSA Institute for Cooperative Development to
coordinate our development efforts and focus resources on cooperative
economic development. The CLUSA Institute is now working with ten
regional centers providing vital technical assistance and support for
the development of cooperative enterprises in rural America. The CLUSA
Institute also signed a partnership agreement last year with USDA's
Cooperative Services program to coordinate strategies to assist rural
cooperative development.
In 1996, Congress demonstrated its strong commitment to the centers
approach when it passed the FAIR Act, also known as the 1996 farm bill.
The program is now called Grants for Rural Cooperative Development in
section 747(c)(4) of Public Law 104-127. The program focuses on
supporting ``nonprofit institutions for the purpose of enabling the
institutions to establish and operate centers for rural cooperative
development.'' It is authorized to provide funding at $50 million per
year. The new statutory language defines the goals of these centers as
``facilitat[ing] the creation of jobs in rural areas through the
development of new rural cooperatives, value added processing, and
rural businesses.''
With the support of funding received from the program over the past
few years, the rural cooperative development centers we work with have
demonstrated quantifiable results. Centers in different regions of the
country have given crucial help to the formation of farmer cooperatives
building value added processing facilities, community development
credit unions, partnerships among cooperative financial institutions,
flexible manufacturing networks, and cooperatives providing housing and
child care for impoverished farmworkers.
This coming year, centers will be involved in replicating successes
they have achieved and breaking new ground in areas where cooperative
development is needed. The electricity industry is rapidly being
deregulated in every part of the country. Consumer-owned rural electric
cooperatives have provided reliable and affordable electricity to rural
Americans since the rural electrification program began directing
federal resources for them in the 1930's. Once again, a small federal
investment can provide essential assistance to develop consumer-owned
energy purchasing cooperatives so that Americans are able to provide
themselves with access to electricity. Centers are providing the
opportunity for people to own and control these cooperative businesses.
Other cooperative development projects include the formation of new
value-added agricultural cooperatives, new child care cooperatives, and
cooperative housing projects. Value-added agricultural cooperatives
give farmers more of the consumer dollar. Child care cooperatives
provide former welfare recipients and other low-income people the
opportunity to reduce the cost of child care and give them control over
how their child care facilities are operated. Cooperative housing gives
seniors and others in rural areas the chance to save money on their
housing and live in safe communities.
The President's budget request has proposed allocating $1.7 million
to this program. This would represent four straight years of level
funding at a very low level indeed. In fiscal year 1996, 87 proposals
submitted for program funding qualified for approval under USDA's
selection criteria. The total amount of funding requested for these
meritorious applications was $13 million. Last year, fewer applications
were submitted because of an unusually short application period.
However, a Cooperative Value-added Program within the Fund for Rural
America drew 104 eligible applications totalling $19.4 million. Only
$1.1 million could be distributed to 18 of those worthy projects.
USDA's National Commission on Small Farms recently recommended that
this program ``be increased by $10 million annually up to $20
million.'' The Commission's report calls the program ``one of the few
that supports rural cooperative development at the grassroots level.''
The program is authorized to be funded at $50 million annually.
We urge this committee to do what over 100 organizations are urging
Congress and the Administration to do: increase funding for this
valuable program. Mr. Chairman, I ask that the letter signed by those
organizations be included in the record of this hearing along with my
testimony.
NCBA is a national cross-industry membership and trade association
representing cooperatives--over 100 million Americans and 47,000
businesses ranging in size from small buying clubs to businesses
included in the Fortune 500. Founded in 1916 and known for many years
as the Cooperative League of the USA (CLUSA), NCBA's membership
includes cooperatives in the fields of housing, health care, finance,
insurance, child care, agricultural marketing and supply, rural
utilities and consumer goods and services, as well as associations of
cooperatives. NCBA's mission is to develop, advance, and protect
cooperative enterprise.
______
Prepared Statement of the National Corn Growers Association
We appreciate this opportunity to provide the Subcommittee with our
views on the fiscal year 1999 agricultural appropriations bill. The
National Corn Growers Association (NCGA) represents 30,000 corn growers
in 47 states. For the fiscal year 1999 agricultural appropriations
bill, the NCGA supports the Administration's budget request for
increased funding for plant and animal genomics, especially the request
for $10 million for the creation of a new, Food Genome, competitive
grants program. The NCGA, also, supports the Administration's request
for increased funding for ARS genomics research and increased funding
for genomics under the National Research Initiative (NRI) competitive
grants program. The plant component of these funds will be used for
USDA's participation in the multi-agency National Plant Genome
Initiative.
While many Federal agricultural programs are important to the
Nation's corn growers, the National Corn Growers Association believes
that the future of the corn industry is written in corn's genetic code.
The NCGA believes that the most important appropriations issue for
fiscal year 1999 is funding for coordinated, plant genomics research.
Genomics consists of mapping, sequencing, and analyzing genomes to
determine the function of genes. The complete genetic makeup of any
organism is known as its genome.
In January 1998, the National Science and Technology Council issued
an Interagency Working Group report on the National Plant Genome
Initiative. The report stated that the time was right for the
implementation of a comprehensive, five-year National Plant Genome
Initiative to meet the major challenges that will face mankind in the
21st Century. In the transmittal letter accompanying the report, the
President's science advisor, Dr. John H. Gibbons, stated the following:
The timing of this initiative is critical, since our
international private sector partners are moving forward
aggressively. A significant public sector program . . . carried
out in partnership with industry will ensure plant genome data
and materials are openly accessible to all scientists. It is a
critical step toward promoting future scientific breakthroughs
in plant biology and their practical application.
To accomplish the short-term goals of the National Plant Genome
Initiative that focus on building plant genome research infrastructure,
the Interagency Working Group on Plant Genomes estimated that $400
million in funding was needed, over five years, to meet the anticipated
needs of the Initiative. The Administration's budget request for
increased funding for USDA plant and animal genomics will help to
ensure that the short-term and long-term goals of the National Plant
Genome Initiative are met.
The National Plant Genome Initiative will help scientists,
geneticists, and plant breeders identify and utilize genes from corn
and other economically significant crops that control important traits,
such as nutritional value, stress tolerance, and resistance to pests.
The far-reaching benefits of this Initiative include:
--Protection of U.S. interests and access to important biotechnology
and gene patents;
--Revitalization of rural America due to a more robust agricultural
sector;
--Expansion of plant-based renewable resources for energy and raw
materials;
--Significant reductions in crop losses and reliance on pesticides
through improved biological methods to control and alleviate
serious industrial threats and targeted pests;
--Improved yields and reduced crop losses caused by adverse
environmental conditions such as heat, drought, and salt;
--Improved nitrogen-use efficiency, thereby, limiting the potential
for nitrates in the water supply;
--Reduced environmental problems confronted by livestock producers,
such as modifying the digestibility of phosphorous in feed corn
to reduce the amount of phosphorous that enters our ground
water;
--Improved animal nutrition leading to healthier meat and increased
meat productivity;
--Reductions in the occurrence of mycotoxin contamination by
significantly improving resistance to fungal infection;
--Development of tailored hybrids with valuable specialty starches,
oils, and protein content; and
--Reduced worldwide malnutrition due to higher yielding and more
nutritious crops.
The National Plant Genome Initiative is critical to the long-term
viability of U.S. agriculture. To compete in the global market, the
U.S. must continually strive to efficiently and economically improve
production capabilities--to maximize yield and combat serious threats
from disease, pests, and climate changes--without harming the
environment. Genomics research holds the key to achieving this goal.
The National Corn Growers Association urges you to provide
increased funding for plant and animal genomics research at USDA to
ensure that our growers have the tools to meet the challenges and
demands of the 21st century.
We appreciate the opportunity to present our views and look forward
to working with you.
______
Prepared Statement of the National Cotton Council of America
cotton industry funding--brief background on request for fiscal year
1999
Boll Weevil.--The industry requests fiscal year 1999 funding which
would allow APHIS to provide up to 30 percent federal cost share for
the operation of the eradication program. The industry also requests
sufficient funds so USDA's Farm Service Agency can provide up to $50
million in loans for boll weevil eradication activities in fiscal year
1999. We also request funding be made available on a no-year basis. The
industry's request for funding and loan authority will fill needs
resulting from operation and continued expansion of the highly
successful boll weevil eradication program. The industry also renews
its request that the Committee instruct USDA to collect and make
available statistics on acreage planted to cotton to ensure producer
assessments can be collected fairly and efficiently.
The accelerated plan for eradication of the boll weevil was
initiated in fiscal year 1995. The plan calls for cost-share programs
to be operated simultaneously in the Southeast, Mid-South and Texas-
Oklahoma-New Mexico regions. In addition, the plan provides for
completion of the eradication effort in Alabama/Middle Tennessee and
Texas' Southern Rolling Plains zone.
Funding for fiscal year 1997 was reduced from $18.084 million to
$16.209 million in part because of the discontinuation of the program
in east Mississippi and the Lower Rio Grande Valley. Funding for fiscal
year 1998 was maintained at $16.209 million. For fiscal year 1999, the
industry requests sufficient funding be provided to restore the federal
cost share to as close to 30 percent as possible. The fiscal year 1998
appropriation allowed APHIS to contribute an average of approximately
10 percent cost share, however some areas did not receive any cost
share. With declining prices and narrow margins, growers are struggling
to finance the program. The 30 percent federal/70 percent grower cost
share arrangement was critical to the timely completion and lasting
success of the program in the Southeastern states and Arizona. Since
1997 producers have approved referenda to restart the program in east
Mississippi, to initiate the program in two additional regions of
Mississippi and Southwest Tennessee, to initiate the program in the Red
River Valley of Louisiana along with Southwest Arkansas, to initiate
the programs in South Texas/Wintergarden and Texas' Rolling Plains
Central zone. New Mexico and Oklahoma have passed referenda and plan to
begin programs in the Fall of 1998. Arkansas producers in all but 4
northeast counties have passed a vote to begin eradication with
Mississippi's Delta and north Louisiana. Referenda covering additional
areas of Mississippi's delta and Louisiana narrowly missed achieving
the necessary 2/3's approval and will be reviewed for possible revotes
in the future.
To succeed, the program requires a highly coordinated program
supplied with equipment and trained personnel. USDA/APHIS/PPQ, the
federal action agency with unique expertise for conducting such
programs, has been invaluable ever since the 1978 eradication trial in
Virginia and North Carolina by providing leadership, experience, and
direction to the Boll Weevil Eradication Program. Their involvement now
is more important than ever as multiple overlapping programs are
initiated.
Elimination of the boll weevil places U.S. cotton producers in
position to be cost competitive with any other cotton producing
country. A strong cotton economy means strong state and local economies
with more jobs and an increased tax base. The program is credited with
generating $12 in economic activity for every $1 expended. It has also
been documented to significantly reduce the cost of production and
improve producer income. The environmental benefit has been documented
in the Southeast by reduction of insecticide use by 40-85 percent. With
the introduction of worm resistant Bt cotton, elimination of the boll
weevil takes on added significance--particularly in the Delta regions
of Mississippi, Louisiana and Arkansas and in Texas.
Thanks to cooperation between regional Boll Weevil Eradication
Foundations who coordinate program operations, and with APHIS, limited
funds have been invested as effectively as possible. While the loan
program initiated in 1997 to supplement the short fall in direct
Federal cost share contributions has been helpful and is needed again
in fiscal year 1999, some areas are under severe stress. In fact, some
eradication zones are operating with little or no Federal cost share
and minimal loan funds. Virtually all programs are operating with
significantly less than the 30 percent Federal cost-share which was
available to earlier program areas. According to calculations, the
current average Federal share is approximately 10 percent.
There has been excellent cooperation from FSA in initiating and
operating the loan program. It would be extremely helpful if the loan
program could be available on a no year basis so that any unused
authority will not be lost. We also request that the Committee increase
the available loan authority for fiscal year 1999 since expanded
operations in Tennessee, Louisiana, Arkansas, Texas and New Mexico are
expected to begin in Fall of 1998.
The Committee included language in the fiscal year 1997
appropriations measure urging USDA to assist with collection of acreage
data so collections of boll weevil assessments could be made
effectively, fairly and at the least possible cost. As of March 1998,
USDA has not advised the Foundations that it would assist with the
collection of acreage data. The Foundations lack the necessary
facilities and resources to carry-out this function and ask the
Committee to renew its instructions to USDA to provide assistance to
the Foundations in collecting data critical to the administration and
collection of assessments.
Pink Bollworm Programs.--The pink bollworm is a serious economic
pest in West Texas, New Mexico, Arizona and the southern desert valleys
of California. California growers for more than two decades have joined
USDA/APHIS in a cost share partnership known as the cooperative pink
bollworm containment program. Through comprehensive cultural and
biological controls, pink bollworm infestation has successfully been
prevented in the San Joaquin Valley. Sterile moth releases are an
essential component of this program. Use of bio-rational methods
includes sterile adult moths, pheromone traps and cultural methods
which allow control of the pink bollworm without use of pesticides.
Over 6 million moths are reared and sterilized each day in Phoenix
facilities owned by California producers. Equipment, methods and
partial support for rearing and operations are furnished by APHIS.
Investments in new rearing capacity will provide opportunities for
USDA/APHIS/ARS, state organizations, and producers to demonstrate area-
wide management of pink bollworm infested areas by integrating
genetically engineered Bt cotton, cultural controls, making disruption
with pheromones and sterile moth releases. Eradication is feasible
using this technology in a highly coordinated, area-wide basis. The
Council's Pink Bollworm Action Committee has endorsed the area-wide
approach, and is currently developing an action plan to be used to
communicate to producers about the proposed area wide pink bollworm
management program.
Funding for USDA/APHIS/PPQ pink bollworm programs has been cut by
over 50 percent compared to fiscal year 1994 levels resulting in delays
in completing area-wide demonstration programs in southern California.
Demonstration of wide area control technology is essential before
producers can consider expansion of the program into other infested
areas in the U.S. Area wide management of the pink bollworm with
maximum suppression, possibly eradication, is becoming a reality. The
goal of reduced pesticide use, optimum use in Integrated Pest
Management (IPM), and reduced production costs are within reach if the
partnership between states, the Federal government and producers can be
continued. California producers in the lower Colorado River Basin area
will, in cooperation with USDA APHIS, California Department of Food and
Agriculture, and California Cotton Pest Control Board, conduct a trial
pink bollworm maximum suppression program including Bt cotton, cultural
controls, pheromone treatments, and sterile moth releases during this
growing season. Producers in other areas will carefully observe the
results from this trial.
The industry requests that fiscal year 1999 base funding be
maintained at fiscal year 1998 level of $1.069 million. If producers
continue to request assistance for conduct, supervision and cost
sharing for areawide pink bollworm programs, the industry will request
an increase in funding likely beginning in fiscal year 2000.
Silverleaf Whitefly.--The whitefly is a cotton pest of significant
importance, particularly in Arizona, California and Texas, causing
yield, disease, grade and contamination losses for growers. Sticky
cotton, caused by whitefly honeydew is a serious problem for textile
mills who at the least impose price discounts and in some cases will
refuse cotton originating in areas with whitefly infestation. The
Council strongly supports funding the continuation and extension of
USDA's Whitefly Research, Action and Technology Transfer Plan which
calls for a multi-disciplinary approach consisting of basic research,
biological controls, integrated pest management, plant breeding for
resistance, and insecticide controls with expedited technology
transfer.
Market Access Program (MAP) and Foreign Market Development (FMD).--
The cotton industry has consistently employed a long-term export market
development strategy. Cotton Council International, the overseas
promotion arm of the U.S. cotton industry, is a participant in the
Market Access Program (MAP) and Foreign Market Development Program
(FMD). Activities carried-out under MAP and FMD have been responsible
for increased export sales of raw cotton and cotton products including
cotton textiles. The U.S. cotton promotions have not only increased
sales, they have generated more than $2.50 in matching contributions
for every $1 spent. In operating programs under MAP, the industry
insists on the following: (1) purchases of U.S. cotton and textile
products must be documented, (2) sales impact must be well-documented,
(3) no funds are provided to foreign or domestic firms, (4) matching
contributions must be documented, and (5) no funds may be used to
promote exports to the United States.
Raw cotton exports now average over 8 million bales annually and
approach $4 billion in value. Exports of value-added cotton products
have quadrupled and add another $4 billion to the value of overall
cotton exports--creating thousands of jobs. The cotton industry urges
that $90 million be made available for MAP for fiscal year 1999. We
also urge that FAS be provided sufficient funds so the FMD program can
be operated at the same level in fiscal year 1999 as in fiscal year
1998. The FMD program is an important long-term component of a
successful market development effort for U.S. agriculture. CCI utilizes
FMD funds to conduct education activities which help build long term
relations with potential customers for U.S. cotton and cotton products.
The industry also strongly supports adequate funding so cover
activities of FAS personnel who carry-out important export enhancement
functions at headquarters and abroad.
Export Credit Guarantee Programs.--Congressional foresight in
authorizing use of $5.9 billion for GSM-102 export credit guarantees
and USDA's timely employment ofthat program has allowed U.S. exporters
to preserve sales to Asia. Cancellation ofthese sales would have had a
devastating effect on exporters and farmers. For fiscal year 1999, GSM-
102 will again play a critical role in facilitating U.S. export sales.
Valued Added/Quality Cotton Textile Research.--The competitiveness
of agriculture depends not only on efficient production, but value
added processes as well. ARS labs have been forced to sharply reduce
support staff, equipment purchases, and scientist positions due to
rising costs and shrinking budgets. The industry urges continuation of
value-added quality oriented research at the SRRC in New Orleans and at
Clemson University.
Germplasm Enhancement.--The United States cotton germplasm
collection is maintained at the ARS Southern Crops Research Laboratory
in College Station, Texas. This collection serves public and private
researchers nationwide as they attempt to meet increasingly serious
challenges for yields, quality and solutions to environmental problems.
The ARS has developed a long-range comprehensive plan for
revitalizing the germplasm enhancement program at College Station.
While we fully support the overall ARS plan, the most urgent need is
for support of the germplasm enhancement and evaluation program for
winter increases.
To meet crucial short term operational needs for the germplasm
program, ARS has temporarily shifted funds for other high priority
research projects.
Oilseed Processing and Quality Research.--The USDA ARS Southern
Regional Research Center (SRRC) in New Orleans has a long history of
research for adding value to commodities including improvements in
processing and utilization of cottonseed and its products. In addition
to its fiber research, the ARS has developed, in cooperation with the
crushing industry, a set of goals for improving process efficiency,
maintaining product quality and enhancing food safety.
Specifically, research at the SRRC is working in three areas
important to cotton and other oil seeds. First, is research to remove
gossypol, a naturally occurring component of cotton seeds which is
toxic at high levels to some animals. Removing gossypol from cotton
seed and its products is technologically feasible, however research is
needed to determine optimum processes of removal. The ability to market
a high quality protein product for animal consumption is a key
ingredient to enhancing markets of U.S. cotton products at home and
abroad.
Aflatoxin control is also an important part of the SRRC research
goals. Eliminating food and feed risks of the mold which produces
aflatoxin is a high priority for cotton, peanuts, corn, tree nuts and
other crops. Pioneering research conducted by researchers in New
Orleans is leading the way to solving this multi-million dollar problem
of U.S. agriculture.
Finally, work to enhance processing efficiency while assuring
environmental responsibility is the third component of the SRRC mission
in oilseed utilization research. Developing new and novel approaches
for extraction of oil while meeting new environmental objectives is
important for cotton and other oil seed commodities.
We request that Congress continue to recognize the USDA/ARS work at
the Southern Regional Research Center for its contribution to
agriculture and ask that the unit continue to be funded at least the
current level.
Plant Science Research.--Agricultural Research conducted by the in-
house program of USDA's ARS and the State Agricultural Experiment
Stations with CSREES support is essential for the long term viability
of agriculture. While we are strongly supportive of the ARS and CSREES
we also recognize the benefits of the basic research--sometimes at the
molecular level--made possible by the National Research Initiative
(NRI). The NRI is a key component of the USDA's research portfolio and
complements other programs in the ARS and CSREES.
We appreciate your strong record of support for vital plant science
research made possible through the NRI, the ARS and CSREES.
PM-10.--A variety of studies allege that agriculture is a major
source of PM-10 emissions. The cotton ginning industry is already
making significant investments to reduce emissions and develop air
quality compliance plans. The research conducted by USDA is critically
important to assist Sinners and producers in making cost effective
decisions. We urge funding for CSREES' PM-10 programs be continued at
not less that fiscal year 1998 levels.
CRP, WRP, EQIP.--The new farm bill extends authority for the
operation of the CRP and WRP. It also authorizes a new program, EQIP,
to provide assistance for projects designed to protect water, soil and
related resources. We urge funding be made available at levels
necessary to operate these important programs without threatening other
important cotton specific programs.
FSA Offices.--The industry is concerned that the ability of FSA to
deliver critical services could be impaired by further office closures
and personnel reductions. USDA has already implemented a significant
re-organization as a result of 1994 legislation. The cotton industry
urges the Secretary to consult with all affected parties to ensure that
further consolidation, closures and personnel reductions do not
jeopardize the agency's ability to deliver services to farmers.
Ginning Labs (ARS).--The industry requests the Committee to urge
ARS officials to provide sufficient funds to the ginning labs at
Stoneville, Mesilla Park and Lubbock so the important work at these
facilities can be continued and enhanced. Each lab conducts research
which is important to gins and producers. Each lab has unique
capabilities and care has been taken to ensure there is no duplication
of effort. The fiscal year 1998 appropriations measure provided funds
specifically to improve research capabilities at the Lubbock lab. We
ask that language be included in the fiscal year 1999 legislation to
ensure ARS continues to make these funds available to the Lubbock
facility.
Office of Pest Management Programs.--NCC supported the role USDA
was given when the new Food Quality Protection Act was passed. We were
encouraged that the Department announced the creation of the Office of
Pest Management Policy, but continue to be concerned that
responsibilities under FQPA are not being met expeditiously enough to
assure cotton producers do not lose access to important crop protection
tools (such as the organophosphate insecticides) unnecessarily. The
OPMP should be funded at the $2.6 requested and to assure the greatest
efficiency all requirements, including the Integrated Pest Management
Coordinators, should be coordinated through that office.
______
Prepared Statement of the National Dry Bean Council
ndbc executive summary
Phaseolus beans are a unique short season, high value food crop
that niche will into shorter production seasons of the northern and
intermountain states, providing vital alternatives to growers where
crop options are limited. Dry beans are grown on 2M acres with an
annual production of 32M hundred weight in 1991 valued at $650M. Snap
beans, both processed and fresh market, are produced on 300,000 acres
with an estimated value of $200M.
Beans offer the consumer a healthy, tasty inexpensive food choice
as either dry bean seed or green bean pods (snap beans). Dry beans are
a protein rich source of complex carbohydrates and fiber, available in
a variety of canned and dry products differing in color, size, shape,
and flavor. Snap beans are rich in vitamins and minerals but low in fat
and calories. Clinical studies have documented that the soluble fiber
of dry bean seed can reduce serum cholesterol, and the National
Research Council suggests that beans will be the fiber food of the
1990's. Beans are currently endorsed by the American Heart Association,
the American Cancer Society, and the American Diabetes Association.
Sixty percent of the U.S. dry bean crop is processed as canned baked
beans with a value of $900M. Currently 40 percent of U.S. production is
exported, with certain commercial classes grown exclusively for export.
Their value as an acceptable protein staple in famine relief is being
recognized.
The research to improve beans is achieved through a highly
integrated system involving state, federal, and industry scientists.
Currently states furnish 24 scientist years (SY's) and the federal
Agricultural Research Service (ARS) furnishes 5 SY's. Industry
contributes very significantly to snap bean research, but it is also
actively involved in dry bean improvement.
Beans need to be improved in three primary research areas:
pathology, quality genetics, and biotechnology, if they are to remain a
viable crop alternative and industry in the 20 production states. The
research must remain multidisciplinary, occur across geographic areas,
and continue to foster collaboration among states, ARS, and industry.
Three critical USDA-ARS positions involved in two of the primary
research areas; bacteriology (E. Lansing, MI), culinary and canning
quality genetics (E. Lansing, MI), and fungal pathology (Beltsville,
MD); need additional funding. A new ARS position, located in the Plains
states, focusing on molecular technology for bean improvement would
address the third research area.
To achieve these critical research goals, the National Bean
Research Task Force recommends:
1. No further reduction in current level of ARS support to bean
research.
2. Maintain the current ARS bean vieral pathology position at
Prosser, WA.
3. Appropriate an additional $80,000 in fiscal year 1999 for the
under funded ARS bean fungal pathology position at Beltsville, MD.
4. Appropriate an additional $300,000 in fiscal year 1999 for the
ARS Sugar Beet and Bean Research Unit, Michigan State University, East
Lansing, MI.
Implementation of these recommendations would be a positive
commitment to the future of bean research and the bean industry in the
U.S. It would create more cooperation between federal, state, and
private sections in their goal towards bean production improvement and
utilization. The ultimate beneficiaries would be the American consumer
with a reliable economic and nutritional food source and the American
taxpayer with positive returns on balance of trade.
strategic plan for u.s. bean research
Dry & Snap bean (Phaseolus vulgaris L.) are versatile short season,
high value food crops that niche well into shorter production seasons
of the northern and intermountain states, providing vital alternatives
to growers where crop options are limited. Beans offer the consumer a
healthy, tasty and inexpensive food choice as either low fat, low
calories vitamin/mineral rich green bean pods or as a protein rich
source of complex carbohydrates and fiber in a variety of canned and
dry bean products differing in color, size, shape, and flavor. Clinical
studies have documented that the soluble fiber or pectin content of dry
bean seed has potent effects in the prevention and treatment of chronic
medical conditions such as cardiovascular disease, diabetes mellitus,
and obesity, hypertension, cancer and diseases of the digestive tract.
Beans are currently endorsed by the American Heart Association, the
American Cancer Society, and the American Diabetes Association. The
beans are touted by these Agencies as the fiber food of the 1990's. The
canning and freezing industry for both seed and pod types is diverse
and located across the country offering employment outside the 20 major
production states. The same processing industry which cans over half
the dry bean crop as beans in either clear brine, sauce with pork, or
chili has seen an increase in production in the last 10 years of 10
million cases. This volume represents an increase of $160 million to a
current value in excess of $900 million.
Production:
Phaseolus dry edible beans are planted on approximately 1.5 million
acres (1.1-2.6) in the U.S. Production fluctuates around 26.7 million
hundred weight (cwt) annually, ranging from 19 million cwt in 1988 to
over 32 million cwt in 1990, 1991, and 1995. On-farm value of this crop
ranges from $350 to $700 million, depending on the season and price.
The major production states ranked in order of acreage are: ND, MI, CO,
NE, CA, ID, MN, WY, WA, NY, and KS. Ten dry bean commercial classes are
produced in the U.S. and these are differentiated by color, size and
shape of the bean.
In addition to production of phaseolus dry beans, green bean, or
snap bean production occurs in several regions of the U.S.
(approximately 220,000 acres), with an estimated value of $110M
annually. States leading in snap bean production for processing are WI,
OR, IL, MI, NY and ID. Snap beans for fresh market are grown primarily
in FL, with smaller acreage in NJ, AR, and TN. Snap beans for fresh
market are grown on approximately 80,000 acres nationwide with an
additional value of $80 million annually.
Utilization and Exportation:
Approximately 60 percent of the total U.S. dry bean production is
consumed nationally. Over 90 percent of the navy bean crop is processed
as canned baked beans, while only 20 percent of the pinto bean market
class is processed as a canned food. Dry bean consumption has increased
from 5.7 to 7.2 lbs since 1984. This represents a 26 percent increase
which is largely due to the recognition of the food and health value of
beans.
A large share of the U.S. dry bean production is now targeted at
export markets. Exports peaked in the early 1980's at over 12 million
cwt. Currently, 40 percent of the U.S. production is exported with
certain commercial classes grown exclusively for export. Cultural
preferences in certain export markets for specific commercial classes
of dry bean allows for diversification of U.S. dry bean agricultural
production. Bean exports have played an important role in reducing the
balance of payment deficit the U.S. suffers in world trade. Bean
exports are becoming increasingly important because they are an
indispensable protein source in Latin America and many developing
countries particularly those in East Africa. Their value in famine
relief in these countries is vital. The array of seed types currently
grown in the U.S. makes beans an important choice to meet the energy
and protein needs of estimated 21 million people at risk of death from
starvation and disease in Central Africa.
current scope of u.s. bean research
A major strength of the U.S. economy is its agricultural
production. Stable U.S. agriculture production helps maintain a vibrant
economy because food costs to consumers can be kept low yet still
profitable to the producer. In addition, agricultural exports
contribute substantially to reduce trade deficits. Continued U.S.
dominance in agriculture will require major efforts to improve both
crop productivity and quality while stabilizing or improving the
physical environment. This process will allow U.S. agriculture to
supply both domestic and world markets with affordable, high quality
products and preserve precious natural resources for future
generations. These efforts can only be accomplished by investing in
strong agricultural research technologies. Beans can only continue to
be a vital part of the U.S. agricultural economy if research to keep
them competitive with other commodities continues.
The number of state and federal scientist years (SY's) devoted to
bean research in the U.S. in all disciplines is approximately 27 (20
SY's--dry beans, 7 SY's--snap beans). The specific locations of the
larger programs are shown on the attached table, along with the
agencies involved, SY's, and primary research emphasis at each
location. A network of federally-supported USDA positions were
established through the Agricultural Research Service (ARS) in the
1920's to support both public and private programs dedicated to dry
bean and snap bean research. The ARS research mission for beans is to
solve specific high priority problems of a national scope. A national
research mission cannot be addressed by any single Agricultural
Experiment Station. Moreover, since the bean industry is regionalized,
ARS is in a better position to develop the necessary research teams to
address problems that extend far and beyond state and regional
boundaries. The national leadership extended by ARS scientists in areas
of pathology, germplasm maintenance and enhancement and food quality
genetics has strengthened the entire bean industry nationally. The
present national bean research effort is operating at a minimal level
but is effective because of the unique collaboration among state,
federal and industry partners, fostered in part by the Western Regional
W-150 project and nurseries and the Phaseolus Crop Advisory Committee.
A National Bean Research Task Force (NBRTF) has been formed to
identify needs and concerns within the research community and to make
recommendations to correct the deficiencies. The task force recognizes
and appreciates the continued federal support for the ARS bean research
positions at Prosser, WA; Beltsville, MD; and Mayaguez, PR, and for the
increase in funding for the ARS food quality genetics position at E.
Lansing, MI, but NBRTF is concerned by the lack of critical research
areas of bean pathology. New and more virulent strains of bean
pathogens have made a major onslaught in several bean production areas.
There is critical need for research to characterize the new pathogens
and develop strategies for resistance in the plant.
The NBRTF requests that the National Dry Bean Council (NDBC) lobby
for support for federally supported research programs which are
currently under funded and for the creation of a new position to solve
critical problems caused by foliar, bacterial and fungal pathogens.
usda-agricultural research service bean research workers and facilities
Goals and Recommendations for fiscal year 1999:
The National Dry Bean Council (NDBC) is urging Congress to approve
funding in fiscal year 1999 for the USDA Agricultural Research Service
(ARS) Plant Science Program that increases funding from fiscal year
1998 levels to the $300,000 required by ARS to fund a CRIS project.
This will enable the ARS to provide adequate support for these bean
scientists.
Specifically, the NDBC is recommending Congress address the
following priority needs in bean research.
Operations Budget:
1. Maintain the current ARS bean viral pathology position at
Prosser, WA with the $300,000 level of funding required by ARS to
maintain a viable CRIS project. This position will enable ARS to
effectively conduct research on common bean virus problems and
resistance breeding and expand activities on bean root rots and allow
ARS to address critical needs pertaining to disease resistance in the
major bean seed production area in the U.S.
2. Appropriate an additional $80,000 in fiscal year 1999 for the
under funded ARS bean fungal pathology position at Beltsville, MD. The
appropriation will bring the funding of this position up to the
$300,000 level required by ARS to maintain a viable CRIS project and
enable the scientist to effectively conduct his research on bean rust
pathology and genetics and expand activities on bean golden mosaic
virus recently introduced into the U.S. and allow the ARS to
successfully refill the position upon the retirement of the scientist.
3. Appropriate an additional $300,000 in fiscal year 1999 for the
ARS Sugar Beet and Bean Research Unit, Michigan State University, East
Lansing, MI to correct a critical federal need in bean pathology,
particularly in the area of foliar bacterial and fungal pathogens
namely common blight, halo blight, bacterial brown spot, anthracnose,
and white mold disease pathogens. The appropriation will enable the
hiring of a bean bacteriologist/microbiologist to conduct the needed
work pursued formerly by the late Dr. Saettler in the area of bean
pathology. This critical position has been vacant for several years.
Background:
A well-balanced approach to the nations's bean research needs
requires the maintenance of a team of ARS bean research workers in
diverse disciplines including genetics, germplasm enhancement,
germplasm evaluation, pathology, quality, and molecular biology. In
order to maintain an adequate team of ARS bean research workers, it is
important that ARS research workers presently engaged in bean research
not be redirected to other crops and that vacancies created by
retirements and deaths be filled and these programs maintained for bean
research.
During the period from 1970 to 1990, the number as USDA-ARS bean
research workers declined substantially, from 13.0 to 5.0 positions, a
decrease of 56 percent. This decline severely hampered the ability of
ARS to meet national bean research needs, and the SAES to meet state
bean research needs.
The total ARS budget increased by 67 percent from fiscal year 1980
to fiscal year 1990 while the bean appropriation remained constant at
just under $1.6M. Total bean appropriations as a percent of total ARS
budget in fiscal year 1980 was 0.43 percent which dropped to 0.25
percent by fiscal year 1990.
Unfortunately, the number of ARS bean researchers is again on the
decline, due to the untimely death of Dr. Saettler in East Lansing, MI
and the impending retirements of incumbents at the USDA, Prosser, WA
and Beltsville, MD facilities. Action by Congress is needed to restore
the national ARS bean research team to a level that can meet the
nation's bean research needs.
In a real sense, the bean industry (dry and snap beans), although
vitally important in specific other geographic regions, does not have
the resources of the major crops to establish pathological or basic
mission oriented expertise in every region where beans are grown. The
USDA can mend this void by maintaining the vital network of scientists
currently working and dealing with important regional pathogens,
problems and opportunities which are of a national importance.
usda/ars bean pathology research position, prosser, washington
The ARS BEAN Project at Prosser, Washington has been long standing
with a presence under the legacies of D.W. Burke and M.J. Silbernagel.
Under the leadership of these scientists, programs were developed to
study the pathogenic variability of common bean mosaic virus (BCMV) and
the introgression of diverse resistance genes into snap and dry bean
germplasm, and the development of screening techniques for germplasm
enhancement of root rot complex pathogens. The ARS Prosser, WA bean
project has released over 10 snap bean lines and 18 dry bean lines in
six distinct market classes. A number of the dry bean lines have become
successful dry bean varieties in the West and Intermountain states (CO,
ID, and WA) and the upper-Midwest (ND). The dry bean varieties
developed by ARS, Prosser, WA have generated about $1 billion in income
to farmers in the Pacific NW over the past 20 years. Othello pinto bean
is grown on about 50 percent of the pinto acreage in the west and
intermountain region and has generate $68 million revenue in the state
of Idaho in the last 5 years. The ARS Prosser, WA bean project is
currently under the leadership of Dr. Phillip Miklas who in addition to
screening for root rot and introgressing genes form diverse germplasm,
is conduction basic genetic studies on the resistance to different
strains of BCMV, bacterial blight, rust and white mold. Mr. Miklas has
developed effective cooperative research efforts with ARS and SAES
scientists at several locations in the U.S. and Puerto Rico, and
commercial plant breeders in CA and ID. Over 90 percent of the
foundation and certified bean seed (dry and garden) is produced in
California, Washington and Idaho. The ARS bean project at Prosser, WA
has saved the Western bean seed industry considerable sums of money
that could have been lost to disease epidemics. Over the years the
facilities at Prosser, Washington have evolved to a point where there
is an excellent infrastructure in which dry bean disease and germplasm
enhancement research is conducted productively, efficiently, and has
garnered a wide customer base. A rapport has been established with this
customer base that is extremely supportive of ARS research efforts. In
addition, nurseries have been established that facilitate long term
research on the complex of bean root rot organisms and curly top virus.
Recommendation:
In order to meet the President's budget requirements for ARS in
fiscal year 1998, the Vegetable & Forage Crops production Research unit
has been slated for closure. Under this plan, there is talk of moving
bean research to Pullman, WA. The NDBC calls on ARS to maintain bean
research at Prosser, WA and fund this project at $300,000, the ARS
guideline for programs. Prosser is near the bean production area and
several long term nurseries have been established at or near Prosser to
conduct bean pathology research. Many of the facilities at the Prosser
Station have been developed to conduct bean research and are highly
suitable to conduct the ``cutting-edge'' research that is fundamental
to Dr. Mikias' CRIS. There are sufficient greenhouses to conduct the
genetic introgression work and disease screening efforts.
The NDBC thinks its at a ``water shed'' in regards to federal
support for bean research. Over the years ARS bean research positions
have eroded to the point the NDBC wonders whether a critical mass of
federal scientific expertise exists in the USA to conduct the type of
research vitally needed to keep our industry healthy.
The NDBC urges Congress to maintain this vital ARS position and
insure funding at $300,000 in fiscal year 1999 for this position.
usda/ars bean fungal pathology research position, beltsville, maryland
Dr. J.R. Stavely, full-time ARS Research Plant Pathologist at
Beltsville, devotes 100 percent of his research effort to the study of
fungal pathogens attacking beans. Historically, Dr. Stavely has studied
the foliar fungal pathogen causing rust disease in dry and snap beans.
Dr. Stavely has developed important technologies for introgressing rust
resistant genes into adapted and useful germplasm. He is also studying
the new viral disease, Bean Golden Mosaic Virus, introduced in 1993 in
South Florida. This disease has the potential to ``wipe-out'' the snap
bean industry in Florida.
This highly productive ARS project has released 43 processing and
15 fresh market snap beans and 24 dry bean germplasm lines in three
market classes. Research has focused on the introgression and
pyramiding of resistance genes into both snap and dry beans as the most
effective control of the variable rust pathogen. This long-term
germplasm enhancement project involves identification of novel sources
of resistance present in the USDA Plant Introduction collection,
incorporation of these resistance genes, both individually and as
groups, into snap bean and several dry bean market classes, and field
evaluation of elite material in major production areas. In addition,
basic plant pathological studies on the epidemiology and genetics of
the rust fungus are conducted. The current project leader cooperates
effectively with other USDA scientists, SAES researchers in at least
nine states, and commercial plant breeders. This position serves the
national needs for bean research in the area of fungal pathogens
attacking beans and provides leadership to SAES and industry and snap
bean breeding efforts.
Dr. Stavely's position is currently under funded, with a major
portion of the funding utilized for salaries and greenhouse rental,
leaving very little for research operating costs. An increase
appropriation of $80,000 is needed to enable Dr. Stavely to effectively
conduct his research, by bringing his CRIS into line with the $300,000
level of funding required by USDA.
Recommendation:
The NDBC calls on ARS to maintain the program in bean rust
pathology germplasm enhancement research at Beltsville, MD and expand
the program into anthracnose disease pathology and study the bean
golden mosaic virus disease. Increased funding to current ARS level of
$300,000 per year would allow this project to perform at optimum
efficiency to develop improved rust, anthracnose, and bean golden
mosaic resistant germplasm lines. An increased emphasis on the genetics
of pathogen virulence will offer insights on the development of
strategies needed to obtain stable rust and broad based genetic
resistance to variable fungal and viral pathogens.
The NDBC urges Congress to appropriate an additional $80,000 in
fiscal year 1999 for this position to bring the funding level to the
$300,000 required by ARS to maintain a CRIS.
usda/ars bean pathology research position, east lansing, michigan
There is a urgent need to create a new position in bean pathology
at E. Lansing, MI recognizing that an increase in bacterial diseases is
negatively affecting bean production in the Midwest and intermountain
areas. An ARS Plant Pathology position addressing national problems
caused by foliar bacterial pathogens was closed-out in 1992 due to the
untimely death of then incumbent (Dr. A.W. Saettler). There are no
funds to ``backfill'' this position. Dr. Saettler worked to determine
the molecular and genetic basis of host and non-host resistance to the
bean common bacterial blight pathogen, Xanthomonas campestris pv.
phaseoli, develop molecular and immunological diagnostics to determine
the epidemiology and population biology of common and halo bacterial
blights, and design alternative control strategies, including
biological, chemical, and cultural practices that will complement the
move toward sustainable agricultural practices.
Dr. Saettler was an international expert on foliar bacterial
pathogens of beans. he was the only bean pathologist in the USA (either
SAES or Federal) that had an active and comprehensive research program
on foliar bacterial pathogens of beans. Dr. Saettler's research
contributed positively and significantly to several of today's highest
national priorities as established by the National Research Council. In
that position at E. Lansing, Dr. Saettler contributed to the
development of 17 dry bean cultivars in five major market classes and
he actively cooperated with other state and private bean research
programs. The bean research community needs a pathologist working full
time on foliar bacterial pathogens. The work could best be done by ARS
because of the national scope of the problem. This position must be
funded at the $300,000 level to meet ARS guidelines for CRIS positions.
Recommendation:
The NDBC calls on ARS to create a new position in bean pathology at
East Lansing, MI, at the level of funding commensurate with ARS
guidelines. A qualified scientist should be recruited to fill the bean
bacteriology position as soon as possible.
The NDBC urges Congress to appropriate an additional $300,000 in
fiscal year 1999 for the creation of the new position.
LOCATION OF DRY AND SNAP BEAN PROGRAMS, SCIENTIST YEARS (SY) INVOLVED, AND KEY WORDS FOR MAJOR RESEARCH AREAS
----------------------------------------------------------------------------------------------------------------
Location Agency SY Major research areas
----------------------------------------------------------------------------------------------------------------
Dry Beans:
Beltsville, MD.................. ARS.............. 0.5 Pathology, Rust Variability.
Davis, CA....................... State............ 2.5 Breeding, Mapping, Agronomy, Pathology.
E. Lansing, MI.................. ARS.............. 1.0 Quality Genetics State.
State............ 1.5 Breeding, Processing Quality, Agronomy.
Fargo, ND....................... State............ 3.0 Breeding, Pathology, Quality, Molecular.
Ft. Collins, CO................. State............ 2.0 Breeding Pathology.
Gainesville, FL................. State............ 0.4 Molecular Mapping.
Ithaca, NY...................... State............ 0.4 Processing Quality.
Lincoln, NE..................... State............ 2.0 Breeding, Pathology.
Madison, WI..................... State............ 0.3 Pathology, Molecular.
Mayaguez, PR.................... ARS.............. 1.0 Germplasm Enhancement State.
State............ 1.5 Breeding, Genetics, Pathology.
Pullman, WA..................... ARS.............. 0.4 Germplasm Collection State.
State............ 0.3 Nutrition.
Prosser, WA..................... ARS.............. 0.5 Pathology, Breeding.
Scottsbluff, N. Platte, NE...... State............ 0.7 Agronomy, Pathology.
St. Paul, MN.................... State............ 0.4 Genetics, N-fixation.
Twin Falls, ID.................. State............ 1.5 Breeding, COB Nursery, Pathology.
Snap Beans:
Beltsville, MD.................. ARS.............. 0.5 Pathology, Rust Variability.
Charleston, SC.................. ARS.............. 0.5 Breeding, Adaptation Nursery.
Corvallis, OR................... State............ 2.0 Genetics, Interspecific, Breeding.
Gainesville, FL................. State............ 1.2 Breeding, Pathology.
Geneva, NY...................... State............ 1.0 Breeding, Genetics, Pathology, Mapping.
Madison, WI..................... State............ 1.0 Breeding, Molecular.
Prosser, WA..................... ARS.............. 0.5 Breeding, Pathology.
St. Paul, MN.................... State............ 0.4 Genetics.
--------
Total......................... ARS.............. 4.9
State............ 22.1
----------------------------------------------------------------------------------------------------------------
______
Prepared Statement of the National Easter Seal Society
easter seal recommendations for usda agrability program fiscal year
1999 appropriations
The National Easter Seal Society appreciates the opportunity to
report on the notable accomplishments of the USDA Cooperative State
Research, Education, and Extension Service (CSREES) AgrAbility Program
and recommend that funding for the AgrAbility Program be increased to
$4.6 million in fiscal year 1999.
The AgrAbility Program is an essential, unduplicated, hands-on
resource for farmers, ranchers, and farmworkers with disabilities. It
is the only USDA program dedicated exclusively to helping disabled
agricultural producers. It demonstrates the value of public-private
partnership by securing donations of funds, talent, and materials to
magnify the impact of a modest federal investment. Small, but damaging,
reductions in funding over the past two years resulted in a fiscal year
1998 appropriation of $1.91 million, down from $2.0 million in 1995.
Your colleagues on the Agriculture Committee expressed strong
bipartisan support for this important program in the ``Agricultural
Research, Extension, and Education Reform Act of 1997'' that is
currently in conference. The Committee included language, that while
strongly supportive of the work of AgrAbility, expressed dismay at the
increased waiting lists, strain on staff members, and unserved states
that still seek funding every year and are unable to offer AgrAbility
services due to funding limitations. In the 1990 Farm Bill, a funding
floor of $150,000 per state was set to assure that the state programs
were successfully implemented. However, because funding has not
approached the $6 million authorized level, state projects have been
funded at only $85,000 per state. In the reauthorization, the Committee
reaffirmed a commitment to that $150,000 per state floor, and Easter
Seals strongly supports the need to fully fund state programs to assure
that they continue to be effective for farmers with disabilities.
Without a concurrent increase in appropriations, fully funding state
projects at $150,000 per state would result of a loss of almost half of
the existing AgrAbility projects. The fiscal year 1999 request of $4.6
million would bring all current states up to the $150,000 level and
would allow seven currently unserved states to implement AgrAbility
programs.
disability & agriculture
Agricultural production is one of the nation's most hazardous
occupations. Each year, approximately 200,000 people working in
agriculture experience injuries that limit their ability to perform
essential farm tasks. Tens of thousands more become disabled as a
result of non-farm injuries, illnesses, other health conditions, and
the aging process. Nationwide, approximately 500,000 agricultural
workers have physical disabilities that prevent them from performing
one or more essential farm tasks.
For many of these individuals, the presence of a disability
jeopardizes their rural and agricultural futures. Rural isolation, a
tradition of self-reliance, and gaps in rural service delivery systems
frequently prevent agricultural workers with disabilities from taking
advantage of growing expertise in modifying farm operations, adapting
equipment, promoting farmstead accessibility, and using assistive
technologies to safely accommodate disability in agricultural and rural
settings. Yet, with some assistance, the majority of disabled
agricultural workers can continue to earn their livelihoods in
agriculture and participate fully in rural community life.
agrability's role and record of success
The AgrAbility Program was established under the 1990 Farm Bill in
response to the needs of farmers with disabilities. The Farm Bill
authorizes the Secretary of Agriculture to make grants to Extension
Services for conducting collaborative education and assistance programs
for farmers with disabilities through state demonstration projects and
related national training, technical assistance, and information
dissemination. Easter Seals is proud to be a partner with Purdue
University's Breaking New Ground Program in providing the national
training and technical assistance portion of AgrAbility. Thousands of
people in states with and without state AgrAbility projects are aided
through this initiative. For example, in New Mexico, 38 farmers and
agricultural and disability professionals have received direct
assistance and information on farming and disability in 1997 from the
national project.
AgrAbility combines the know-how of Extension Service and national
disability organizations to provide people with disabilities working in
agriculture the specialized services that they need to safely
accommodate their disabilities in everyday farm operations. AgrAbility
received strong bipartisan support during the 1996 Farm Bill
reauthorization, and was extended through fiscal year 1997. The $6
million authorization level for AgrAbility was continued and is
expected to be included in the current reauthorization of the USDA-
CSREES.
Under the statute, state and multi-state AgrAbility projects engage
Extension Service agents, disability experts, rural professionals, and
volunteers in offering an array of services, including: identifying and
referring farmers with disabilities; providing on-the-farm technical
assistance for agricultural workers on adapting and using farm
equipment, buildings, and tools; restructuring farm operations:
providing agriculture-based education to prevent further injury and
disability; and, upgrading the skills of Extension Service agents and
other rural professionals to better promote success in agricultural
production for people disabilities.
In 1997, USDA received an allocation of $1.91 million to support
eighteen projects in nineteen states: Idaho, Illinois, Indiana, Iowa,
Kentucky, Minnesota, Mississippi, Missouri, Montana, Nebraska, New
Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania,
South Dakota, Tennessee, and Wisconsin. The 1998-1999 grant cycle is
nearly complete and USDA will be announcing the list of funded states
for this year within the next two weeks. Easter Seals understands that
the USDA received applications from twenty states for the fourteen
available AgrAbility project slots in the 1998 grant cycle.
AgrAbility provides customized assistance to farmers, ranchers, and
farmworkers with disabilities and their families. The nature and degree
of assistance depends on the individual's disability needs and
agricultural operation. For example:
Kenneth Stennett, a 45-year-old poultry and beef farmer from
Waynesboro, Mississippi, has paraplegia due to a spinal cord injury two
years ago. He was unable to use many of his farm buildings and
equipment. The Mississippi Department of Rehabilitation Services
referred Kenneth to the newly formed Mississippi AgrAbility project.
Project staff are now providing support to help make his farm
accessible. A major problem for Kenneth was his inability to use his
workbench or hand tools to perform general maintenance activities.
AgrAbility staff organized a community workday with the Cattleman's
Association to recruit volunteer carpenters who lowered his workbench
and made other changes to make his shop accessible. AgrAbility staff
also referred him to the T.K. Martin Assistive Technology Center to get
information on modifications for his hand tools. AgrAbility staff are
also working with local limestone dealers to fill areas of the farm
terrain with crushed limestone to enable Kenneth' to maneuver his
wheelchair more easily and safely. Finally, AgrAbility worked with
Kenneth to locate a padded seat with armrests and a seat belt for his
tractor so that he would be more stable while driving it, and to
prevent pressure sores. Kenneth is paying for many of these
modifications himself, so AgrAbility staff helped him develop a
comprehensive list of needs and prioritize these needs and
modifications to make the best use of his resources.
A third generation farmer, Don Wolford of Franklin County, Iowa,
farms about 1,100 acres, raises 40 head of beef cows, finishes 560 head
of hogs, and maintains a 24-stall farrowing building. In 1992, he had
surgery to remove a tumor along his spine, which left him with
paraplegia. AgrAbility staff first met with him in the hospital and
showed him videos of farmers with disabilities using modifications, and
advised him of modifications that he could make to his operation. After
he returned home, AgrAbility staff wrote a proposal that helped get
funding for Don to purchase an all-terrain vehicle that was adapted for
him using a kit from the manufacturer. This vehicle allows him to move
equipment and supplies on his farm. A friend designed hand brakes for
his tractors and pick-ups. AgrAbility provided him with plans for
installing a lift on his tractor. Local welders were then able to use
the plans to install the lift. Since his injury, Don has been elected
president of the Franklin County Farm Bureau and named 1997 Franklin
County Master Pork Producer. He also volunteers his time as an
AgrAbility peer counselor to other farmers with disabilities in similar
situations.
Dave Kemper, a dairy farmer from Huntington County, Pennsylvania,
thought he would not be able to remain in farming after a car accident
left him with a severe neck injury and degenerative bone disease. His
doctors referred him to an AgrAbility for Pennsylvanians workshop,
where Dave saw that it was possible for him to continue farming.
AgrAbility staff assessed Dave's farm and educated him about possible
modifications to his buildings and equipment that would allow him to
tend his dairy herd. AgrAbility then worked with the state Department
of Vocational Rehabilitation to obtain an overhead milking system that
reduces his need to bend or carry heavy milk containers, and other
equipment that minimizes heavy lifting.
Since 1991, twenty-eight states have been served by AgrAbility
projects. In the aggregate, AgrAbility is estimated to have:
--Provided direct on-farm assistance to more than 5,000 farmers,
ranchers, and farmworkers with disabilities and their families.
--Provided information and advice to 10,000 persons with disabilities
employed in agriculture and related occupations.
--Educated more than 100,000 agricultural, rehabilitation, and rural
health professionals on safely accommodating disability in
agriculture.
--Recruited and trained more than 1,000 volunteers to assist
agricultural producers with disabilities and their families.
--Reached approximately 6.1 million people through 3,200 exhibits,
displays, and demonstrations to increase awareness of the
challenges affecting and resources available to people with
disabilities who work in agriculture.
impact of current funding levels
For too long, AgrAbility projects have been underfunded relative to
need and objective. At $85,000 per state, only a few staff can be hired
to provide state-wide education and assistance to disabled farmers,
educate rural professionals, recruit volunteers, and work with rural
businesses on disability-related issues. Rising demand for services and
the great distances that must be traveled to reach farmers and ranchers
severely strains even the most dedicated of AgrAbility's outstanding
staff.. Easter Seals fears that failure to invest wisely in this
worthwhile program will ultimately cause it to falter.
One of the consequences of limited funding is that in every grant
cycle, some states that have existing AgrAbility programs, and can
demonstrate a legitimate need for services, are not renewed and forced
to discontinue services to farmers with disabilities in that state and
often have difficulty getting the access to the limited state and
private funding sources that the federal seed money granted them. More
than a dozen states have sought AgrAbility funding without success.
Other states, including Colorado, Louisiana, Michigan, New Hampshire,
South Carolina, and Vermont, had USDA-funded AgrAbility projects in the
past and seek to re-establish their programs. Each of these states can
demonstrate significant unmet needs among farm and ranch families
affected by disability that AgrAbility could potentially address.
Beginning with the 1998-1999 grant cycle that commences April 1, it is
Easter Seals' understanding that projects in Ohio, New York, Idaho/
Montana, and New Jersey will cease to receive federal support. This
loss will greatly affect farmers with disabilities in these states for
whom AgrAbility is the primary resource through which they seek
information and assistance on farming with a disability. For example:
David Biehl has spent his life working the family wheat and barley
farm near Helena, Montana. When a spinal infection, six years ago, left
him with paraplegia, weakness in his hands, and low vision, he started
searching for a way to remain in farming. His case management nurse
referred him to the Montana/Idaho AgrAbility project. AgrAbility staff
member Tom Scott, helped David remodel his home for wheelchair
accessibility, modify his farm equipment, and find equipment to make it
possible for him to drive the family truck. Together, David and the
AgrAbility staff developed creative solutions to obstacles facing him.
For instance, instead of purchasing an expensive mechanical lift for
his tractor, David learned to use the leg braces he had unsuccessfully
tried to walk in during his rehabilitation, to safely board his
tractor. David expresses the importance of AgrAbility when he says,
``It was very important for me not to give up. Tom understood how I
felt and was able to help me find ways to be part of things.''
Unfortunately, the Montana/Idaho program was not successful in the USDA
competition for renewal of funding in fiscal year 1998. Effective April
1, 1998, the project is no longer a resource to David and other farmers
with disabilities in Montana and Idaho.
The need for AgrAbility services has never been greater, and its
accomplishments to date are remarkable by any standard. The National
Easter Seal Society is proud to contribute to the ongoing success of
the USDA-CSREES AgrAbility Program. Please support the allocation of at
least $4.6 million for AgrAbility in fiscal year 1999 to ensure that
this valuable public-private partnership continues to serve rural
Americans with disabilities and their families. Thank you for
considering Easter Seals' views and recommendations.
______
Prepared Statement of the National Pharmaceutical Alliance and the
Generic Pharmaceutical Industry Association
Mr. Chairman and Members of the Subcommittee, the National
Pharmaceutical Alliance and the Generic Pharmaceutical Industry
Association are pleased to have the opportunity to present these
comments on the fiscal year 1999 budget requests for the Food and Drug
Administration, on behalf of their members. Medicines developed,
manufactured, and marketed by the approximately 200 members of both
organizations account for more than 75 percent of all generic
prescriptions dispensed annually in the U.S.
cost benefits are provided by the generic pharmaceutical industry
Generic drugs represent one of the most cost-effective means of
controlling U.S. healthcare costs. For example, consumers, insurance
carriers, and the U.S. government spent an estimated $81.17 billion on
approximately 2.5 billion drug prescriptions in 1997 alone.\1\ About
half of those prescriptions were filled with generic versions of the
prescribed drug,\2\ which typically enter the market at 30 percent
below the brand price, and within two years decline to 60-70 percent of
the brand price.\3\ Moreover, brand drug retail prices rose an average
of 4.3 percent in 1997, while generic prices declined by approximately
7.6 percent in the same period.\4\ In addition to the price discount
obtained when compared to the brand product, competition within the
generic pharmaceutical industry results in declining prices that create
a substantial savings to taxpayers, insurance providers, and
consumers--especially senior citizens, the 40 million Americans without
health insurance, and the underinsured.
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\1\ See The Plymouth Group/IMS America, Ltd. ``Year-in-Review
1997'' prescription pharmaceutical data, presented at NPA Annual
Meeting on February 26, 1998, and cited in Post-1990 Launches Represent
43 percent of Rx Market, IMS Says, F-D-C Reports, Inc. (``The Pink
Sheet''), Mar. 9, 1998, at 9, and Bristol-Myers Squibb Swallows No. 1
Spot in U.S. Drug Sales, Medical Industry Today, Mar. 2, 1998.
\2\ See The Plymouth Group/IMS America, Ltd. ``Year-in-Review
1997'' prescription pharmaceutical data, presented at NPA Annual
Meeting on February 26, 1998.
\3\ See ``Economic Impact of GATT Patent Extension on Currently
Marketed Drugs,'' PRIME Institute, College of Pharmacy, University of
Minnesota, March 1995, at Executive Summary.
\4\ See The Plymouth Group/IMS America, Ltd., ``Brand vs. Generic
Price Changes, Prescription Pharmaceuticals, 1997.''
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While cost-effective generic pharmaceuticals have reduced health
care costs in this country, these savings could be even greater if FDA
took final action on generic applications within the statutorily
required six months.\5\ Due in large part to the leadership of the
Appropriations Committee, OGD has been able to take the first steps in
augmenting its resources to meet its statutory requirements. While the
fiscal year 1998 Operating Plan has not been completely implemented, it
is our understanding that the plan will include between $400,000 and
$700,000 in additional funds for OGD.\6\ These funds will give OGD the
opportunity to begin a modest expansion of its resources.
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\5\ Under the law, FDA, through the Office of Generic Drugs, must
review generic applications within 180 days. 21 U.S.C. Sec. 355(j)(4).
In 1997, the median time to approval for ANDA's was 19.6 months--more
than three times the length mandated by statute. See NDA/PLA Approvals
on First Review Increase to 44 percent. The Pink Sheet, Dec. 15, 1997,
at 7 (citing Janet Woodcock, M.D., Director of FDA's Center for Drug
Evaluation and Research).
\6\ See FDA Budget Would Keep Generics Staff Level, Generic Line,
Jan. 14, 1998, at 1.
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The additional fiscal year 1998 funding for OGD is a watershed
event. Instead of a continual focus on retaining its already inadequate
resources, OGD will be able to direct its attention to speeding generic
drug approvals. Yet, the foundation for a properly funded OGD must be
continued with additional funding in fiscal year 1999, in order to
substantially improve OGD's system of generic drug approvals.
npa and gpia recommend an increase in funding for ogd
We recommend that the Appropriations Committee build on the fiscal
year 1998 initiative and provide additional funds that will allow OGD
to continue its progress toward compliance with the six month statutory
period for final agency action on generic drug applications.
Specifically, NPA requests that the Subcommittee take the following
actions:
1. Appropriate $3 million directly for the Office of Generic Drugs,
in addition to its fiscal year 1998 funding level;
2. In the alternative, re-allocate $3 million to OGD from FDA
Administrative Offices that usually do not direct programs with
statutorily required deadlines;
3. At a minimum, ensure that OGD and its programs maintain fiscal
year 1998 funding levels in fiscal year 1999, despite the
Administration's fiscal year 1999 budget request.
4. In addition, continue to insist that FDA provide detailed
information about agency expenditures for, and by OGD.
In addition, we would like to highlight several challenges
confronting OGD that could be addressed with the appropriations
recommended above. We believe that additional funding in fiscal year
1999 could be used productively to:
--increase the number of reviewers to help OGD meet its statutory
requirements;
--add scientific and legal personnel to address the issues related to
the use of the citizen petition process to delay generic drug
approvals; and
--provide funding to assist OGD in educating consumers, health care
providers, and state legislative and regulatory officials about
generic equivalence and the generic drug approval process.
appropriations are needed for additional reviewers to meet ogd's
increased workload
Among the most pressing needs at OGD is one for additional staff
members to review generic applications. OGD continues to experience a
steady increase in ANDA filings, which went up from 404 in 1996 to 462
in 1997.\7\ Yet, of these 1996 and 1997 filings, OGD annually approved
only 340 and 404, respectively.\8\ This increase in workload, and the
backlog that it creates, must be addressed by hiring reviewers.\9\ Even
with the infusion of funds under the fiscal year 1998 FDA Operating
Plan, however, it is unclear how many additional reviewers will be
added to OGD's staff. Given the current situation, NPA maintains that
increased appropriations for additional reviewers is paramount.
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\7\ See FDA fiscal year 1999 Justification of Estimates for
Appropriations Committees and Performance Plan, at 153.
\8\ See id.
\9\ Other resources that would help to improve ANDA review times
are statistical analysts, computer professionals, and computer software
and related information technology.
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additional scientific and legal staff are needed to address citizen
petitions
In addition, OGD's priorities must be expanded to address a
specific challenge to FDA's generic drug approval authority: citizen
petitions. Over the past few years, brand drug firms have increased
their use of citizen petitions to challenge FDA's bioequivalence
determinations and other scientific decisions related to ANDA's.\10\
The petitions usually request that FDA refrain from approving a
competing generic product until the ``scientific'' questions have been
resolved. Unfortunately, FDA has taken, on average, 17 months to
resolve the issues raised in the 40 citizen petitions that have been
filed since 1990.\11\ The addition of senior scientists and/or lawyers
would assist OGD in managing these administrative challenges, most of
which are ultimately denied by the agency.\12\
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\10\ A detailed chart describing the 40 citizen petitions that NPA
has catalogued from FDA's Dockets Management Branch is available on
request. It is titled, ``Citizen Petitions That Have Resulted In A
Delay To The Approval Of Generic Drug Applications (ANDA's), 1990-
Present.''
\11\ Id. As evidenced by NPA's chart on citizen petitions, 13 of
the 40 petitions filed since 1990 were pending at the agency for over
two years before receiving a final disposition. Of those 13, three
petitions remained unresolved for three years, and two petitions
remained unresolved for four years.
\12\ Id.
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ogd resources should be directed to educating the public and state
officials about generic equivalence
OGD also must take up a second challenge to FDA's authority; that
is, the efforts of brand drug firms to undermine the agency's
therapeutic equivalence decisions. They do this by arguing to state
legislators, boards of pharmacy, and drug formulary committees that the
substitution of generic drugs for pioneer drugs raises a patient health
risk.\13\ To counter this misinformation, additional funds could be
used by OGD to educate consumers and health care providers and to
dispatch qualified spokespersons to the affected state entities.\14\
These agency spokespersons would be instrumental in presenting accurate
information to the states about the scientific integrity of the ANDA
review process and the fitness of FDA's therapeutic equivalence
evaluations.\15\ In addition, OGD has worked effectively with academic
experts and the industry in forums such as the Product Quality Research
Initiative to solve difficult scientific issues. Expanding FDA's
participation in PQRI would be a constructive use of additional
appropriations. Regardless of the use(s) to which additional
appropriations are put, it is imperative that this Subcommittee
continue its support of the generic drug approval process by allocating
necessary funds.
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\13\ A detailed chart describing the state lobbying initiatives
that NPA has catalogued from public sources is available on request. It
is titled, ``Anti-Generic Challenges Before State Formularies (Other
Than Coumadin'/NTI Challenges).''
\14\ NPA continues to advance the position that legislation is
needed to amend the Federal Food, Drug, and Cosmetic Act to provide for
the express preemption of state generic substitution laws and
regulations that impose standards different from or in addition to
FDA's generic bioequivalence and therapeutic equivalence
determinations.
\15\ The agency has noted a need for increased communication
between FDA and state entities. In response to questions posed by state
formularies about the bioequivalence of generic drugs, FDA's Roger
Williams replied, ``We've got to do a better job of communicating [to
the health care practitioners and state agencies] about how well and
how hard we work together to control the quality of these [generic]
products.'' Narrow Therapeutics Need to be Identified in Phase II, The
Pink Sheet, Mar. 23, 1998, at 20-21.
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increased efficiencies are not sufficient to accelerate approval times
With limited resources, OGD has made Herculean efforts to speed up
its review times, through a combination of diligent effort and
increased efficiency. Specifically, generic drug median approval times
have improved from 28.2 months in 1995 to 19.6 months in 1997.\16\
System advances also were made, despite a reduced budget and staff,
including the streamlining of OGD's approval process and a reduction in
the number of review cycles.\17\ Program improvements, some of which
were industry recommendations, have included implementing electronic
data filing, publishing bioequivalence protocol reviews, and
establishing efficient labeling procedures.
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\16\ See FDA fiscal year 1999 Justification of Estimates for
Appropriations Committees and Performance Plan, at 154.
\17\ FDA reports that, ``[a]s a result of OGD's initiative to
contact applicants that undergo two or more major deficiency cycles,
the Office has seen a drop in the number of review cycles needed to
approve abbreviated applications,'' from 4.0 cycles in fiscal year 1995
to 2.9 cycles in fiscal year 1997. Id. at 153.
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Nevertheless, improvements in generic approval times cannot be
sustained with tireless staff efforts and streamlining initiatives. OGD
continues to fall short of its statutory responsibility to take final
action on generic drug applications within six months. Our position has
not changed: this delay is unacceptable. While NPA and GPIA will
continue to cooperate with OGD to implement additional program
improvements, our members maintain that further efficiency measures
will not significantly impact approval times. Although the fiscal year
1998 FDA Operating Plan funding for OGD is a good beginning, OGD
requires additional funding and staffing to function effectively.
summary: a rationale for appropriating additional funds for ogd
We maintain that Congress must continue to guide FDA's priorities
by appropriating and allocating resources directly to OGD. Only
Congressional mandates can ensure that FDA will continue to invest the
resources necessary to ensure timely generic approvals. Once again, the
Administration has incorporated as-yet unauthorized user fees into its
fiscal year 1999 budget request to cover OGD's responsibilities.
Specifically, the Administration has proposed $12.4 million in generic
drug user fees. Yet, according to FDA, this $12.4 million in user fees
will enable OGD to review and act upon only 60 percent of generic
applications within the six months required by statute.\18\ Regardless
of the generic drug industry's position on the suitability of user
fees, the above request clearly establishes that current appropriations
are inadequate to meet FDA's obligations with respect to generic drug
approvals. In sum, the ability of safe and effective generics in
reducing healthcare costs for this nation cannot be fully realized
without direct OGD appropriations.
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\18\ See id. at 56.
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In closing, Mr. Chairman, the NPA and GPIA would like to thank you
and the Subcommittee for its time and attention concerning this
critical aspect of FDA's fiscal year 1999 budget requests. We look
forward to continuing our work with you and members of the Subcommittee
to bring safe, effective and more affordable pharmaceuticals to
consumers.
______
Prepared Statement of Chuck Gunnerson, Vice President, Legislative/
Government Affairs, National Potato Council
My name is Chuck Gunnerson. I am a potato farmer from Minnesota and
current Vice President Legislative/Government Affairs for the National
Potato Council (the Council). On behalf of the Council, we thank you
for your attention to the needs of our potato growers.
The Council is the only trade association representing commercial
growers in 50 states. Our growers produce both seed potatoes and
potatoes for consumption in a variety of forms. Annual production in
1996 was 498,600,000 cwt with a farm value of $2.4 billion. Total value
is substantially increased through processing. The potato crop clearly
has a positive impact on the U.S. economy.
The potato is the most popular of all vegetables grown and consumed
in the United States and one of the most popular in the world. Annual
per capita consumption was 143 pounds in 1996 up from 107 pounds in
1962 and is increasing due to the advent of new products and heightened
public awareness of the potato's excellent nutritional value. Potatoes
are considered a stable consumer commodity and an integral, delicious
component of the American diet.
the council priorities for fiscal 1999 appropriations
The National Potato Council strongly urges that the Congress: (1)
support Agricultural Research Service (ARS) base funding for potatoes
at fiscal year 1998 levels, with the addition of $150,000 for the
replacement of Dr. Joe Pavek, retiring plant breeder, at Aberdeen,
Idaho, continue to include report language urging that the ARS work
with the National Potato Council in determining priorities, and oppose
the USDA budget proposal to close ARS facilities at Prosser,
Washington, and Orono, Maine. Much of the USDA research at Prosser has
focused on reducing pesticide use through the development of pest
resistant plants with genetic engineering. Eliminating USDA research at
Prosser would appear to conflict with President Clinton's goal of
helping minor crop producers find new ways to control pests while
reducing pesticide use. The ARS lab in Orono is the only one in the
northeast that approximates Maine's unique soil types and climatic
conditions which are different from most other potato-producing areas.
Maine is a humid area rather than arid with less than 10 percent of its
production under irrigation. Closure of this facility would be
disruptive to current research and marketing activities of the
northeast. Considering current budget constraints, it is critical that
the ARS, working with potato growers, be able to adjust current
research to meet agreed upon priorities. This would allow for better
program streamlining and effectiveness; (2) appropriate additional
funds for a special grant under the Cooperative State Research
Education and Extension Service (CSREES) to accelerate national efforts
in breeding and varietal development to among other things eradicate or
manage late blight disease. We urge that the CSREES Special Grant
Program be increased from $1.2 to $1.4 million. We also support the
Administration's budget request for the continuation of the USDA-IPM
initiative and funds to meet the data requirements of the new Food
Quality Protection Act; (3) appropriate at least fiscal year 1997 level
of $444,000 in funds to the Animal and Plant Health Inspection Service
(APHIS) to continue the Golden Nematode quarantine program, without
which the industry would be subjected to probable export trade
restrictions by importing nations; and (4) not restrict funding for the
Market Access Program.
agricultural research service (ars) funding
For fiscal year 1999, in order to maintain the current level of
research, the National Potato Council seeks at least the 1998 base
level of funding for all programs, the addition of $150,000 to maintain
a breeder position in Aberdeen, Idaho, and flexibility by ARS for
potato research priority projects which would include more research on
late blight. The Council specifically urges that the Appropriations
Committee report also include language directing ARS to continue to
work with the National Potato Council in determining priorities. We
also hope that you will encourage the ARS, as potato base research
funds come up for review, to direct more of such base funds into agreed
upon higher priority research projects.
As you recall, the National Potato Research Proposal was the result
of an intensive effort begun in 1984 between the Council and the ARS to
identify national priority research issues of concern to the potato
industry. Based on these identifiable research needs, the National
Potato Research Proposal received initial funding from the Congress for
ring rot diseases; early dying disease; marketing; aphids; potato
beetle and varietal development.
The monies provided to the ARS have been greatly appreciated and
the potato growers definitely see results from this research program.
As a result of ARS research, potato varieties have been developed that
are resistant to aphids which carry the potato leafroll virus. This
virus limits potato yields and marketability by causing spotting and
discoloration inside potatoes. The development of these resistant
varieties should translate into reduced use of crop protection
chemicals to control aphids on potatoes. We are getting feedback on
research results back to the producer by having researchers speak at
seminars and by making available to the potato industry a written
summary of all research underway.
Potato growers recognize that, in order to remain a viable and
competitive industry, we must constantly strive to improve production
efficiency and market quality while reducing the use of pesticides.
Through carefully planned and coordinated research, we believe we can
continue to offer an excellent high-value product and maintain a viable
and competitive industry in the United States.
The National Potato Council has agreed to work with USDA, EPA and
FDA in the Pesticide Environmental Stewardship Program (PESP). Our
growers will work toward pest management practices that further reduce
risk to humans and the environment. Through this program the NPC has
developed a national IPM protocol so potato growers can better judge
their progress in IPM. Flexibility by the ARS in allocating potato
research funds will greatly facilitate this effort.
It is important to note that representatives of the Council have
held annual meetings with ARS officials, the most recent in December of
1997, to discuss the distribution and use of research funds. In
response to this Committee's direction, the Council has worked closely
with the ARS to ensure that the research conducted is meaningful and
addresses industry problems in the most thorough, expeditious, and cost
effective manner. The Council looks forward to continuing its close
partnership with ARS to maximize the use of these important funds as
this subcommittee has directed.
csrees special grant request
The Council has also been working with CSREES on priorities for
potato research and extension.
We request $1.4 million (an increase of $200,000 over last year)
for a special grant under the CSREES and urge that the Committee report
again include the following report language: ``Potato research--The
conferees expect the Department to ensure that funds provided to CSREES
for potato research are utilized for varietal development/testing.
Further, these funds are to be awarded competitively after review by
the Potato Industry Working Group.''
CSREES received 15 excellent proposals totaling almost $2 million
for variety development and testing in 1998, but due to funding
limitations only about 8 can be funded. Although the proposals are all
from different states, the Potato Industry Working Group has encouraged
the various established breeding programs to move rapidly toward
cooperating on a regional basis. The additional $200,000 will assure
this cooperation will go forth and many of the current state proposals
will be funded within this regional approach.
The Council will continue to work closely with USDA and will report
annually to the Congress on the progress of current research and, once
USDA's reviews are completed, the need for new research efforts.
golden nematode quarantine and survey
The Animal and Plant Health Inspection Service assures that
potatoes are protected from the importation of harmful pests and
diseases and works with potato growers in assuring that potatoes meet
phytosanitary export requirements.
The Golden Nematode is a significant pest which has been
quarantined by USDA-APHIS for over 50 years, and this pest has been
confined to a few locations in New York state. Its commercial hosts are
potatoes, tomatoes, and eggplants. It is important to our domestic
industry and to our export market that this quarantine be continued and
be effective. We are informed that federal budget reductions over the
past several years have raised concerns over the future of this
program. Funding for this program has dropped from almost $900,000 in
fiscal year 1992 to $444,000 in fiscal year 1997 and $435,000 in fiscal
year 1998. The fiscal year 1999 budget request would further reduce
funding to $417,000. We strongly urge that at least the 1997 level of
$444,000 be provided and used for regulation enforcement and survey
work so that this program can continue in order to avoid jeopardizing
domestic production and eliminating export markets.
market access program
The Foreign Agricultural Service (FAS) assists U.S. potato growers
in the export market and administers funds provided to the National
Potato Promotion Board under the Market Access Program (MAP). MAP and
its predecessor program have been particularly successful since 1986 in
helping potatoes gain greater access and product recognition in foreign
markets and is legal under the new GATT agreement.
Industry research shows that there is a direct correlation between
receiving MAP funds and the ability to effectively market overseas.
With MAP assistance, the U.S. Potato Board has developed long-term
markets for U.S. potato exports and created an outlet for surplus
potatoes grown domestically, helping stabilize farm gate prices
throughout the U.S. industry. As a direct result of promotional
campaigns made possible by the pooling of industry monies and
government MAP funds, U.S. potato exports have reached record volumes
and values. Since 1986, total U.S. potato exports have increased three-
fold in volume terms and almost six-fold in value, reaching an export
value of over $618 million in 1997. In fiscal year 1997, U.S. frozen
potato exports alone were valued at over $320 million, a 12 percent
increase over 1996. Exports for 1986 were valued at $64 million.
Exports account for 10 percent of U.S. production. With MAP, U.S.
potato exports have expanded to new markets in Asia and South America
and the industry has diversified its marketing activities to include
trade advertising, trade seminars, restaurant and food service
promotions, industry orientation tours, merchandising, and research and
evaluation.
During the recent Farm Bill debate, the U.S. potato industry in
cooperation with a coalition of agricultural commodity groups fought to
preserve the current MAP program. It was our industry's position then
and remains our position today that substantive changes made to the MAP
program by the 1993 Omnibus Budget Reconciliation Act and the 1996
Agricultural Appropriations Bill, which our industry supported, fully
addressed the concerns raised by some in the Congress and others about
program efficiencies and management. Those changes imposed minimum
contribution amounts for nonprofit participants, required that all
participants certify that funds supplement but do not supplant industry
funds, imposed a five-year limit on the use of brand MAP funds in a
given country, and gave priority funding to small U.S. entities and
cooperatives under the branded program. Additional changes to the
program made by the 1996 Farm Bill, which preclude direct MAP funding
to large corporations and to foreign entities for foreign-produced
products, ensure that the real beneficiaries of the MAP program will be
U.S. farmers, cooperatives, and U.S. agricultural products.
One remaining concern about the MAP program relates to annual
funding levels, which have been reduced by Congress over the last
several years and again last year by the 1996 Farm Bill. U.S. potato
growers were discouraged that the 1996 Farm Bill reduced program
funding from its previous authorized level of $110 million to $90
million annually, and strongly believe that finding should eventually
be restored to its previously high level of $200 million to take full
advantage of the WTO-legal program.
Despite funding cuts, we nevertheless are encouraged that Congress
recognized the importance of continuing this fully accountable and
result-oriented program for U.S. farmers. At a time when U.S.
agriculture is struggling to compete with subsidized foreign
competition and foreign governments are increasing GATT/WTO-legal
promotional assistance to their agricultural sectors, we encourage
Congress to keep in tact and extend greater funding to the one USDA
program that has truly helped U.S. agricultural products compete in the
global marketplace.
This concludes our statement and we would be pleased to respond to
questions or provide further information for the record.
______
Prepared Statement of John F. O'Neal, General Counsel, National Rural
Telecom Association
summary of testimony requests
Project involved.--Telecommunications lending programs administered
by the Rural Utilities Service of the U.S. Department of Agriculture
Actions proposed.--Supporting loan levels for fiscal year 1999 in
the same amounts as those contained in the Fiscal Year 1998 Agriculture
Appropriations Act (Public Law 105-86) for hardship, cost-of-money,
Rural Telephone Bank and guaranteed loan programs and the associated
subsidy to support hardship and Rural Telephone Bank loans at existing
levels. Also supporting funding for $150 million in loan and $15
million grant authority designated for distance learning and
telemedicine purposes as requested in the President's budget.
Supporting an extension of the language removing the 7 percent interest
rate ceiling on cost-of-money loans for fiscal year 1998. Supporting
continuation of the restriction on retirement of Rural Telephone Bank
class A stock in fiscal year 1998 at the level contained in Public Law
105-86 and an extension of the prohibition against the transfer of
Rural Telephone Bank funds to the general fund. Opposing the proposal
contained in the budget to transfer funds from the unobligated balances
of the liquidating account of the Rural Telephone Bank for the bank's
administrative expenses and loan subsidy costs.
Mr. Chairman, Members of the Committee: My name is John F. O'Neal.
I am General Counsel of the National Rural Telecom Association. NRTA is
comprised primarily of commercial telephone companies which borrow
their capital needs from the Rural Utilities Service of the U.S.
Department of Agriculture (RUS) to furnish and improve telephone
service in rural areas. Approximately 1000, or 71 percent of the
nation's local telephone systems borrow from RUS. About three-fourths
of these are commercial telephone companies. RUS borrowers serve almost
6 million subscribers in 46 states and employ over 30,000 people. In
accepting loan funds, borrowers assume an obligation under the act to
serve the widest practical number of rural users within their service
area.
program background
Rural telephone systems have an ongoing need for long-term, fixed
rate capital at affordable interest rates. Since 1949, that capital has
been provided through telecommunications lending programs administered
by the Rural Utilities Service and its predecessor, the Rural
Electrification Agency (REA).
RUS loans are made exclusively for capital improvements and loan
funds are segregated from borrower operating revenues. Loans are not
made to fund operating revenues or profits of the borrower system.
There is a proscription in the Act against loans which would duplicate
existing facilities providing adequate service and state authority to
regulate telephone service is expressly preserved under the Rural
Electrification Act.
Rural telephone systems operate at a severe geographical handicap
when compared with other telephone companies. While almost 6 million
rural telephone subscribers receive telephone service from RUS borrower
systems, they account for only four percent of total U.S. subscribers.
On the other hand, borrower service territories total 37 percent of the
land area--nearly 1\1/2\ million square miles. RUS borrowers average
about six subscribers per mile of telephone line and have an average of
more than 1,000 route miles of lines in their systems.
Because of low-density and the inherent high cost of serving these
areas, Congress made long-term, fixed rate loans available at
reasonable rates of interest to assure that rural telephone
subscribers, the ultimate beneficiaries of these programs, have
comparable telephone service with their urban counterparts at
affordable subscriber rates. This principle is especially valid today
as the United States endeavors to deploy telecommunications
``information superhighway'' technology and as customers and regulators
constantly demand improved and enhanced services.
At the same time, the underlying statutory authority which governs
the current program has undergone significant change. In 1993,
telecommunications lending was refocused toward facilities
modernization. Most of the subsidy cost has been eliminated from the
program. The subsidy that remains has been targeted to the highest
cost, lowest density systems. Other loans are made at Treasury's cost-
of-money or greater.
We are proud to state once again for the record that there has
never been a default in the RUS/REA telephone program! All loans have
been repaid in accordance with their terms with interest. As of
December 31, 1997, well over $4 billion of principal and $5 billion in
interest had been paid by telephone borrowers.
need for rus telecommunications lending continues
The need for rural telecommunications lending is great today,
possibly even greater than in the past. Technological advances make it
imperative that rural telephone companies upgrade their systems to keep
pace with improvements and provide the latest available technology to
their subscribers.
These rapid technological changes and federal policies of
competition and deregulation in the telephone industry, as evidenced by
passage of the ``Telecommunications Act of 1996'', underscore the
continuing need for targeted assistance to rural areas. The inherently
higher costs to serve these areas have not abated. Regulatory trends
encouraging competition among telephone systems increase pressures to
shift more costs onto rural ratepayers. Interstate subscriber line
charges have already shifted substantial costs to local exchange
customers. Pressures to recover more and more of the higher costs of
rural service from rural customers to foster urban competitive
responses will further burden rural consumers. And, as rural rates
rise, small telephone systems will tend to lose confidence that they
can recover the investments for costly network upgrades.
1996 telecommunications act effect on rural america
Congress passed the Telecommunications Act of 1996 as the
culmination of more than a decade of debating national
telecommunications policy and balancing many diverse needs and
interests. The 1996 Act responded to a number of rural needs and
differences with a series of safeguards to ensure that rates, services
and network development in rural America will be reasonably comparable
to urban telecommunications opportunities.
The process of implementing the new law continues to raise
troubling uncertainties and concerns about whether the FCC and the
states will honor the balance Congress achieved in its policy, as
regulators (a) radically revise the mechanisms for preserving and
advancing ``universal service,'' (b) adjust the cost recovery
responsibilities and allocations of authority between federal and state
regulation, (c) effectuate the Act's somewhat different urban and rural
ground rules for how new companies and incumbent universal service
providers connect their networks and compensate each other and (d) peel
back layers of regulation developed over a century. So far, the FCC has
been overzealous in expanding the Act's market-opening provisions to
give new entrants a regulatory head start and advantage at the expense
of the Act's rural development and universal service provisions. The
FCC is trying to usurp the role of competition by dictating a whole
new--and wholly inadequate--way to measure the costs of modern,
nationwide telecommunications access to information. Congress and the
courts must carefully supervise the FCC's implementation to achieve the
rural access to information and an evolving modern public network
intended by Congress, as well as the benefits of deregulation and
genuine competition.
expanded congressional mandates for rural telecommunications
Considerable loan demand is being generated because of two
additional mandates for enhanced rural telecommunications standards
contained in the authorizing legislation enacted in 1993 by Congress in
Public Law 103-129.
First, Congress expanded the definition of a ``rural area'' to
include towns up to 5,000 population from the previous standard of
1,500 which had the effect of qualifying substantial additional
geographic areas of the country for loans. Second, as a prerequisite to
eligibility for insured and Rural Telephone Bank loans, RUS, has
approved a telecommunications modernization plan for each state which
meet certain minimum statutory objectives for the deployment of modern
telecommunications technology. Implementation of these plans will
generate additional loan demand as rural telephone systems strive to
meet these increased service objectives in the rural areas they serve.
These two Congressional mandates coupled with the need for stable
financing sources to meet the infrastructure demands envisioned for
rural areas by the new telecommunications act amply demonstrate the
continuing need for this important program at the levels established in
the fiscal year 1998 appropriations act. They are:
5 percent Hardship Loans................................ $75,000,000
Cost-of-Money Loans..................................... 300,000,000
Guaranteed Loans........................................ 120,000,000
Rural Telephone Bank Loans.............................. 175,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 670,000,000
The President's budget request for fiscal year 1999 for this
program closely parallels fiscal year 1998 enacted loan levels with one
exception: Despite substantial ongoing demand, the President proposes
to reduce hardship loans $25 million next year. The savings which would
be achieved are only about $2.5 million dollars. Based on figures
supplied by RUS, at the end of the first quarter, the agency had
already approved almost all of the entire authorization of $75 million
for this fiscal year and expects to carry over an additional $79
million in completed applications into the next fiscal year. We believe
that the needs of this program balanced with the minimal cost to the
taxpayer argue for its continuation at enacted levels given the fact
that it provides funding for the neediest borrower systems serving the
highest cost areas.
specific additional requests
Continue the Removal of the 7 percent Cap on Cost-of-Money Loans
Again this year we are supporting removal of the 7 percent ceiling
on cost-of-money loans. This Committee included language in the fiscal
year 1996 act to permit borrower interest rates on cost-of-money loans
to exceed the 7 percent per year interest rate ceiling contained in the
authorizing act. The language has been continued in subsequent acts. We
support an extension of this provision in the fiscal year 1999 bill.
Long-term Treasury interest rates might exceed 7 percent in fiscal year
1999. In that event, the cost-of-money loan program could be disrupted
and loan levels not achieved since adequate subsidy would not be
available to support the program at the authorized levels. For this
reason, we believe it is important to incorporate this language in the
bill again this year.
Continue the Restriction on Retirement of Class A Government Stock in
the Rural Telephone Bank (RTB) and also Continue the
Prohibition Against Transfer of RTB Funds to the General Fund
The Committee should continue the restriction on retirement of the
amount of class A stock by the Rural Telephone Bank in fiscal year
1999. The Bank is currently retiring the government's stock as required
under current law. We believe that this process which began in fiscal
year 1996 should continue to be an orderly one as contemplated by the
retirement schedule enacted two years ago and continued in last year's
bill to retire no more than 5 percent of the total class A stock in one
year. We also urge the Committee to continue the prohibition against
the transfer of any unobligated balance in the bank's liquidating
account which is in excess of current requirements to the general fund
of the Treasury along with the requirement that the bank receive
interest on those funds. The private Class B and C stockholders of the
Rural Telephone Bank have a vested ownership interest in the assets of
the bank including its funds and their rights should not be abrogated.
Reject Budget Proposal to Transfer Funds from RTB Liquidating Account
for Administrative and Subsidy Costs
In this same vein, we are also opposed to the proposal contained in
the President's budget that the subsidy cost associated with Rural
Telephone Bank loans be funded by a transfer from the unobligated
balances of the bank's liquidating account rather than by a traditional
appropriation from the general fund of the Treasury which has been the
funding mechanism utilized for the bank since enactment of the federal
credit reform act in 1990. Requiring the bank to fund the subsidy cost
of its loans would dilute the interests of the bank's stockholders. By
definition, the bank's unobligated balances are not federal funds but
are subject to the respective ownership interests of all the
stockholders of the bank. Previous appropriations acts, including the
fiscal year 1997 and fiscal year 1998 acts, have recognized the
ownership rights of the private class B and C stockholders of the bank
by prohibiting a similar transfer of the bank's excess unobligated
balances which otherwise would have been required under the federal
credit reform act. This cost is more properly funded through a regular
appropriation from the general fund of the Treasury.
The President's budget also proposes that the bank assume
responsibility for its administrative costs also by a transfer of funds
from the unobligated balances of the bank's liquidating account rather
than through an appropriation from the general fund of the Treasury.
This recommendation is contrary to the RTB enabling act. Under Sec.
403(b) of that act, until the ownership, control and operation of the
telephone bank is converted (or privatized). . . .
in order to perform its responsibilities under this title, the
telephone bank may partially or jointly utilize the facilities
and the services of employees of the Rural Electrification
Administration or of any other agency of the Department of
Agriculture, without cost to the telephone bank''. (emphasis
supplied)
The budget language acknowledges that neither proposal would result
in budgetary savings. No justification for these recommendations is
contained in the budget. Both proposals would require consideration by
the authorizing committees and enactment of new authorizing legislation
as a prerequisite to an appropriation. As of this date, no such
legislation has been transmitted by the Administration or is under
consideration before the authorizing committees.
Loans and Grants for Telemedicine and Distance Learning
The President's budget requests $150 million in loan authority for
fiscal year 1999 and $15 million in grants specifically devoted to
telemedicine and distance learning purposes. Loans are made at the
government's cost-of-money. The purpose is to accelerate deployment of
telemedicine and distance learning technologies in rural areas through
the use of telecommunications, computer networks, and related advanced
technologies by students, teachers, medical professionals, and rural
residents.
We believe this program specifically designated for distance
learning and telemedicine purposes is particularly important.
Continuing to target funds in this manner spurs deployment of this
important new technology which is vital for the survival of rural
schools, hospitals and the rural communities they serve. At the same
time, we believe the level proposed strikes a cost effective balance
for the taxpayer.
conclusion
Thank you for the opportunity to present the association's views
concerning this vital program. The telecommunications lending programs
of RUS continue to work effectively and accomplish the objectives
established by Congress at a minimal cost to the taxpayer.
______
Prepared Statement of the National Telephone Cooperative Association
summary
Considering the current telecommunications demands being made by
the Administration, Congress, and rural Americans, it is clear that the
need for the Rural Utilities Service (RUS) telecommunications lending
has never been greater. In this context, the National Telephone
Cooperative Association (NTCA) strongly supports the continuation of
the RUS telecommunications loan program. For nearly 49 years, the RUS
and its predecessor, the REA, has carried out its mission, of both
providing and improving rural telephone service, with distinction.
Appropriately funded, it will continue to do so well into the future.
In short, RUS financing is critical to ensuring that rural Americans
enjoy the benefits of the information revolution currently sweeping the
nation.
introduction
It is a pleasure to discuss the current financing needs of the
rural local exchange carrier (LEC) industry. In light of all that is
occurring on the telecommunications front, this discussion is urgently
needed. NTCA is a national trade association representing 500 small,
rural cooperative and commercial telephone systems. These locally owned
and operated LEC's are situated throughout our nation. More than 80
percent of NTCA's member systems have benefited from the RUS/REA
telecommunications loan program.
NTCA's members, like most of the country's independent LEC's,
evolved to serve high cost rural areas of the nation. There can be no
doubt regarding the high cost of providing telecommunications services
to rural America. Just considering that this account for approximately
40 percent of the nation's geographic area is convincing enough. In
addition, when we consider that rural subscribers account for only 4.3
percent of the nation's total population, it quickly becomes clear why
rural America is so costly to serve.
Congress recognized this unique financing dilemma confronting
America's rural LEC's as early as 1949. It was in that year that it
amended the Rural Electrification Act (RE Act) to create the REA
telephone loan program. Congress planned for the future and fully
understood that rural America's telecommunications financing needs
would be ongoing. It charged the REA with the responsibility for making
low interest loans to both ``. . . furnish and improve . . .'' rural
telephone service.
In keeping with it mission, Congress has periodically amended the
RE Act to ensure that the original mission of the program is met. In
1971, the Rural Telephone Bank (RTB) was created as a supplemental
source of direct loan financing. In 1973, the REA was provided with the
ability to guarantee Federal Financing Bank (FFB) and private lender
notes. In 1993, the Congress established a fourth program lending
facet, the REA treasury-cost fund. Most recently, the reorganization of
the U.S. Department of Agriculture facilitated consolidation of the
Department's utility development programs through transferring the
telecommunications loan and technical assistance programs of the REA to
the Rural Utilities Service (RUS).
The infrastructure being deployed by a majority of rural LEC's
today is capable of providing state-of-the-art services such as two-way
interactive video links and internet access. These services are
changing the destiny of rural America. Through this technology, rural
Americans are assured of improved education, health care access, and
business and government services. The RUS's telecommunications loan
program is financing a significant portion of such infrastructure
enhancement.
responsibilities confronting the industry are substantial
The success of private/public partnership represented by NTCA's
members' use of the RUS telecommunications loan program is substantial.
This partnership boasts infrastructure of a highly sophisticated
quality. With the assistance of RUS capital and technical standards,
NTCA's members are leaders in modernizing their telecommunications
capabilities for their communities. This financing partnership fosters
a true commitment to rural residents. Compared to their urban
counterparts, rural communities are faced with higher poverty rates,
lower income levels, and higher costs of delivering modern
infrastructure.
These rapid changes are underscored by recent actions taken with
passage of the ``Telecommunications Act of 1996.'' As we enact federal
policies of competition and deregulation, the high costs associated
with providing modern telecommunications services in rural areas will
not diminish. Moreover, the mandated provisions for an evolving
definition of universal service serves to emphasize the need for
targeted assistance to rural areas. Two years into the implementation
of the act, the FCC's interpretation of the law has held little regard
for congressional intent particularly with respect to rural provisions
that are vital to rural incumbent LEC's. This is evidenced by the 25
percent federal/75 percent state split in universal service funding.
These important provisions include universal service language mandating
a national commitment to geographic toll rate averaging and consumer
access to quality services at reasonable and affordable rates;
interconnection exemption, suspension and modification language to
spare rural LEC's from excessive new regulatory burdens; infrastructure
sharing language requiring large carriers to engage in such sharing
upon request of a facilities based universal service designee that
lacks resources; as well as other provisions important to the rural
industry.
It is clear that without appropriate strong national safeguards,
the transition to a competitive and deregulatory telecommunications
environment would damage the ability of rural Americans to full
participate in the information age. Today, RUS borrowers average only 6
miles per subscriber compared to 37 per mile for the larger, urban-
oriented, non-RUS financed systems. This results in an average plant
investment per subscriber that is 38 percent higher for RUS borrowers.
Without the availability of affordable capital financing to compete and
provide adequate, up-to-date services in an unfavorable environment,
building adequate telecommunications infrastructure in rural
communities will be untenable.
rus: connecting rural america to the future
Clearly, the RUS telecommunications loan program is helping extend
benefits of the information superhighway to rural America. RUS
telecommunications lending creates public-private partnerships that
work to create telecommunications infrastructure. These federal
resources have stimulated billions of dollars in private capital.
For example, in fiscal year 1997 a subsidy of just $3.6 million
generated $670 million in federal loans and loan guarantees. For every
dollar in government money invested, 4.5 private dollars were invested.
RUS financing in 1996 involved the construction or rebuilding of an
estimated 9,472 route miles of line (including fiber optic facilities)
and other plant facilities to provide initial or improved service to
72,874 subscribers.
The RUS is also making a difference in our rural schools,
libraries, and hospitals. Since 1993, the RUS Distance Learning and
Telemedicine (DLT) Grant and Loan program has funded 192 projects in 41
states totaling over $52 million for interactive technology in rural
schools, libraries, hospitals, and health clinics. This program has
provided unprecedented educational opportunities for rural students and
enhanced health care for rural residents.
As a result of this program, thousands of rural students will gain
access to additional classes and advanced curriculum. The RUS reports
that previously unavailable courses such as calculus, physics,
chemistry, and accounting are now being made to 550 rural schools in 33
states. In addition, telemedicine facilities which provide cost-
effective services such as 24 hour access to trauma specialist,
continuing medical education, and distance consultations for
pediatrics, obstetrics, cardiology, and oncology will be made available
to 438 hospitals and clinics in 23 states. Simply stated, this critical
program is allowing our rural citizens to overcome the isolated nature
of their rural areas through the power of modern telecommunications.
At the end of 1997, about $4 billion in principal and $5 billion in
interest had been paid by borrowers. We are proud to claim that there
has never been a loss for U.S. taxpayers through borrower default or
abuse in 49 years of RUS telecommunications lending!
recommendations for the subcommittee's consideration
RUS Telecommunications Loan Program.--Increasing demand for
expanded telecommunications services and infrastructure upgrades
indicates the level of need. The RUS has indicated that as of the end
of the second quarter of fiscal year 1998, all of the 5 percent
Hardship loan funds have been allocated and are expecting a backlog of
$60-100 million in hardship loan requests this year. To allow for this
demand to be met, NTCA recommends that the committee consider the
following RUS Telecommunications loan levels for fiscal year 1999:
5 percent Hardship Loans................................ $75,000,000
Treasury-rate Loans..................................... 300,000,000
FFB Loan Guarantees..................................... 120,000,000
Rural Telephone Bank Loans.............................. 175,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 670,000,000
These loan levels are the same as the current fiscal year's funding
provided by this committee and represent a genuine commitment to rural
telecommunications needs.
Removal of Interest Rate Cap on Treasury-rate Loans.--We are also
requesting that the committee include language removing the 7 percent
interest rate cap on Treasury-rate loans. This provision was included
in this year's Fiscal Year 1998 Agriculture Appropriations Act (H.R.
2160), and it prevents the potential disruption of the program in the
case where interest rates exceed 7 percent and insufficient subsidy
cannot support authorized lending levels. It is a continuation of
current policy and supports the viability of this critical loan
program.
Prohibition of the Transfer of Unobligated Balances of the Rural
Telephone Bank Liquidating Account.--NTCA also recommends that the
subcommittee continue the prohibition against the transfer of any
unobligated balances of the Rural Telephone Bank liquidating account to
the general fund of the Treasury. This language was first introduced in
the Fiscal Year 1997 Agriculture Appropriations Act (H.R. 3603) to
protect the private Class B and C stockholders ownership rights to the
assets of the bank. Restatement of this language will ensure that RTB
borrowers are not stripped of the value of this required investment.
Fund the Rural Telephone Bank's Loan Subsidies and Administrative
Expenses through Traditional Appropriation from General Funds of the
Treasury.--The Administration's fiscal year 1999 budget proposal would
fund the Rural Telephone Bank's loan subsidies and administrative
expenses out of unobligated balances in the bank's liquidating account
rather than out of the general fund of the Treasury as normally
appropriated. NTCA urges the subcommittee to reject this proposal for
three reasons.
Specifically, the proposal would require new authority in the
authorizing act as a prerequisite to an appropriation. Current law
under the Rural Electrification Act provides for the use of facilities
and services of employees of the Department of Agriculture, without
cost to the Rural Telephone Bank until the ownership, control and
operation of the telephone bank is converted or privatized.
Additionally, the proposal appears to be in conflict with the intent of
the Federal Credit Reform Act (Public Law 101-508). The Subcommittee
should also recognize that this proposal will not result in budgetary
savings. Because of the aforementioned concerns, NTCA requests the
subcommittee to fund the RTB's loan subsidies and administrative
expenses through the general funds of the Treasury.
Rural Telephone Bank Privatization Proposal.--Under the President's
fiscal year 1999 budget proposal, the Rural Telephone Bank is proposed
to ``become a Performance Based Organization to establish its financial
and operational independence prior to its being privatized within ten
years.'' At this time, it is difficult to support, or evaluate any
privatization proposal without first obtaining an answer to the
critical question of who own the assets of the bank--the federal
government or the stockholders of the RTB. Without a definitive and
official determination of this central issue, it is not possible to
formulate an informed position regarding privatization of the bank.
NTCA believes any privatization plan should be well conceived
before implementation. At the very least, privatization should proceed
in an orderly fashion with a full accounting of the various financial
and legal implications involved. Congress, RTB Stockholders, and the
rural telecommunications industry deserve the benefit of having RTB
privatization reviewed thoroughly. In addition to having a high
concentration of NTCA members as stockholders of RTB stock, NTCA itself
maintains a substantial interest in RTB stock. As the RTB possess
nearly $2 billion in assets, it continues to play a critical role in
the modernization of rural telecommunications infrastructure throughout
the United States, and its future will continue to be closely monitored
by the rural telecommunications industry.
RUS Distance Learning and Telemedicine Program.--The RUS Distance
Learning and Telemedicine Grant program has proven to be an
indispensable tool for rural development. In this regard, NTCA urges
the Committee to provide adequate funding for this critical program.
NTCA supports the exciting initiative included with the enactment of
the 1996 Farm Bill. The legislation authorized a $100 million Distance
Learning and Telemedicine and Grant cost-of-money loan and grant
program that began in fiscal year 1996. NTCA encourages the
subcommittee to continue funding for this critical program for the
purpose of extending benefits of modern telecommunications to rural
America.
conclusion
The RUS telecommunications loan program bears a proud record and
should remain in place to continue assisting the rural LEC industry to
meet its service commitment to rural Americans. As changes to the
nation's telecommunications policy are on the horizon, the continuation
of the RUS telecommunication loan program is a critical necessity to
ensure the highest standard of modern service in rural America. The
rural segment of the nation's telecommunications infrastructure is
critical to the national objective of universal telecommunications
service. The RUS and the rural LEC industry are natural partners in
linking all Americans to the ``information superhighway.''
As the nation faces substantial economic and technological
challenges in the near future, rural areas must be equipped with the
appropriate tools needed to manage those challenges. The RUS
telecommunications loan program has carried out its mission for more
than 49 years with distinction and unrivaled financial reliability.
Congress willing, the RUS can do the job necessary to connect rural
America to the future!
______
Prepared Statement of Dr. Robert C. Shearman, Executive Director,
National Turfgrass Evaluation Program
On behalf of the National Turfgrass Evaluation Program (NTEP), I
appreciate this opportunity to provide the Subcommittee with the
turfgrass industry's perspective in support of restoration of the
$55,000 appropriation for the National Turfgrass Evaluation Program
(NTEP) deleted in the President's fiscal year 1999 budget request for
the Agricultural Research Service (ARS).
The National Turfgrass Evaluation Program (NTEP) has been unique in
that it provides a working partnership that links the federal
government, turfgrass industry and land grant universities together in
their common interest of turfgrass cultivar development, improvement,
and evaluation. The National Turfgrass Evaluation Program is the
primary means by which cultivated varieties of turfgrass are evaluated
in this country. It provides unbiased information on turfgrass cultivar
adaptations, disease and insect resistance, and environmental stress
tolerance. The public and private sectors of the turfgrass industry use
this information to develop cultivar recommendations for home owners,
sod producers, sports turf managers and golf course superintendents.
At a time when this nation's awareness of environmental
considerations is increasing, and because of the multiple benefits
provided by turfgrass, as well as the advancements that are being made
to further improve them through integrated pest management programs,
recycling, and other means, the USDA has before it a unique opportunity
to take positive action in support of the turfgrass industry, and
similarly enjoy a tremendous return for what must be considered, in
relative terms within USDA's budget, a minuscule investment of
Department funds.
While the vast majority of the USDA's funds have been and will
continue to be directed toward traditional ``food and fiber`` segments
of U.S. agriculture, it is important to note that turfgrasses (e.g.,
sod production) are defined as agriculture in the Farm Bill and by many
other departments and agencies. Further, it is estimated by the
Economic Research Service that the turfgrass industry, in all its
forms, is a $30-$35 billion industry. It should also be noted that the
turfgrass industry is the fastest growing segment of U.S. agriculture,
while it receives essentially no federal support. There are no subsidy
programs for turfgrass, nor are any desired.
For the past 70 years, the USDA's support for the turfgrass
industry has been modest at best. The turfgrass industry's rapid
growth, importance to our urban environments, and impact on our daily
lives warrant more commitment and support from the USDA. Failing to
support the National Turfgrass Evaluation Program would be a tremendous
oversight of a major opportunity. USDA's support of the NTEP at the
$55,000 level does not cover all cost. In fact, NTEP represents an
ideal partnership of the public and private sectors in terms of program
cost sharing . The NTEP relies most heavily on turfgrass industry
(i.e., public sector, end-users) support. However, it is essential that
the USDA maintain its financial support and work closely with NTEP. The
turfgrass industry relies heavily on NTEP for unbiased findings.
Discounting this support will also eliminate a highly reliable and
credible level of objectivity that is associated with the NTEP program.
I respectfully request that the Subcommittee restore this vital
$55,000 appropriation for the National Turfgrass Evaluation Program
(NTEP) in the fiscal year 1999 budget for the Agricultural Research
Service.
Thank you very much.
______
Prepared Statement of Lino DeAlmedia, Jr., President, National Utility
Contractors Association
Mr. Chairman and members of the subcommittee, my name is Lino
DeAlmeida, Jr. I am president and chief executive officer of
Consolidated Construction Management Services, Inc., in Colts Neck, New
Jersey. I am pleased to submit written testimony on behalf of the
National Utility Contractors Association (NUCA).
Every day my colleagues and I see firsthand the consequences of
failed or nonexistent water and waste disposal infrastructure. We can
also attest to the positive public health, environmental, and economic
benefits of infrastructure investment in rural communities. We are
proud of the vital public services that we provide to rural communities
across the country, whether it's the construction of a new drinking
water treatment facility or upgrades to existing plant and pipework.
The USDA Rural Utilities Service (RUS) has played a critical role in
helping these communities finance basic water infrastructure needs.
fiscal 1999 recommendation
NUCA supports the Administration's fiscal 1999 request for $629
million in budget authority to support RUS Water and Waste Loans and
Grants totaling $1.34 billion. The request represents a modest $66
million increase over fiscal 1998. The proposed increase is well
justified when you consider that RUS had $3.7 billion worth of unfunded
applications on hand as of January 1998.
rural infrastructure needs
Many small, rural communities find it difficult to maintain safe
and affordable drinking water supplies and provide sanitary waste
disposal. Lack of access to conventional financing, inadequate
technical resources, and a limited tax base are significant reasons why
small communities struggle to meet basic water infrastructure needs.
Federal regulatory requirements under the Clean Water and Safe Drinking
Water Acts pose additional financial burdens.
Last fall, the U.S. Environmental Protection Agency (EPA) revised
its assessment of publicly owned wastewater treatment needs. The survey
found more than $139 billion in wastewater collection and treatment
needs over the next twenty years, including $13.8 billion for
communities with fewer than 10,000 residents. These small communities
represent 11 percent of the nation's total documented need, including
$3.9 billion for secondary treatment and $6.6 billion for sewer pipe
repair, replacement, and new construction.
Drinking water infrastructure needs are equally alarming. A 1996
study by the USDA (Water 2000) estimated that as many as 8 million
people have drinking water quality problems and that approximately 1.1
million people lack indoor plumbing.
A 1997 EPA drinking water infrastructure survey found that more
than $138 billion is needed over the next twenty years for transmission
and distribution lines, water treatment plants, and water storage and
supply facilities. Small systems serving 3,300 or fewer people reported
more than $37 billion in construction needs. As we noted in our fiscal
1998 testimony before the subcommittee, rural households represent the
largest per-household need and are burdened with the highest per-
household cost.
rural infrastructure investment benefits
Numerous benefits accrue when a small community builds a new
drinking water treatment plant or makes repairs to leaking water and
sewer pipes. Foremost, water infrastructure investment improves public
health and safety, by reducing the incidence of disease and mortality
and enhancing fire protection. Capital investment also yields economic
benefits, such as new jobs and better labor productivity. New
businesses are attracted to improved communities, and over time the
local tax base grows and provides more financial stability.
conclusion
The RUS Water and Waste Disposal Loans and Grants are an important
source of financing for small, rural communities that have been turned
down by more conventional lenders. The program has a solid track record
in terms of loans repaid and maximum use of appropriated dollars. The
need for continued federal investment in rural America is evident and
worth every penny. We urge the subcommittee to fully support the
Clinton Administration's fiscal 1999 request for the RUS water and
waste disposal loans and grants.
Thank you for the opportunity to provide this recommendation.
______
Prepared Statement of Ben F. Bowden, Chairman, National Watershed
Coalition
The National Watershed Coalition (NWC) is pleased to present this
testimony in support of some of the most beneficial water resource
conservation programs ever developed in the United States. The
Coalition recognizes full well the very difficult financial situation
our nation faces. That makes the work of this Subcommittee very
important. It also makes it imperative that the federal programs that
are continued are those that provide real benefit to society, and are
not programs that would be nice to have if funds were unlimited. We
believe that the Small Watershed Program (Public Law 83-566) and the
Flood Prevention Operations Program (Public Law 78-534) are examples of
those rare programs that address our nations vital natural resources
which are critical to our very survival, do so in a way that provide
benefits in excess of costs, and are programs that serve as models for
the way all federal programs should work.
The National Watershed Coalition is an alliance of national,
regional, state and local organizations that have a common interest in
advocating the use of the watershed when dealing with natural resource
issues. We also support the use of total resource management principles
in planning. We are advocates of both the Small Watershed Program and
the Flood Prevention Operations Program administered by USDA's Natural
Resources Conservation Service (NRCS), formerly the Soil Conservation
Service (SCS). These resource protection programs deserve much higher
priority than they have had in the past. Even in difficult financial
times, their revitalization would pay dividends in monetary and other
benefits, and jobs! The disastrous 1993 Midwest floods should have
taught us something. If one examines the Report of the Interagency
Floodplain Management Review Committee that studied that event, we see
that flood damages were significantly reduced in areas where Public Law
566 projects were installed. The requests for disaster assistance were
also less.
The watershed as the logical unit for dealing with natural resource
problems has long been recognized. Public Law 566 offers a complete
watershed management approach, and should have a prominent place in our
current federal policy emphasizing watersheds and total resource
management based planning. Why should the federal government be
involved with these watershed programs?
--They are programs whose objectives are the sustaining of our
nations precious natural resources for generations to come.
--They are not federal, but federally assisted. They do not represent
the continued growth of the federal government.
--They are locally initiated and driven. Decisions are made by people
affected, and respect private property rights.
--They share costs between the federal government and local people.
Local sponsors pay between 30-40 percent of the total costs of
Public Law 566 projects.
--They produce net benefits to society. The most recent program
evaluation (1987) demonstrated the actual ratio of benefits to
costs was approximately 2.2:1. The actual adjusted economic
benefits exceeded the planned benefits by 34 percent. How many
other federal programs do so well?
--They consider and enhance environmental values. Projects are
subject to the discipline of being planned following the
National Environmental Policy Act (NEPA), and the federal
``Principles and Guidelines'' for land and water projects. That
is public scrutiny.
--They are flexible programs that can adapt to changing needs and
priorities. Objectives that can be addressed are flood damage
reduction, watershed protection (erosion and sediment control),
water quality improvement, rural water supply, water
conservation, fish and wildlife habitat improvement,
recreation, irrigation and water management, etc. That is
flexibility.
--They are programs that encourage all citizens to participate.
--They can address the needs of low income and minority communities.
--And best of all--they are programs the people like!
The National Watershed Coalition commends the Congress for the
support given these programs over the years, and hopes that the outcome
of the fiscal year 1999 appropriations process will enable this vital
work to continue and expand as we seek to preserve, protect and better
manage our nation's water and land resources. Every State in the United
States has benefited from the Small Watershed Program.
In order to continue this high priority work in partnership with
states and local governments, the Coalition recommends a fiscal year
1999 funding level of $250 million for Watersheds and Flood Prevention
Operations, Public Laws 566 and 534. The allocation between these two
programs is best left to the ARCS. Of this amount, we would suggest
that $50 million be used for structural rehabilitation and replacement,
and $10 million be used for wetland acquisition as authorized by the
1990 Farm Bill. We recognize that in these difficult financial times,
the Congress may not find it possible to provide that amount, but we
also believe that we are not doing our job of helping you recognize the
true need if we continually recommend the federal share of these needed
funds be less. We would hope that everyone understand these federal
funds are only a part of the total that are committed to this vital
purpose. The local project sponsors in these ``federally assisted''
endeavors have a tremendous investment also. Additionally, the
Coalition supports $10.5 million for watershed planning, $13.0 million
for River Basin Surveys and Investigations. We also suggest that the
Emergency Watershed Program (EWP) be provided with $20 million to allow
the NRCS to provide rapid response in time of natural disaster.
The issue of the current condition of those improvements
constructed over the last fifty years with these watershed programs is
a matter of great concern. A USDA study published in 1991 estimated
that in the next ten years, $590 million would be needed to protect the
installed works. That figure is likely larger today. Of that amount,
$100 million would come from local sponsors as their operation and
maintenance contribution. That is the reason we are recommending
starting with $50 million for the work necessary to protect these
installed structures. If we don't start to pay attention to our rural
infrastructure needs, the ultimate cost to society will only increase,
and project benefits will be lost. This is a serious concern. We are
pleased that NRCS and some Members recognize this issue.
In addition to offering our thoughts on needed conservation program
budget levels, we would like to express our great concern with the way
in which the Administration's budget proposes to change the watershed
program funding in fiscal year 1999. The Administration again proposes
taking $71 million from the Public Law 83-566 Small Watershed Program,
and putting it in the NRCS Conservation Operations account, leaving
only $49 million for actual on the ground implementation. While the
Administration's budget suggests this approach simply combines some of
the NRCS's technical assistance expenses into one account, and the
funds will be used for ``water resource assistance,'' we believe this
is a means to put these funds in an account where they will not be used
for Public Law 83-566 Small Watershed Projects, but instead will be
spread around with virtually no program accountability. In our view
this represents the long time desire of some in the Administration to
circumvent the will of the Congress and eliminate Small Watershed
Projects. The Administration's budget also eliminates any funding for
the eleven watersheds authorized by the Flood Control Act of 1944
(Public Law 78-534), which was about $18 million in 1997, but suggests
that ``worthwhile Public Law 534 projects'' can be continued under the
Small Watershed Program, Public Law 83-566 (with no funding?). We see
this as a way to again administratively eliminate a congressionally
mandated program which some in the Administration don't care for, but
one which has provided millions of dollars of benefits to society.
Watershed project sponsors, who were encouraged to assume such
responsibility by the federal government, now feel abandoned by that
same federal ``partner.'' It seems to us that the money taken from the
Small Watershed Program ($71 million put in the Conservation Operations
account) would be far better used, and provide many more real benefits,
if left in the Small Watershed Program where Congress intended it.
The availability of only $49 million in the administration's budget
for actual project installation presents a special problem for
watershed sponsors. In addition to virtually eliminating most project
construction, this lack of funding allows the NRCS to say they are
``reevaluating project priorities in order to make the limited finds
stretch, and be used for environmentally friendly projects.'' Thus
reevaluation is done without the input of project sponsors, whose
planned work meets every environmental regulation, and meets the
criteria in the law. What in truth happens with this reevaluation, is
that projects which have a flood damage reduction objective, and which
might propose building a small upstream dam to reduce flooding, are
eliminated from the NRCS priority listing. Those local project sponsors
have made legal commitments based on the federal agreements, and they
are being left out in the cold.
The Administration has also suggested that the $49 million for
project construction be transferred to the Rural Development for
``loans.'' They are also proposing the collection of ``user fees'' for
services that taxpayers have already paid for once, and for which no
statutory authority exists. Not only is this not the intent of Congress
or in the legislation, if the wealthy communities elect to use the loan
option to implement their projects, it would virtually eliminate any of
the poorer, limited resource communities from competition for very
limited funds. This sounds like another crazy idea originating with the
Office of Management and Budget (OMB). It flies in the face of those
interested in the notion of ``environmental justice.''
A number of proposed amendments to this legislation were considered
during the discussions of the 1996 Farm Bill. The NWC would urge you,
whenever the time is appropriate, to take another look at those
proposals, particularly the idea of expanding the objectives that the
legislation can serve to include more non-structural practices, allow
the provision in the law to provide assistance in developing rural
water supplies (without water there is no rural development) actually
be used (we understand OMB has never allowed its use), eliminate the
current requirement that mandates twenty percent (20 percent) of the
total project benefits be ``directly related to agriculture'' which has
the unintended effect of penalizing projects in poor, small, rural
communities, and continue to explore the idea of allowing the USDA
Secretary to accept transfers from other Federal departments and
agencies to carry out projects under Public Law 83-566, when it is to
the advantage of all. We would also urge that as the issue of cost
sharing rates is examined in the future, cost sharing rates be set for
the natural resource purpose to be achieved, rather on the practices
used to achieve those purposes.
The Coalition appreciates the opportunity to offer these comments
regarding fiscal year 1999 funding for the water resource programs
administered by the Natural Resources Conservation Service. With the
``downsizing'' the NRCS has experienced, we would be remiss if we did
not again express some concern as to their ability to provide adequate
technical support in these watershed program areas. NRCS technical
staff has been significantly reduced and budget constraints have not
allowed that expertise to be replaced. Traditional fields of
engineering and economics are but two examples. We see many states
where the capability to support their responsibilities in these program
areas is seriously diminished. This is a disturbing trend that needs to
be halted. This downsizing has a very serious effect on state and local
conservation programs. Local Watershed and Conservation Districts and
the NRCS combine to make a very effective delivery system for providing
the technical assistance to local people--farmers, ranchers and rural
communities--in applying needed conservation practices. Many states and
local units of government also have programs that provide financial
assistance to land owners and operators for installing measures that
reduce erosion, improve water quality, and maintain environmental
quality. The NRCS provides, through agreement with the USDA Secretary
of Agriculture, ``on the land'' technical assistance for applying these
measures. The delivery system currently is in place, and by downsizing
NRCS we are eroding the most effective and efficient coordinated means
of working with local people to solve environmental problems ever
developed. Our system and its ability to produce food and fiber is the
envy of the entire world. In our view, these programs are the most
important in terms of national priorities.
The administration is also proposing millions of dollars for a new
so-called ``Clean Water Initiative.'' Why have they chosen to abandon
the tried and proven conservation watershed programs which have served
us so remarkably for 50 years in order to fund diner initiatives?
The Coalition pledges its full support to you as you continue your
most important work. Our Executive Director/Watershed Programs
Specialist Mr. John W. Peterson, who has over forty years experience in
this business, is located in the Washington, DC area, and would be
pleased to serve as a resource as needed. John's address is 9304 Lundy
Court, Burke, VA 22015-3431, phone 703-455-6886, Fax; 703-455-6888,
email; [email protected].
Thank you for allowing the National Watershed Coalition (NWC) this
opportunity.
______
Prepared Statement of Dr. Sam Curl, Dean and Director, Division of
Agricultural Sciences and Natural Resources, Oklahoma State University,
The Oklahoma Agricultural Experiment Station, and the Oklahoma
Cooperative Extension Service
Mr. Chairman and Members of the Subcommittee: Thank you for
providing me the opportunity to submit testimony to your subcommittee
today concerning agriculture research, extension, and education funding
for fiscal 1999.
On behalf of Oklahoma State University, the Oklahoma Agricultural
Experiment Station and the Oklahoma Cooperative Extension Service, I
seek your support of funding for the following continuing special
research grants, which are the priority initiatives for the Division of
Agricultural Sciences and Natural Resources:
Animal Waste Management in Semiarid Agroecosystems............ $400,000
Expanded Wheat Pasture........................................ 330,000
Integrated Production Practices for Horticultural Crops....... 258,000
Preservation and Processing of Selected Fruits and Vegetables 258,000
Pilot Tech Transfer (Mississippi and Oklahoma)................ 400,000
Your support is also solicited for national agriculture research,
extension, and education funding consistent with the recommendations of
the National Association of State Universities and Land-Grant Colleges.
Included within those recommendations is the proposal for a 5.7 percent
increase in base (formula) funding for agriculture research, extension,
and education that we solidly support.
animal waste management in semiarid agroecosystems--$400,000
The proposed Oklahoma Panhandle Research and Education Center's
research project in Animal Waste Management in Semiarid Agroecosystems
is designed to develop sustainable, environmentally safe, and
ecologically sound best management principles and practices for
beneficial animal waste applications for ``High Plains Agriculture.''
The project will be conducted in support of rural economic development
through a federal-state-local partnership.
Emphasis is placed on the rapidly expanding hog industry in the
semiarid region, but information gained will also be applicable to the
beef and dairy industries. The objectives of this study are to develop
informational databases for:
(1) sustainable, environmentally safe, and ecologically sound
principles and practices for beneficial animal waste management in
semiarid agroecosystems;
(2) best management practices to maximize nutrient utilization and
minimize odor for land application of animal wastes in crop and
grazingland production systems;
(3) the design and operation of waste lagoons in semiarid
agroecosystems to minimize odor and risk of harmful effects to ground
water, air quality, and the environment;
(4) ensuring public health; and
(5) technology transfer systems that will benefit ``High Plains
Agriculture.''
Research and education programs must provide a flow of timely
information addressing problems faced by agricultural clientele and
allied industries in the region. Climatic conditions and soils are
unique to this semiarid region, and information that has been derived
from other more humid regions is not applicable. This research will
develop regional information regarding the prudent management of animal
waste systems that is applicable to a five state, semiarid area. The
multidisciplinary research activities will be conducted by the Oklahoma
Agricultural Experiment Station and Oklahoma Cooperative Extension
Service in cooperation with Oklahoma Panhandle State University and
consultation with other land-grant universities from the four
surrounding states.
Information gained will be adaptable to producers in the Texas
panhandle, northeastern New Mexico, eastern Colorado, and western
Kansas. Research and extension programs dealing with beneficial land
applications of biosolids from well-established beef-cattle feedlots,
new emerging swine lagoons, and the expanding dairy industry are
underway. Nutrient loading rates for crop production and grazingland
systems, design and operation of waste lagoon systems with major
emphasis on odor control, and minimizing risks to surface and ground
water all will receive major attention. It is essential that
economical, sustainable, environmentally prudent, and ecologically
sound waste management principles and practices be developed for the
rapidly expanding animal industry in this semiarid region.
expanded wheat pasture--$330,000
The Expanded Wheat Pasture Project is a continuing
multidisciplinary research and extension initiative at Oklahoma State
University. The project is also known as, ``Increasing Profitability of
the Wheat/Stocker Cattle Enterprise,'' and its objectives are to:
(1) increase profitability of the wheat grain/stocker-feeder cattle
enterprise;
(2) decrease production risks and income variability from the
enterprise, thereby increasing growth of the industry in the southern
Great Plains; and,
(3) improve the economics of many rural communities in Oklahoma and
the southern Great Plains.
This initiative permits Oklahoma State University (OSU) to help
improve the profitability, global competitiveness, and sustainability
of agriculture, and revitalize rural Oklahoma.
This initiative is at a pivotal stage with regard to evaluation of
grazing management strategies to overcome the negative effects of
increasing stocking density on grain yield, and further development of
decision-support microcomputer models. The project presently focuses on
evaluating different wheat varieties by cattle grazing trials, and
further development of supplementation programs that will minimize
variation in daily intake while achieving desired mean intakes of new
technologies for growing cattle. This will maximize both biologic and
economic efficiency.
This initiative compliments the new Beef Cattle Environmental
Stress Research Facility at OSU. This will allow measurement of the
effects of receiving health and nutrition treatments for stressed
calves on subsequent performance on wheat pasture. Similarly, effects
of treatments on wheat pasture on subsequent feedlot performance of the
cattle can be evaluated. These studies are a prerequisite to improving
the overall efficiency and decreasing costs of beef cattle production
in the United States.
Differences in net return (dollars per acre) from cattle and total
net return from cattle and grain have been as large as $35 and $63 per
acre, respectively, depending on variety and stocking density. Oklahoma
plants about 7.4 million acres of wheat each year.
The potential of this project for improving the economies of many
rural communities in Oklahoma and the southern Great Plains is
enormous. Annual income in Oklahoma could be increased by $131,000,000
by improving the technical efficiency of production of the 1.5 million
head of stocker cattle that are grown to heavier weights on wheat
pasture in Oklahoma prior to being finished in feedlots. By improving
the technical efficiency and increasing the number of cattle that are
grazed on wheat pasture in Oklahoma, annual income in the state could
potentially be increased by almost $308,000,000. This research has
similar potential impacts on the 5.5 million head of wheat pasture
stocker cattle in Texas, Kansas, New Mexico, and Colorado. The
opportunity for expansion (growth) of the industry has never been
greater than it is today because of the changing structure of the U. S.
beef cattle industry.
integrated production practices for horticultural crops--$258,000
The goals of the Integrated Production Practices for Horticulture
Crops research project include evaluating and developing cropping
systems that will diversify agricultural production, thus increasing
profits and improving the stability of farms in the southeast region of
Oklahoma. The focus of the project has been to develop alternative
agricultural enterprises for the region, especially horticulture crops.
The research is conducted by a multidisciplinary team of scientists
from OSU and the U.S. Department of Agriculture's Agriculture Research
Service (ARS), who are co-located at the Wes Watkins Agricultural
Research and Extension Center in southeast Oklahoma, as well as
scientists at other universities. The mission of the facility is to aid
in the agricultural development in the region.
Applied and theoretical research projects are necessary and are
being conducted in support of the overall project. The project leaders
have received additional peer reviewed competitive grants for
supporting work. Funds from these grants have directly supported the
research of scientists located at the Center, support local students as
technicians working on projects, supplies, scientific equipment, and
infrastructure that will support long term research efforts at the
center.
Research has resulted in development of cropping systems for six
different vegetable crops not currently grown extensively in the region
plus a comprehensive cropping system for watermelons. The cropping
systems that have been developed will allow producers to reduce risks,
diversify farms, and increase profits. In addition, results will be
useful for producers of traditional crops grown in the region. Future
support will allow the team to develop new systems, extend the results
of prior research to producers, and to optimize production in the
region. Databases developed will enable producers to better understand
the relationships among farm geography, climate, management practices,
yield, and profit.
preservation and processing of selected fruits and vegetables--$258,000
Preservation of quality after harvest is of special importance for
fresh fruits, nuts, and vegetables. The overall objectives of the
Preservation and Processing of Selected Fruits and Vegetables research
initiative at OSU are: to define the major limitations for maintaining
quality of harvested fruits, nuts, and vegetables, and, then, to
prescribe appropriate harvesting, handling, and processing protocols to
extend shelf life and/or to improve value. Research activities have
concentrated on factors currently limiting quality and shelf life of
Oklahoma-grown produce and focuses on supporting the growth of the
fruit, nut, and vegetable industry by providing technological
improvements essential to meet consumer demands. This research program
also addresses high priority national research topics in development of
new technologies for handling and processing agricultural products.
A systems approach to harvesting, handling, and processing
operations is being used to integrate specialized crop culture,
harvesting, handling, and processing operations to optimize new
cropping systems, and to provide technological information required for
integration of new value-added processing industries for Oklahoma
horticultural products. Commercial application of ongoing food products
processing projects will be facilitated by activities in the newly
opened Oklahoma Food and Agricultural Products Research and Technology
Center. Technological improvements in fruit, nut, and vegetable
harvesting, handling and processing are critically needed to supply
domestic markets and to support continued U.S. participation in
international commerce. This research will help Oklahoma industries
compete in a global economy.
pilot tech transfer (mississippi and oklahoma)--$400,000
Within the Mississippi and Oklahoma Pilot Technology transfer
project, the Oklahoma funding supports an integrated extension program
that provides technology transfer and associated business support for
small manufacturers in southeastern Oklahoma. The team includes
engineers and technology transfer specialists from the Oklahoma
Cooperative Extension Service working cooperatively with specialists
from Rural Enterprises, Inc., of Durant, Oklahoma. Team members
cooperate with specialists in other districts of the state in programs
supported by the National Institutes of Standards and Technology (NIST)
through the Oklahoma Alliance for Manufacturing Excellence. The
Alliance programs are focused on other areas in Oklahoma.
The focus of the program is one-on-one assistance to small
manufacturers to help make their operations sustainable and more
profitable. In the process, jobs are saved and created. In addition,
the small manufacturers increase their technical competence and learn
to access these kinds of services on their own through private service
providers. They are also encouraged to become members of local and
state manufacturing organizations that can help make them sustainable.
Rural Oklahoma traditionally has relied on agriculture and energy,
with a scattering of small industry, for its economic base. Of the more
than 5,800 manufacturing firms in Oklahoma, more than 5,200 employ
fewer than 250 employees. Approximately half of these small firms are
located in rural areas. Rural manufacturers are extremely important to
their local economies. The loss or downsizing of these small plants can
have devastating consequences for the host and surrounding communities,
while the establishment or growth of a manufacturing facility can
provide far-reaching and sustainable economic benefits.
The technology transfer activity supported by this program provides
the only on-site, one-on-one, focused transfer of engineering and
technical assistance to manufacturers in southeast Oklahoma. It is the
only fully integrated program of financial, technical, and business
assistance to small manufacturers in Oklahoma.
national agriculture appropriations for research, extension, and
education
Agricultural science is important for improving the components of
life that matter the most to the public. Agricultural science
continually produces healthier, more nutritious, safer food than found
anywhere else in the world. It produces fibers for American clothing
and textiles. Agricultural science produces discoveries that make
dramatic improvements in human health. Agricultural scientists work
closely with Cooperative Extension personnel who ensure that
agricultural discoveries get into the hands of those who need them,
resolving problems for whole industries and single individuals.
Despite the documented successes of agricultural research, and
education, federal funding for these programs has stagnated since the
1970's. Buying power has eroded 15 percent in real terms since 1985.
The Clinton Administration has proposed significant budget cuts for
fiscal 1999 in the base funds, which are compounded when the last five
years of flat funding for the programs is taken into account. The
Clinton budget base funding cuts of particular concern are:
--Hatch Act, Experiment Station--9 percent cut;
--Smith-Lever, Cooperative Extension--4 percent cut;
--McIntire-Stennis, Forestry--3 percent cut; and
--Animal Health--elimination.
Support is requested for agriculture appropriations for fiscal 1999
to: (1) increase base formula funding for agriculture research,
extension, and education by 5.7 percent; and (2) fund other
agricultural research, extension, and education appropriations as
outlined in the recommendations of the National Association of State
Universities and Land-Grant Colleges.
______
Prepared Statement of the Organization for the Promotion and
Advancement of Small Telecommunications Companies
summary of request
The Organization for the Promotion and Advancement of Small
Telecommunications Companies (OPASTCO) seeks the Subcommittee's support
for fiscal year 1999 loan levels for the telecommunications program
administered by the Rural Utilities Service (RUS) in the same amounts
as those contained in the fiscal year 1998 Agriculture Appropriations
Act. The requested program levels are:
Telecommunications Loans Program
5 percent hardship loans................................ $75,000,000
Treasury rate loans..................................... 300,000,000
Guaranteed loans........................................ 120,000,000
Rural Telephone Bank (RTB) loans........................ 175,000,000
In addition, OPASTCO requests the Subcommittee's support for the
following: (1) removal of the statutory 7 percent cap on Treasury rate
loans for fiscal year 1999; (2) a prohibition against the transfer of
unobligated RTB funds to the general fund of the Treasury or Federal
Financing Bank; (3) continuation of funding the RTB's administrative
expenses and subsidy budget authority through the general fund of the
Treasury; and, (4) funding of the distance learning and telemedicine
grant and loan program at sufficient levels.
OPASTCO is a national trade association of more than 500
independently owned and operated telephone companies serving rural
areas of the United States. Its members, which include both commercial
companies and cooperatives, together serve over 2 million customers in
40 states. Well over half of OPASTCO's members are RUS or RTB
borrowers.
Perhaps at no time since the inception of the RUS (formerly the
REA) has the telecommunications program been so vital to the future of
rural America. The telecommunications industry is at a crossroads, both
in terms of technology and public policy. Great leaps in
telecommunications technology in recent years will deliver on the
promise of a new ``information age.'' The Federal Communication
Commission's (FCC) implementation of the landmark Telecommunications
Act of 1996, as well as fundamental statutory changes to RUS's lending
program, will expedite this transformation. However, without continued
RUS support, rural telephone companies will be hard pressed to build
the infrastructure necessary to bring their communities into this new
age, creating a bifurcated society of information ``haves'' and ``have-
nots.''
Contrary to the belief of some critics, RUS's job is not finished.
In fact, in a sense, it has just begun. We have entered a time when
advanced services and technology--such as broadband fiber optics,
digital switching equipment, custom calling features, and the
Internet--are an expected and needed part of a customer's
telecommunications service. In addition, the fast approaching year 2000
will require all telephone companies to upgrade their digital switches
in order to avoid network disruptions and provide a seamless transition
to the new millennium. Unfortunately, the inherently higher costs of
upgrading rural networks has not abated. Rural telecommunications
continues to be more capital intensive and involves fewer paying
customers than its urban counterpart. RUS borrowers average only 6.1
subscribers per route mile versus 130 subscribers per route mile for
large local exchange carriers. In order for rural telephone companies
to modernize their networks and provide their customers with advanced
services at reasonable rates, they must have access to reliable low-
cost financing.
Furthermore, the relative isolation of rural areas increases the
value of telecommunications services for these citizens.
Telecommunications enables applications such as distance learning and
telemedicine that can alleviate or eliminate some rural disadvantages.
Telecommunications can also make rural areas attractive for some
businesses and result in revitalization of the rural economy. For
example, businesses such as telemarketing and tourism can thrive in
rural areas, and telecommuting can become a realistic employment
option.
While it has been said many times before, it bears repeating that
RUS's telecommunications loans program is not a grant program. The
funds loaned by RUS are used to leverage substantial private capital,
creating public/private partnerships. The RUS estimates that every
dollar of government money invested in telecommunications plant
leverages $4.80 in private capital. For a very small cost, the
government is encouraging tremendous amounts of private investment in
rural telecommunications infrastructure. Moreover, there has never been
a default in the history of the lending program.
The FCC's implementation of the Telecommunications Act of 1996 will
only increase rural telephone companies' need for RUS assistance in the
future. The forward-looking Act defines universal service as an
evolving level of telecommunications services that the FCC must
establish periodically, taking into account advances in
telecommunications and information technologies and services. While the
competitive environment engendered by the 1996 Act may offer the means
of meeting this definition in urban areas, rural and high cost areas
have less potential for competitive investment.
One of the principles of universal service established in the 1996
Act is that consumers in rural areas have access to advanced
telecommunications and information services that are reasonably
comparable to those services provided in urban areas at reasonably
comparable rates. At present, it is uncertain whether the FCC will
provide a ``sufficient'' mechanism, as required by the Act, to achieve
this urban/rural comparability goal. Long before the enactment of the
1996 Act, RUS has been the great facilitator of a dynamic universal
service concept in rural areas, providing rural telephone companies
with the financing to fund technological improvements. RUS now has an
essential role to play in the implementation of the new law, as it will
compliment new funding mechanisms established by the FCC and enable
rural America to move closer to achieving the federally mandated goals.
Working in tandem with the 1996 Act, the Rural Electrification Loan
Restructuring Act of 1993 (RELRA) will further help to ensure the
comparability of telecommunications service between urban and rural
America. As a prerequisite to eligibility for insured and RTB loans,
RELRA requires that every state have an RUS approved modernization plan
which provides a timeline for the improvement of the state's
telecommunications network and assures that the purpose of every loan
is consistent with achieving the requirements of the borrower's state
plan. These plans set forth the requirements for the transmission of
video images and high speed data that will promote educational and
health care opportunities as well as provide the necessary
infrastructure for economic development. Implementation of these plans
has already begun to generate additional loan demand as rural telephone
systems strive to meet the increased service objectives in the rural
areas they serve.
One of the most vital components of RUS's telecommunications loans
program is the 5 percent hardship loan program. These loans are
referred to as hardship loans for good reason: They provide below-
Treasury rate financing to telephone companies serving some of the most
sparsely populated, highest cost areas in the country. The commitment
these companies have to providing modern telecommunications service to
everyone in their communities has made our nation's policy of universal
service a reality and, in many cases, would not have been possible
without RUS's hardship loan program. Companies applying for hardship
loans must meet a set of eligibility requirements and the projects to
be financed are rated on a point system to ensure that the loans are
targeted to the most needy and deserving. The RUS reports that through
the second quarter of fiscal year 1998, they had already approved over
$65 million in hardship loans--or more than 86 percent of their
authorization--and had an additional $62 million in applications on
hand. By year end, RUS estimates that it will have $79 million in
hardship loan applications that cannot be funded. For fiscal year 1998,
the government subsidy needed to support a $75 million loan level was
under $3 million. Given the need and demand for this essential program,
it is critical that the loan level be maintained at $75 million for
fiscal year 1999.
With regard to RUS's Treasury rate loan program, OPASTCO supports
the removal of the 7 percent ceiling on these loans for fiscal year
1999. This Subcommittee appropriately supported language in the fiscal
year 1996 Agriculture Appropriations Act to permit Treasury rate loans
to exceed the 7 percent per year ceiling contained in the authorizing
act. This language was continued in fiscal year 1997 and fiscal year
1998. Were long-term interest rates to exceed 7 percent, adequate
subsidy would not be available to support the Treasury rate loan
program at the authorized levels. Accordingly, OPASTCO supports the
continuation of this language in the fiscal year 1999 appropriations
bill in order to prevent potential disruption to this important
program.
OPASTCO also urges the Subcommittee to reinstate the language
introduced in the fiscal year 1997 Agriculture Appropriations Act, and
continued in fiscal year 1998, prohibiting the transfer of any
unobligated balance of the RTB liquidating account to the Treasury or
the Federal Financing Bank which is in excess of current requirements
and requiring the payment of interest on these funds. As a condition of
borrowing, the statutory language establishing the RTB requires
telephone companies to purchase Class B stock in the bank. Once all
loans are completely repaid, a borrower may then convert its Class B
stock into Class C stock. Thus, all current and former borrowers
maintain an ownership interest in the RTB. As with stockholders of any
concern, these owners have rights which may not be abrogated. The
Subcommittee's inclusion of the aforementioned language into the fiscal
year 1999 appropriations bill will ensure that RTB borrowers are not
stripped of the value of this required investment.
On the other hand, the Subcommittee should reject the
Administration's proposal to fund the RTB's administrative expenses and
subsidy budget authority through the bank's liquidating account
balances. This proposal is inappropriate on both legal and policy
grounds. Statutorily, the Rural Electrification Act provides for the
RTB's use of facilities and services of employees of the Department of
Agriculture, without cost to the RTB, until such time as the bank is
privatized. The proposal also appears inconsistent with the bifurcated
structure of the RTB under the Federal Credit Reform Act of 1990 which
does not permit funds in the liquidating account to finance new loans.
From a public policy standpoint, unobligated balances of the
liquidating account have been targeted to support the privatization of
the RTB and use of these funds for other purposes would only serve to
dilute the value of the bank for all stockholders. Finally, paying for
the RTB's administrative expenses and subsidy through the liquidating
account offers no budgetary savings. For these reasons, OPASTCO is
opposed to the Administration's proposal and urges the Subcommittee to
continue to fund the RTB through the general fund of the Treasury.
In addition to RUS's telecommunications loans program, OPASTCO
supports adequate funding of the distance learning and telemedicine
grant and loan program authorized in the Federal Agriculture
Improvement and Reform Act of 1996. This sensible investment allows
rural students to gain access to advanced classes which will help them
prepare for college and jobs of the future. Also, rural residents will
gain access to quality health care services without traveling great
distances to urban hospitals. The Agriculture Act authorizes $100
million for each of the fiscal years 1996 through 2002. Loans are made
at the government's cost-of-money, which should help to meet demand for
the program in the most cost effective way. In light of the
Telecommunications Act's requirement that schools, health care
providers, and libraries have access to advanced telecommunications
services, sufficient targeted funding for this purpose is essential in
fiscal year 1999.
conclusion
The development of the nationwide telecommunications network into
an information superhighway, as envisioned by policymakers, will help
rural America survive and prosper in any market--whether local,
regional, national, or global. However, without the availability of
low-cost RUS funds, building the information superhighway in
communities that are isolated and thinly populated will be untenable.
By supporting the RUS telecommunications programs at the requested
levels, the Subcommittee will be making a significant contribution to
the future of rural America at a negligible cost to the taxpayer.
______
Prepared Statement of Alan F. Holmer, President, Pharmaceutical
Research and Manufacturers of America
Mr. Chairman and Members of the Subcommittee: On behalf of the
Pharmaceutical Research and Manufacturers of America (PhRMA), I present
recommendations on the fiscal year 1999 budget request submitted by the
Administration for the Food and Drug Administration (FDA). PhRMA
represents the country's major research-based pharmaceutical and
biotechnology companies, which are leading the way in the search for
new cures and treatments that will enable patients to lead longer,
happier, healthier, and more productive lives.
Let me acknowledge at the outset that we appreciate the very
difficult decisions the Subcommittee must make as it considers funding
for the many vital agriculture, infant feeding, rural development,
tobacco, and other programs with which it is concerned. Our interest is
in the FDA and the critical role it plays in promoting and protecting
the health and safety of our country's citizens.
Let me also acknowledge and thank the Subcommittee for its key
leadership in ensuring that FDA receives the necessary funding to carry
out its important functions. This was particularly true last year when
the Subcommittee approved funding for fiscal year 1998 that enabled
Congress to pass the FDA Modernization Act of 1997 (FDAMA), which
extended the Prescription Drug User Fee Act of 1992 (PDUFA) for another
five years. Under the first five years of the user-fee law, FDA cut
drug-approval times in half and is making new life-saving, cost-
effective medicines available to patients much more quickly.
We also thank you, Mr. Chairman, for your leadership on the pending
fiscal year 1998 supplemental appropriations legislation. PhRMA
supports FDA's request, as a result of FDAMA, for an increase to the
current authorized appropriation level, plus an additional amount for
the FDA's increased workload of drug applications, for a total of $25.9
million. We appreciate that your Subcommittee has pressed to provide
this additional funding for the agency to allow it to utilize all of
the drug user-fee revenues that will be paid this year.
PhRMA also supports the Administration's fiscal year 1999 request
for budget authority for direct federal appropriations of $878.9
million for FDA salaries and expenses--the major and essential
component of FDA's resources. This represents a $21.4 million increase
over the appropriations enacted by Congress for the current fiscal
year.
However, the Administration is further proposing to raise an
additional $127.7 million through the imposition of new user fees for
such activities as medical device reviews, animal drug approvals,
import inspections, food additive petition reviews, generic drug
application reviews, and post-market surveillance of products. Unlike
the prescription-drug user fee program, these user fees would
substitute for regular appropriations, would not be dedicated to a
specific purpose, and would not require that FDA meet performance
goals.
For more than a decade, this and previous Administrations have made
such proposals and Congress has repeatedly rejected them. We anticipate
that this will happen again this year.
For this reason, we believe it is critical that Congress provide
direct federal appropriations of $1.007 billion for FDA salaries and
expenses for fiscal year 1999--which includes the $878.9 million
requested by the Administration and the additional $127.7 million the
Administration believes is necessary but should be derived from general
user-fees that Congress has consistently declined to authorize.
Without the additional $127.7 million in appropriations, FDA will
not be able to carry out all of its important public health and safety
responsibilities in regulating more than $1 trillion worth of
products--one-quarter of all the money spent annually by U.S.
consumers--in the areas of drugs, biologics, medical devices, food,
cosmetics, radiation-emitting devices, and pet food and drugs.
In his prepared testimony for the Subcommittee's hearing on March
31, 1998, FDA Lead Deputy Commissioner Michael A. Friedman, M.D.,
stated that, while ``focused'' food safety and tobacco programs that
have received ``specially designated appropriations [will] continue to
grow, core FDA functions have seen a steady decline in non-PDUFA FTE's
from the fiscal year 1992 level of 8,868 to a low of 8,444 in the
current fiscal year, a 4.8 percent drop.''
Of primary concern to PhRMA, the prescription drug user-fee
program--entirely different than the Administration's proposals for
general new user fees--is good for FDA, industry and, above all,
patients. The pharmaceutical industry and FDA are working to serve a
common client--the patient. The research-based pharmaceutical industry
is working to develop new and better drugs, FDA to improve the drug
development and approval process. According to the agency, more than 11
million patients received an approved medicine in 1997 that would not
have been available except for the prescription drug user-fee law.
PhRMA companies will spend over $20 billion this year--almost 20
percent of sales, more than virtually any other U.S. industry--to
discover and develop new medicines and vaccines to combat such diseases
as AIDS, cancer, Alzheimer's, heart disease, stroke, diabetes,
arthritis, asthma, and numerous other diseases. In his testimony, Dr.
Friedman recognized the symbiotic relationship between industry and
FDA:
The industry's research and development investment of some
$21 billion in drugs and nearly $4 billion in medical devices
last year continues to grow as companies try to transform the
advancing medical science into new products. The payoff is a
new product pipeline filled with promising new therapeutics,
some of which are strikingly novel. For society, the benefit
from this investment in basic research is great. For FDA, as
society's technological midwife for medical products, the
burden also is great as it struggles to manage the burgeoning
flow of new products to the market.
We are concerned that FDA's baseline appropriations be maintained
and that user fees not be substituted for direct federal
appropriations. This is a fundamental principle underlying the
agreement reached between Congress, FDA, and industry and embodied in
PDUFA and FDAMA.
Under the 1992 law, industry agreed to pay $327 million in user
fees during 1993-1997, which enabled FDA to hire 600 additional
reviewers and cut drug-approval times from 29.2 months in 1992 to 16.2
months in 1997. During fiscal years 1998-2002, pharmaceutical companies
will pay more than $550 million in user fees under FDAMA so FDA can
continue to reduce approval times and can begin to cut development
times as well. While approval times have been cut in half, total
development times have continued to rise through the 1990's to more
than 15 years according to the most recent figures.
As Dr. Friedman stated in his prepared testimony, FDA will increase
its number of reviewers and support staff under FDAMA by 120 FTE's over
the current fiscal year to 820 in fiscal year 1999, ensuring that the
agency will be able to continue to perform at its current high level.
As revised under FDAMA, general fund appropriations for FDA
salaries and expenses each year must equal or exceed the fiscal year
1997 appropriation level (excluding user fees) of $820 million, as
adjusted for inflation or changes in overall domestic discretionary
budget authority, beginning after fiscal year 1998, whichever is lower.
We understand that the requested basic direct federal appropriations
level of $878.9 million for overall federal salaries and expenses may
be adequate to meet the ``waterline'' requirement for ``triggering''
FDA authority to assess and collect user fees for prescription drugs in
fiscal year 1999.
However, if FDA must absorb a shortfall of $127.7 million that will
not be derived from proposed new user fees and is required to direct
existing staff resources to support new Administration domestic policy
initiatives in such areas as tobacco and food safety, the agency will
not be able to carry out all of its other important public-health
responsibilities, as Dr. Friedman made clear.
Thus, PhRMA strongly urges that Congress appropriate $1.007 billion
in fiscal year 1999 for FDA salaries and expenses to ensure that the
agency can fulfill all its vital responsibilities to promote and
protect public health and safety.
______
Prepared Statement of David Gaillard, Forest Predator Protection
Campaign Coordinator, Predator Project
I am writing you on the 67th anniversary of the creation of the
Wildlife Services program (formerly called, ``Animal Damage Control''),
in regards to the appropriations of federal funds to this program. I am
writing on behalf of Predator Project, a non-profit conservation
organization based in Bozeman, Montana. We urge you and the other
members of the Appropriations Subcommittee on Agriculture to cut $10
million from Wildlife Service's ``livestock protection'' program, which
is almost entirely comprised of lethal predator control in the western
United States.
The federal Wildlife Services program has received much public
scrutiny and criticism for its livestock protection program, which
primarily involves killing coyotes, mountain lions and other predators.
As we explain in our attached report, the problem with the USDA's
Wildlife Services program is that public money is being spent to kill
publicly owned wildlife, often on public lands, for the benefit of a
small percentage of private livestock producers, who are neither
required to change their management practices to reduce livestock/
predator conflicts nor directly pay for this government ``service.'' Of
the federal funds Congress allocates to Wildlife Services, we find that
the majority goes to the western states, and the majority of that is
spent on killing predators.
Our report ``Wildlife Services?'' identified the following
problems:
--Despite a Clinton Administration policy that federal dollars should
fund no more than half of Wildlife Services' state office
expenditures, this is violated in 13 of the 17 western states;
--Western livestock producers, including individuals and
organizations, contributed less than 14 percent in direct
payments for livestock protection, and less than 26 percent
when indirect payments to county governments (typically due to
a ``head'' tax on livestock) are included;
--Livestock protection--which is almost exclusively lethal predator
control--accounts for two-thirds (67 percent) of Wildlife
Services' western state office expenditures, and more than two-
thirds (69 percent) of its western state office expenditures of
federally appropriated funds; and
--Wildlife Services' western state office expenditures to kill
predators exceeds reported livestock losses to predators in
those states by more than three times!
Predator Project considers the Clinton Administration's recent
proposal to reduce Wildlife Services' operational budget for fiscal
year 1999 by $2.5 million a step in the right direction. However, we
urge Congress to further reduce Wildlife Services' budget by $10
million, by eliminating federal appropriations for the lethal predator
control work conducted through the Wildlife Services' ``livestock
protection'' program. For fiscal year 1996 (the most recent years for
which figures are available) Wildlife Services state offices spent
$9.95 million of federally appropriated funds on livestock protection.
We propose a $10 million cut in Wildlife Services' annual federal
appropriations to eliminate this aspect of the Wildlife Services
program. It is important to note that this total comprises the amount
spent by state offices only. Additional federally appropriated funds
are spent by the western and national Wildlife Services offices to
manage lethal predator control work; these funds will be unaffected by
this cut, and will therefore be available to provide technical
assistance to livestock producers, targeted lethal predator control,
and other Wildlife Services activities in the western 17 states.
Eastern Wildlife Services activities, which largely assist landowners
in managing their own wildlife problems, would be unaffected by this
reduction.
Predator Project is not alone in suggesting that Congress end the
wildlife control program. In January, an unusual coalition of taxpayer
and environmental groups released ``Green Scissors 1998--Cutting
Wasteful and Environmentally Harmful Spending''. Wildlife Services was
one of 71 programs which the report recommended be cut, because the
program is ``preying on taxpayers.'' According to the report, not only
is the program harmful and costly, it does not even work: ``Livestock
losses to predators have not declined despite a 71 percent inflation-
adjusted increase in WS's appropriations between 1983 and 1993 and a 30
percent increase in coyotes killed in the last decade.'' In addition,
Wildlife Services' livestock protection activities benefit western
ranchers to the exclusion of most eastern ranchers. I would add to this
that only a small percentage of western ranchers use Wildlife Services.
In sum, there are three good reasons for cutting Wildlife Services'
budget. First, ranchers who get Wildlife Services' help are neither
required to pay directly for that help, nor do they have to change
their livestock management practices to try and reduce the need for
Wildlife Services' predator control work. In other words, those
ranchers who are asking for Wildlife Services' assistance are getting
something from the federal government without having to try and meet
their own needs first. Second, all wildlife is considered the property
of the individual states. So, the states should retain the
responsibility for managing its wildlife. This would give power back to
the states. Increasingly, we are hearing that states in the West are
frustrated with Wildlife Services' work. Eliminating the Wildlife
Services' lethal predator control program would allow the states to
manage their own wildlife, instead of having to accept the constraints
of the federal government's program. Finally, the federal predator
control program is outdated because it is no longer in step with the
wishes of the majority of Americans. Our nation spends millions of
dollars each year to aid wildlife, so the killing of wildlife by
Wildlife Services is not cost-effective.
We look forward to working with you to reduce the federal
government's operations and budget.
______
Prepared Statement of A. Lynn Lowe, President, Red River Valley
Association
The Red River Valley Association is a voluntary group of citizens
banded together to advance the economic development and future well-
being of the citizens of the four state Red River Basin area in
Arkansas, Louisiana, Oklahoma and Texas.
For the past 73 years, the Association has done notable work in the
support and advancement of programs to develop the land and water
resources of the Valley to the beneficial use of all the people. To
this end, the Red River Valley Association offers its full support and
assistance to the various Port Authorities, Chambers of Commerce,
Economic Development Districts and other local governmental entities in
developing the area along the Red River.
The Resolutions contained herein were adopted by the Association
during its 73rd Annual Meeting in Shreveport, Louisiana on February 19,
1998, and represent the combined concerns of the citizens of the Red
River Basin area as they pertain to the goals of the Association,
specifically:
--Economic and Community Development;
--Flood Control;
--Bank Stabilization;
--Watershed Improvement;
--A Clean Water Supply for Residential, Commercial, Industrial and
Agriculture Uses;
--Hydroelectric Power Generation;
--Recreation;
--Navigation; and
--Environment.
The Red River Valley Association is aware of the constraints on the
federal budget, and has kept those restraints in mind as these
Resolutions were adopted. Therefore, and because of the far-reaching
regional and national benefits addressed by the various programs
covered in these Resolutions, we urge the members of Congress to review
the materials contained herein and give serious consideration to
funding at the levels requested.
Mr. Chairman and members of the Committee. I am Lynn Lowe, and I am
pleased to represent the Red River Valley Association as its President.
Our organization was founded in 1925 with the express purpose of
uniting the citizens of Arkansas, Louisiana, Oklahoma and Texas to
develop the land and water resources of the Red River Basin.
As an organization that knows the value of our precious water
resources we support the most beneficial water and land conservation
programs administered through the Natural Resources Conservation
Service (NRCS). We understand how important a balanced budget is to our
nation; however, we cannot sacrifice what has been accomplished. The
NRCS programs are a model of how conservation programs should be
accomplished and our testimony will address the needs of the nation as
well as our region. We believe strongly that the whole, national
program must be preserved.
Even though the fiscal year 1999 President's budget appears to
increase NRCS funding the actual use of the funds has changed, to the
detriment of the agency and our citizens. The effect is a decrease of
usable funds for direct technical and financial assistance. The
diversion of funds to new proposed initiatives would reduce assistance
to those who need it.
We would like to address several of the programs affected by the
President's fiscal year 1999 budget proposal.
1. Watershed and Flood Prevention Operations (Public Laws 566 and
534).--More than 10,400 individual structures have been installed
nationally. They have contributed greatly to environmental enhancement,
economic development and the social well being of our communities. More
than half of these structures are over 30 years old and approaching
their 50 year planned life.
These programs offer a complete watershed management approach and
should continue for the following reasons:
--Their objectives sustain our nation's natural resources for future
generations.
--They are federally assisted and do not grow the federal government.
--Initiatives and decisions are driven by the communities.
--They are cost shared.
--They follow NEPA guidelines and enhance the environment.
--They can address the needs of low income and minority communities.
--The benefit to cost ratio of this program has been evaluated to be
2.2:1. What other federal programs can claim such success?
There is no doubt of the value of this program. The cost of losing
this infrastructure exceeds the cost to reinvest in our existing
watersheds. Without upgrading existing structures we will miss the
opportunity to keep our communities alive and prosperous. It would be
irresponsible to dismantle a program that has demonstrated such great
return and is wanted by our citizens.
The present level, outlined in the budget, of $49 million is not
adequate. We strongly recommend that a funding level of $250 million be
dedicated to this program. This is more realistic and compares to the
programs appropriated in the years prior to 1997. At the proposed
funding level it would take over 30 years to complete just the
identified projects, with no attention given to rehabilitation needs.
2. Technical and Financial Assistance.--The Administration wants to
change the watershed program from its existing ``financial assistance''
policy to ``loans''. This is not acceptable and NOT the intent of
Congress. Under a loan system there would be no financial incentive to
develop these projects.
A serious issue is that the Administration has diverted the
necessary ``Technical Assistance'' funds from the watershed program to
``Conservation Operations''. These funds must be put back in
``Watershed Operations'' to provide accountability and assure the
program will continue. Once in the Conservation Operation's account
these funds could be diverted to any other program.
The watershed program was mandated by Congress and this is an
attempt by the Administration to eliminate the program through funding
cuts. We know this is not the will of Congress.
3. User Fees.--It is proposed that $10 million of the NRCS budget
come from newly established user fees, which requires legislation to
implement. This would be for technical assistance, sales of seeds and
plants, soil and snow survey data and technical services.
This cannot be cost effective and will be a burden on the producers
that are least able to afford good conservation practices. There has
not been a federal fee program that has been effective. We strongly
recommend that Congress NOT implement this proposal and instead fund
the NRCS budget at the levels required to provide the services our
nation needs.
4. Forestry Incentives Program.--The President's budget has no
funding for this program, citing that it ``promotes timber production
on private lands and is incompatible with the agency (NRCS) strategic
plan''. In fact, Congress transferred this program to NRCS from the
Farm Service Agency as a restructuring in the Federal Agricultural
Improvement and Reform Act of 1996. Forestry is recognized as a farming
activity. NRCS is the best agency to administer this program which
assists farmers in production agriculture.
We request Congress to fund the Forestry Incentives Program at a
level of $10 million for fiscal year 1999.
5. Environmental Quality Incentives Program (EQIP).--Requests for
assistance through the EQIP program have been overwhelming. The
resulting requests far exceed the available funds and is an additional
workload on NRCS's delivery system. Additionally, the Administration
has failed to provide adequate funding for technical assistance to
implement the program. The fiscal year 1999 budget increases the
program by $100 million but reduces the technical assistance by $8
million from fiscal year 1998. In essence, the program, or workload,
was increased by 50 percent and the technical assistance was reduced
from 19 percent in 1998 to 10 percent in 1999. There is no logic in
this proposal.
The $300 million proposed for the EQIP program is an adequate
budget for fiscal year 1999; however, we request that the technical
assistance for this program by increased to $57 million.
6. NRCS Staffing.--We are greatly concerned with the
Administration's effort to ``downsize'' this agency. Over the past 3
years staffing has been reduced by about 2,000 staff years. Most of
this has been absorbed by national Headquarters (50 percent) and the
state offices (20 percent) with minimal impact to field offices. The
further cuts proposed will come from the field offices, closing many.
This will adversely impact technical support required for field
delivery of conservation programs. The end result will be the
dismantling of our nation's conservation infrastructure. The proposed
budget would eliminate another 532 staff years. Can we afford this?
Congress must not allow this to happen.
Additionally, we request that $10.5 million be appropriated for
``Watershed Planning'', $13 million for River Basins Surveys and
Investigations and that $20 million be allocated for the Emergency
Watershed Program to provide rapid response in time of natural
disaster.
A further reduction to technical assistance will jeopardize the
local, state and federal partnership in conservation making it
impossible to meet this nation's commitment to land stewardship in a
voluntary manner. Acceptance of the proposed budget would contradict
the policies set forth by Congress over the years, abandoning their
commitment to the sound, conservation goals of our agricultural policy.
Over 70 percent of our land is in private ownership. This is
important to understanding the need for NRCS programs and technical
assistance. Their presence is vital to ensuring sound technical
standards are met in our conservation programs. These programs not only
address agricultural production, but sound natural resource management.
Without these programs and NRCS properly staffed to implement them much
of our private lands will not apply conservation measures.
The administration has proposed ``new'' Clean Water Initiatives,
but why do they ignore the agency that has a proven record for
implementing conservation watershed programs? Congress must make a
decision. Will NRCS continue to provide the leadership within the
communities to build upon the partnerships already established? The
President does not provide for that leadership and so it is up to
Congress to insure NRCS is properly funded and staffed to provide the
needed help to our taxpayers for conservation programs.
All these programs apply to the citizens in the Red River Valley
and we are concerned for the future. The RRVA is dedicated to work
toward the programs which will benefit our citizens and provide for
high quality of life standards. We therefore request that you correct
the President's budget and appropriate the required funding levels
within the dedicated programs to insure our nation's conservation needs
are met.
I thank you for the opportunity to present this testimony on behalf
of the members of the Red River Valley Association and we pledge our
support to assist you in the appropriation process.
Grant Disclosure.--The Red River Valley Association has not
received any federal grant, subgrant or contract during the current
fiscal year or either of the two previous fiscal years.
______
Prepared Statement of Lester W. Myers, President and General Manager,
Delta Western, Inc.
Mr. Chairman and Members of the Subcommittee, I thank you for the
opportunity to provide testimony in support of the Regional Aquaculture
Centers. My name is Lester Myers. I own and operate a catfish farm near
Inverness, Mississippi, and am President and General Manager of Delta
Western, Inc., Indianola, Mississippi, the largest catfish feed mill in
the United States.
With relatively little fanfare, the aquaculture industry in the
United States has developed into a significant part of domestic
agriculture in the last 20 years. Production of channel catfish, the
largest sector of domestic aquaculture, has increased more than 30
percent this decade--a rate of expansion matched by very few
industries. Channel catfish now make up a remarkably large proportion
of domestic seafood consumption and, on a value basis, catfish ranks
fourth in the United States, behind only shrimp, salmon, and crabs.
Further, a significant portion of the salmon consumed by Americans also
derives from aquaculture. So, as we enter the next century, domestic
aquaculture is well positioned to make up for the expected shortfalls
in wild fisheries harvest and supply an increasing proportion of the
domestic demand for seafood products.
Continued expansion and profitability of the aquaculture industry
will, however, depend on development of new technology to reduce
production costs and make production more competitive in the global
market. For the past several years, I have been actively involved with
the Southern Regional Aquaculture Center as Chairman of the Industry
Advisory Council, and I feel that the Regional Aquaculture Center
program is well suited to help meet the need for technology
development. Already, results from the Regional Center projects are
having a significant impact on domestic aquaculture. I believe this
success is attributable to three characteristics that set the Regional
Aquaculture Centers apart from other publicly funded programs.
First, the activities of the Regional Centers are industry-driven.
The Center's activities are initiated by the Industry Advisory Council,
which consists of producers, marketing personnel, bankers, and other
individuals with fiscal interests in aquaculture. The Industry Advisory
Council provides a forum for input from private and public sectors
which is then incorporated into annual and ongoing plans for the
Center. As such, the genuine needs of the industry are addressed rather
than the needs as perceived by scientists or government officials.
Second, allocation of funds through the Center is a deliberate
process involving input from experts and concerned industry
representatives from throughout the region and the nation. This
approach assures that only priority issues are addressed and that the
approach used to solve the problem is efficient, thorough, and
carefully developed.
Third, the Center's programs are regional in nature, rather than of
local interest only. It is the policy of the Center that the issues
addressed must be of regional significance and that the resulting
project involves participation from institutions from at least two
states within the region. In reality, most Center projects involve
institutions from at least seven states within the region. This
approach makes it possible for Centers to efficiently address problems
that require more personnel, equipment, and facilities than are
generally available at one location. It also makes better use of
limited resources and a saving of funds relative to funding of
independent, uncoordinated projects at many different locations.
Accordingly, it is possible to bring the best scientific talent in the
region to bear on priority problems in an extremely cost-effective
manner.
In summary, representatives of the U.S. aquaculture industry are
convinced that the Regional Center programs are highly valuable and
productive. Additional new research findings will help insure future
success for aquaculture production in the United States. The authorized
level of funding for the five Regional Aquaculture Centers is $7.5
million annually. The total annual appropriation for the Centers for
fiscal year 1998 was $4.0 million, or $800,000 for each of the five
Regions. Despite an enviable performance record while operating for
more than 10 years at half the authorized level of funding, the
President's Budget Proposal for fiscal year 1999 calls for a 3 percent
reduction in funding for the Center Program. We strongly request that
you rescind the proposed fiscal year 1999 reduction in funding and
provide the full authorized level of $7.5 million for the existing five
Centers to support these extremely important and effective programs.
On behalf of the U.S. aquaculture industry, I thank you for the
opportunity to present testimony in support of the Regional Aquaculture
Centers, and express my sincere appreciation for the support you have
provided in previous years. Again, I would like to emphasize that
significant benefits have already been provided from work conducted by
these Centers and additional funding is urgently needed by our
industry.
______
Prepared Statement of Dr. Richard Spencer, Limited Partner, Hawaiian
Marine Enterprises
Mr. Chairman and Members of the Subcommittee, thank you for
allowing me to submit testimony on behalf of the Regional Aquaculture
Centers and the Center for Tropical and Subtropical Aquaculture or
CTSA. My name is Richard Spencer, and I am a limited partner in
Hawaiian Marine Enterprises, a commercial aquaculture farm that raises
edible seaweeds, clams and abalone. I have been a member of the CTSA
Industry Advisory Council for ten years and am privileged to serve as
its chairman.
I am a businessman, and I have a doctorate in oceanography. Wearing
both those hats gives me a true appreciation of the Center's singular
role linking the needs of industry and the expertise of science to
further the development of aquaculture. The Center recognizes the
necessity of integrating industry priorities and scientific research to
ensure that its program directly meets the needs of commercial
aquaculture producers.
Each year, the United States imports far more seafood than it
exports. A high proportion of those imports come from countries that
have little or no regulations regarding the safety of cultured aquatic
animals or the manner in which wild stocks are harvested. The growth of
the U.S. aquaculture industry ensures a reliable, safe source of high
quality protein for the American diet and an alternative to the over-
harvesting of wild stocks, which are being rapidly depleted. In
addition, the growth of aquaculture will create new jobs and generate
tax revenues, thereby strengthening the economy. However, commercial
aquaculture is a mere toddler in terms of its development, and, like
all toddlers, requires support and nurture to develop to its full
potential.
The Center for Tropical and Subtropical Aquaculture provides that
support. Each year, the Center holds a meeting for commercial producers
from throughout the region and asks them to define industry problems.
Then the appropriate scientific experts are called upon to conduct
research to solve those problems.
The routes to those solutions have varied, including education,
training, technology transfer, addressing disease issues and government
regulations, marketing and economics, and revitalizing or initiating
aquaculture activity throughout the Pacific. Most importantly, each
route was mapped out in direct response to an industry need.
Although the Center's research projects have been underway for one
to ten years, commercial producers in the region and throughout the
nation have already reaped enormous benefits.
As a producer of edible seaweed, I benefited directly from Center-
funded projects investigating Graccilaria gall syndrome. The syndrome,
a relatively new disease problem, attacks cultured seaweed and makes it
unsuitable for sale. It nearly devastated seaweed production in Hawaii.
The project titled ``Disease Management for Hawaiian Aquaculture''
found that continuous aeration controls the syndrome. Since that time,
I have lost no crops to the syndrome.
The Center-funded ``Pacific Regional Aquaculture Information
Service for Education'' provides easy access to the latest scientific
information on aquaculture. It also ensures that individuals in the
developing Pacific Island nations--where libraries may well be non-
existent--also can easily access that vital information. The project
provides a cost benefit of $20 for each $1 of Center funding.
Another project, ``Ornamental Aquaculture Technology Transfer,''
allowed me to diversify into producing ornamental fish for the aquarium
trade. In 1995, the U.S. imported $54 million worth of ornamental fish,
so this is clearly a lucrative market that U.S. farmers should tap.
Such progress in so short a time clearly illustrates that the
Regional Aquaculture Centers' approach of spotlighting industry
concerns is the right one, offering rapid, effective results. The
investment in the Regional Aquaculture Centers has yielded high returns
thus far and will continue to do so. However, I was recently informed
that the future yields may well be diminished because of a planned 3
percent funding cut for fiscal 1999. I find that most unfortunate. I
have continually urged that expanding the funding capabilities of the
Centers would afford even greater results. Please reconsider this
decision. Although that may not sound like a huge cut, it will
seriously deter the Centers ability to fulfill its mission of
developing a viable U.S. aquaculture industry to benefit producers,
consumers and the U.S. economy.
With level funding, the Regional Aquaculture Centers funding
allocation had lost much of its purchasing power. Over the years, we
have found it increasingly difficult to fund the desired research at
levels equivalent to the scope of the work. The cost of conducting
science has increased dramatically, and the number of worthy proposals
has increased as the aquaculture industry in the Pacific region has
grown.
With reduced funding, the rising costs of research are eroding
available funds and further reducing the amount of real dollars
available for projects. This means that a project must be funded over
several years to solve a problem that could possibly be solved in a
shorter time span, given sufficient funds. Because the economy is doing
well, now would be the perfect time to move forward decisively. I
strongly urge you to take this into account and approve the authorized
full funding of $7.5 million for the Regional Aquaculture Centers
program.
Thank you again for the opportunity to submit this testimony.
______
Prepared Statement of Dr. David A. Smith, President, Freshwater Farms
of Ohio, Inc.
This past year in Ohio, several landmark events have occurred in
aquaculture. The first is that all farm-raised fish products have been
brought under the new federal seafood inspection program of HMCP. The
second is that fish processors along Lake Erie have turned their sights
inland to the few pioneering fish farmers that have started modest
production of yellow perch. Fishery harvests of wild perch stocks are
at an all time low, and record prices have been maintained virtually
all year. The bad news is that there is no perch aquaculture industry
large enough in the whole country to satisfy the demand of just one of
these major fish wholesalers in northern Ohio.
Why is this the case? If there is such demand, why don't fish
farmers just produce more? There is a reason. A technological/extension
bottleneck exists at the level of fingerling production. Farmers cannot
produce, with today's level of understanding, a reliable and adequate
number of young fish to stock out their ponds.
This is one example of problems that are directly addressed by
research at the U.S.D.A. Regional Aquaculture Centers. In our own North
Central Region, yellow perch research has been given the highest
priority and attention. The Center's research priorities are identified
by those of us in commercial aquaculture, and are geared to providing
hands-on answers to these very real problems that hold back the
economic potential of aquaculture in the United States. They are
designed to do this through a network of university research and
extension outreach that has the highest potential of economic return
than any other program out there.
Please give serious consideration to supporting a higher level of
funding for adequate aquaculture research through the Regional
Aquaculture Centers. I would like to request on behalf of the
aquaculture industry that funding be extended to the fully authorized
level of $7.5 million. If the fully authorized amount is not
appropriated, then they should at least be funded at the level they
have received over the last few years which is $4.0 million.
______
Prepared Statement of Joseph McGonigle, Executive Director, Maine
Aquaculture Association
Mr. Chairman and members of the Subcommittee: I appreciate this
opportunity to express my support for USDA's Regional Aquaculture
Centers in the Northeast and in the four other regions of the country
where vital research partnerships among entrepreneurs, academia and the
extension service are fostering an emerging fish farming industry that
is bringing economic opportunity to rural communities and the hope of
food sufficiency to an increasingly crowded world.
Maine has been a leading supplier of high quality seafood for fully
400 years--since before the settlement at Jamestown and the landing at
Plymouth Rock. But capture fishery harvests are stagnant or declining,
no less in Maine than around the world. So today, Maine is a leader in
marine aquaculture, as well, with fanned fish and sea vegetable
harvests that are closing in on the state's lobster catch as our most
valuable fishery.
I represent a trade association whose members grow salmon, trout,
oysters, mussels, clams and nori, with commercial quantities of
haddock, halibut, urchins and scallops on the immediate horizon. Twenty
years ago, my association did not exist. Ten years ago, its members
produced just a few hundred tons of fish. Today, Atlantic salmon is
Maine's third most important farm crop, after potatoes and dairy.
Worldwide, one pound of fish in five is Ann raised, and virtually
all of the growth in the world seafood harvest stems from aquaculture.
In the U.S., fish fauns also contribute to the growth to our seafood
supply, but only 7 percent to the overall harvest. The difference
between U.S. and world aquaculture performance is largely attributable
to differences in public investments in research, demonstration and
technology transfer--investments like the RAC's before you today. The
farms I represent in Maine are living proof of the returns such
investments can provide to the consumers and communities we all serve.
Of the ten marine species grown in Maine today, NRAC supported
either the basic research or the technology transfer that launched
three new crops from a standing start and provided critical management
breakthroughs for four others:
--NRAC tech transfer support in 1993 helped a tiny 2-man seaweed
company create America's first nori farm, which today supports
25 jobs, cross-licensing with an emerging web of biotechnology
fines and a budding seaweed cooperative that could provide jobs
and incomes for up to 100 displaced fishermen.
--A 1995 project allowed a small salmon farmer to diversify into
halibut by supporting broodstock collection from which future
generations can be spawned. A follow-up grant is supporting
University research into the light- and depth-sensitive
breeding behavior and the nutritional needs of these
mysterious, and disappearing, beasts.
--Several dozen displaced fishermen are looking ahead this year to
new careers on the water as mussel farmers, following an NRAC-
supported education program that brought Canadian and European
raft culture technology to the hard-fished waters of the Gulf
of Maine.
--A University of Maine professor's 1997 breakthrough in groundfish
nutrition will pay off this year with America's first
commercially-significant haddock crop, thanks to research
funded in part by NRAC.
--A 1996 graduate student in Food Science has become an entrepreneur
in 1998 with a new line of sausages made from salmon scraps,
based on techniques he identified with NRAC assistance.
--NRAC also supports long term fish health research with particular
value to Maine's established salmon and oyster industries,
including projects to identify genetic susceptibility to, and
genetic probes for, Juvenile Oyster Disease, partial support
for an investigatory new animal drug coordinator (INAD) at FDA,
and the northeast's premier fish health workshop, now entering
its 6th year.
While these examples focus on projects that have impacted Maine, in
particular, a key element of the RAC approach is an emphasis on multi-
state proposals or on research that has impacts beyond a single species
or state. So, for example, the salmon sausage project actually has
potential applications for any value-added fish product subject to
oxidation and off flavors. The Maine projects, in fact, have been only
a small part of NRAC's impact on the development of a fresh and marine
water aquaculture industry between the Gulf of Maine and the Chesapeake
Bay. And what NRAC provides in the northeast, four other RAC's offer in
the south, the west and the heartland of the nation.
RAC projects have addressed waste management and effluent
reduction; improved low phosphorous feeds and acoustic ``seal scarers''
that replace lethal taking of predators. They have led the way in
demonstrating how aquaculture can be environmentally benign as well as
economically beneficial--how rural and water-dependent communities can
have payrolls and pickerel well into the future.
RAC-sponsored forums where industry and academic researchers sit
down together to hammer out a common research agenda have evolved into
efficient collaborative networks that can quickly marshal public and
private resources to find solutions in a rapidly changing world. The
RAC's have become a research infrastructure, a problem solving tool
that, with your continued support and the full authorized allocation of
$7.5 million, can make this the generation of Americans that farms the
sea, the next generation of Americans that feeds the world.
______
Prepared Statement of Kenneth E. Cline, Cline Trout Farms
Mr. Chairman and Members of the Subcommittee: My name is Kenneth
Cline. I am an owner of Cline Trout Farms, a family owned business
established in 1946. We produce trout for recreation markets in
Colorado, New Mexico, Wyoming, and surrounding states. I have served as
president of the National Aquaculture Association, The United States
Trout Farmers Association, and the Colorado Aquaculture Association.
Currently, I chair the Colorado Fish Health Board and am a member of
the Colorado Aquaculture Board. I have been a member of the Western
Regional Aquaculture Center Industry Advisory Council for the past
eight years.
In addition to the potential for aquaculture to provide food fish,
aquaculture also provides fish and services to recreation fisheries.
State and federal natural resource management agencies are adjusting
their priorities away from sport and recreation fisheries and toward
endangered species, biodiversity, and native species. Private
aquaculture provides fish and services for over one-third of Colorado's
billion dollar recreation fishing industry.
Research is needed for the aquaculture industry to keep pace with
increasing demand for its products and for the industry to respond to
environmental concerns. The Regional Aquaculture Centers have been very
successful in identifying research needs, coordinating research
efforts, and disseminating research results to industry. In September
of 1995 industry representatives from all of aquaculture met to discuss
the National Aquaculture Development Plan. The Regional Aquaculture
Center program was identified as the most positive government program
for aquaculture in the last ten years.
The success of the Regional Aquaculture Center system lies in
several strengths. First, the Regional Aquaculture Centers are industry
driven. Research needs are identified and prioritized by industry, and
research is monitored by industry so that industry research objectives
are accomplished. Second, the Regional Aquaculture Centers are very
successful in facilitating collaboration among institutions. Leveraging
of resources among institutions has resulted in a very high rate of
return on research dollars. Another strength is the regional structure;
which, along with the strong input from fish farmers, facilitates
responsiveness to the many diverse, and often local, research needs.
The Regional Aquaculture Centers have strongly demonstrated their
worth to our industry and to the national economy. This program is an
investment, not an expense, for the American public. It is unfortunate
that the Administration has proposed a 3 percent cut in funding. I urge
you to not only reinstate that 3 percent, but also to bring the
appropriation for the Regional Aquaculture Centers to the fully
authorized funding of $7.5 million per year.
Thank you for this opportunity for input.
______
Prepared Statement of William H. Banzhaf, CAE, Executive Vice
President, Society of American Foresters
Mr. Chairman, my name is William H. Banzhaf. I am the Executive
Vice-President of the Society of American Foresters (SAF). The more
than 18,000 members of the Society constitute the scientific and
educational association representing the profession of forestry in the
United States. SAF's primary objective is to advance the science,
technology, education, and practice of professional forestry for the
benefit of society. We are ethically bound to advocate and practice
land management consistent with ecologically sound principles. I am
especially pleased to submit comments on the President's proposed
fiscal year 1999 budget for the Department of Agriculture and Related
Agencies. I wish to thank the subcommittee for its continued support of
professional forestry and its continued support of SAF's priorities. We
will especially need your help this year to correct a mistake on the
part of the Administration in requesting the elimination of the
Forestry Incentives Program. I thank the Chair for the opportunity to
submit testimony on the Forestry Incentives Program, the Renewable
Resources Extension Act, and Department of Agriculture research
programs.
The public policy activities of SAF are grounded in scientific
knowledge and professional judgment. From this perspective we review
proposed budgets for forestry and related natural resource programs to
determine their adequacy to meet stated objectives and public needs.
forestry incentives program (fip)
As you know, the forest-related programs funded under the
Department of Agriculture largely affect the nation's 9.7 million
nonindustrial private forest landowners, who own 57 percent of the
nation's forestlands, which supply 48 percent of the nation's timber
harvest. A recent report by the National Research Council points out
that these owners are woefully underserved by both the private and the
public sector. This is critically important today because, as you are
aware, the level of timber harvest from federal lands has dropped
significantly in recent years, an important factor resulting in
increased harvests on other ownerships. Several programs within this
appropriations bill are important to ensuring that the shift of timber
demand to nonindustrial private lands doesn't impair their owners'
willingness or ability to produce a broad array of forest resources
sustainably over the long term.
Programs such as the Forestry Incentives Program (FIP) are needed
now more than ever. FIP's focus on reforestation helps keep large
tracts of land in continuous forest cover, helping to ensure long-term
forest benefits while providing habitat for wildlife, protecting soil
productivity, and enhancing water quality. We strongly oppose the
Administration's request to eliminate the Forestry Incentives Program
and reject their rationale that the program is not compatible with the
Natural Resources Conservation Service's (NRCS) strategic plan. Keeping
lands forested most certainly helps the NRCS meet its objectives of
protecting watersheds and soils. In fiscal year 1997, FIP provided
funding to help plant trees on more than 141,000 acres and helped
owners perform timber stand improvement on more than 22,000 acres.
Congress specifically reauthorized FIP through the 1996 Farm Bill, and
the NRCS has a statutory responsibility to carry out the program.
There is concern about the NRCS's administration of the FIP
program. It appears to many that the NRCS is not committed to the FIP
program. We encourage the USDA to reevaluate the transfer of this
program from the Farm Services Agency (FSA) to NRCS and request that
USDA consider either returning the program to the FSA or transferring
it to the Forest Service.
forestry research
The Society of American Foresters promotes public policies that
advance knowledge about the behavior and functioning of forest
ecosystems and their responses to specific actions and policies. SAP
believes forestry research is critical to understanding the
relationship between societal expectations for diverse needs and values
from the forest, and the capability of the forest to meet and sustain
those expectations. We advocate continued public and private funding of
research activities that address a broad variety of natural resource
concerns. Such knowledge, based on sound science, is vital for
resolving conflicts about forest policy and management. Two key
programs funded by this appropriations bill provide important research
dollars that can be used to benefit forest management across all
ownerships in this country.
The first is the Cooperative Forestry (McIntire-Stennis) Research
Program. This program supports research on forestry and wood fiber
conducted by the nation's public universities. University-based
research is an important part of the collaborative forestry research
effort involving federal, state, and industry scientists. McIntire-
Stennis research is critical to the development of new information and
technologies that increase not only the efficiency and productivity of
forest management on all forest ownerships for a wide range of forest
benefits, but also provide information for developing natural resource
management policy. As you know, McIntire-Stennis research funds are
granted directly to public colleges and universities on a matching
basis. This program has provided funding for research demands that have
not been met through other programs or in the private sector.
The second research program is the National Research Initiative
(NRI). This competitive grant program provides funding for research on
problems of national and regional importance in biological and
environmental sciences. The NRI awards grants on a matching basis to
university researchers in biological, environmental, and engineering
sciences to address critical problems in agriculture and forestry. The
SAF strongly supports this program and believes some of the funding
should be specifically directed at renewable natural resources
research.
renewable resources extension act program (rrea)
Finally, we are pleased that the Administration has requested
funding for the Renewable Resources Extension Act program (RREA) for
fiscal year 1999, and we applaud the action of this subcommittee in
restoring funding for RREA in spite of the Administration's request to
eliminate it in fiscal year 1998. The SAF supports this program, which
we believe helps in communicating ecologically sound technical advice
to landowners, foresters, and loggers. This advice improves the
productivity and management of nonindustrial private forests.
about the society
The Society of American Foresters, with about 18,000 members, is
the national organization that represents all segments of the forestry
profession in the United States. It includes public and private
practitioners, researchers, administrators, educators, and forestry
students. The Society was established in 1900 by Gifford Pinchot and
six other pioneer foresters.
The mission of the Society of American Foresters is to advance the
science, education, technology, and practice of forestry; to enhance
the competency of its members; to establish professional excellence;
and to use the knowledge, skills, and conservation ethic of the
profession to ensure the continued health and use of forest ecosystems
and the present and future availability of forest resources to benefit
society.
The Society is the accreditation authority for professional
forestry education in the United States. The Society publishes the
Journal of Forestry; the quarterlies, Forest Science, Southern Journal
of Applied Forestry, Northern Journal of Applied Forestry, and Western
Journal of Applied Forestry; The Forestry Source; and the annual
Proceedings of the Society of American Foresters national convention.
______
Prepared Statement of the Society for Animal Protective Legislation
We respectfully request the following appropriations and oversight
to permit these programs within the U.S. Department of Agriculture to
be carried out effectively.
$12 million for aphis' animal care program
At least $12 million is desperately needed for enforcement of the
federal Animal Welfare Act. The Act, passed in 1966 and amended in
1970, 1976, 1985 and 1990, is intended to ensure the protection of
millions of animals nationwide used in exhibition, the commercial pet
trade, experimentation, and during transportation.
Animal Care is responsible for enforcement of the Animal Welfare
Act, but their excellent efforts are on the verge of collapse due to
the failure of Congress to provide sufficient resources. The Animal
Care program has always been forced to function with less than needed
funds, as a result they are squeezing everything they possibly can out
of what Congress provides. Given the vital protection provided to
animals, it is time for Congress to provide a little support back to
Animal Care through a modest increase in appropriations. Shamefully,
current appropriations are below the fiscal year 1993 level:
Fiscal year Million
1993..............................................................$9.188
1994.............................................................. 9.262
1995.............................................................. 9.262
1996.............................................................. 9.185
1997.............................................................. 9.175
This decreased funding is impairing the ability of Animal Care to
fulfill its duties, leaving the animals and the Department vulnerable.
This year circus elephants were diagnosed with tuberculosis. This
serious potential health hazard to humans arid elephants must be
addressed by Animal Care. The plan calls for tuberculosis testing and
monitoring of all elephants covered under the Animal Welfare Act. More
work for the Animal Care staff!
The Animal Care field staff of 44 Veterinary Medical Officers and
30 Animal Care Inspectors must inspect to ensure compliance with the
Act, including provision of food, water, housing and veterinary
attention, at the more than 10,000 sites of dealers (random source
suppliers, breeders, brokers and operators of auctions), exhibitors
(zoos, circuses and carnivals), research facilities (hospitals,
pharmaceutical companies, universities and private firms), intermediate
carriers (airlines and railroads), and intermediate handlers (service
between consignor and carrier).
Approximately $800,000 in license fees currently go to USDA's
general treasury; at minimum, these funds should be provided as
additional funding to Animal Care. Animal Care is taking a get tough
attitude towards licensees and registrants who habitually violate the
Animal Welfare Act; in fiscal year 1997, violators of the Animal
Welfare Act were assessed more than $820,000 in fines. License
revocations and suspensions increased substantially.
Critical additional needs of Animal Care include:
Laptops for all inspectors (to facilitate data transfer and
storage).................................................. $350,000
Training (program implementation and computer instruction).... 120,000
Addition of 15 Veterinary Medical Officers.................... 1,243,000
Addition of 12 Animal Care Inspectors......................... 715,000
Tuberculosis testing/monitoring in elephants.................. 190,000
Cost savings in the existing Animal Care Program could be achieved
through the elimination of Random Source (USDA licensed Class B)
dealers who supply dogs and cats to research. Report language could
offer support to H.R. 594, The Pet Safety and Protection Act, sponsored
by Agriculture Committee Members Congressman Charles Canady and
Congressman George Brown. As you can see from the attached book, The
Animal Dealers: Evidence of Abuse of Animals in the Commercial Trade,
1952-1997, this legislation would greatly reduce USDA's regulatory
burden, while still allowing research to continue unhindered.
$900,000 line item for the animal welfare information center at the
national agricultural library
In 1985, Congress had the ingenuity and foresight to create the
Animal Welfare Information Center (AWIC) to serve as a resource for all
individuals involved in the care and use of animals in research
(scientists, veterinarians, caretakers, administrators, members of
Institutional Animal Care and Use Committees and USDA inspectors
responsible for enforcing the law).
The Center provides information on: (a) appropriate care for
animals including minimization of pain and distress, (b) reduction and/
or replacement of the use of animals in research where possible, (c)
preventing unintended duplication of experiments, (d) training for
employees in the laboratory, and (e) legal requirements regarding the
use of animals in research.
Its value to the research community has led to an ever-increasing
demand for assistance. However, AWIC has not received an increase in
appropriations during its 11 years, making it impossible to provide
services as needed. The Center has had to stop use of a work study
student and is facing the laying off of additional staff it will not be
able to afford. AWIC staff have responded to more than 24,000 requests
for specific publications and more than 2,500 request for reference
services. The Center produces a newsletter, now in its eighth year. It
also maintains a worldwide web site (http://www.nal.usda.gov/awic)
which is being used an average of 860 times per day!
An increase in appropriations to $900,000 provided as a line item
with report language preventing use of these funds for other purposes
is desperately needed. (The report language is necessary to stop the
siphoning off of funds by the National Agricultural Library.)
$500,000 for the horse protection act
APHIS Animal Care is in need of an appropriation of $500,000 to
maintain at least a minimal level of enforcement of the Horse
Protection Act (HPA). The HPA, passed in 1970 and amended in 1976,
prohibits the cruel practice of ``soring''. According to APHIS, soring
is defined as ``the application of any chemical or mechanical agent
used on any limb of a horse or any practice inflicted upon the horse
that can be expected to cause it physical pain or distress when
moving.'' Soring is done to give the animal an exaggerated gait.
Tennessee Walking Horses are the common victims.
Due to a lack of basic funding, enforcement of the Horse Protection
Act is being increasingly turned over to industry. Unfortunately,
industry has demonstrated a failure to achieve the level of enforcement
of the unbiased, well-trained, professional inspectors who work for
Animal Care. The inspectors from industry are called ``Designated
Qualified Persons''. The rate at which DQP's turned-down horses for
soring in fiscal year 1996 was 1.09 percent, less than half the rate of
government inspectors who had a turn-down rate of 2.55 percent.
Nearly 600 horse shows took place in fiscal year 1996, yet Animal
Care inspectors were only able to inspect 22! Additional resources are
needed to permit Animal Care inspectors to attend more shows thereby
ensuring significantly stronger compliance with the HPA.
USDA possesses thermography equipment which is used to look for
abnormal heat indications as a means to detect apparent soreness.
Resources are needed to permit training of inspectors to maximize use
of this important enforcement tool. Thermography can greatly strengthen
enforcement efforts by providing an accurate, scientific determination
of soreness in horses and by serving as a useful deterrent against
would-be violators.
increased oversight of wildlife services
Animal Damage Control changed its name to Wildlife Services (WS) to
signify a re-birth of the program with increased effectiveness and an
improved consciousness. Unless key changes are made, Wildlife Dis-
Services may be a more appropriate title. We, therefore, hope that
Congress will provide increased oversight of both the research and
field operations of Wildlife Services.
A basic principle of WS is supposed to be consideration of non-
lethal methods of control prior to the conduct of any lethal control
activities. Last year, WS was preparing a non-lethal report form as a
means of documenting efforts at non-lethal control. We supported use of
this form. However, WS announced recently that it has curtailed
development and implementation of the reporting form and instead ``will
work with the National Agricultural Statistics Service to obtain
information regarding the extent to which WS cooperators use non-lethal
control methods.'' No reason for this change has been offered. We
strongly object to WS' abandonment of the reporting form which would
have provided accountability here to fore lacking in the program.
A fundamental matter is continued use of steel jaw leghold traps by
WS. 30,000 steel traps are owned by WS for use in predator control.
Polls reveal that the vast majority of Americans want these traps
banned, and the American Veterinary Medical Association has condemned
them as ``inhumane''. A growing list of states are prohibiting or
severely restricting their use. A switch to less cruel methods must
take place if WS wants to retain the ability to manage predators when
necessary.
In an international trapping agreement reached on December 11,
1997, between the U.S. and the European Union, the U.S. agreed to phase
out use of ``conventional steeljawed leghold restraining traps'' within
6 years. WS has the responsibility of complying with the U.S.
obligation by ending its use of these traps. Steps should be undertaken
immediately.
Last year Congress provided $350,000 for trap testing ``to
determine the most humane design while maintaining efficiency.''
(Senate Report language). The testing was necessary ``to meet U.S.
obligations under an international agreement for trap standards.''
(House Report language) The U.S.-E.U. agreement was reached in response
to E.U. Regulation 3254/91 against the leghold trap. Under the terms of
the agreement, in addition to phasing out use of leghold traps, the
U.S. agreed to implement trap standards within 8 years.
Instead of conducting trap research with the funds, Wildlife
Services passed the bulk of the monies received from Congress on to the
International Association of Fish and Wildlife Agencies (IAFWA). The
research being conducted under the auspices of the IAFWA needs careful
scrutiny as we are gravely concerned that the funds are being misused.
The only traps being tested are different types of steel jaw
leghold trap and the EGG trap (a painful, footholding trap used on
raccoon). We were shocked to discover that the control traps for the
studies are standard steel jaw traps. There is no excuse for continued
use of these traps. Box traps are extremely efficient at capture of
raccoon, and they cause virtually no injuries to the animals, thus we
fail to understand why they are not being considered. Further, since
box traps are such a successful trap both at minimizing injuries as
well as at catching animals, we fail to see the need for conducting
painful tests of leghold traps on approximately 800 raccoon.
Although USDA was presented with proposals for testing of
footsnares on coyote and killing traps on muskrat, the Department
elected to spend their money on leghold traps, that have been tested
innumerable times over the years. By narrowing their testing to leghold
traps, they guarantee results concluding that a leghold trap is
acceptable. No further funding should be provided for trap testing
while the process for determining which traps are tested and why is
examined.
______
Prepared Statement of Peter M.P. Norris, President, SPIN-2
Mr. Chairman, thank you for this opportunity to present a short
statement for the hearing record for outside witnesses. The subject of
my statement concerns the potential for improved accuracy of
agricultural usage and yield estimates in USDA's food and fiber supply
and demand reports.
There shortly will be a new data source available for high
resolution remote sensing information. SPIN-2, which stands for ``Space
Information/2-meter'', is a joint commercial venture with
SOVINFORMSPUTNIK, the commercial division of the Russian Space Agency,
utilizing Russian mapping satellites and launch vehicles. SPIN-2 is
located in Washington, D.C., and is wholly owned by Aerial Images, Inc.
of Raleigh, North Carolina. At two meter resolution, SPIN-2 data is 250
percent higher resolution than previously available through commercial
remote sensing channels. Ten meter resolution stereographic SPIN-2 data
is used to produce the most accurate digital elevation models in the
world made from satellite data.
The first launch and recovery of data was highly successful. The
catalog of data will be available through the Internet, utilizing
Microsoft's Terraserver. The concentration of the first mission was the
Southeastern United States and Southern California. However, large data
sets were also gathered from the following regions: China, Brazil,
Australia, the Middle East and Canada. These regions include major crop
production areas. Many local, several state, and international
governments have placed orders for the data. The data will be used in
local planning, assessment and decision making regarding land use,
natural resource assessment, and environmental change.
What does this mean to the Department of Agriculture and USDA
missions? There are two answers to this question.
(1) USDA has the responsibility of producing world food and fiber
supply and demand estimates. These estimates heavily influence futures
prices of commodities, and also impact decision making on planting for
numerous crops. The accuracy of USDA's supply and demand estimates
depends on the refinement of the data from which the estimates are
based. Today's estimates are derived from technology and equipment that
have been eclipsed by several generations of improvement. Two meter
resolution SPIN-2 data offers information not available through current
methods (a) by providing refined field boundary definition, a major
element in determining crop yields, and (b) crop differentiation by
interpretation of feature texture on images. The accuracy of crop and
growing condition estimates through the use of SPIN-2 data can be
improved by 15 percent to 25 percent.
(2) USDA has the responsibility of managing vast areas of natural
resources through its conservation programs and the U.S. Forest
Service. While the Forest Service is not funded through this
appropriations bill, USDA decisions on Forest Service programs depend
heavily on input through the portions of USDA that are funded through
this bill. Improved information on the environment would help provide
more accurate assumptions to Department officials in program decisions
that were environmentally fragile or subject to change. USDA's
stewardship of natural resources would be improved through better
information and a more accurate data base.
Some federal agencies are becoming aware of SPIN-2's resource base,
and are exploring ways in which the new information can be applied to
the better management of their programs. We think USDA should be among
those who utilize this new source of information.
The key aspect of my statement relates to the timely availability
of information. If USDA were to access the SPIN-2 information this
year, savings could be realized in the current growing season, and
subsequent marketing season, as opposed to waiting for later data that
could not be used for the current growing season, both domestically and
world wide. USDA's timely access to this information would, in our
estimate, result in real-time savings and more accurate forecasts one
year in advance of later systems.
Mr. Chairman, that concludes my brief remarks. If there are any
questions regarding my testimony, we would be pleased to address them.
Thank you again for this opportunity to present these views in the
hearing record.
______
Prepared Statement of William K. Quarles, Vice President, Corporate
Relations and Counsel, Sunkist Growers
Chairman Cochran, Senator Bumpers, Members of the Subcommittee,
Sunkist Growers appreciates this opportunity to bring to the
Subcommittee's attention several matters of great importance to Sunkist
Growers and to American agriculture as you undertake the difficult task
of crafting the agriculture appropriations measure for the final fiscal
year of this millennium.
As you know, Sunkist Growers is a non-profit, farmer-owned
marketing cooperative serving 6,500 citrus farmers in California and
Arizona. For 105 years Sunkist has successfully marketed fresh citrus
fruit grown by its farmer-members. Today, Sunkist Growers produce
approximately 65 percent of the oranges, lemons, grapefruit and
tangerines grown in Arizona and California. Eighty percent of our
member's farms are fewer than 40 acres, truly small farms by U.S.
standards. Our cooperative enjoys a long history of dedicated effort to
create and develop markets around the world for our U.S.-grown citrus.
Sunkist exports currently account for nearly 45 percent of our farmers'
annual fresh fruit sales. Competition is intense with 18 countries now
producing for the international market. Conditions in those markets is
often inequitable and the terms of trade under which we have to compete
are often unfair. For these reasons we need the continued help and
partnership of our government.
market access program
Concerning the U.S. Department of Agriculture programs that assist
American farmers export their products, we urge the Committee to
continue to fully fund at $90 million the very effective, essential and
extensively reformed Market Access Program (MAP) which provides at
least some limited help to American farmers confronted by the highly
competitive and often inequitable market environments beyond our
borders. The many reasons why American farmers need this vital USDA
help to secure and maintain market access for American agricultural
products continue to validate this program. Unfair trade barriers to
U.S. products have not been eliminated. Increasingly we are having to
counter bogus sanitary and phytosanitary allegations concerning U.S.
agricultural products. High protectionist tariffs against American-
grown fruit in key markets have not been reduced. In a direct challenge
to displace American-grown commodities in markets around the world,
foreign governments like the European Union have significantly
increased market promotion assistance for their countries' competitor
products. Unlike the U.S., many foreign governments continue to
subsidize the transportation costs of our foreign competitors to help
them move their products to market and be able to undercut our prices.
At a time when America is once again confronted by massive trade
deficits, American agriculture continues to be the one industry sector
contributing a positive trade balance for our country. This effort
needs to be fostered not undermined.
The bottom line is this--if American farmers didn't have to contend
with this host of anti-competitive, trade-distorting, tariff-imposed,
foreign government-subsidized, discriminatory practices and inequitable
conditions in the global marketplace, we could deliver the very best
products at the most competitive price anywhere in the world. But
reality is we do have to contend with these unfair conditions and we
need our government's help to do so.
We urge the Committee to continue to support full funding for the
Market Access Program at USDA.
foreign agricultural service
The work of USDA's Foreign Agricultural Service (FAS) is a critical
component in America's global effort to compete with our products in
overseas markets. FAS, with its corps of dedicated and very able
professionals, both here and abroad, provides insightful information
and guidance in overcoming trade barriers, responding to the actions of
foreign competitors, and intervening to address unfavorable regulatory
policies of foreign governments which negatively impact American farm
exports into those markets. During the past year alone, FAS actions on
behalf of our industry have been critically important in Korea, Japan,
China, Thailand, Mexico, Chile, Argentina and other countries. The
reality of a globalized marketplace increases FAS' workload and makes
their that much more significant to American agriculture. We urge the
Committee to provide increased resources to the Foreign Agricultural
Service to meet this challenge in the year ahead. Specifically, we
strongly support USDA's request for $145.6 million for FAS operations
in fiscal year 1999. The workload and responsibilities of FAS will only
increase in the days ahead as we commence in 1999 the next round of WTO
negotiations on agricultural trade.
animal and plant health inspection service
Despite progress in the Uruguay Round of trade negotiations, those
still intent upon maintaining protectionist barriers now resort to
sanitary and phytosanitary claims to thwart successful importation of
U.S. agricultural products like our citrus fruit. SPS issues have
become increasingly significant in determining the course of
international trade for agricultural products. SPS issues, including
pest quarantines, have with growing regularity become the linchpin of
trade negotiations in determining market access for fresh produce. For
example, the U.S. citrus industry's efforts to gain market access to
the huge and potentially profitable consumer market in China is
dependent upon the success of USDA's Animal and Plant Health Inspection
Service (APHIS) in negotiations with its Chinese counterpart agency
(CAPQ) to satisfactorily address concerns about periodic outbreaks of
Mediterranean fruit fly in California and Florida. Only when these
technical issues are resolved will market access efforts prove
successful. Similar technical and scientific SPS issues have become
pivotal in various markets for a host of American commodities. As a
result, the manpower and resources of agencies like APHIS and ARS are
spread dangerously thin.
Concerns about proper management of production areas, assurance of
swift eradication of destructive pests and diseases and mandatory
certification that the fruit exported is pest free have become critical
components of international trade. The surest way for us to have
foreign markets slam shut their doors to our products is the advent of
an exotic pest like Mediterranean fruit fly in or near our production
areas. That is why USDA's Agricultural Quarantine and Inspection
Service (AQI) which seeks to prevent exotic pests and diseases from
entering the U.S. from abroad is vitally important to the health and
well being of agriculture in California and Arizona.
Sunkist Growers urges the Committee to fully fund APHIS at the
requested fiscal year 1999 amount of $461,352,000 which includes
$237,642,000 for Plant Protection and Quarantine (PPQ); $30,648,00 for
AQI-appropriated; $6,685,000 for Pest Detection; and $22,322,000 for
Fruit Fly Exclusion.
Contrary to its actions in fiscal year 1997 and 1998, Congress
should, we believe, appropriate the full $100 million for the AQI-User
Fee budget. The reduced appropriations by Congress in fiscal year 1997
and fiscal year 1998, totaling $14 million, imposed a severe hardship
on these inspection and enforcement programs so vital to assuring pest
protection for vulnerable U.S. farming areas like California where we
are already witnessing increased volumes of contraband produce
surreptitiously entering the U.S. If not fully funded, further
reductions in the appropriated amount will likely reduce already
deficient inspection levels at ports of entry and increase
significantly the risk of exotic pest and disease.
Similarly we strongly urge approval of the USDA budget request for
Fruit Fly Exclusion and Detection. This program carries out all fruit
fly trapping in Florida, Texas and California; the sterile fly release
program to combat Medfly in California; the Mexican fruit fly program
in the lower Rio Grande Valley in Texas; the Medfly programs in Mexico
and Guatemala; and the sterile fruit fly rearing programs in Hawaii and
Guatemala. This is preventive action needed to avoid the costly
incidence of exotic pest infestation that destroys export markets
because of quarantines and imposes tremendous costs of eradication both
on industry and government.
arizona citrus research project
Last year, the Committee provided $250,000 to the University of
Arizona for research of attacking the problem of brown wood rot fungus
citrus trees in southern Arizona. Nearly 40 percent of the commercial
lemon groves in the region, which now includes the Coachella Valley in
southern California, have been infected by the Coniophora eremophila
fungus which is indigenous to the Sonora Desert. We ask the Committee
to continue the same level of funding for this research, which will be
the second of a planned three year effort.
Mr. Chairman, we appreciate the opportunity to apprise the
Committee of our interests and concerns about the fiscal year 1999
agriculture appropriations legislation. Recognizing the significant
reductions in funding levels imposed on agriculture programs over the
last several years relative to other sectors of the federal budget, it
is our fervent hope the Committee will ably defend existing programs
and work to meet the needs identified as important to American farmers.
______
Prepared Statement of A. Ellen Terpstra, President and CEO, USA Rice
Federation
My name is Ellen Terpstra and I serve as president and chief
executive officer of the USA Rice Federation. I am submitting this
statement in behalf of the Federation to recommend several items of
particular concern to the organization that we would like to see
included in the fiscal year 1999 appropriation bill for the Department
of Agriculture (USDA). The USA Rice Federation is a trade association
that consists of producers from States that are responsible for
production of over 80 percent of the rice grown in the United States,
as well as practically all the rice millers in the United States,
wherever they may be located, and allied organizations.
I would like to preface my remarks to thank the Subcommittee for
its actions in the past in behalf of U.S. agriculture. Those engaged in
agricultural production, processing, and marketing of U.S. agricultural
products owe much to the efforts of the Subcommittee. When the farm
bill was enacted in 1996, it heralded the end of an era for government
supports which are gradually being phased down over a seven-year
period. Producers are adjusting to the new environment where they must
depend more and more on market forces for income. Increasingly they are
reliant on export markets and research to maintain their competitive
edge in world and domestic markets. Accordingly, we strongly recommend
that appropriations for the export programs and research programs be
maintained at current levels, if not increased. They should not be
reduced as has been recommended by the Administration in several
instances.
1. For example, the Administration has recommended a drastic
reduction in the appropriation for title 1, Public Law 480 from the
current appropriated level--a reduction of more than 50 percent from
$245 million to $112 million that would practically phase out the
program completely. As the Administration has stated in its proposed
budget, priority under title 1 is given to agreements which provide for
the export of U.S. agricultural commodities to those developing
countries which have demonstrated the potential to become commercial
markets, among other things. Despite severe budgetary limitations in
recent years, title 1 has remained vital and provided the stimulus to
developing strong commercial markets for U.S. agricultural commodities.
This concessional program continues to be America's ticket of admission
into new markets for the future. It is particularly important today as
the ``Asian flu'' has caused a reduction of over $2 billion in
anticipated exports of U.S. agricultural commodities.
2. Another item for which we recommend additional support is the
appropriation for the Foreign Agricultural Service (FAS) which provides
funding for the foreign market development program. It is our
understanding that to maintain this program at current levels it will
be necessary to increase the appropriation for FAS slightly. In the
past the FMD program has been sustained in part by funds from a reserve
that is almost exhausted and will no longer be available to supplement
the FAS appropriation. This program is operated on a cost share basis
with cooperators and has shown success in maintaining and expanding
markets abroad. This program, like the title 1, Public Law 480 program,
is part of the Department of Agriculture's ``arsenal'' in assuring that
the U.S. can remain competitive in world markets.
3. The USDA research program is another area that is of great
importance to the rice industry. Construction of a National Rice
Germplasm Evaluation and Enhancement Center at Stuttgart, Arkansas, is
nearing completion. The work of this Center will enable the rice
industry to improve efficiency and yields. The current year's
appropriation bill provides an additional allocation of $700,000 in
base funding for the Center's program of work from the appropriation to
the Agricultural Research Service (ARS). However, the Administration
eliminated this allocation in base program funds from its recommended
fiscal year 1999 appropriation bill. Therefore, this allocation of
$700,000 needs to be restored for fiscal year 1999, and an additional
amount of $800,000 in program funds should be provided to complete
staffing of the Center in fiscal year 1999. We urge that this
additional allocation in a total amount of $1.5 million be provided
from the appropriation to ARS to fully fund the Center's operations in
the next fiscal year.
4. Finally, we wish to express support for maintaining at current
levels the existing USDA program to control blackbird damage to rice
producers and others. The Administration's proposed budget would reduce
the appropriation for the animal damage control activities, now part of
the Wildlife Services Operations. The USDA has reported that blackbirds
are the most frequently reported source of wildlife damage throughout
the United States causing annual damage to a variety of U.S.
commodities and to livestock feedlots and aquaculture. They congregate
in large roosts where they also cause health, aesthetic and nuisance
problems in addition to agricultural losses. USDA is constantly
conducting research and testing methods to better control blackbirds,
and adequate resources are needed to continue this work.
We appreciate the opportunity to advise you of the recommendations
of the USA Rice Federation and would appreciate it if you would include
this statement in the record. Thank you again for the help you and the
Subcommittee have provided the rice industry in the past.
______
Prepared Statement of the U.S. Agricultural Export Development Council
U.S. agricultural exporters want to compete on a level playing
field. However, the large amount of foreign government manipulation of
markets and production means U.S. agricultural exporters need
Washington's support to make this happen. The record shows that U.S.
agriculture is serious enough about this public-private partnership to
contribute significant amounts of its own resources to the effort.
Further, U.S. agriculture and the U.S. Department of Agriculture (USDA)
are using strategic planning, program evaluation, quantifiable goals,
and a competitive award process to ensure that taxpayer's money is
being used in a way which generates the biggest returns for the U.S.
economy and its 1.1 million citizens who depend on a healthy
agricultural export sector for their livelihood. The U.S. Agricultural
Export Development Council (USAEDC) respectfully urges this
subcommittee to fully support all USDA export promotion efforts in the
fiscal year 1999 budget, especially the FMD program at a level of $30
million, and an MAP program at $90 million. We also urge the
subcommittee to support a strong USDA Foreign Agricultural Service
(FAS), our partner in promoting increased U.S. agricultural exports.
First and foremost, it is important to revisit the role
agricultural exports play in the health of our national economy and the
well being of our citizenry. Every $1 billion in agricultural exports
supports approximately 20,000 U.S. direct and indirect jobs. With our
$57 billion in agricultural exports in 1997, this means a successful
U.S. agriculture export effort was responsible for 1.1 million jobs.
According to the U.S. Department of Agriculture Foreign Agricultural
Service (FAS), more than ten percent of this total work force is in
California (137,000 jobs). Iowa and Texas have the second and third
largest number of agricultural export related jobs at 96,000 and 77,000
respectively. Agricultural exports play an important role in every
region of the country, including the South (189,000 jobs), the Pacific
Northwest (67,000 jobs), and the Northeast (24,300 jobs). These jobs
not only ensure family incomes, but help grow the national tax base and
thus increase revenue to the Treasury, contributing to the reduction of
our national debt. It is clear that without a healthy agricultural
export sector, we all lose.
Ensuring the long-term vitality of U.S. agricultural exports is the
reason the U.S. Agricultural Export Development Council (USAEDC)
exists. We are a national, non-profit, private sector trade association
funded solely by our members. Our nearly 80 members are U.S. farmer
cooperatives and agricultural trade associations who in turn represent
the interests of farmers and agribusinesses in every state of the
Union. Our members represent producers of both bulk and high-value
processed products, including grains, fruits and vegetables, cotton,
livestock, dairy products, seeds, fish, wood products, wine, poultry,
nuts, and rendered products among others.
Our members continually strive to ensure the United States remains
one of the most active agricultural exporting countries in the world.
We proudly produce among the world's highest quality products as
evidenced by our ability to be one of the few sectors of the U.S.
economy to consistently run a positive balance of trade. In 1997, U.S.
agriculture racked up an impressive year in exports: $57 billion in
sales to more than 40 countries.
the world agricultural playing field is tilted against u.s. exporters
Unfortunately, record exports do not tell the whole story. U.S.
agriculture has done well, but international conditions are
increasingly competitive. Foreign governments are bolstering
agricultural production, putting the United States at a competitive
disadvantage in foreign markets. With the demise of the Cold War, more
and more countries have turned their attention to increasing support
for agricultural production for both their domestic and export markets.
Through their spending and production decisions, foreign governments
have strengthened traditional, and created new, competitors for U.S.
exports.
U.S. exporters are also encountering a rapid increase in the
proliferation of new non-tariff barriers to agricultural products. With
the Uruguay Round's move to reduce tariffs, many countries have turned
to sanitary and phytosanitary requirements as barriers to market entry
of U.S. agricultural products. Although said by their proponents to be
objective, many of these sanitary and phytosanitary barriers are in
actuality an attempt to use scientific data (or lack thereof) to
establish import regimes which effectively halt or severely restrict
U.S. imports. The recent EU uproar concerning U.S. genetically modified
corn and soybeans is a perfect example.
A myriad of other types of non-tariff barriers exist. FAS and its
overseas offices have gathered plentiful information on the numerous
cases of foreign assistance for agricultural production as well as
barriers to trade which prevent U.S. agriculture from reaching the
exports levels of which it is capable. The National Trade Estimate of
the Office of the U.S. Trade Representative catalogues this loss to
U.S. agricultural exports from unfair foreign competition. Despite a
significant commitment of their own resources, the U.S. private sector
cannot overcome such an extensive amount of barriers alone.
a u.s. public-private partnership is necessary and appropriate
Given the magnitude of the task, it would be impossible to expect
either the U.S. private sector or the U.S. public sector to be able to
remedy the unfair competition which U.S. agriculture faces overseas on
their own. In the past, U.S. agriculture has worked successfully with
the U.S. Government to remedy foreign unfair competition and market
access barriers which have prevented U.S. exports from fulfilling their
potential. To those who say there is no appropriate role for Washington
in this fight, former U.S. Under Secretary of Commerce Jeffrey Garten,
now dean of the Yale School of Management, sums up the situation quite
well: ``In the best of worlds, governments ought to get out of this
business [of export promotion] altogether. But the marketplace is
corrupted by the presence of government. So do you sit on the side and
pontificate about Adam Smith, or do you enter the fray?'' \1\ Mr.
Garten argues that Washington must enter into the battle or risk losing
U.S. jobs.
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\1\ ``Don't Be Salesmen'', The Economist, Jan. 2, 1997.
---------------------------------------------------------------------------
In the fiscal year 1999 Federal Budget, USDA proposes funding a
number of programs for U.S. agriculture which help the sector overcome
these foreign trade barriers and market distortions. USAEDC commends
the actions of this subcommittee in the past to fund these programs. We
strongly support efforts by this Congress and the Administration, as
provided for in the fiscal year 1999 Federal Budget, to again provide a
dynamic arsenal of programs to boost the efforts of U.S. agricultural
producers to maintain current, and establish new, markets around the
world.
The Federal Agricultural Improvement and Reform Act of 1996 (the
1996 Farm Bill) re-authorized and refocused a number of important
export-related programs to help achieve the specific U.S. agricultural
export goals contained in the Act itself. It is essential that the full
range of USDA's export programs be fully funded and aggressively
implemented this coming year, including the Foreign Market Development
(FMD) program and the Market Access Program (MAP).
Nowhere is the record of success of the public-private partnership
move evident than in the FMD and MAP programs. USAEDC members consider
these programs the ``heavy artillery'' in the USDA arsenal. These
complementary programs have been instrumental in our record export
performance. The Foreign Market Development Program is aimed at long-
term marketing efforts, i.e., making infrastructural changes to foreign
markets through training and educational efforts among members of the
foreign trade. Successful efforts result in a modification of the
foreign market structure so that U.S. products become an available,
attractive, well understood alternative to other sources of competing
products. FMD activities help the foreign importer, processor, and
retailer to understand not only how to properly store, handle, process,
and market the U.S. product, but also to appreciate its unique
characteristics, high quality, and reliability of supply.
The FMD program helps create new markets for U.S. agricultural
exports. For example, as a result of FMD-funded market development
efforts by the U.S. Beef Breeds Council and the American Shorthorn
Association--one of their seventeen U.S. partner associations
contributing their own resources to this program--150 head of U.S.
breeding beef cattle departed in 1996 for China. This was the first-
ever shipment of U.S. purebred cattle breeders to China. Now that an
agreement has been reached between Washington and Beijing on a health
regulation protocol, further purchases are expected. And, a Chinese
buying team made inspections and selections for a second shipment
completed within the first half of 1997. Without the FMD program, the
Council does not believe they would have had the opportunity or
resources to establish this new market for U.S. cattle. With the
sustained effort of the U.S. cattle industry and the FMD program, China
could become a multi-million dollar market for U.S. cattle exporters in
the near future.
The FMD program helps expand existing markets. Last year, the
American Forest & Paper Association (AF&PA) succeeded in having the
Government of Japan accept U.S. grade stamps for softwood lumber, a
major non-tariff barrier to U.S. value-added wood products exports to
Japan. AF&PA and the Western Wood Products Association--one of AF&PA's
four U.S. partner associations contributing their own resources to this
program--have been able to work with the Japanese for almost ten years
on this issue. As the number one export market for U.S. wood products,
Japan is currently a billion dollar market for the U.S. wood products
industry and is expected to expand further with this major development.
Without it, U.S. exports would have been lost to the Canadian wood
industry which has already had its grade marks accepted by Japan. FMD
resources, combined with those of the U.S. wood products industry, made
this U.S. export expansion possible.
The Market Access Program (MAP) is the complement to the FMD
program. Where the FMD program is aimed at long-term market
infrastructural change, MAP targets more immediate, shorter-term market
opportunities. MAP funds are often used for consumer promotion efforts
to create or capitalize on new trends in foreign consumption.
Activities tend to be targeted at the foreign consumer, increasing
their awareness and level of comfort with the imported U.S. product.
Consumer promotions have taken the form of in-store promotions,
contests, advertising, and cooking demonstrations to name but a few.
Numerous examples of both successful FMD and MAP programs are contained
in the attached pamphlet, ``A Working Partnership Builds Markets
Abroad, Creates U.S. Jobs,'' which catalogues USAEDC member successes
with both programs.
Therefore, USAEDC strongly supports an fiscal year 1999 FMD funding
level of $30 million. This amount does not grow the program, but keeps
it at a level U.S. agriculture feels is necessary to support meaningful
export promotion. It is consistent with recent funding levels of the
program following years of program budget reductions. In addition,
USAEDC strongly supports a fiscal year 1999 MAP funding level of $90
million.
It is important to realize that the program participants put up
their own money to participate in these programs. As such contributions
are part of the rules of both the FMD and MAP programs, no one is
getting a ``free ride.'' Program participants are required to
contribute their own cash and manpower to run these programs. Thus, the
program participants have just as much, if not more, impetus to conduct
responsible and effective FMD and MAP marketing programs. For example,
in fiscal year 1995 (the most recent date available), USDA reports that
U.S. program participants contributed over $60 million of their own
funds to match the $92 million in MAP funds expended. Thus, U.S.
agriculture contributed 65 cents for every MAP program dollar used. The
FMD ratio is even higher, with U.S. agriculture contributing $1.12 for
every FMD program dollar used in fiscal year 1996. These numbers
clearly illustrate the private sector's strong belief that the FMD and
MAP programs are essential, and that the public-private partnership
approach is effective.
U.S. agriculture is also active on other fronts to maximize
opportunities for export increases, e.g., our public-private
partnership with Washington extends into the trade policy arena. U.S.
trade policy efforts have met with success in opening new markets to
U.S. agricultural products. We are encouraged that the Administration
appears set to continue this effort, as evidenced by Acting U.S. Trade
Representative Charlene Barshefsky's comments to the House
Appropriations Commerce, Justice, State Subcommittee March 14, 1997,
indicating that increasing U.S. agricultural exports will be one of her
top priorities.\2\ However, trade policy alone is not enough. Bringing
down barriers to trade is only truly effective at increasing U.S.
agricultural exports when followed by intensive marketing efforts. The
FMD and MAP programs help U.S. agriculture do just that.
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\2\ ``China Dominates Barshefsky Hearing,'' Annie Tin,
Congressional Quarterly Daily Monitor, March 17, 1997, on-line service.
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fine tuning of the fmd and map programs has enhanced effectiveness
USAEDC members are as concerned as anyone else in America about the
federal budget deficit and the long-term fiscal health of this country.
The public-private partnership in the FMD and MAP programs allows us to
do something about it, namely increase U.S. agricultural exports beyond
that which U.S. agricultural interests would be able to do on their
own. USDA's own evaluation efforts indicate that for every federal
dollar spent on agricultural export promotion, $16 worth of exports are
generated. In addition, USDA program rules require all program
participants to conduct independent annual evaluations to determine the
past impact and future direction of their marketing programs. This
evaluation is in addition to that conducted independently by many of
the associations themselves as part of their own strategic planning.
Program evaluations are reviewed jointly by USDA and program
participants to determine the appropriate promotional programs for
particular markets in the future. These evaluations are evidence that
USDA and program participants are serious about getting the best
possible return on FMD and MAP funds.
Both generic and branded promotion have a place in marketing U.S.
agricultural products abroad. Depending on the type of product and
foreign market involved, branded promotion can be more effective than
generic promotion as a way to increase U.S. farmers' exports. In fiscal
year 1997, 100 percent of FMD funds and more than 70 percent of MAP
funds were awarded for generic marketing efforts overseas. More than 80
percent of MAP branded marketing funds went to U.S. farmer cooperatives
and small agribusinesses which met the Small Business Administration's
definition of a ``small business.'' In accordance with recent program
reforms, in fiscal year 1998 only farmer cooperatives and small
businesses are eligible to receive MAP branded promotion funds.
Additionally, all applicants--whether large or small, non-profit or
corporate, for FMD or MAP programs--must go through a rigorous
competitive award process for program funds. Recent program reforms
have resulted in application and allocation criteria being much more
widely known and transparent for all potential applicants.
USDA has also made other changes to the FMD and MAP programs over
the past several years in response to General Accounting Office and
Office of Management and Budget recommendations to ensure the best
possible return to the U.S. taxpayer and the U.S. Treasury. Changes
also reflect public comment on various proposed changes published in
the Federal Register. These changes include: per the Government
Performance and Results Act, changes to evaluation procedures and
demonstrations of additional sales as a result of the programs; a
reduction in paperwork requirements; the addition of an appeal
procedure for compliance findings; and the expediting of routine
administrative issues by delegating approval authority to lower levels
within FAS. FAS is to be commended for its work in implementing these
changes as well as its continuing efforts to support efforts by U.S.
agriculture to expand our exports. A continued strong and well-funded
FAS is an important part of our successful public-private partnership.
The U.S. Agricultural Export Development Council (USAEDC)
appreciates this opportunity to submit written testimony in support of
an aggressive U.S. effort in fiscal year 1999 to increase U.S.
agricultural exports, specifically with an FMD program funded at $30
million, and an MAP program funded at $90 million.
______
Prepared Statement of the U.S. Apple Association
On behalf of the U.S. apple industry, the U.S. Apple Association
appreciates the opportunity to provide comments on the appropriations
for the U.S. Department of Agriculture (USDA) for fiscal year 1999.
Our focus is on four agencies of the Department: the Agricultural
Research Service (ARS), the Foreign Agricultural Service (FAS), the
Cooperative State Research, Education, and Extension Service (CSREES)
and the Agricultural Marketing Service (AMS).
The U.S. Apple Association is a non-profit national trade
association representing all segments of the U.S. apple industry. Our
membership includes 30 state organizations representing approximately
9,000 producers and over 450 individual firms which handle and market
the bulk of the nation's apples. Apples are grown commercially in 35
states, with gross returns to growers last year totalling $1.7 billion.
Top producing states include Washington, New York, Michigan,
California, Pennsylvania, Virginia, North Carolina, Oregon, Idaho and
West Virginia.
foreign agricultural service--market access program (map)
All segments of the U.S. apple industry benefit directly from the
use of the export promotion funds, which build markets and demand for
our domestically produced product, and indirectly strengthen our
markets in this country as well. While many FAS activities are
important to the apple industry, the U.S. Apple Association believes
the Market Access Program (MAP) in particular should be fully funded at
its current authorized level of $90 million. This program is consistent
with new international trade rules, helps small businesses, and is
effective in promoting U.S. exports.
After nearly a decade of multinational trade negotiations in the
Uruguay Round, the global agricultural community is facing substantial
trade liberalizing policies. One of the few areas in which government
policies can still effect agriculture is export promotion. We support a
strong MAP, which is permissible under the Uruguay Round international
trade rules.
The U.S. apple industry faces severe competition from around the
globe. Most competitors receive significant government funds for
generic promotions. Both production and exports from European Union
(EU) countries receive government subsidies. Foreign governments spend
approximately $500 million on export promotion and market development.
With apple production increases occurring around the world, already
severe competition is expected to intensify further.
Apple industry members believe in agricultural export programs and
back their support of these programs with cost-sharing contributions of
30 to 75 percent of the total. According to USDA estimates, every $1 in
export promotion funds translates into $16 in additional agricultural
exports. MAP is an investment by the federal government that generates
substantial returns to the Treasury and helps American business. MAP
has been a sound investment in this nation's agricultural economy.
California, Colorado, Connecticut, Idaho, Maine, Massachusetts,
Michigan, New Hampshire, New York, Pennsylvania, Utah, Vermont and
Virginia are members of the U.S. Apple Export Council (USAEC). USAEC
manages the export promotion activities of these states.
Each year export markets become increasingly important to apple
businesses and related industries. U.S. apple production has steadily
grown over the past decade, and these new markets provide outlets for
this increased production. It is vital not only to the apple industry
but agriculture as a whole to continue trade promotion efforts to help
U.S. producers and exporters take full advantage of emerging and
existing export markets. It is critical that assistance to small
businesses is continued. The program makes export markets more
accessible to smaller businesses which would otherwise be unable to
individually effectively promote and market their apples around the
world.
agricultural marketing service--pesticide data program (pdp)
As requested in the President's budget, we recommend appropriation
of $12 million for the Pesticide Data Program (PDP), managed by the
Agricultural Marketing Service (AMS) of USDA.
Since 1991, USDA has utilized PDP to collect reliable,
scientifically-based pesticide residue data that benefit consumers,
food processors, crop protection pesticide producers, and farmers.
These data accurately reflect the consumer's actual exposure to
pesticides from certain dietary sources. This real-world information
allows the U.S. Environmental Protection Agency (EPA) to make more
accurate assessments of risk. Without the actual residue data, overly
conservative theoretical assumptions of risk are used. These
assumptions could lead to withdrawal of pesticide uses that pose no
actual human health risk.
On August 3, 1996 the President signed into law the Food Quality
Protection Act (FQPA). This landmark legislation requires extensive
reevaluation of the safety of agricultural pesticides and requires
extensive data to evaluate the risk associated with the exposure to
pesticides. Over the next three years, EPA will reevaluate the
pesticide tolerances of many of the most important pesticides used on
apples. Lacking sufficient data, EPA will make conservative assumptions
about the use of pesticides and the resulting exposure. The
conservative assumptions could lead to unnecessary cancellations or
restrictions of critically important pesticides used on apples. EPA
will be able to make a more accurate assessment of the actual risk
associated with pesticides using data from PDP. As a result, apple
growers will benefit from the continued availability of safe and
effective pesticides. It is imperative that the subcommittee support
PDP.
agricultural research service--food consumption survey
The U.S. Apple Association supports the $2 million funding of the
USDA food consumption survey as proposed in the USDA fiscal 1999
budget. The data from this survey is expected to lessen the potential
that critical pesticides used on apples will be unnecessarily canceled
or restricted as a result of implementation of the Food Quality
Protection Act.
EPA uses food consumption data from the USDA food consumption
survey to evaluate dietary pesticide exposures resulting from different
food consumption patterns. EPA currently uses data which was produced
from the latest survey conducted in 1978. The data from this survey are
inadequate for certain demographic categories such as infants and
children.
As previously noted, FQPA implementation will require accurate data
to avoid the unnecessary cancellation of critical pesticides used on
apples. Under FQPA, EPA must issue a finding that tolerances are safe
for infants and children. Lacking sufficient data on infants and
children, EPA is required by the new law to use additional margins of
safety that could threaten the availability of pesticides used on
apples. Data from a new consumption survey would refine EPA's risk
assessments and possibly prevent unnecessary cancellations or
restrictions on pesticides used on apples. It is also important that
the survey is completed as quickly as possible since EPA will make many
of its most critical decisions on apple pesticides within the next
three years and will proceed on that schedule regardless of the
availability of the data.
national agricultural statistics service (nass)--pesticide use surveys
The U.S. Apple Association supports the $7 million fiscal year 1999
budget request for NASS pesticide usage surveys. On an annual basis,
USDA conducts statistical surveys on the use of agricultural
pesticides. These surveys provide up to date information on the amount
of pesticide use, the percentage of agricultural crops that are treated
and other specific information on pesticide usage patterns. These data
are used by the public and government agencies charged with the
responsibility of tracking pesticide use and its implications. EPA
currently uses the data in risk assessments that measure the
theoretical health risk to the public from exposure to pesticides.
Accurate information on pesticide use has never been so critical to the
apple industry. Under FQPA, EPA will reassess the pesticide tolerances
of some of the most important pesticides used on apples. The outcome of
those assessments and the overall availability of pesticides for apple
production will depend on the availability and accuracy of the
pesticide usage data. A well funded USDA program that gathers pesticide
use data on apples is critical to the proper implementation of the Food
Quality Protection Act and to a realistic health risk assessment.
agricultural research service--temperate fruit fly research position--
yakima, washington
The U.S. Apple Association requests support for ongoing apple-
specific research of $825,000 and requests an additional $300,000 in
fiscal year 1999 for a temperate fruit fly research position at the
USDA Agricultural Research Service facility in Yakima, Washington.
Implementation of the food Quality Protection Act is expected to
significantly reduce the number of pesticide alternatives that growers
currently use to control a family of insects such as cherry fruit fly
and apple maggot that are devastating pests to tree fruit growers.
Research on this family of pests is critically important because
alternative pest controls are presently unavailable without the use of
organophosphate pesticides. Over the next two years, EPA is expected to
take regulatory action that will significantly reduce if not eliminate
the use of organophosphate pesticides. This action will leave growers
without a commercially viable control. The apple industry believes that
research on this family of insects must be undertaken immediately if
growers are to avoid a future crisis in pest management.
cooperative state research, education and extension service (csrees)--
``safeguarding the supply of specialty crops for consumers'' michigan
state university
The U.S. Apple Association requests funding of $700,000 for funding
of a special grant to Michigan State University to develop alternative
pest management strategies on key apple pests such as plum curculio and
apple maggot. Implementation of the Food Quality Protection Act is
expected to eliminate organophosphate pesticides, the primary
pesticides that currently control those pests. If other pesticide
alternatives are used they will destroy the ability of growers to
utilize Integrated Pest Management (IPM), cause growers to use more
miticides, and eventually will lead to massive pesticide resistance.
Apple growers and pest management experts agree that without
organophosphate pesticides, growers will not be able to control apple
maggot or plum curculio in the future. Plum curculio and apple maggot
feed directly on the apple causing worm holes, surface defects and
misshapen fruit that is unmarketable in the fresh or processing market.
This special project will investigate alternative pest management
strategies that could control these pests. The research enjoys broad
support among the apple industry since the research results will be
applicable to many major apple growing regions outside of Michigan.
agricultural research service--national agricultural pesticide impact
assessment program minor-use pest management office
The U.S. Apple Association supports an increase of $1.5 million for
the National Agricultural Pesticide Impact Assessment Program (NAPIAP)
in the ARS budget to support the Office of Pest Management Policy
established in August 1997 to improve coordination and communication
with grower associations, USDA agencies and the U.S. Environmental
Protection Agency. In passing the FQPA, Congress provided for the
establishment of a minor-use program within USDA. The primary purpose
of this office is to provide coordination and policy oversight for
specific program areas within USDA that impact minor-use pest
management practices. The $1.5 million increase will enable USDA to
staff the Office of Pest Management Policy appropriately to meet the
needs of minor-use industries.
Some of the areas of emphasis for the Office of Pest Management
Policy would include the issue of meeting grower needs for chemical or
nonchemical pest management tools, providing extension and educational
services, and direct coordination with other federal agencies,
primarily with the U.S. Environmental Protection Agency.
The minor-crop community believes that responsibility for this
program must be placed at the highest levels of USDA. The U.S. Apple
Association believes that the office should take an aggressive
leadership role in providing for the needs of minor-use growers in the
implementation of FQPA.
cooperative state research, education and extension service (csrees)--
ipm research grant program
The U.S. Apple Association supports the President's fiscal year
1999 budget request of $8 million for the CSREES IPM Research Grant
Program. Apple growers in all regions of the United States are taking
steps to avoid pesticide applications whenever possible. The apple
industry has made tremendous progress in reducing pesticide
applications and reducing the risks associated with the use of
pesticides through the use of IPM. Increased IPM funding is necessary
to discover improved IPM practices that will lead to even more
environmentally-friendly production practices.
______
Prepared Statement of Dr. D. Jay Grimes, Director, Gulf Coast Research
Laboratory
Mr. Chairman, I am pleased to be here today and to have this
opportunity to provide the Committee an overview of the activities of
the U.S. Marine Shrimp Farming Program.
Mr. Chairman, the United States imports 70 percent of the marine
shrimp it consumes, resulting in annual trade deficits well in excess
of $2 billion. The U.S. Marine Shrimp Farming Program, supported by
this Committee since 1985, undertook the development of high tech
processes, products and services designed to make U.S. shrimp farmers
competitive in the world market.
The Consortium enlisted the participation of top scientists, their
institutions and states, the cooperation of the fledgling industry, and
participation of government scientists and administrators to undertake
narrowly focused and results oriented projects, to provide a sound
scientific basis for industry expansion. Its approach is based on
financial accountability, and minimal bureaucratic constraint. The
Program has been administered by CSREES/USDA, which provides oversight
and conducts periodic review by independent scientific panels.
The obstacles to be overcome by new technologies and products, in
order to underpin a competitive advantage for U.S. agriculture, were
formidable. By comparison, worldwide shrimp farming practices are
primitive as compared to modern animal husbandry standards. They depend
on catching wild shrimp stocks, have little regard for the
environmental consequences of their actions, use drugs and chemicals
indiscriminately, and contribute to the spread of shrimp diseases with
their products; this approach has often been referred to as ``rape and
run.''
These practices, while low-cost in the short-run, are not
sustainable environmentally or economically in the long-run. Currently,
worldwide producers are experiencing increasing shrimp mortalities,
lower quality product, and lower profits. These world wide problems
provide a substantial opportunity for exploitation of the technologies
and products developed by the Consortium.
The Consortium has made the United States a world leader in the
development and use of:
--domesticated stocks of high health and genetically improved shrimp
broodstock and seed. Shrimp with superior growth and disease
resistance traits are made available to U.S. farmers;
--the most advanced molecular diagnostic tools for disease screening
and control, including monoclonal antibodies and gene probes.
Consortium scientists serve a primary role in the U.S. risk
assessment of viral pathogens in imported shrimp products;
--environmentally sound, sustainable and biosecure shrimp production
systems that offer protection against viral pathogens and
produce virus free products; and
--advanced feeds and feeding methods in support of the domesticated
stocks and biosecure production systems to maximize feed
conversion and system stability, while minimizing and
containing system wastes.
The accomplishments above, while very encouraging, are not yet
complete. We are in the process of integrating these advances into
working shrimp farming systems for demonstration purposes. The industry
does not yet have the complete technology package and remains dependent
upon the Consortium for critical products and services. The Consortium
is the only supplier of high health and genetically improved shrimp
stocks in the United States and these stocks are provided at cost. The
industry is equally dependent upon the Consortium for disease
diagnosis, prevention and treatment methods, and services.
Abrupt loss of Consortium support would cut the existing industry
off at the knees and preclude completion of this important pioneering
work. In anticipation of near term technology transfer, we are
encouraging the industry to establish its own breeding program and
disease control operations. The risks, however, are as yet too high to
encourage the movement of investment capital. We are making substantial
progress toward increasing profitability and reducing risk.
Mr. Chairman, it is envisioned that the United States, with the
best animal feed grains and health care in the world, will become a
nonpolluting producer and major competitor in the shrimp farming world.
Superior technologies, products and services will deliver higher
quality and lower cost shrimp products to the nation and to the world.
The Consortium receives substantial support and encouragement from
CSREES/USDA. They have suggested that this is a model program for
resolving important problems and capturing opportunities in both
agriculture and aquaculture. Such sentiments have been repeatedly
expressed by independent scientific review teams in 1988, 1991 and
1995.
To complete the tasks identified, the Consortium is requesting
continued support of $3.5 million for fiscal year 1999. We deeply
appreciate the Committee's support to date, and respectfully ask for
favorable consideration.
______
Prepared Statement of the United States Telephone Association
summary of request
Project involved.--Telephone Loan Programs Administered by the
Rural Utilities Service.
Actions proposed.--Supporting RUS loan levels for the hardship,
cost of money, Rural Telephone Bank and loan guarantee programs in
fiscal year 1999 in the same amount as loan levels specified in the
Fiscal Year 1998 Agriculture Appropriations Act (Public Law 105-86).
Also supporting an extension of the language removing the 7 percent
interest rate cap on cost of money loans for fiscal year 1999. Also
supporting continuation of the restriction on the retirement of class A
Rural Telephone Bank stock in fiscal year 1999 at the level contained
in Public Law 105-86) and an extension of the prohibition against the
transfer of Rural Telephone Bank funds to the general fund. Supporting
funding for $150 million in loan authority and $15 million in grants
designated for distance learning and telemedicine purposes.
The United States Telephone Association (USTA) represents over 1000
local telephone companies that provide over 95 percent of the access
lines in the United States. USTA members range from large public held
corporations to small family owned companies as well as cooperatives
owned by their customers. We submit this testimony in the interests of
the members of USTA and their subscribers.
USTA members firmly believe that the targeted assistance offered by
a strong telephone loan program remains essential in order to maintain
a healthy and growing rural telephone industry that contributes to the
provision of universal telephone service. We appreciate the strong
support this committee has provided for the telephone program since its
inception in 1949 and look forward to a vigorous program for the
future.
a changing industry
As Congress recognized through passage of the Telecommunications
Act of 1996, the telephone industry is in the midst of one of the most
significant changes any industry has ever undergone. Both the
technological underpinnings and the regulatory atmosphere are
dramatically different. Without system upgrades, rural areas will be
left out of the emerging information revolution.
The need has never been greater for the technology employed by RUS
borrower rural telephone companies to continue to be modernized. The
demand for new switches to serve rural areas could be unprecedented in
the next year. What is driving this demand? First, there are several
Federal Communications Commission mandates that incumbent local
companies will have to meet. Upgrades related to new rules regarding
pay phone compensation, implementation of four digit Carrier
Identification Codes (CIC's), and number portability are all new
Commission requirements driven by the 1996 Telecommunications Act.
Second, there are still some companies that are not equipped to offer
equal access to competing long distance carriers. Third, the
Communications Assistance for Law Enforcement Act (CALEA) imposes new
requirements on all carriers to upgrade their capabilities to assist
the Federal Bureau of Investigation and other law enforcement agencies.
Fourth, telephone company switches, which are really just sophisticated
computers, are impacted by the ``year 2000'' problem.
In addition to upgrading switching capability, it is important that
rural areas be included in the nationwide drive for greater bandwidth
capacity. In order to provide higher speed data services, such as ISDN
(Integrated Services Digital Network) or even faster connections to the
Internet, outside plant must be modernized in addition to new
electronics being placed in switching offices. Rural areas with
relatively long loops are particularly difficult to serve with these
higher speed connections and require additional investment to allow
modern services to be provided.
Provision of greater bandwidth and switching capabilities are
crucial infrastructure elements which will allow rural businesses,
schools and health care facilities to take advantage of the other
programs available to them as end users. The money spent on having the
most modern and sophisticated equipment available at the premises of
the business, school or clinic is wasted if the local telephone company
cannot afford to quickly transport and switch the large amounts of data
that these entities generate. RUS funding enhances the synergies among
the FCC and RUS programs targeted at improving rural education and
health care through telecommunications.
The RUS program provides needed incentives to help offset
regulatory uncertainties related to universal service support and
interconnection rules with a reliable source of fairly priced long term
capital. After all, RUS is a voluntary program designed to incent local
telephone companies to build the plant essential to economic growth.
RUS endures because it is a brilliantly conceived public private
partnership in which the borrowers are the conduits for benefits from
the federal government to flow to rural telephone customers, the true
beneficiaries of the RUS program. The government's contribution is
leveraged by the equity, technical expertise and dedication of local
telephone companies.
impact of credit reform on the rural telephone bank
Contrary to the intent of Congress, the interpretation of credit
reform by the Office of Management and Budget (OMB) has significantly
affected the operation of the Rural Telephone Bank (RTB). One of the
most damaging impacts of OMB's interpretation of the credit reform law
is to essentially cleave the RTB into two banks--a liquidating account
bank which is responsible for pre-credit reform loans, and a financing
account bank which is responsible for post credit reform loans. Until
the Administration's current budget proposal, OMB has clung to the
proposition that funds from the two banks could not be intermingled.
USTA has protested this arrangement since it began, since it prevents
the relending of borrower repayments to fund new loans in direct
contravention of Sec. 409 of the Bank's enabling act. This, in turn,
forces the RTB to borrow unnecessarily from the Treasury to fund new
loans. It also permits funds to build up in the liquidating account
that were generated by GAO documented interest rate overcharges,
instead of those funds being returned through relending to the same
universe of borrowers that initially generated them.
In this new budget proposal, the Administration proposes to take
funds from the liquidating account and fund the loan subsidy for new
loans as well as the RUS administrative expenses allocated to the RTB
beginning in 1999. This is in direct conflict with an existing
provision of law, Sec. 403(b) of the Rural Telephone Bank Act (Public
Law 92-12). That provision states ``. . . in order to perform its
responsibilities under this title, the telephone bank may partially or
jointly utilize the facilities and the services of employees of the
Rural Electrification Administration or of any other agency of the
Department of Agriculture, without cost to the telephone bank''.
(Emphasis added)
OMB has clearly changed its position on whether the liquidating
account funds can be used for purposes other than liquidating the pre-
credit reform loans. And on this point OMB is correct. However, instead
of using the repayments into the liquidating account to fund the
expenses of the RTB (contrary to the Rural Electrification Act) or to
fund the loan subsidy, neither of which would result in any budget
savings, OMB should adhere to Sec. 409 of the Rural Electrification Act
and allow those repayments to be used to fund new RTB loans. It is
ironic that in the same budget proposal that purports to have the RTB
act more like a private bank, OMB continues to maintain the artificial
split of the bank's resources which prevents it from acting as would a
private bank--relending repayments.
rus telephone program procedures should be streamlined
The Government Performance and Results Act of 1993 (Public Law 103-
62) was designed by Congress to establish clear goals for government
programs and places a strong focus on results, service and customer
satisfaction. This Act applies to all RUS lending programs.
Streamlining the practices and procedures of the RUS telephone programs
is an extremely meritorious notion. USTA is fully in support of less
regulation and improved service delivery, within the context of the
government's interest in security for these rural telecommunications
infrastructure improvement loans. We have consistently requested RUS to
examine and streamline its rules and procedures for the benefit of both
the agency and the borrowers and their subscribers. Unfortunately
nothing has been done by RUS to move in this direction. We hope that
the Government Performance and Results Act provides the needed spur to
encourage RUS to expeditiously accomplish this goal.
recommendations
Continuation of the loan levels and necessary associated subsidy
amounts for the RUS telephone loan programs that were recommended by
this committee and signed into law for fiscal year 1998 would maintain
our members' ability to adequately serve the nation's
telecommunications needs and to maintain universal service.
For a number of years, through the appropriations process, Congress
has eliminated the seven percent ``cap'' placed on the insured cost-of-
money loan program. The elimination of the cap should continue. If long
term Treasury interest rates exceeded the 7 percent ceiling contained
in the authorizing act, adequate subsidy would not be available to
support the program at the authorized level. This would be extremely
disruptive and hinder the program from accomplishing its statutory
goals. Accordingly USTA supports continuation of the elimination of the
seven percent cap on cost-of-money insured loans in fiscal year 1999.
The restriction on the retirement of the amount of class A stock by
the Rural Telephone Bank, adopted in fiscal 1997, should be continued.
The Bank is currently retiring Class A stock in an orderly, measured
manner as current law requires. This should continue. The Committee
should also continue to protect the legitimate ownership interests of
the Class B and C stockholders in the Bank's assets by continuing to
prohibit a ``sweep'' of those funds into the general fund.
Recommended Loan Levels.
USTA recommends telephone loan program loan levels for fiscal year
1999 as follows:
RUS Insured Hardship Loans (5 percent).................. $75,000,000
RUS Insured Cost-of-Money Loans......................... 300,000,000
Rural Telephone Bank (RTB) Loans........................ 175,000,000
Loan Guarantees......................................... 120,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 670,000,000
The President's budget proposes a reduction of $25 million in the
hardship program designed for the neediest borrowers. There is strong
demand for hardship loans. Rural Americans cannot wait any longer to be
full participants in the Information Age. A minimum amount of subsidy
authority would restore this proposed $25 million cut in the hardship
loan level. We cannot imagine a more deserving use of scarce government
resources for the benefit of rural Americans.
Distance Learning and Telemedicine
USTA strongly supports the loan and grant proposal and recommends
its funding for fiscal year 1999 at the levels proposed in the
Administration's budget submission, that is, $15 million for the grant
program and $150 million for the loan program. This program is a
perfect complement to the traditional RUS telephone loan programs. For
distance learning and telemedicine to become a reality, schools and
hospitals need training and equipment. Similarly, local telephone
companies need modern infrastructure to connect these facilities to the
telecommunications network.
conclusion
Our members take pleasure and pride in reminding the Subcommittee
that the RUS telephone program continues its perfect record of no
defaults in almost a half century of existence. RUS telephone borrowers
take deadly seriously their obligations to their government, their
nation and their subscribers. They will continue to invest in our rural
communities, use government loan funds carefully and judiciously and do
our best to assure the continued affordability of telecommunications
services in rural America. Our members have confidence that the
Subcommittee will continue to recognize the importance of assuring a
strong and effective RUS Telephone Program through authorization of
adequate loan levels.
______
Prepared Statement of Cyrus M. Jollivette, Vice President for
Government Relations, University of Miami
Mr. Chairman and Members of the Subcommittee: I am pleased to
submit testimony on behalf of the University of Miami and Florida State
University. My colleagues in Florida are deeply appreciative of your
leadership, Mr. Chairman, and the Subcommittee's confidence in our
respective institutions. We recognize that you and your colleagues on
the Appropriations Committee face difficult choices as you prepare for
the Subcommittee's priorities for fiscal year 1999 and we know that you
will continue to make the difficult choices with the best interests of
the nation guiding your decisions. My colleagues and I hope that you
will find it possible to fund an important initiative detailed below in
the fiscal year 1999 appropriations cycle.
In the past several years, the Congress has been especially
responsive to the Florida Congressional Delegation's requests
concerning The Florida Consortium for Climatic Research, a project
involving the University of Miami, Florida State University, the
University of Florida, and the University of South Florida. We greatly
appreciate your support of this critical area of research.
The importance of El Nino South Oscillation (ENSO) events as a
major source of climate fluctuations, together with advances in ENSO
predictability, suggest that forecasts have significant potential for
benefiting agricultural productivity and economic decision-making. The
Florida Consortium for Climatic Research proposes to focus on the
southeastern United States geographical area., a large food producer
whose productivity is significantly impacted by weather conditions
generated by the ENSO phenomenon. Decisions made by well-informed
participants from farm to policy level, made several months or seasons
in advance, can significantly benefit productivity, an especially
farmers' ability to plan ahead.
This project presents an end-to-end approach that will provide the
bridge between climate and forecast producers, such as the recently-
formed International Research Institute for Climate Prediction (IRICP),
and agricultural decision makers. Specific objectives for the project
are to: (1) adapt, develop, and evaluate a generic, flexible set of
tools and methodologies for assessing regional agricultural
consequences of El Nino events and for applying forecasts to improve
agricultural decision-making; (2) demonstrate by successful
applications of forecasts to agriculture and other sectors which would
benefit best in the southeastern United States that began in 1996; and
(3) assess the value of climate predictions to different agricultural
sectors in these southeastern region.
The consortium's objectives include developing scientific
applications for climate data. This consortium draws upon the expertise
of scientists at FSU (climate analyses and coupled ocean-atmosphere
prediction models), UM (climate analyses and economic value of
forecasts), and the University of Florida (agriculture) to quantify
climate variability (e.g., the El Nino phenomena) for the SE and to
explore the potential value and practical application (there is a
strong emphasis on agricultural applications) of climate forecasts.
During the initial phase of this effort, the FSU team described
qualitatively the impact of El Nino (and the other extreme, La Nina) on
temperature and precipitation patterns across the SE. Additionally,
they found a geographic shift in tornadic activity associated with El
Nino events. A new climate forecast system to provide predictions of
seasonal temperatures and precipitation with longer lead times and
improved skill is in the testing phase. Improvements are due partly to
the coupled nature (i.e., linking the ocean and atmosphere so they
respond to each other dynamically) of the forecast system. Our
colleagues at the University of Florida identified several crops in
Florida which are vulnerable to shifts in weather patterns associated
with El Nino and La Nina, but noted further that the impact is not
uniform in nature across the state.
Continuing with this collaboration, we hope to estimate the
economic advantages that could be achieved by incorporating climate
forecast information into farming management systems and eventually
work with sector representatives in developing guidance products for
the agricultural community. We believe that the Department of
Agriculture is a major stakeholder in this critical area. We
respectfully seek $3 million from USDA to continue and expand this
important research activity in fiscal year 1999.
______
Prepared Statement of Dr. Shelby F. Thames, Professor of Polymer
Science, University of Southern Mississippi
Mr. Chairman, distinguished Members of the Subcommittee, I would
like to thank you for this opportunity to provide testimony to you
concerning the ongoing efforts of The University of Southern
Mississippi (USM) and the Mississippi Polymer Institute. I would also
like to repeat my expression of gratitude to the Subcommittee for its
leadership and support of the Institute and its work. This testimony
will include an update on the progress of the Institute since my
testimony of approximately one year ago. During the past year, our
efforts have primarily focused on the commercialization of novel
inventions resulting from our emulsion polymerization team and efforts
to produce multi-functional additives. I am happy to report that we
have secured industrial partners who wish to manufacture and sell our
novel agricultural based materials into the polymer industry.
Specifically, we have designed and synthesized novel monomers or
polymer building blocks that allow the production of solvent-free, non-
polluting, latex coatings. This is novel technology, and promises to be
significant in reducing emissions of polluting materials into our
atmosphere. In yet another, invention we have developed formaldehyde-
free adhesives for use in the particle board industry. The new
adhesives are composed of more than 98 percent agricultural products,
and are comparable in properties with traditional formaldehyde
adhesives. The examples noted herein are two of several active ongoing
commercializing efforts.
In 1983, the Mississippi Legislature authorized the Polymer
Institute at USM to work closely with emerging industries and other
existing polymer-related industries to assist with research, problem-
solving, and commercializing efforts. During the past year, seventeen
new polymer-related industries have located in Mississippi. The
Institute provides industry and government with applied or focused
research, development support, and other commercializing assistance.
This effort complements existing strong ties with industry and
government involving exchange of information and improved employment
opportunities for USM graduates. Most importantly, through basic and
applied research coupled with developmental and commercializing efforts
of the Institute, the Department of Polymer Science continues to
address national needs of high priority.
The focus of my work is commercialization of alternative
agricultural crops in the polymer industry. This approach offers an
array of opportunities for agriculture as the polymer industry is the
largest segment of the chemical products industry in the world, and
heretofore has been highly dependent upon petroleum utilization.
However, my efforts are directed to the development of agricultural
derived materials that can improve our nation's environment, and reduce
our dependence on imported petroleum. As farm products meet the
industrial needs of American society, rural America is the benefactor.
Heretofore this movement to utilize alternative agricultural products
as industrial raw materials has received some attention but much less
than the opportunities warrant. Your decisions are crucial to the
accomplishment of these goals as funding from this Subcommittee has
enabled us to implement and maintain an active group of university-
based polymer scientists whose energies are devoted to commercializing
alternative crops. We are most grateful to you for this support and ask
for your continued commitment.
The faculty, the University, and the State of Mississippi are
strongly supportive of the Mississippi Polymer Institute and its close
ties with industry. Most faculty maintain at least one industrial
contract as an important part of extramural research efforts.
Polymers, which include fibers, plastics, composites, coatings,
adhesives, inks, and elastomers, play a key role in the materials
industry. They are used in a wide range of industries including
textiles, aerospace, automotive, packaging, construction, medical
prosthesis, and health care. In the aerospace and automotive
applications, reduced weight and high strength make them increasingly
important as fuel savers. Their non-metallic character and design
potentials support their use for many national defense purposes.
Moreover, select polymers are possible substitutes for so-called
strategic materials, some of which come from potentially unreliable
sources.
As a polymer scientist, I am intrigued by the vast opportunities
offered by American agriculture. As a professor, however, I am
disappointed that few of our science and business students receive
training in the polymer-agricultural discipline as it offers enormous
potential.
I became involved in the polymer field 34 years ago, and since that
time have watched its evolution where almost each new product
utilization offered the opportunity for many more. Although polymer
science as a discipline has experienced expansion and a degree of
public acceptance, alternative agricultural materials are an under-
utilized national treasure for the polymer industry. Moreover, there is
less acceptance of petroleum derived materials today than ever before
and consequently the timing is ideal for agricultural materials to make
significant inroads as environmentally friendly, biodegradable, and
renewable raw materials. These agricultural materials have always been
available for our use, yet society, for many reasons, has not
recognized their potential. I would like to share with you several
examples to support this tenet:
--I have described our efforts at meeting volatile organic compound
(VOC) emission standards via the design and synthesis of
solventless emulsion polymers. The novel technology which
allows the synthesis of solventless emulsion polymers is based
on the use of an agricultural material. For instance, this
natural product allows the synthesis of emulsion polymers that
perform their intended uses at room temperature and without any
organic solvents. Thus, we have developed a truly no VOC
coating. Most coatings of this type contain approximately 400
to 1500 grams of VOC/gallon. It is expected that this monomer
will be offered for sale in the first quarter of 1999.
--A waterborne, waterproofer has been designed and formulated with
the help of several natural products. The material functions as
a waterproofer yet is carried in water. However, after
application to the intended substrate, typically wood or
cementous products, the material becomes hydrophobic and highly
water resistant. We have collected two and one-half years of
exposure data on this product with excellent success. It is
currently being marketed via Southern Chemical Formulators of
Mobile, AL.
--A new, multi-functional polymer additive has been designed,
synthesized, and tested. It is currently being evaluated by the
J.W. Hanson Company as a potential commercial product. It is a
highly efficient, multi-faceted additive that functions as a
dispersant, a defoamer, an adhesion promoter, a gloss enhancer,
and corrosion inhibiting species. It is derived from an
agricultural raw material and is very novel in its performance
and applications.
--We continue to exploit the potential of lesquerella, a crop that
produces a triglyceride similar to castor oil. Several products
have been prepared and include: polyesters, stains, foams,
pressure sensitive adhesives, and 100 percent solid ultraviolet
(UV) coatings. This technology was highlighted at the AARC/
NASDA meeting in Washington, DC.
--Novel open cell foams have been designed and prepared from
lesquerella and/or castor oil. They are of high quality and can
substitute for foams used extensively in industrial settings.
The Union Camp Corporation has shown interest in these
materials and will soon visit our facility to discuss possible
application/commercialization of these foams.
--Closed cell lesquerella foams have been prepared from lesquerella
derivatives and will be submitted for testing. This
commercialization focus is attractive as castor foams are
prepared from imported oil, i.e., at an annual $50-$75 million
import cost. Thus, emergence of a lesquerella oil industry has
the potential to reduce U.S. imports.
It is clear that commercial utilization of agricultural products is
needed and that ag based products can play a viable role as industrial
raw materials for the polymer industry. However, we simply must
continue to devote support and effort to this rewarding undertaking.
U.S. agriculture has made the transition from the farm fields to
the kitchen tables, but America's industrial community continues to be
frightfully slow in adopting ag based industrial materials. Let us
aggressively pursue this opportunity and in doing so:
--Intensify U.S. efforts to commercialize alternative crops.
--Reduce U.S. reliance on imported petroleum.
--Maintain a healthy and prosperous farm economy.
--Foster new cooperative opportunities between American farmers and
American industry.
Mr. Chairman, your leadership and support are deeply appreciated by
the entire University of Southern Mississippi community. While I can
greatly appreciate the difficult financial restraints facing your
Subcommittee this fiscal year, I feel confident that further support of
the Mississippi Polymer Institute will continue dividends of increasing
commercialization opportunities of agricultural materials in American
industry. Advances in polymer research are crucial to food,
transportation, housing, and defense industries. Our work has clearly
established the value of ag products as industrial raw materials;
however, while these are but a limited number of applications, our
success confirms that it is time to move to yet another level of
effort. Thus, we respectfully request $1.2 million in federal funding
to exploit the potentials of commercializing alternative agricultural
materials and to continue our initiatives. Thank you Mr. Chairman and
Members of the Subcommittee for your support and consideration.
______
Prepared Statement of Sam J. Maselli, Executive Vice President, Western
Rural Telephone Association
summary of requests
Program of Interest.--Telecommunications lending programs
administered by the Rural Utilities Service (RUS) of the U.S.
Department of Agriculture.
Recommendation.--WRTA supports loan levels for fiscal year 1998 at
such amounts as they have been designated in the Agriculture
Appropriations Act for Fiscal Year 1997 (Public Law 105-86) for
hardship, treasury-cost, Rural Telephone Bank (RTB), and guaranteed
loan programs and the associated subsidy to support hardship and RTB
loans at existing levels. WRTA also supports the President's budget
request for funding of the RUS's Distance Learning and Telemedicine
(DLT) programs at $15 million in grants and $150 million in loan
authority. WRTA supports a continuation of the current fiscal year's
policy of language removing the 7 percent interest rate ceiling on
Treasury-cost loans for fiscal year 1998. WRTA supports the continued
provisions contained in Public Law 105-86 restricting retirement of RTB
class A stock in fiscal year 1998 and prohibiting the transfer of RTB
funds to the general fund. Finally, we are opposed to the President's
budget proposal to transfer funds from the unobligated balances of the
liquidating account of the RTB for the bank's administrative expenses
and loan subsidy costs.
Mr. Chairman and Members of the Subcommittee: It is an honor and
privilege to have the opportunity to discuss the unique infrastructure
financing needs of the rural local exchange carrier (LEC) industry. My
name is Sam J. Maselli, and I am the Executive Vice President of the
Western Rural Telephone Association (WRTA). WRTA is a regional trade
association representing nearly 150 small rural commercial and
cooperative telephone systems throughout the western United States and
the Pacific Rim territories.
background
WRTA's member systems, like most of this nation's independent
LEC's, evolved to serve the high cost, low density areas in the rural
western United States. Congress recognized this unique dilemma
confronting America's rural LEC's as early as 1949 when it amended the
Rural Electrification Act (RE Act) to create the REA telephone loan
program. With the future of rural America in mind, Congress charged the
REA with the responsibility for making low interest rate loans to both
``furnish and improve'' rural telephone service at the local exchange
level.
In subsequent years, Congress has periodically acted to amend the
RE Act to insure that the original mission of the program is fully met.
In 1971, the Rural Telephone Bank (RTB) was created as a supplemental
source of direct loan financing. In 1973, the REA was provided with the
ability to guarantee Federal Financing Bank (FFB) and private lender
notes. And in 1993, the Congress established a fourth lending
component, the Treasury-cost program, and Congress eliminated most of
the subsidy costs associated with the administration of the program.
The formal consolidation of the Department's utility programs through
transferring the telecommunications loan and technical assistance
programs of the REA to the Rural Utilities Service (RUS) in 1994
further served to enhance and update the effectiveness of the agency in
promoting rural infrastructure development.
Due to the difficulty of providing service in high cost, low
density areas, Congress provided for long-term, fixed rate loans
available at reasonable rates to borrowers to assure that rural
citizens benefited from the highest quality of telephone service and
affordable subscriber rates. Through this ongoing commitment to capital
financing, Congress affirmed the goal of comparable and affordable
telephone service for rural Americans as their urban counterparts.
As a result of this commitment to rural telecommunications, rural
America has greatly benefited from the highest quality of information
technology. Through its effort, Congress has played a critical role in
developing a rural telecommunications infrastructure financing program
which best responds to the needs of rural America.
the obligations of the industry continue
The RUS telecommunications loan program represents a remarkable
public/private partnership success story which continues to produce
tangible results in the lives of rural citizens. With the assistance of
RUS capital and technical standards, rural telephone systems are
providing modern telecommunications services of a highly sophisticated
quality. However, with the rapid pace of change in the development of
information technology, the need for RUS telecommunications lending is
greater than ever.
Due to the nature of rural areas, particularly in the rural West,
the challenge of providing modern telecommunications services is
formidable. Compared to their urban counterparts, rural communities are
faced with higher poverty rates, lower income levels, physical
isolation and higher costs associated with deploying modern
infrastructure. Economic development is often frustrated by these
unique rural conditions. With the United States in the midst of the
``information revolution,'' rural areas are confronted with the dilemma
of being left behind.
The implementation of the Telecommunications Reform Act of 1996 has
also added to the uncertainty and collective uneasiness of the rural
telecommunications industry. Despite the Act's solid rural safeguard
provisions, the Federal Communications Commission (FCC) has embarked in
a regulatory direction which explicitly threatens rural ratepayers,
services, and infrastructure investment.
Congress must keep a vigilant watch over the FCC to ensure that
implementation of the Act is consistent with congressional intent. This
is particularly true of RUS program borrowers where the federal
government has a significant loan security interest at stake. Whatever
the outcome of the regulatory process, the RUS telecommunications loan
program will be as important as ever to rural systems attempting to
modernize their networks and improve service to rural residents.
the promise of the rus program
Despite the obstacles to rural economic revitalization, information
technology holds significant promise for our rural areas. As we have
seen in recent years, information services can directly benefit our
schools, libraries, hospitals and clinics. In addition,
telecommunications services facilitate commercial opportunities such as
telemarketing, insurance, and manufacturing not possible in previous
years.
While the explosive nature of technological change offers our rural
communities genuine opportunities for economic and social progress,
special attention must be placed on providing rural areas with the
appropriate tools to address their unique set of needs. In this
context, the RUS telecommunications loan program is playing a critical
front-line role in ensuring that rural America is linked to the
Information Superhighway.
Today, RUS borrowers average only 6 subscribers per mile compared
to 37 per mile for the larger, urban-oriented telephone systems. This
results in an average plant investment per subscriber that is 38
percent higher for RUS borrower systems. Without the availability of
affordable capital financing, enhancing telecommunications networks for
rural communities would be untenable.
The RUS is providing affordable capital financing to allow its
borrowers to upgrade their plant and facilities for digital switching,
fiber optic cabling, emergency 911, and other enhanced features such as
ISDN, SS7, and CLASS. Due to the dependability of the RUS program,
borrowers provide their rural subscribers with cutting edge services.
RUS telecommunications lending also performs a pivotal function of
stimulating substantial private investment. In fact, RUS borrowers
invest in telecommunications plant at a rate of $4.80 for every RUS
dollar spent.
In addition, the RUS telecommunications program boasts a proud
financial record probably unprecedented for federal loan programs. To
date, the program has never experienced a borrower-related default in
its history. At the end of 1997, $4.5 billion in principal and $4.5
billion in interest had been paid by RUS borrowers. For nearly 49
years, this successful public/private partnership has worked.
In 1993, this partnership agreed to a $31 million cut in the name
of debt reduction, and it agreed to a twelve year freeze in program
loan levels while other programs grew by at least the rate of
inflation. This partnership is committed to providing service to areas
long neglected by others. Ultimately, this partnership will foster the
rural information network of the 21st century.
specific recommendations for the subcommittee's consideration
RUS Telecommunications Loan Program.--Increasing demands for
expanded telecommunications services and infrastructure upgrades
suggests that the level of need continues. Congressional mandates as a
result of the Rural Electrification Restructuring Act (RELRA) of 1993
(Public Law 103-129) have placed additional obligations on RUS
borrowers to upgrade their technology in order to maintain their loan
eligibility. To address the persisting need, WRTA recommends that the
Committee consider the following RUS Telecommunications Program loan
levels for fiscal year 1999:
5 percent Hardship Loans................................ $75,000,000
Treasury-cost Loans..................................... 300,000,000
FFB Loan Guarantees..................................... 120,000,000
Rural Telephone Bank Loans.............................. 175,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 670,000,000
These loan levels are the same as the current fiscal year's funding
provided by Congress and represent a genuine commitment to rural
telecommunications.
Removal of Interest Rate Ceiling on Treasury-cost Loans.--WRTA
supports language removing the 7 percent interest rate cap on the
program's Treasury-cost loans. This provision was originally included
in the Agriculture Appropriations Act for fiscal year 1996 and
continued for the current fiscal year. The inclusion of this provision
for fiscal year 1999 will prevent a potential disruption of the program
in the case where interest rates exceed 7 percent and insufficient
subsidy cannot support authorized loan levels. Stated simply, it is a
continuation of current policy, and it promotes the viability of the
program at zero cost.
Rural Telephone Bank (RTB) Issues.--During the course of fiscal
year 1996, the Rural Telephone Bank began the statutory retirement of
class A, government-owned stock. WRTA supports the restriction on
accelerating the privatization process as conceived beginning in fiscal
year 1996 of no more than 5 percent of total class A stock retired in
one year. We believe that a continuation of this policy best addresses
the orderly and systematic privatization of the RTB. WRTA also urges
the Committee to continue the prohibition against the transfer of bank
funds to the general fund of the Treasury along with the requirement
that the bank receive interest on those funds. The private B and C
stockholders of the RTB have an interest in the assets of the bank and
the protection of all funds.
For these reasons, WRTA is also opposed to the proposal contained
in the President's budget that the costs of RTB administration and loan
subsidy be funded by a transfer from the unobligated balances of the
bank's liquidating account rather than by appropriations consistent
with the federal credit reform act. WRTA believes that this proposal
would impinge upon the ownership interests of the bank's stockholders.
In addition, we believe that funding the administrative costs of
the bank through a transfer of unobligated balances of the bank's
liquidating account rather than through appropriation is contrary to
the RTB enabling act (Public Law 92-12). Budget language suggests that
these recommendations would not result in budgetary savings, and no
justification for this proposal is contained in the budget.
Furthermore, this proposal would require new authorizing legislation
prior to an appropriation.
Distance Learning and Telemedicine (DLT) Loans and Grants.--The RUS
Distance Learning and Telemedicine (DLT) program has proven to be a
remarkable tool for promoting rural development. The DLT loan and grant
program administered by the RUS significant promise for the deployment
of modern technology for scores of our rural communities. WRTA supports
the President's request for $150 million in loans delivered at the
government's cost-of-money and $15 million in grants for DLT purposes.
We believe that the proposed level adequately responds to the
overwhelming demand for DLT resources since the implementation of the
program by the RUS in 1993.
conclusion
Rural economic and social development and access to advanced
information services are an inseparable combination for the future. The
RUS telecommunications program has proven to be an indispensable tool
for rural America. Its existence continues to improve the nature of
rural life in our nation, particularly in our isolated Western
communities.
We appreciate the opportunity to comment on this critical program.
Thank you for your time and consideration of this issue.
______
Prepared Statement of Ronald R. Helinski, Conservation Policy
Specialist, Wildlife Management Institute
I am Ronald R. Helinski, Conservation Policy Specialist of the
Wildlife Management Institute. Established in 1911, the Institute is
staffed by professional wildlife scientists and managers. Its purpose
is to promote the restoration and improved management of wildlife in
North America.
cooperative state research, education, and extension service (csrees)
The Wildlife Management Institute (WMI) recognizes that the
research and educational programs of the CSREES and its Land Grant
Partners effect relevant, positive changes in attitudes and
implementation of new technologies by private landowners, managers,
community decisionmakers, and the public. This results in significant
benefits to individuals and to the Nation through building and
sustaining a more viable and productive natural resource base and a
competitive and profitable agriculture. Since over two-thirds of our
lands, approximately 1.35 billion acres, are controlled by over 10
million private landowners and managers, it is most appropriate that
the CSREES-Land Grant System, with its grass roots credibility and
delivery system, be adequately funded to translate and deliver
research-based educational programs and new technologies to help the
Nation's private landowners and managers move towards a more
sustainable society. However, in the President's fiscal year 1999
budget, we see very little emphasis on natural resources research and
education directed toward helping these clientele.
purpose
The Wildlife Management Institute recommends that the fiscal year
1999 budget for CSREES should redirect funding to accomplish the
following goals:
WMI recommends that the Renewable Resources Extension Act be funded
at a minimum level of $9.5 million in fiscal year 1999. The RREA funds,
which are apportioned to State Extension Services, effectively leverage
cooperating partnerships at an average of about four to one, with a
focus on the development and dissemination of useful and practical
educational programs to private landowners (rural and urban) and
continuing education of professionals. The increase to $9.5 million
would enable the Extension System to accomplish the goals and
objectives outlined in the 1991-1995 Report to Congress. The need for
RREA educational programs is greater today than ever because of the
fragmentation of ownerships, the diversity of landowners needing
assistance, and the increasing environmental concerns of society about
land use. It is important to note that RREA has been reauthorized
through 2002. It was originally authorized at $15 million annually;
however, even though it has been proven to be effective in leveraging
cooperative state and local funding, it has never been funded at a
level beyond $3.4 million. An increase to $9.5 million would enable the
Extension Service to expand its capability to assist over 500,000
private landowners annually to improve decisionmaking and management on
an additional 35 million acres while increasing productivity and
revenue by $200 million.
WMI recommends that Smith-Lever 3(b)&(c) base program funding be
increased by 9.0 percent to a level of $280,950,770 with an appropriate
portion of this increase targeted to Extension's Natural Resource and
Environmental Management programs (NREM). The President's fiscal year
1999 budget requests a reduction of $10,740,000 funding for Smith-Lever
3(b)&(c) funds from the fiscal year 1998 level. WMI appreciates that
Smith-Lever 3(b)&(c) base programs provide ``Block Grant'' type funds
for land grant universities to provide essential educational outreach
based on local needs assessment. This will enable NREM programs to
develop the critical mass of expertise at the state and local levels to
redirect and leverage limited funding to address critical existing and
emerging natural resource and environmental issues that are directly
affecting small landowners and farmers in both rural and urban
communities nationwide. Expanding Extension programs in natural
resource public issues education on such issues as forest health,
wetlands, endangered species, and human/wildlife interactions, as well
as to strengthen its programs in urban and community forestry and
environmental education as called for in the 1990 FACT Act is essential
to address natural resource issues that are relevant to the
sustainability of these critical resources. Such an increase targeted
appropriately would help producers better understand and implement the
changes in the 1995 Farm Bill Conservation Provisions. Moreover, we are
concerned that appropriate positions in the Natural Resources and
Environment Unit have not been retained to provide needed national
leadership for critical interdisciplinary resources such as range
management.
WMI encourages continuation of close cooperation between State
CES's and their State Fish and Wildlife agencies, as well as other
appropriate state and federal agencies and conservation organizations.
Extension 4-H Youth natural resource programs and projects continue to
increase with over 1,350,000 youngsters presently enrolled from both
urban and rural communities across the Nation. Increased Smith-Lever
funds targeted appropriately will enable CSREES to carry out its
environmental education and NREM National Strategic Plan obligations
nationwide.
WMI recommends restoration of the Rangeland Research Grants
$500,000 budget for fiscal year 1999. The Institute is disappointed
that the practical and applied problems addressed by the Rangeland
Research Grants (RRG) program were zeroed out in the President's 1998
budget and totally ignored in this fiscal year 1999 budget. Over one-
half of the land area of the United States is rangeland; and
elimination of the only federal competitive grants program for
rangelands has serious implications for wildlife, watersheds, and other
natural resources. Modest appropriations for RRG in the past have
supported some of the most important rangeland research conducted over
the past decade, and wildlife issues on rangelands will present some of
the more critical rangeland research problems over the next decade.
This would help increase the interdisciplinary capacity of research and
educational programs to help landowners improve the adoption of forests
and rangelands ecosystem management and the conservation of
biodiversity on an ecoregion level.
WMI recommends that an appropriate portion of the total increased
appropriation for Pest Management should be dedicated to educational
programs for prevention and control of vertebrae pests in urban and
rural communities and to address invasive exotic species and noxious
weed problems on rangelands for restoring, managing, and sustaining the
biological integrity of the Nation's natural resource base upon which
the agricultural and natural resource economies depend. WMI notes that
a combined total increase of almost $15.5 million has been recommended
in the President's budget for Pest Management and related research and
extension programs over and above increases received in fiscal year
1998. Vertebrate pests and invasive species have been identified in
many states as posing the most significant problems, now and in the
future, that agricultural and related crop producers and private
landowners face. This targeting of Pest Management funds for research
and educational programs would advance the knowledge and capability of
landowners to reduce significant losses to vertebrate pests and
invasive species.
WMI recommends that the Hatch and McIntire-Stennis funds be
restored to fiscal year 1998 levels and, if necessary, redirected from
the substantial $32,800,000 proposed increase in NRI funding, WMI is
pleased that the Administration proposes a 9.5 million increase in
basic research identified under the National Research Initiative (NRI)
as Natural Resources and the Environment; however, what is proposed
under this ``Area of Special Emphasis'' clearly does not address
critical natural resource research needs that the Natural Resource
Community and the public are vitally concerned about. The Institute is
alarmed at the significant reduction in both the Hatch Act and
McIntire-Stennis research programs of over $15.5 million. Both of these
research programs, conducted by land grant university partners and
other educational institutions, are crucial to addressing natural
resource and environmental issues critical to agriculture and natural
resource sustainability now and in the future.
summary
The Wildlife Management institute, based on the above
considerations, recommends the following for the fiscal year 1999
budget of CSREES:
(a) The RREA budget be increased to $9.5 million;
(b) Smith-Lever 3(b)&(c) base program funding be increased by 9.0
percent;
(c) Rangeland Research grants be restored at $500,000 level;
(d) A portion of the Pest Management and related increase be
targeted to provide increased research and education programs to
address vertebrate pest prevention and control needs and invasive
species and exotic weed problems; and
(e) McIntire-Stennis and Hatch Act funding be restored to fiscal
year 1998 levels.
______
Prepared Statement of Hon. Jim Geringer, Governor, State of Wyoming
This testimony supports fiscal year 1999 funding for the Department
of Agriculture in the amount of $300,000,000 for the Environmental
Quality Incentives Program (EQIP). The State of Wyoming requests that
$12,000,000 of that amount be directed for EQIP activities to continue
the functions of the Colorado River Colorado River Salinity Control
Program, one of the programs made a part of the EQIP by Public Law 104-
127. Designation of Colorado River Basin salinity control as an EQIP
national conservation priority area is requested.
This testimony supports fiscal year 1999 appropriations for the
Department of Agriculture's Environmental Quality Incentives Program to
carry out Colorado River salinity control activities. You recently
received testimony from the Colorado River Basin Salinity Control Forum
(Forum), on behalf of the seven Colorado River Basin States. The State
of Wyoming, a member state of the Forum, concurs in that testimony
submitted by the Forum's Executive Director, Jack Barnett. I wish to
emphasize to this Subcommittee that EQIP funding to accomplish salinity
control in the Colorado River Basin is critically important to
maintaining the basin-wide Water Quality Standards for Salinity in the
Colorado River System.
Interpretation by the Environmental Protection Agency of Public Law
92-500, the 1972 amendments to the Federal Water Pollution Control Act,
led to the adoption of basin-wide water quality standards for salinity
in the Colorado River in 1975. Those standards consist of numeric
criteria at three lower river stations (Hoover Dam, Parker Dam and
Imperial Dam) and a plan of implementation. Jointly developed by the
States and involved Federal agencies, the Plan of Implementation is
reviewed and updated each three years in accordance with Section 303 of
the Clean Water Act. The overall strategy is to prevent salts from
dissolving and mixing with the river's flow. The USDA's CRSC Program
has focused on reducing deep percolation of applied irrigation water by
reducing the amount applied through conversion from flood application
to sprinkler systems and other irrigation water application procedure
improvements. Changing irrigation methodologies and other irrigation
improvements have provided some of the most cost-effective (dollars
spent per ton of salt loading reduction) means to control salinity
loading into the river system available in the Colorado River Basin.
In June 1974, Congress enacted the Colorado River Basin Salinity
Control Act (CRBSCA) which directed the Secretary of the Interior to
proceed with a program to enhance and protect the quality of the water
available in the Colorado River for use in the United States and the
Republic of Mexico. Implementation of the Salinity Control Act is
necessary to assure that the U.S. complies with both the quality of
water delivery requirement under a 1973 amendment to the Mexican Water
Treaty and the water quality standards for salinity established in the
United States. The USDA was directed to establish a major voluntary on-
farm cooperative salinity control program by the 1984 amendments to the
Act. Since that time, a cost-effective on-farm program involving six
units located in the states of Colorado, Utah and Wyoming has been
initiated. Through fiscal year 1996 almost 230,000 tons of salt loading
reduction per year had been put into place on these USDA Colorado River
Basin Salinity Control units. Prior to its incorporation into USDA's
Environmental Quality Incentives Program, the USDA's on-farm Colorado
River Salinity Control (CRSC) program was working; providing the least
cost means of controlling salt loading available to the basin-wide
program and providing important benefits to producers installing
salinity reduction practices and downstream water users for whom the
salinity concentrations of Colorado River water creates severe economic
damages and detriments. The Bureau of Reclamation has recently updated
studies on the economic impacts of these salt concentrations in the
River and estimates that damages to United States' water users may soon
be approaching $1,000,000,000 per year.
The Federal Agriculture Improvement and Reform Act of 1996 (Public
Law 104-127) combined the CRSC Program and three other programs into
the newly-created Environmental Quality Incentives Program (EQIP).
Public Law 104-127 is explicit in stating that the functions of the
CRSC Program would continue as a part of EQIP. We view the inclusion of
the Salinity Control Program in EQIP as a direct recognition on the
part of Congress of the Federal commitment to maintenance of the water
quality standards for salinity in the Colorado River--and that the
Secretary of Agriculture has a vital role in meeting that commitment.
The intent and approach of the EQIP is that this agricultural program
is to be ``locally led and driven.'' We agree with that approach, but
experience over the past several years has indicated that the basin-
wide CRSC Program (now a part of EQIP) is not being funded at a level
adequate to ensure that the water quality standards for Colorado River
salinity can be maintained.
As we have observed the start-up and administration of the EQIP
over that past year and a half, EQIP is not working relative to the
Congressional directive to ``carry out salinity control measures in the
Colorado River Basin as part of the Environmental Quality Incentives
Program'' (Section 336.c.1 of the FAIRA, amending Section 202.c. of the
CRBSCA). Locally led, locally-derived resource management priorities
are both displacing and preempting salinity reduction program
activities that have both international and basin-wide significance and
importance. Experience is indicating, as we observe the EQIP resource
allocation and funding process at work, that local working groups and
state technical committees do not feel obliged to implement the above-
mentioned Congressional directive with regard to salinity control.
Local working groups and state technical committees are unable and
perhaps should not be expected to maintain the ``national perspective''
(e.g., maintaining basin-wide water quality standards and a water
quality commitment to the Republic of Mexico) when local priorities are
competing for limited EQIP funding to accomplish very visible, local
resource management goals and objectives.
For these reasons, the State of Wyoming urges this Subcommittee to
direct the Department of Agriculture to establish an EQIP national
conservation priority area for Colorado River Basin salinity control.
Numerous requests by the Forum and its participating states for
designation of the basin-wide salinity control program as an EQIP
national conservation priority area have gone unheeded by the
Department of Agriculture. It is our contention that the proposal for
national conservation priority area designation has great merit and is
urgently needed to keep the basin-wide salinity control program on
track. As time passes, it is becoming clear that implementation of
USDA's salinity control program is falling further behind under the
present administration of the EQIP. I wish to emphasize that the USDA
portion of the basin-wide salinity reduction effort is critical to the
continued success of the salinity control program.
In the President's Recommended Budget, the Administration has
indicated its intention to borrow $300,000,000 from the Commodity
Credit Corporation (CCC) for EQIP in fiscal year 1999. This increase of
$100,000,000 over the prior fiscal year's level will be most helpful in
addressing important environmental needs across this nation. We urge
the Subcommittee to remind the Secretary of Agriculture of his
obligations to continue the Colorado River Salinity Control Program
under EQIP and to direct that no less than $12,000,000 of the fiscal
year 1999 EQIP funding allocation be expended for Colorado River
salinity control.
Wyoming is represented on both the Colorado River Basin Salinity
Control Forum and the Colorado River Basin Salinity Control Advisory
Council, created within the 1974 CRBSCA. Like the Forum, the Advisory
Council is composed of gubernatorial representatives of the seven
Colorado River Basin states. It serves as a liaison between the seven
States and the Secretaries of the Interior and Agriculture and the
Administrator of the Environmental Protection Agency (EPA). The Council
advises these Federal officials and the involved agencies on the
progress of efforts to control the salinity of the Colorado River and
annually makes funding recommendations, including the amount believed
necessary to be expended by the USDA for its on-farm Colorado River
Salinity Control (CRSC) Program. The Forum's testimony is in accordance
with the Advisory Council's written recommendations.
During its October, 1997 meeting, the Advisory Council recommended
that at least $12,000,000 be expended by the Department of Agriculture
for cost-sharing to implement salinity reduction practices (funds that
are matched with individual contractor's cost-share funds) in fiscal
year 1999, plus sufficient funds for administration, technical
information and education activities. The Council's recommendation is
based on assuring that the progress of removing salt and preventing
additional salt loading into the Colorado River system stays on
schedule with the Plan of Implementation. Should a lesser funding level
be provided for this important basin-wide water quality program, the
progress (as measured in tons of salt prevented from entering the
Colorado River system) achieved by the USDA component of the multi-
agency, state and federal Colorado River Basin Salinity Control Program
will fall far short of meeting the rate of salinity control determined
to be needed to maintain compliance with the water quality standard's
numeric criteria for salinity.
Falling further behind the schedule set forth in the water quality
standard's plan of implementation raises vitally important questions
about whether the Basin States can be assured that the water quality
numeric criteria for the Colorado River will continue to be complied
with in the future. Accordingly, if less salt is removed from the
Colorado River than specified in the Plan of Implementation, salinity
concentration levels of Colorado River water at the three downstream
stations will exceed the numeric criteria values established for those
stations.
The Forum and Advisory Council have both enjoyed a good working
relationship with the Department of Agriculture since the 1984
amendments to the CRBSCA mandated direct involvement and a significant
role in salinity control by the Department of Agriculture. Prompt,
appropriate measures to ensure the viability of USDA's salinity control
efforts are needed to continue that productive relationship.
I wish to thank you for the opportunity to bring to your attention
the status of the Colorado River Basin Salinity Control Program
component of the Environmental Quality Incentives Program and the
necessity to remind the Department of Agriculture to carry out the
Congressional directive in Public Law 104-127 to continue the functions
of the salinity control program. I am pleased to submit this testimony
and would request, in addition to your consideration of its contents,
that you make it a part of the formal hearing record concerning fiscal
year 1999 appropriations for the Department of Agriculture.
LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS
----------
Page
Ackerman, Kenneth D., Administrator, Risk Management Agency...... 865
Prepared statement........................................... 896
Ad Hoc Coalition, prepared statement............................. 1205
Adee, Richard, president, American Honey Producers Association,
Inc., prepared statement....................................... 1222
Allen, W. Ron, president, National Congress of American Indians,
prepared statement............................................. 1347
American Association of Retired Persons, prepared statement...... 1207
American Farm Bureau Federation, prepared statement.............. 1209
American Indian Higher Education Consortium, prepared statement.. 1223
American Nursery & Landscape Association, prepared statement..... 1226
American Seed Trade Association [ASTA] Corn and Sorghum Basic
Research Committee, prepared statement......................... 1232
American Society for Nutritional Sciences [ASNS], prepared
statement...................................................... 1239
Amontree, Tom, Director of Communications, Office of
Communications, Department of Agriculture, prepared statement.. 1170
Amundson, Sara, Doris Day Animal League, prepared statement...... 1275
Anand, Rajen, Executive Director, Center for Nutrition Policy and
Promo-
tion........................................................... 647
Biographical sketch.......................................... 667
Armstrong, Robert, Executive Director, Alternative Agricultural
Research and Commercialization Corporation..................... 557
Biographical sketch.......................................... 589
Association of American Veterinary Medical Colleges, prepared
statement...................................................... 1328
Baker, James R., Administrator, Grain Inspection, Packers and
Stockyards Administration...................................... 745
Prepared statement........................................... 786
Banzhaf, William H., CAE, executive vice president, Society of
American Foresters, prepared statement......................... 1395
Barnett, Jack A., executive director, Colorado River Basin
Salinity Control Forum, prepared statement..................... 1262
Bay, Donald, Administrator, National Agricultural Statistics
Service........................................................ 129
Prepared statement........................................... 141
Berne, Bernard H., M.D., Ph.D., prepared statement............... 1247
Beyer, Wally, Administrator, Rural Utilities Service............. 557
Prepared statement........................................... 571
Bier, Dennis, M.D., director, Children's Nutrition Research
Center, prepared statement..................................... 1256
Billy, Thomas J., Administrator, Food Safety and Inspection
Service........................................................ 745
Prepared statement........................................... 754
Bohlen, Larry, D.C. issues coordinator, Friends of the Earth,
prepared statement............................................. 1289
Bolinger, Madge, Director, Office of Financial Management,
Commodity Futures Trading Commission........................... 983
Biographical sketch.......................................... 995
Born, Brooksley, Chairperson, Commodity Futures Trading
Commission..................................................... 983
Biographical sketch.......................................... 994
Prepared statement........................................... 987
Bowden, Ben F., chairman, National Watershed Coalition, prepared
statement...................................................... 1377
Brouha, Paul, executive director, American Fisheries Society,
prepared statement............................................. 1220
Bumpers, Hon. Dale, U.S. Senator from Arkansas, prepared
statements............................3, 130, 469, 649, 747, 867, 983
Burns, Hon. Conrad, U.S. Senator from Montana, prepared
statements...........................................5, 471, 749, 869
Bye, Dr. Raymond E., Jr., associate vice president for research,
Florida State University, prepared statement................... 1286
Byrd, Robert J., Deputy Commissioner, Management and Systems,
Food and Drug Administration, Department of Health and Human
Services....................................................... 1021
Biographical sketch.......................................... 1032
Carlson, Mary, president, National Association of Farmers' Market
Nutrition Programs, prepared statement......................... 1321
Castelnuovo, Richard, attorney, National Farm*A*Syst/Home*A*Syst
Office, prepared statement..................................... 1277
Cheney, Carolyn, chairman, American Sugar Alliance, prepared
statement...................................................... 1242
Chunha, Manuel, Jr., president, Nisei Farmers League, prepared
statement...................................................... 1249
City of Gainesville, FL, prepared statement...................... 1283
Clark, Les, vice president, Independent Oil Producers'
Association, prepared statement................................ 1249
Cline, Kenneth E., Cline Trout Farms, prepared statement......... 1394
Coalition to Promote U.S. Agricultural Exports, prepared
statement...................................................... 1261
Collins, Father T. Byron, S.J., assistant to the president,
Georgetown University, prepared statement...................... 1292
Collins, Keith, Chief Economist, Office of the Chief Economist,
Department of Agriculture...................................... 1
Prepared statement........................................... 1148
Cooper, Norman G., Director, National Appeals Division,
Department of Agriculture, prepared statement.................. 1146
Coughlin, R. Lawrence, president, Friends of the National
Arboretum, prepared statement.................................. 1290
Crispin, William K., executive director, Everglades Restoration
Oversight Group, prepared statement............................ 1276
Crow, Dr. Michael, vice provost, Columbia University, prepared
statement...................................................... 1265
Curl, Dr. Sam, dean and director, Division of Agricultural
Sciences and Natural Resources, Oklahoma State University,
prepared statement............................................. 1379
DeAlmedia, Lino, Jr., president, National Utility Contractors
Association, prepared statement................................ 1376
Dewhurst, Stephen B., Budget Officer, Department of Agriculture.. 1
Dunn, Michael, Assistant Secretary, Marketing and Regulatory
Programs, Department of Agriculture............................ 745
Prepared statement........................................... 765
Fass, Luie, International Seafood, prepared statement............ 1306
Figueroa, Enrique, Administrator, Agricultural Marketing Service. 745
Biographical sketch.......................................... 794
Prepared statement........................................... 780
Floyd, Dr. McArthur, research director, Alabama A&M University,
prepared statement............................................. 1341
Friedman, Michael A., M.D., Lead Deputy Commissioner, Food and
Drug Administration, Department of Health and Human Services... 1021
Biographical sketch.......................................... 1031
Prepared statement........................................... 1024
Gaillard, David, forest predator protection campaign coordinator,
Predator Project, prepared statement........................... 1387
Gain, W. Jeffrey, prepared statement............................. 587
Biographical sketch.......................................... 589
George, Father William L., S.J., assistant to the president,
Georgetown University, prepared statement...................... 1292
Geringer, Hon. Jim, Governor, State of Wyoming, prepared
statement...................................................... 1421
Glenn, Gary A., president, Massachusetts Foundation for
Excellence in Marine and Polymer Sciences, prepared statement.. 1314
Glickman, Dan, Secretary of Agriculture.......................... 1
Prepared statement........................................... 19
Goldstein, Ruth, Federal policy program manager, American Farm
Trust, prepared statement...................................... 1212
Goldthwait, Christopher E., General Sales Manager, Department of
Agriculture.................................................... 865
Gonzalez, I. Miley, Under Secretary, Research, Education, and
Economics, Department of Agriculture........................... 129
Biographical sketch.......................................... 159
Prepared statement........................................... 136
Grimes, Dr. D. Jay, director, Gulf Coast Research Laboratory,
prepared statement............................................. 1410
Grocery Manufacturers of America, prepared statement............. 1293
Gunnerson, Chuck, vice president, legislative/government affairs,
National Potato Council........................................ 1365
Guthrie, Dr. Richard L., associate dean and director,
International Programs in Agriculture, Auburn University,
prepared statement............................................. 1340
Hatamiya, Lon, Administrator, Foreign Agricultural Service....... 865
Biographical sketch.......................................... 900
Prepared statement........................................... 889
Health Industry Manufacturers Association, prepared statement.... 1294
Helinski, Ronald R., conservation policy specialist, Wildlife
Management Institute, prepared statement....................... 1419
Hollis, Steven M., American Federation of Government Employees,
prepared statement............................................. 1214
Holmer, Alan F., president, Pharmaceutical Research and
Manufacturers of America, prepared statement................... 1385
Holveck, David P., president and chief executive officer,
Centocor, Inc., prepared statement............................. 1252
Hooper, Helen, director of public policy, Land Trust Alliance,
prepared statement............................................. 1312
Horn, Floyd P., Administrator, Agricultural Research Service..... 129
Prepared statement........................................... 145
Humane Society of the United States, prepared statement.......... 1298
Intertribal Agriculture Council, prepared statement.............. 1306
Jackson, Gary, director, National Farm*A*Syst/Home*A*Syst Office,
prepared statement............................................. 1277
Jackson, Yvette, Administrator, Food and Nutrition Service....... 647
Biographical sketch.......................................... 666
Prepared statement........................................... 660
Jollivette, Cyrus M., vice president for government relations,
University of Miami, prepared statement........................ 1413
Kaplan, Dennis, Deputy Director, Office of Budget and Program
Analysis, Department of Agriculture...........129, 557, 647, 745, 865
Kavanaugh, E. Edward, president, Cosmetic, Toiletry, and
Fragrance Association, prepared statement...................... 1270
Kelley, Keith, Administrator, Farm Service Agency................ 865
Biographical sketch.......................................... 899
Prepared statement........................................... 883
Kennedy, Eileen, Acting Deputy Under Secretary, Research,
Education, and Economics, Department of Agriculture............ 129
Biographical sketch.......................................... 160
Kenny, Michael P., executive officer, California Air Resources
Board, prepared statement...................................... 1249
Kohl, Hon. Herb, U.S. Senator from Wisconsin, prepared statement. 904
Kwan, Quon Y., D. Crim., prepared statement...................... 1311
Leahy, Hon. Patrick J., U.S. Senator from Vermont, prepared
statement...................................................... 871
Levitt, Joseph A., Director, Center for Food Safety, Food and
Drug Administration, Department of Health and Human Services... 1021
Lowe, Lynn A., president, Red River Valley Association, prepared
statement...................................................... 1388
Lyons, James R., Under Secretary, Natural Resources and
Environment, Department of Agriculture......................... 467
Prepared statement........................................... 479
Maizel, Margaret S., principal investigator, National Center for
Resource Innovations, prepared statement....................... 1343
Martin, Marsha Pyle, Chairman and Chief Executive Officer, Farm
Credit Administration, prepared statement...................... 1142
Maselli, Sam J., executive vice president, Western Rural
Telephone Association, prepared statement...................... 1416
Maurer, Teresa, project manager, National Center for Appropriate
Technology, prepared statement................................. 1342
McGonigle, Joseph, executive director, Maine Aquaculture
Association, prepared statement................................ 1393
Medley, Terry L., Administrator, Animal and Plant Health
Inspection Serv-
ice............................................................ 745
Prepared statement........................................... 772
Metropolitan Water District of Southern California, prepared
statement...................................................... 1315
Miller, Gordon, president, National Commodity Supplemental Food
Program Association, prepared statement........................ 1346
Minor, Samuel F., chairman, Council for Agriculture Research,
Extension, and Teaching, prepared statement.................... 1273
Moench, Lorin, Jr., president, American Sheep Industry
Association, prepared statement................................ 1236
Mortenson, Dr. James H., associate dean, resident instruction,
Pennsylvania State University, prepared statement.............. 1331
Myers, Lester W., president and general manager, Delta Western,
Inc., prepared statement....................................... 1391
National Association of State Foresters, prepared statement...... 1325
National Corn Growers Association, prepared statement............ 1349
National Cotton Council of America, prepared statement........... 1350
National Dry Bean Council, prepared statement.................... 1354
National Easter Seal Society, prepared statement................. 1360
National Pharmaceutical Alliance and the Generic Pharmaceutical
Industry Association, prepared statement....................... 1362
National Telephone Cooperative Association, prepared statement... 1372
Norris, Peter M.P., president, SPIN-2, prepared statement........ 1399
Notar, Russell C., president and CEO, National Cooperative
Business Association, prepared statement....................... 1348
O'Neal, John F., general counsel, National Rural Telecom
Association, prepared statement................................ 1368
Offutt, Susan, Administrator, Economic Research Service.......... 129
Prepared statement........................................... 149
Oliver, Janice F., Deputy Director, Center for Food Safety, Food
and Drug Administration, Department of Health and Human
Services....................................................... 1021
Organization for the Promotion and Advancement of Small
Telecommunications Companies, prepared statement............... 1383
Patrick, Barbara, member, Board Supervisors of Kern County and
member, California Air Resources Board, prepared statement..... 1249
Payne, Dr. Thomas L., director, Agricultural Research and
Development Center, Ohio State University, prepared statement.. 1335
Peterson, R. Max, executive vice president, International
Association of Fish and Wildlife Agencies, prepared statement.. 1301
Quarles, William K., vice president, corporate relations and
counsel, Sunkist Growers, prepared statement................... 1400
Quickel, Dr. Kenneth E., Jr., president, Joslin Diabetes Center,
prepared statement............................................. 1309
Rawls, Charles R., Acting General Counsel, Office of the General
Counsel, Department of Agriculture, prepared statement......... 1172
Ray, Dr. Melvin C., Mississippi State University, chair,
Mississippi EPSCoR Committee, prepared statement............... 1259
Reed, Pearlie S., Acting Assistant Secretary for Administration,
Departmental Administration, Department of Agriculture,
prepared statement............................................. 1137
Reheis, Catherine H., managing coordinator, Western States
Petroleum Association, prepared statement...................... 1249
Rice, Rudy K., president, National Association of Conservation
Districts, prepared statement.................................. 1317
Robinson, Bob, Administrator, Cooperative State Research,
Education, and Extension Service............................... 129
Prepared statement........................................... 153
Rominger, Richard, Deputy Secretary of Agriculture............... 1
Scalet, Charles G., president, National Association of University
Fisheries and Wildlife Programs, South Dakota State University,
prepared statement............................................. 1326
Schram, Susan G., Ph.D., food and agriculture coordinator, deputy
director, Washington operations, Consortium for International
Earth Science Information Network, prepared statement.......... 1268
Schultz, William B., Deputy Commissioner, Policy, Food and Drug
Administration, Department of Health and Human Services........ 1021
Biographical sketch.......................................... 1032
Schumacher, August, Jr., Under Secretary, Farm and Foreign
Agricultural Services, Department of Agriculture............... 865
Biographical sketch.......................................... 899
Prepared statement........................................... 876
Shadburn, Jan E., Administrator, Rural Housing Service........... 557
Prepared statement........................................... 575
Shalala, Donna E., Secretary of Health and Human Services, letter
from........................................................... 1081
Shearman, Dr. Robert C., executive director, National Turfgrass
Evaluation Program, prepared statement......................... 1375
Smith, Dr. David A., president, Freshwater Farms of Ohio, Inc.,
prepared statement............................................. 1393
Society for Animal Protective Legislation, prepared statement.... 1397
Spencer, Dr. Richard, limited partner, Hawaiian Marine
Enterprises, prepared statement................................ 1392
Terpstra, A. Ellen, president and CEO, USA Rice Federation,
prepared statement............................................. 1402
Thames, Dr. Shelby F., professor of polymer science, University
of Southern Mississippi, prepared statement.................... 1414
Thompson, Jill Long, Under Secretary, Rural Development,
Department of Agriculture...................................... 557
Prepared statement........................................... 565
Thompson, Sally, Chief Financial Officer, Office of the Chief
Financial Officer, Department of Agriculture, prepared
statement...................................................... 1157
Biographical sketch.......................................... 1161
Thomson, Anne F., Chief Information Officer, Office of the Chief
Information Officer, Department of Agriculture, prepared
statement...................................................... 1162
U.S. Agricultural Export Development Council, prepared statement. 1403
U.S. Apple Association, prepared statement....................... 1407
United States Telephone Association, prepared statement.......... 1411
Viadero, Roger C., Inspector General, Office of the Inspector
General, Department of Agriculture, prepared statement......... 1179
Vogel, Ronald J., Associate Deputy Administrator, Special
Nutrition Programs, Food and Nutrition Service................. 647
Biographical sketch.......................................... 667
Vogt, Dr. Albert, president, National Association of Professional
Forestry Schools and Colleges, prepared statement.............. 1322
Wardensky, Kim M., American Federation of State, County, and
Municipal Employees, prepared statement........................ 1214
Watkins, Dayton J., Administrator, Rural Business-Cooperative
Service........................................................ 557
Prepared statement........................................... 580
Watkins, Shirley R., Under Secretary, Food, Nutrition, and
Consumer Services, Department of Agriculture................... 647
Biographical sketch.......................................... 666
Prepared statement........................................... 654
Weber, Thomas A., Acting Chief, Natural Resources Conservation
Service........................................................ 467
Prepared statement........................................... 490
Wilcox, Caren A., Deputy Under Secretary for Food Safety,
Department of Agriculture, biographical sketch................. 763
Williams, Dennis P., Deputy Assistant Secretary, Budget,
Department of Health and Human Services........................ 1021
Biographical sketch.......................................... 1033
Wootton, Richard D., associate dean and associate director,
Cooperative Extension Service at Kansas State University,
prepared statement............................................. 1337
Woteki, Catherine, Ph.D., R.D., Under Secretary, Food Safety,
Department of Agriculture...................................... 745
Biographical sketch.......................................... 762
Prepared statement........................................... 752
Yount, Ralph G., Ph.D., president, Federation of American
Societies for Experimental Biology, prepared statement......... 1281
Zeller, Mitchell R., Director, Office of Tobacco Programs, Food
and Drug Administration, Department of Health and Human
Services....................................................... 1021
Zimbelman, Dr. Robert G., chair, Coalition on Funding
Agricultural Research Missions, prepared statement............. 1260
Zimmerman, Gerald R., executive director, Colorado River Board of
California, prepared statement................................. 1264
Zuiches, Dr. James J., chair, National Association of State
Universities and Land Grant Colleges, prepared statement....... 1332
SUBJECT INDEX
----------
COMMODITY FUTURES TRADING COMMISSION
Page
Market surveillance, new system for.............................. 997
Off-floor transactions, fraud or abuse in........................ 998
Over-the-counter derivatives market.............................. 996
Overseas exchanges, losing business to........................... 995
Streamlining operation of the agency............................. 998
Submitted questions.............................................. 999
Tokyo communique, impact of...................................... 995
DEPARTMENT OF AGRICULTURE
Farm Service Agency
General Sales Manager
Foreign Agricultural Service
Risk Management Agency
American producers, market promotion spending by................. 911
Asian exports, reasons for declines in........................... 913
Boll weevil eradication.......................................... 919
Chinese import restrictions...................................... 907
Cochran Fellowship Program, resources for........................ 920
Dairy export incentive program................................... 902
Dairy options pilot program...................................... 901
Declines in Asian exports, reasons for........................... 906
Disaster assistance, needs for................................... 904
EEP expenditures................................................. 912
Expense reimbursement to private companies, GAO report on........ 917
Fiscal year 1998 MAP allocation.................................. 905
Flood risk reduction program..................................... 909
Farm Service Agency [FSA]:
Data collection.............................................. 919
Reductions in staff-years.................................... 907
Reorganization............................................... 915
IMF supplemental................................................. 912
Market Access Program............................................ 910
Proposed risk management tools................................... 917
Public Law 480, reduction in..................................... 912
Single FSA personnel system...................................... 909
State trading enterprises........................................ 903
Submitted questions.............................................. 923
Trade negotiations, goal for next round of....................... 914
WTO negotiations, congressional participation in................. 914
Food and Nutrition Service
Center for Nutrition Policy and Promotion
Administrative savings and offsets............................... 681
Center for Nutrition Policy and Promotion........................ 653
Child Nutrition Program.......................................... 651
Reauthorization.............................................. 689
Electronic benefit transfer cards and fraud...................... 684
Estimating and addressing America's food losses.................. 668
Food and Nutrition Service fiscal year 1999 budget request....... 650
Food gleaning.................................................... 654
Recovery..................................................... 668
Food Program Administration...................................... 654
Food Stamp Program............................................... 651
Employment and training...................................... 689
Food stamps and school breakfast, participation in............... 680
National Food Service Management Institute....................... 690
Program and financial integrity.................................. 679
Reserves, Food Stamp Program and WIC............................. 682
Studies and evaluation........................................... 653
Transfer..................................................... 683
Submitted questions.............................................. 690
Training and technical assistance................................ 654
Transportation and storage....................................... 679
Women, Infants and Children [WIC] Program........................ 652
Electronic transfer program.................................. 688
Food package costs reductions................................ 686
Full participation........................................... 686
Food Safety and Inspection Service
Animal and Plant Health Inspection Service
Agricultural Marketing Service
Grain Inspection, Packers and Stockyards Administration
Animal and Plant Health Inspection Service [APHIS]............... 764
Boll weevil...................................................... 806
Brucellosis...................................................... 796
Budget request, fiscal year 1999................................. 750
Food safety initiative........................................... 751
Fruit and vegetable inspection................................... 800
FSIS Directive 5400.5............................................ 795
Grain inspection, packers and stockyards......................... 764
Guidelines versus command and control............................ 803
Hazard Analysis and Critical Control Point Program [HACCP]:
Implementation............................................... 798
Inspection changes due to.................................... 794
Plant closures under......................................... 800
Hudson Foods recall.............................................. 802
Import inspection................................................ 801
Inspectors, redeployment of...................................... 798
Irradiation...................................................... 797
Marketing and regulatory programs................................ 764
Recall, impact of................................................ 804
Reworked product...............................................803, 804
Sanitary/phytosanitary standards................................. 796
Seafood inspection............................................... 799
Single food safety agency........................................ 797
Submitted questions.............................................. 807
User fee proposal.........................................746, 751, 799
National Agricultural Statistics Service
Agricultural Research Service
Economic Research Service
Cooperative State Research, Education, and Extension Service
Agricultural research............................................ 172
Agricultural Research Service:
Implementation of fiscal year 1999 program increases......... 160
Proposed closure of facilities............................... 164
Alternative pest controls........................................ 165
Aquaculture:
Census....................................................... 172
Research..................................................... 162
Budget request, fiscal year 1999................................. 132
Civil rights initiative.......................................... 135
CSREES research programs, reductions in.......................... 169
Economic Research Service budget................................. 135
Facilities task force............................................ 164
Fiscal year 1998 implementation plans, status of................. 162
Food genome initiative........................................... 134
Food safety initiative........................................... 134
High-priority initiatives for fiscal year 1999................... 134
McIntire-Stennis Program......................................... 171
National Agricultural Statistics Service budget.................. 135
Pest management initiative....................................... 134
Postaward management............................................. 170
Production agriculture........................................... 166
Proposed funding levels, fiscal year 1999........................ 135
Rice research.................................................... 163
Submitted questions.............................................. 173
Trade flows...................................................... 168
Office of the Secretary
Agricultural:
Exports...................................................... 15
Research..................................................... 16
Trade balance................................................ 49
Agriculture, status of........................................... 47
Asia's commodity export value.................................... 50
Asian financial crisis........................................... 37
Civil rights..................................................... 13
Cochran Fellowship Program....................................... 53
Commodity yield comparisons...................................... 48
Conservation..................................................... 17
Programs..................................................... 50
Conservation Reserve Program..................................... 13
Crop Insurance Program........................................... 14
CSREES research programs......................................... 39
Customer service and program delivery............................ 18
Dairy price issue................................................ 12
E. coli.......................................................... 42
EQIP Program..................................................... 51
European Union................................................... 47
Federal crop insurance funding................................... 38
Food assistance.................................................. 17
Food Safety Inspection Service................................... 42
Government debt forgiveness...................................... 14
Lower Mississippi Delta Commission............................... 52
National Commission on Small Farms............................... 14
National food safety initiative.................................. 16
New milk marketing order......................................... 44
Office of the Inspector General..................................18, 36
President's balanced budget...................................... 13
Rice production.................................................. 41
Rural development................................................ 15
Severe weather problems.......................................... 12
State trading enterprises........................................ 46
Submitted questions.............................................. 53
USDA outlays, decreases in....................................... 12
Weakened livestock prices........................................ 12
Rural Utilities Service
Rural Housing Service
Rural Business-Cooperative Service
Alternative Agricultural Research and Commercialization Corporation
Alternative agricultural research and commercialization.......... 599
Appropriate technology transfer for rural areas.................. 594
Business and industry programs................................... 602
Cooperatives, research on........................................ 604
Delta region economic development program........................ 590
Delta Regional Commission........................................ 593
Delta Teachers Academy........................................... 593
Electrical restructuring......................................... 595
Home ownership loans............................................. 593
Mississippi Delta................................................ 603
Multifamily housing.............................................. 598
National Centers for Excellence.................................. 590
Rural:
Business-cooperative programs................................ 564
Housing programs...........................................563, 598
Utilities programs........................................... 562
Rural Utilities Service.......................................... 591
Salaries and expenses............................................ 565
Submitted questions.............................................. 604
Water 2000 initiative............................................ 592
Water and waste programs......................................... 594
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Arkansas regional laboratory..................................... 1040
Blood safety..................................................... 1048
Food safety initiative........................................... 1033
Irradiation of food..........................................1038, 1042
Medguide program................................................. 1039
New product applications......................................... 1049
Submitted questions.............................................. 1051
User fees........................................................ 1043
Youth tobacco prevention initiative.............................. 1044
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